TMI Tax Updates - e-Newsletter
April 25, 2023

Case Laws in this Newsletter:

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

Articles

1. Save the date June 30, 2023 for Amnesty Scheme

   By: Sandeep Saini

2. CANCELLATION OF GST REGISTRATION - RECENT CASE LAWS

   By: DR.MARIAPPAN GOVINDARAJAN

3. IMPORTANT CONSIDERATIONS IN INTERPRETATION

   By: Dr. Sanjiv Agarwal

4. Rule 89(4)(c) is ‘ultra-vires’ to the provisions of GST law and held ‘unconstitutional’

   By: Bimal jain

News

1. Advisory on Bank Account Validation

2. Sh. Rajesh Kumar Singh takes charge as Secretary, Department for Promotion of Industry and Internal Trade

3. Sh. Rajesh Kumar Singh takes charge as Secretary, Department for Promotion of Industry and Internal Trade

4. Banks should work towards Banking the unbanked, Securing the unsecured and Funding the unfunded: Dr Bhagwat Karad

5. Union Minister of Commerce & Industry Piyush Goyal felicitates top exporters at the 49th India Gem & Jewellery Awards

Notifications

GST - States

1. CT-8-0005-2023-Sec-1-V (CT) (12) - dated 21-4-2023 - Madhya Pradesh SGST

Modification of the Notification No. F-A3-31-2020-1-V (67), Dated 5th December, 2020

2. CT-8-0004-2023-Sec-1-V (CT) (11) - dated 21-4-2023 - Madhya Pradesh SGST

Waives the amount of late fee referred to in section 47 of the MPGST Act

3. CT-8-0002-2023-Sec-1-V (CT) (09) - dated 21-4-2023 - Madhya Pradesh SGST

Amnesty scheme for deemed withdrawal of assessment orders issued under Section 62.

4. CT-8-0001-2023-Sec-1-V (CT) (08) - dated 21-4-2023 - Madhya Pradesh SGST

Extension of time limit for application for revocation of cancellation of registration

Circulars / Instructions / Orders

Central Excise

1. CBIC-240137/14/2022-SERVICE TAX SECTION-CBIC - dated 18-4-2023

Pre-deposit payment method for cases pertaining to Central Excise & Service Tax- Issues faced by the taxpayers who have paid the pre-deposit amount through FORM GST DRC-03 in GST Appeals

Highlights / Catch Notes

GST

• Wooden Ice Cream Sticks and Spoons Classified as Tableware, Subject to 12% GST Under Tariff Code 4419 90 90.

  Case-Laws - AAR : Classification of goods - rate of GST - wooden ice cream sticks and wooden ice cream spoons - The impugned products being the wooden spoon and wooden stick qualify to be covered under spoons and crumb-scoops respectively. Thus the more specific classification of the impugned products would be 4419 90 90 as tableware made up of wood other than bamboo. - Liable to GST @12% - AAR
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• GST Valuation Must Include Free Materials Provided by Buyer, Per Section 15; Account for Barter Consideration.

  Case-Laws - AAR : Valuation - inclusion of value of material supplied Free of Cost (FOC) by the buyer - Combine readings of provisions of section 15 - from such type of adjustments applicant will receive the consideration in barter. I.e. one consideration in the shape of price as per agreement and second in the shape of free issue of essential inputs like cement and steels. - For part of transaction value for GST - AAR
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• Precast Manholes and Risers Supply Not Job Work, Liable to GST, Rules Authority for Advance Rulings (AAR.

  Case-Laws - AAR : Classification of supply - supply of goods or supply of services or both - manufacture and supply Precast Manholes and Rises to various government and non government entities - Cannot be treated as Job work - Liable to GST - AAR
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• Airports Authority's Business Transfer to SPV Classified as Going Concern, Exempt from GST under Notification 12/2017-CT(R.

  Case-Laws - AAR : Supply or not - transfer of business - going concern or not - Business may be covered under the umbrella of the definition of Service, in accordance to Section 2(102) CGST Act and the activity of transfer of business is in the nature of supply. - the business arrangement between AAI and SPV vide Concession Agreement dated 16.01.2021 is squarely covered under transfer of going concern. - the transfer of business by Airports Authority of India to M/s AJAIL (SPV) is transfer of a 'going concern' and the same is not covered in clause 4 of schedule II of CGST Act. - The subject Supply is covered at Entry No. 2 of Notification 12/2017-CT(R) - Exempted from GST - AAR
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Income Tax

• Court Upholds Legal Procedures for Reopening Tax Assessment u/s 147; Petitioner Must Follow Statutory Remedies.

  Case-Laws - HC : Reopening of assessment u/s 147 - Maintainability / entertainability of writ petition - The exceptions carved out are absent. Contentions raised by the first respondent that petitioner did not disclose fully and truly all material facts necessary for assessment and as a result, there is escapement of income from assessment for the assessment year 2011-2012, cannot simply be brushed aside. In such a case, it would be just and proper if the procedure prescribed under the statute is followed, in which event, petitioner would have all the opportunities and remedies to present its case. - HC
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• Income Tax Assessment Reopened u/s 147 Due to Filing Error; Case Sent Back for Reconsideration.

  Case-Laws - HC : Reopening of assessment u/s 147 - An inadvertent error committed by the Petitioner in reflecting that the return of income had been filed under the category ‘u/s 119(2)(b)’ instead of selecting the option ‘u/s 148’ could have been treated to be a return validly filed by invoking the provisions of Section 292B of the Act especially when the Petitioner claims that the mistake was brought to the notice of the concerned A.O. at the appropriate stage. - Matter restored back to AO - HC
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• Delayed Amalgamation Return: Income Tax Department Must Assess Income u/s 170 Despite Missed Deadline.

  Case-Laws - HC : Revised return of income in terms of the scheme of amalgamation approved by the NCLT -Period of limitation - It is because of circumstances beyond the control of the petitioner that the revised return could not be filed before the due date. However, under Section 170 of the Act, Income Tax Department is obligated to assess the total income of the assessee of the previous assessment year post-amalgamation. - HC
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• ITAT Overrules CIT's Section 263 Order on Cash Purchases, Validating Assessing Officer's Original Inquiry Scope.

  Case-Laws - HC : Revision u/s 263 - assessee has made purchases in cash - when the learned assessing officer was not required to enquire on those issues such as purchases in cash more than specified sum, the learned CIT was not correct in holding that the learned assessing officer has not made due inquiries on that ground as the verification of the purchases exceeding specified limit in cash was not an issue before the assessing officer. Naturally, he should not have made any enquiry on that aspect. - ITAT rightly set aside the order - HC
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• CIT(A) Denies Approval u/s 80G Due to Assessee's Unjustified Donation Accounts; Findings Upheld.

  Case-Laws - AT : Approval u/s 80G - CIT(Exemption) has given finding regarding two sets of accounts related to donation being maintained by the assessee. In the absence of any rebuttal by the assessee society, we do not see any reason to interfere in the findings of authorities below - Order of CIT(A) rejecting the approval u/s 80G sustained - AT
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• AO Must Clearly Differentiate Between Concealment and Inaccurate Income Details for Penalty u/s 271(1)(c) of IT Act.

  Case-Laws - AT : Penalty u/s 271(1)(c) - Necessity of recording satisfaction - AO Statement that the assessee has consciously made the concealment by furnishing inaccurate particulars of his income is very vague and mixing up both the default of concealment as well as furnishing inaccurate particulars of income. - AT
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• Dissolved Partnership Firms Still Liable for Tax Assessments u/s 189 of Income Tax Act.

  Case-Laws - AT : Accrual of interest income in the hands of dissolved partnership firm - section 189 keeps the firm alive for the purposes of assessment despite its dissolution. It ensures that the firm which is dissolved does not escape the liability to tax after its dissolution - No substance in the argument of the Ld. AR that the entire amount of interest received by the firm during the previous year cannot be assessed in the hands of the assessee firm - AT
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• Section 195: No Tax Withholding on Business Profits Without Permanent Establishment Under Treaty Articles 12 or 14.

  Case-Laws - AT : TDS u/s 195 - Once the payment does not fall either under Article 12 or Article 14, in absence of any other provision in the treaty specifically dealing with such payment, it has to be treated as business profit at the hands of the recipient. Thus in absence of a PE or fixed base, the payment is not taxable at the hands of the recipient. That being the case, there was no obligation on the assessee to withhold tax at source on such payment. - AT
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• Unexplained Money as "Deemed Income" u/s 69A Taxed on Receipt, Not by POC Method.

  Case-Laws - AT : Unexplained money u/s. 69A - “deemed income” - since the amount was not recorded in the books, it did not form the part of the Revenue Receipts of the Assessee. The amount was enjoyed by the Assessee on receipt basis and never recorded in the regular books of accounts, therefore, the amount has to be taxed on receipt basis and not on the basis of POC method.- AT
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• Tax Return Delay Condoned: Section 80-IA(4) Deduction Granted After One-Minute Filing Delay Due to Website Issues.

  Case-Laws - AT : Deduction u/s 80-IA(4) denied - delay of one minute in filing of the return was due to technical snags in the website of department, and therefore return could not be uploaded. There is only a negligible delay (one minute only) which is due to bonafide reasons as has explained above, therefore, delay in Filling return of income is hereby condoned. - AT
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• Foreign Tax Credit u/s 90 not limited by Rule 128; Form 67 filing not mandatory for FTC claim.

  Case-Laws - AT : Claim of foreign tax credit (FTC) u/s 90 - Rule 128 of the Rules cannot override the provisions of DTAA and impose an additional condition that credit will not be given if Form 67 is not filed on or before the due date of filing the return of income as prescribed under section 139(1) Form 67 for claiming FTC - AT
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Customs

• Petitioner Denied Duty Drawback Claim u/r 16A(5) for Lack of Required Details and No ECGC Compensation Received.

  Case-Laws - HC : Recovery of duty drawback - non receipt of foreign exchange - the statement of facts, as stated in the Revision Application filed by the petitioner, does not set out the factual details for claiming the benefit of Rule 16A(5) of the Drawback Rules. It is not disputed that the petitioner has not received compensation from the ECGC. Thus, Rule 16A(5) of the Drawback Rules is not applicable. - HC
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• Adjudicating Authority Failed to Verify EOU's NFEE and Permissions for Domestic Sales Before Granting Notification 2/95-CE Benefits.

  Case-Laws - AT : 100% EOU - diversion of imported/indigenous goods procured duty free - The learned adjudicating authority has not examined the fact whether the respondent have achieved a positive NFEE and whether the realization for deemed export was in convertible currency in EEFC; we also find that the learned Commissioner has not bothered to verify whether the respondent had any permission granted by the competent authority i.e. Development Commissioner to sell the goods manufactured by the EOU in domestic market - adjudicating authority was not correct in extending the benefit of Notification No. 2/95-CE dated 04.01.1995 to the respondents without verifying the relevant facts. - AT
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• Refund Denied for Unexported Goods: Customs Duties Not Applicable Due to Lack of Export Proceeds Realization.

  Case-Laws - AT : Refund of Customs duties paid at the time of assessment - goods short shipped - Since the goods under question were not exported, there is no relevance in bringing into consideration the contractual obligations towards realization of export proceeds, as there are no export proceeds realized for the said 7833 MTs of goods not exported. - AT
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• Customs broker's license revoked and penalty imposed for misuse of credentials; irrelevant emails failed as evidence.

  Case-Laws - AT : Revocation of Customs Broker License - levy of penalty - allowing others to use its credentials - the appellant enclosed some irrelevant emails at Annexure A18 as the correspondence between it and the exporter to support its claim that it had filed the Shipping Bill. The emails which were enclosed do not mention the Shipping Bill number and they were not from or to the email ID of the appellant or the exporter - the revocation of the licence, forfeiture of security deposit and imposition of penalty on the appellant are just and fair and proportionate to the serious nature of the violations by the appellant. - AT
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Indian Laws

• ESI Dues Recovery Barred Against Sick Companies Without Consent u/s 19(2) of SICA. No Statutory Revival Allowed.

  Case-Laws - HC : Initiation of recovery proceedings - ESI dues - By virtue of Section 19 (2) of SICA, the consent can be inferred. Therefore, it is not open to the ESI Corporation to revive the liability of a sick company by operation of statutory discharge. - HC
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IBC

• Appellant Settles Dues with Three Creditors; No Justification to Prevent Settlement with Fourth Creditor in Liquidation Case.

  Case-Laws - AT : Liquidation proceedings - settlement dues of Corporate Debtor - the Appellant having successfully met the dues of three statutory creditors, there is no reason to deny an opportunity to the Appellant to settle the dues of the fourth statutory creditor. It has also weighed that if the dues of GST Department are also cleared by the Appellant, no useful purpose will be served by pressing ahead with liquidation. - AT
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Service Tax

• High Court Upholds Service Tax Obligations Under Chapter-V of Finance Act, Validating Fresh Proceedings Despite GST Implementation.

  Case-Laws - HC : Maintainability of fresh proceedings - demand of service tax post GST era - the petitioner has an obligation to correctly pay the service tax under Chapter-V of the Finance Act and the proceedings initiated by the impugned SCN are merely to ensure discharge of the said obligation. - WP dismsised - HC
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• CENVAT Credit Valid Unless Dealer's Assessment Revised; Invoices Lacking Service Details Not Grounds for Denial.

  Case-Laws - AT : CENVAT Credit - business support services - taxable service provided or not - invoices were issued without specifying the actual nature of services provided by the dealers - unless and until the assessment made at the dealer’s end is revised or altered, the Cenvat credit availed on the basis of invoices by the recipient’s unit cannot denied/whittled down. - AT
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• Service Tax Not Applicable on Joint Venture Contributions by Co-Venturer for Own Benefit and Venture Advancement.

  Case-Laws - AT : Levy of Service Tax - Joint venture - expenditure incurred by the appellant, in respect of its employees and assets which were deployed for undertaking joint operations at the blocks, where it was acting as the Operator - Infact, the appellant had as a co-venturer, in furtherance of the venture as its capital contribution to the venture, deployed manpower and assets for its own benefit and in the furtherance of the venture. This cannot, by any stretch of imagination, be regarded as a service being provided, so as to attract levy of service tax. - AT
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• CBIC Circular No. 214/2023 clarifies service tax on liquidated damages; Tribunal's 2022 order demand set aside.

  Case-Laws - AT : Levy of service tax with interest and penalty - liquidated damages - While the above Orders have been passed by the Tribunal in 2022, subsequently, CBIC has issued Circular No. 214/2023-Service Tax dt. 28.02.2023. In this Circular, the issue of leviability of Service Tax on Liquidated Damages has been considered in elaborate details - Demand in respect of Liquidated Damages set aside - AT
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VAT

• Dealers Must Prove Transactions with Detailed Evidence to Claim Input Tax Credit After VAT Registration Cancellation.

  Case-Laws - HC : Input Tax Credit (denied retrospectively) - denial on account of cancellation of the VAT registration of the dealers (who have effected sale of the goods to these petitioners/appellants) - Therefore a dealer claiming ITC has to prove the actual transaction of sale by furnishing the name and address of the selling dealer, details of the vehicle which was/were used for delivery of the goods, tax invoices and payment particulars etc. The above information would be in addition to tax invoices, particulars of payment etc. - HC
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• Gujarat VAT Act Amendment Overruled for Violating Separation of Powers; Court Decisions Must Be Implemented, Interest Denial Questioned.

  Case-Laws - HC : Legislative competence - power to amend repealed Gujarat VAT act with retrospective effect - denial of interest on delayed refund - Impermissible Judicial Overiride - Infringement of doctrine of separation of powers - The impugned Amendment Act is an impermissible legislative override. Therefore, based upon the impugned Amendment Act, the respondents cannot decline to implement this Court's decisions in Writ Petition No. 424/2018 and connected matters. - HC
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Case Laws:

• GST

• 2023 (4) TMI 966
  Constitutional validity of para 2 of the Schedule II to the Central Goods and Services Tax Act, 2017 and the Goa Goods and Services Tax Act, 2017 read with Sections 7 and 9 thereof - HELD THAT:- Leave granted. It is clarified that there is no stay against the recovery and it will be open for the Revenue to recover the tax in accordance with law and on its own merits.

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• 2023 (4) TMI 965
  Maintainability of petitioner s appeal - petitioner s appeal declined to be maintained on the ground that it was barred by limitation - Section 100 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- In terms of Section 100(2) of the Act, an appeal to the Appellate Authority is required to be filed within a period of thirty days from the date on which the ruling sought to be appealed against is communicated to the aggrieved party - In the present case, there is no dispute that the order dated 28.06.2019, passed by the Delhi Authority for Advance Ruling was promptly communicated to the petitioner. The petitioner had filed an appeal on 14.02.2020, which was beyond the period of thirty days as stipulated under Section 100(2) of the Act. The proviso to Section 100(2) of the Act makes it clear that the Appellate Authority can extend the stipulated period of thirty days for filing the appeal if it is satisfied that the appellant was prevented by a sufficient cause from presenting the appeal within the said period. However, the power of the Appellate Authority is confined to extending the said period by a further period not extending thirty days. Thus, in any event, the Appellate Authority did not have the power to entertain the appeal beyond a period of sixty days from the date of the communication of the order passed by the Appellate Authority - Since the appeal was filed on 14.02.2020, which is also beyond the period of sixty days from the date on which the petitioner received the order dated 28.06.2019 or from the date it became aware of the constitution of the Appellate Authority, the delay is in excess of the period that could be condoned by the appellant. In STATE OF GOA VERSUS WESTERN BUILDERS [ 2006 (7) TMI 581 - SUPREME COURT] and CHHATTISGARH STATE ELECTRICITY BOARD VERSUS CENTRAL ELECTRICITY REGULATORY COMMISSION AND OTHERS [ 2010 (4) TMI 1031 - SUPREME COURT] , the Supreme Court had considered similar provisions where the power of the concerned authority court to extend limitation was limited to a specified period, albeit in the context of the Arbitration and Conciliation Act, 1996 and the Electricity Act, 2003. The Court had held that given the language of the relevant provision limiting the period for which delay could be condoned, the period of limitation for filing the application / appeal could not be extended beyond the said period. There are no fault in the decision of the Appellate Authority in declining to entertain the petitioner s appeal under Section 100 of the Act - petition dismissed.

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• 2023 (4) TMI 963
  Seeking revocation of cancellation of GSTIN registration - failure to file return for a continuous period of three months - HELD THAT:- In identical circumstances, this Court, in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR [ 2022 (2) TMI 933 - MADRAS HIGH COURT ] held that The petitioners are directed to file their returns for the period prior to the cancellation of registration, if such returns have not been already filed, together with tax defaulted which has not been paid prior to cancellation along with interest for such belated payment of tax and fine and fee fixed for belated filing of returns for the defaulted period under the provisions of the Act, within a period of forty five (45) days from the date of receipt of a copy of this order, if it has not been already paid. In view of the fact that this Court has been consistently following the directions issued in the case of Tvl.Suguna Cutpiece and the Revenue Department has also accepted the said view as evident from the fact that no appeal has been filed in any of the matters, this Court intends to follow the above order of this Court. Petition allowed.

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• 2023 (4) TMI 962
  Attachment of bank account of the partners of the petitioner firm and the properties of the partners of the petitioner firm - appeal was dis-allowed on the ground of non-payment of pre-deposit - HELD THAT:- On the basis of the provision of Sub-section (6) of Section 107 of CGST Act, it was submitted by learned senior advocate for the petitioner that disputing the entire amount of GST levied on the product chewing tobacco. According to his case, the total output of the product chewing tobacco is to the tune of Rs. 9,88,31,089/-. It is the case of the petitioner that for supply of the composite product, the demand is Rs. 26 crores and Rs.20 crores for the subsequent year. It was submitted that the petitioner has already paid about Rs. 28 crores. Therefore, the question of predeposit does not arise as there is no admitted amount. On the other hand, the case of the department is that the product chewing supari, lime and tobacco are composite products and that the petitioner cannot adjust the tax. The petitioner has arguable issues. Notice and notice as to interim relief returnable on 28.04.2023.

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• 2023 (4) TMI 961
  Classification of goods - rate of GST - wooden ice cream sticks and wooden ice cream spoons - to be classified under HSN 4421 91 90 or not - HELD THAT:- The impugned products i.e. wooden sticks and wooden spoons are made of specific wood European white Birch (Betula Pendula) taken from Siberian forest and thus they are qualified to be articles of wood. The applicant contended that the impugned products merit classification under HSN code 4421 91 90, however the heading 4421 pertains to other articles of wood such as cloth hangers; articles such as spools, cops, bobbins etc., for cotton machinery, jute machinery and other machinery; and also covers parts of wood. From the above it is seen that the subject articles, i.e., wooden sticks and wooden spoons do not merit classification under the said tariff heading. Alternate classification for the impugned products - HELD THAT:- The heading 4419 covers tableware and kitchenware of wood and specifically 4419 90 covers table ware and kitchenware of other wood i.e. other than bamboo wood. Further HSN explanatory notes provides that the heading 4419 covers spoons, crumb-scoops in addition to other articles. The impugned products being the wooden spoon and wooden stick qualify to be covered under spoons and crumb-scoops respectively. Thus the more specific classification of the impugned products would be 4419 90 90 as tableware made up of wood other than bamboo. Rate of GST applicable to the impugned products - HELD THAT:- Notification No. 1/2017-Central Tax(Rate) dated 28.06.2017, as amended, specifies GST rate of 12% on the impugned products i.e. wooden sticks and wooden spoons, in terms of Sl.No. 99B of Schedule II to the Notification.

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• 2023 (4) TMI 960
  Classification of supply - Valuation - supply of goods or supply of services or both - manufacture and supply Precast Manholes and Rises to various government and non government entities - price to be charged from the recipient i.e. M/s Larsen Toubro Ltd by the applicant for supply of precast manhole shall be transaction value in terms of Section 15(1) of the CGST/ RGST Act 2017 - material which are to be made available free of cost by the recipient - forming part of the transaction value for the purpose of levy of tax or not? HELD THAT:- It is observed that it is imperative for any act to be service that should not be goods. It would be worthwhile to mention that applicant himself stated that he has intention to manufacture and supply Precast Manholes and Rises. Even the manufacturing process submitted by the applicant itself shows that the applicant is engaged in manufacturing of goods ie Precast Manholes and Rises. The Precast Manholes and Rises are movable property; hence we conclude that supply of Precast Manholes and Rises is supply of goods and not a supply of services on the basis of aforesaid findings. The manufacturing activities carried out by applicant do not fall under the ambit of job work as it involved whole manufacturing process for manufacturing of Precast Manholes and Rises and it cannot be termed as any treatment or process undertaken by a person on goods belonging to another registered person. Even concept of job work in GST is govern by different set of Rules and procedures and these are not question in hand. Hence in this case Precast Manholes and Rises are to be manufactured by applicant on order from recipient wherein main ingredients are supplied by recipient, and applicant will manufacture a fresh Precast Manholes and Rises, so the ownership of goods remains with applicant hence Subject supply is supply of goods under GST Act 2017. Valuation - inclusion of value of material supplied Free of Cost (FOC) by the buyer - HELD THAT:-t Free of cost supply of main ingredients from recipient is nothing but mutual understanding between both parties which do not debar them from the essence of supply of goods and consideration received under GST. - Combine readings of provisions of section 15, we hold from such type of adjustments applicant will receive the consideration in barter. I.e. one consideration in the shape of price as per agreement and second in the shape of free issue of essential inputs like cement and steels. The price to be charged from the recipient i.e. M/s Larsen Toubro Ltd by the applicant for supply of precast manhole shall not be transaction value in terms of Section 15(1) of the CGST / RGST Act 2017 - the material which are to be made available free of cost by the recipient and are not within the scope of applicant for supply of precast manhole shall form part of the transaction value for the purpose of levy of tax.

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• 2023 (4) TMI 959
  Supply or not - transfer of business - going concern or not - transfer of business by M/s. Airports Authority of India to M/s. Adani Jaipur International Airport Limited is covered under the Entry No. 2of the exemption notification No 12/2017 - Central Tax (Rate) dated 28-06-2017 issued u/s Section 11 of CGST Act 2017 or not - levy of GST on the transfer of Existing assets ( RAB ), Aeronautical Assets, non-aeronautical assets and Capital work in progress by M/s. Airport Authority of India to the M/s. Adani Jaipur International Airport Limited - transfer of asset be treated as services and the classification or not - concession fees paid by M/s. Adani Jaipur International Airport Limited to M/s. Airports Authority of India be treated as consideration for transfer of business or not - Monthly/Annual concession fees charged by the Applicant on the M/s. Adani Jaipur International Airport Limited - invoice raised by the Applicant for reimbursement of the salary/ staff cost on M/s. Adani Jaipur International Airport Limited - reimbursement claimed of Municipal tax, Property Tax and Water Charges by the Applicant from M/s. Adani Jaipur International Airport Limited - reversal as required in accordance with section 17 (2)/ (3) of CGST Act viz-a-viz RGST Act. Whether the business module executed through agreement between M/s. AAI and M/s. ADIAL is transfer of business or not? - HELD THAT:- The applicant i.e. Airports Authority of India (AAI) is the authority created under the Airports Authority of India Act, 1994 (AAI Act). AAI Act was enacted to provide for the constitution of the AAI for the better administration and cohesive management of the airports. AAI has been created for the purposes of establishing or assisting in the establishment of the airports and for matters connected thereto. On referring the definition of Goods in CGST Act, Section 2 (52) CGST Act, defines Goods as follows: goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply - the business is not Goods for it is not a movable property and thereby Transfer of Business cannot be supply of goods. On going through the definition of Service, Section 2(102) CGST Act, which defines Service as follows: services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged - Business may be covered under the umbrella of the definition of Service, in accordance to Section 2(102) CGST Act and the activity of transfer of business is in the nature of supply. Whether the transfer of business by Airports Authority of India to M/s. Adani Jaipur International Airport Limited is treated as supply as going concern and covered in clause 4 of schedule II of CGST Act viz-a-viz RGST? - HELD THAT:- As per Article 16.2 and 16.3 of the agreement, the SPV shall assume control of all Aeronautical Assets, Non Aeronautical assets and Terminal Building on the commercial operation date [hereinafter referred as COD ]. Further, we find that as per Article 16.1.1 of the agreement, all revenues, receipts, expenditure and other financial transactions for and in respect of the Airport shall be deemed to be transferred from the AAI to SPV on COD and all rights, obligations and liabilities in respect thereof shall vest exclusively in the SPV until the transfer date - it is not essential to transfer all assets and liabilities against a transaction to qualify for a transfer of business. That is to say that even if some assets are retained by the AAI, and the SPV after such takeover carries out subject business activities without any obstruction then it shall qualify to be a transfer of a business. As per Article 16.1.1 of the Agreement, all the liabilities incurred by the AAI prior to commercial operation date including any debt obligations and payments to AAI or any third party shall continue to vest in AAI at all times - the business arrangement between AAI and SPV vide Concession Agreement dated 16.01.2021 is squarely covered under transfer of going concern. Whether the transfer of business by Airports Authority of India to M/s. Adani Jaipur International Airport Limited is covered in clause 4 of schedule II of CGST Act viz-a-viz RSGST? - HELD THAT:- Concession Agreement dated 16.01.2021, AAI has only transferred its Jaipur Airport business to the M/s AJAIL (SPV) but its other business are not transferred AAI through this Concession Agreement, hence AIA has not ceased to be a Taxable person and for other business the AAI is a taxable person and registered under GST - Schedule II (4) CGST Act stipulates whether the transactions with respect to Transfer of Business Assets to be treated as supply of Goods or supply of services. Having gone through the subject Contract, we find the subject business arrangement is transfer of going concern . As such, there are no merit to vivisect the subject Contract and examine the treatment of aeronautical assets/ non aeronautical assets/ other business assets in the Contract entered between AAI and SPV - the transfer of business by Airports Authority of India to M/s AJAIL (SPV) is transfer of a going concern and the same is not covered in clause 4 of schedule II of CGST Act. Whether the transfer of business by M/s. Airports Authority of India to M/s. Adani Jaipur International Airport Limited is covered under the Entry No. 2 of the exemption notification No 12/2017 Central Tax (Rate) dated 28-06-2017? - HELD THAT:- In exercise of powers conferred under Section 11(1) CGST Act, the Central Government has issued Notification 12/2017-CT(R) dated 28-6-2017, wherein at serial no. 2 of said Notification, reads the description of service as Services by way of transfer of a going concern, as a whole or an independent part thereof . The transfer of business is service thus, services by way of transfer of a going concern, is Transfer of a going concern service - business is service and transfer of a going concern is supply of service. Whether the concession fees paid by M/s. Adani Jaipur International Airport Limited to M/s. Airports Authority of India be treated as consideration for transfer of business? - HELD THAT:- Consideration for Services by way of transfer of a going concern may be as per the terms and conditions of the Contract and there is no restriction on consideration being upfront/ one time/ in installments. Concession fees is payable by SPV to AAI during the concession period, calculated on a formula based on passenger footfall. The same is part of consideration for transfer of business assets. Whether GST is applicable on Monthly/Annual concession fees charged by the Applicant on the M/s. Adani Jaipur International Airport Limited? If yes at what rate? - HELD THAT:- The monthly/annual concession fees is also part of consideration for Services by way of transfer of a going concern and exempted from GST vide entry no. 2 of Notification No. 12/2017-CT dated 28.06.2017. Whether GST is leviable on the invoice raised by the Applicant for reimbursement of the salary/ staff cost on M/s. Adani Jaipur International Airport Limited? If yes at what rate? - HELD THAT:- The points of agreements that payment of salary or emoluments of staff is onus of applicant i.e. AAI. The M/s. Adani Jaipur International Airport Limited (SPV) from paying emoluments to the manpower which is engaged in providing their services in operation of the airport and this manpower can demand or and will receive their emoluments from the AAI only. Further, AAI will receive interest on delayed payment of reimbursement - in light of condition the emoluments received by the AAI form a part of services by transfer of outgoing concern, it seems the supply of manpower services by AAI to the M/s. Adani Jaipur International Airport Limited (SPV). Thus, it is clear that the employees of AAI may opt or may not opt for employment under the SPV and there may be circumstances in which they do not receive employment offers or they continue their services with the AAI and in this condition they will be redeployed by the AAI and removed from the airport which will be managed and operated by the SPV. Thus there is no case for exemption on the reimbursement of emolument of employees to the AAI as services of manpower supply is provided by one distinct entity to another distinct entity where transfer of business as a going concern is not a precondition nor this supply of manpower services is a corollary to the agreement for transfer by outgoing concern for the operations management and development of the airport - the invoice raised by the Applicant for reimbursement of the salary/ staff cost on M/s. Adani Jaipur International Airport Limited is falls is a consideration for supply which falls under the ambit of manpower service and hence taxable @ 18%. not for supply of transfer of business as a going concern. Reimbursement of municipal tax, property tax and water charges - HELD THAT:- The reimbursement of municipal tax, property tax and water charges has occur in light of the terms of Concession Agreement dated 16.01.2021 and falls under the Supply of Transfer of Going concern Service , which is exempt from GST. Reversal of ITC under section 17 (2) / (3) of CGST Act viz-a-viz RGST Act - HELD THAT:- AAI is providing services by way of transfer of a as a going concern which is exempt supply in light of Sl.No. 2 of Notification 12/2017 of CGST Act 2017 Further, as per sec. 17 read with rule 42 of CGST Rules, 2017, in case any registered person is having any exempted supplies, then ITC pertaining to such exempted supplies shall be reversed proportionately.

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• Income Tax

• 2023 (4) TMI 958
  Reopening of assessment u/s 147 - Change of opinion - reasons to believe - excess claim of bad debts - Notice issued beyond a period of four years - HELD THAT:- This re-opening is sought for is on the basis of assessment record itself, which assessment record undisputedly consist of the explanation about excess claim of bad debts and this re-opening is not on the basis of any fresh tangible material from what was forming part of assessment proceeding itself and as such in view of this when there is no fresh tangible due material distinct from what was very much available, the re-opening in such circumstance is impermissible as is well propounded in case of Shanti Enterprise [ 2016 (9) TMI 1614 - GUJARAT HIGH COURT] Case on which undisputedly notice for re- opening is issued beyond a period of four years and in the absence of any fresh tangible material and during the course of assessment the specific questions have been raised, which is already indicated above, and the answers and explanations were put-forth for consideration and scrutiny during the assessment proceedings and despite such material available on hand, the AO has not thought it fit to make any addition with regard to aforesaid claim and as such when the material was very much available and accepted by the Assessing Officer while passing the assessment order now to re- open that issue again is appearing to be based upon change of opinion and in view of law laid down by the Court in case of Premium Finance Pvt. Ltd. [ 2016 (9) TMI 706 - GUJARAT HIGH COURT] and Gujarat State Board of School Texbooks [ 2016 (10) TMI 775 - GUJARAT HIGH COURT] such change of opinion cannot formed on the basis of re-opining of assessment No re-opening is permissible merely on the basis of change of opinion. Decided in favour of assessee.

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• 2023 (4) TMI 957
  Reopening of assessment u/s 147 - Maintainability / entertainability of writ petition - According to the respondents, first respondent had passed assessment order u/s 144 read with Section 147 and such draft assessment order is subject to the provisions of Section 144C - HELD THAT:- An elaborate procedure is laid down in Section 144C of the Act. Assessing officer is under a mandate to forward a copy of draft order to the eligible assessee, whereafter the eligible assessee would have the opportunity to file objection. In the event objection is filed, the Dispute Resolution Panel shall issue directions to the assessing officer for his guidance to complete the assessment after considering, amongst others, the objections filed and evidence furnished by the assessee. The Dispute Resolution Panel has also the liberty to make further enquiry if it considers necessary. But before issuing such direction, the Dispute Resolution Panel shall have to provide an opportunity of hearing to the assessee if such directions are prejudicial to the interest of the assessee. As we have seen, the Dispute Resolution Panel is a high powered body comprising of three very senior officers of the Income Tax Department. The Dispute Resolution Panel is constituted by the Central Board of Direct Taxes. The eligible assessee, in this case the petitioner, has an effective remedy provided by the statute itself for ventilation of its grievance. Power of the High Court under Article 226 of the Constitution of India cannot be fettered by any statutory limitation, it being a constitutional power. The exceptions carved out are absent. Contentions raised by the first respondent that petitioner did not disclose fully and truly all material facts necessary for assessment and as a result, there is escapement of income from assessment for the assessment year 2011-2012, cannot simply be brushed aside. In such a case, it would be just and proper if the procedure prescribed under the statute is followed, in which event, petitioner would have all the opportunities and remedies to present its case. The present is not a fit case for invoking the writ jurisdiction under Article 226 of the Constitution of India and interdict the reassessment proceedings without allowing it to be proceeded as per procedure laid down under the law. However, since we have refused to entertain the writ petition on the point of statutory remedy available to the petitioner, we refrain from expressing any opinion on merit. Therefore, any observations made while coming to the aforesaid conclusion are only in the context of the present decision. Accordingly, all contentions are kept open.

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• 2023 (4) TMI 956
  Reopening of assessment u/s 147 - unexplained investments under Section 69 - initiating penalty proceedings under Section 271(1)(c) - assessee had neither filed any return of income nor offered any income for taxation in respect of the transaction regarding purchase of immovable property, the assessee had not replied to the notices issued under Section 142(1) - HELD THAT:- Petitioner did file a return of income in response to the notice issued under Section 148 of the Act and had also furnished appropriate responses and material pursuant to the notices issued under Section 142(1) by the Jurisdictional A.O.. After the case of the Petitioner was transferred to the A.O. of Ward 3(3)(1), Mumbai dealing with the international taxation, the information which was already sought for and submitted, was called yet again. Revenue has not been successful in satisfying us as to whether the information which was required to be furnished pursuant to the notices issued by the A.O. of Ward 3(3) (1), Mumbai, dealing with the international taxation was not already on record and if it was then the same ought to have been considered. An inadvertent error committed by the Petitioner in reflecting that the return of income had been filed under the category u/s 119(2)(b) instead of selecting the option u/s 148 could have been treated to be a return validly filed by invoking the provisions of Section 292B of the Act especially when the Petitioner claims that the mistake was brought to the notice of the concerned A.O. at the appropriate stage. Matter requires to be reconsidered by the concerned A.O. by treating the return of income filed by the Petitioner as a return of income filed in terms of the notice under Section 148 of the Act and treat the said return as valid. We also direct that the material on record be considered and if there is any other information which is required by the A.O. the same may be called for specifically from the Petitioner. Fresh orders be passed in accordance with law preferably within three months from today.

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• 2023 (4) TMI 955
  Condonation of delay in filing income tax return u/s 119(2)(b) for the assessment year 2021-2022 - As stated that because of COVID-19 pandemic, financial condition of the petitioner was severely affected because of which it could not file the income tax return within the due date - HELD THAT:- We are of the view that it is a case of genuine hardship on the part of the petitioner which prevented it from filing the return and the related form within the due date. Besides, the delay is of only about fifteen days time. That being the position, we feel that present is a fit case where CBDT may exercise its discretion under clause (b) of sub-section (2) of Section 119 of the Act and do the needful. Accordingly, we direct respondent No.3 CBDT, to consider the grievance of the petitioner and thereafter pass appropriate order under Section 119(2)(b) of the Act regarding condonation of delay in filing the return of income for the assessment year 2021-2022 along with Form 10-IC of the Act. Let the above exercise be carried out within a period of two months from the date of receipt of a copy of this order.

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• 2023 (4) TMI 954
  Reopening of assessment u/s 147 - Exemption u/s 54EC - HELD THAT:- Notice for reopening and the grounds on which it was rested, were without supported by any foundational facts. When the return of income was filed and all the relevant details including the share in the sale proceeds, the basis of the details of exemption claimed under section 54EC, the index cost etc. were shown, there was nothing to doubt the said details which figured in the return of income, which was processed. The submission that the co-owners showed the capital gains of different amount, is also not a valid ground since the facts and computation in case of each assessee in respect of return of income would differ. Petitioner assessee showed all facts and details in the return of income. Neither there existed foundational facts, nor it could be said that any tangible material was available with the assessing officer to justify exercise of power. It could be said that the basis for reopening was absent. When the foundation was missing, there could not have been erection of ground to seek reopening of assessment. It could not be said, in the facts of the case, that the assessing officer could have harboured a reason to believe acceptable in eye of law to seek reopening. Decided in favour of assessee.

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• 2023 (4) TMI 953
  Reopening of assessment u/s 147 - Non furnishing the reasons for reopening to the assessee - Petitioner was informed that a return of income tax ought to be filed first whereafter only the reasons for reopening would be furnished - HELD THAT:- As per the ratio of the judgment of the Apex Court in GKN Driveshafts (India) Ltd. [ 2002 (11) TMI 7 - SUPREME COURT ] after the issuance of notice under Section 148 of the Act, the noticee is required to file a return if he so desires and to seek reasons for issuing the notice under Section 148 of the Act. The A.O. is then bound to furnish the reasons within a reasonable period of time to which the noticee is entitled to file objections. There have been a plethora of judgments reiterating the importance of furnishing the reasons for reopening to the assessee so that the assessees in appropriate cases bring to the notice of the A.O. facts which could persuade the A.O. to drop the reassessment proceedings on the ground that the reopening was not warranted based upon issues of facts or of law of which the A.O. was either ignorant of or had entertained misconceptions regarding the same. It can be seen from the facts narrated hereinabove that after receipt of notice under Section 148 of the Act, by the Petitioner, there was some delay in filing the return. Petitioner had consistently requested the A.O. to furnish the reasons for reopening, which admittedly were never provided to the Petitioner. In the present case therefore failure on the part of the A.O. to furnish reasons recorded for purposes of reopening the assessment does make the order of assessment unsustainable in law. We allow the present petition. The order of assessment and notice of demand as also the notice under Section 148 are set aside.

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• 2023 (4) TMI 952
  CIT (Appeals) power to enhance the original assessment - Non issuing a show cause notice / opportunity of hearing, as mandated u/s 251(2) - HELD THAT:- We find merit in the submission that the appellant / assessee was entitled to put to notice before enhancing the cash in hand, by the Commissioner (Appeals). We, accordingly, answer the first question in favour of the assessee, and against the Revenue. The matter is remanded to the Commissioner (Appeals) for rehearing of the appeal on the aforesaid issue.

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• 2023 (4) TMI 951
  Revised return of income in terms of the scheme of amalgamation approved by the NCLT - Assessment of income post-amalgamation - Period of limitation for revision of return expired - filing of modified return of income following business reorganization in terms of Section 170A - HELD THAT:- Scheme of amalgamation was approved and sanctioned by the NCLT after the due date of filing the revised return for the assessment year 2016-2017. Supreme Court referred to the provisions of Section 139(5) of the Act and opined that the said provision would not be applicable in a case where revised return could not be filed on account of the time taken to grant sanction to the scheme of amalgamation by NCLT. Section 139(5) of the Act deals with filing of revised return within a period of one year upon discovery of an omission or wrong statement made in the initial return of income. Supreme Court also referred to Section 170 of the Act and held that it is incumbent upon the Income Tax Department to assess the total income of the successor company in respect of the previous assessment year after the date of succession. Income Tax Department is required to assess the income of the successor company after taking into account the revised return filed after amalgamation of the company. In the facts and circumstances of that case, Supreme Court directed the Income Tax Department to receive the revised return of income for the assessment year 2016-2017 filed by the appellants therein and to complete the assessment for the said assessment year after taking into account the scheme of amalgamation as sanctioned by the NCLT. Upon thorough consideration, we are of the view that the decision of the Supreme Court in Dalmia Power Limited [ 2019 (12) TMI 991 - SUPREME COURT ] is squarely applicable to the facts of the present case. It is because of circumstances beyond the control of the petitioner that the revised return could not be filed before the due date. However, under Section 170A of the Act, Income Tax Department is obligated to assess the total income of the assessee of the previous assessment year post-amalgamation.

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• 2023 (4) TMI 950
  Revision u/s 263 - assessee has made purchases in cash in contravention of the provisions of section 40A(3) - HELD THAT:- Tribunal has rightly observed that there was an audit objection by the Internal audit party. It is apparent from the audit objection filed the selection of the scrutiny in case of the assessee was also only on the parameters of AIR information. According to para number 2 (il) the scope of enquiry should be limited only on that aspect only. In such cases, the assessing officer are also directed to confine themselves by questionnaire only to the specific issues pertaining to AIR data and further the wider scrutiny in those cases can only be conducted as per the guidelines and procedures stated in Instruction number 7/2014. According to us when the learned assessing officer was not required to enquire on those issues such as purchases in cash more than specified sum, the learned CIT was not correct in holding that the learned assessing officer has not made due inquiries on that ground as the verification of the purchases exceeding specified limit in cash was not an issue before the assessing officer. Naturally, he should not have made any enquiry on that aspect. Even though the learned assessing officer has raised the specific questions on that aspect and verified the requisite detail. The order passed by the Tribunal has been passed after going through the entire record in detail. No substantial question of law.

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• 2023 (4) TMI 949
  Penalty u/s 271(1)(c) - furnishing inaccurate particulars of income for unexplained unsecured loan - assessee is seeking for adjournment on the ground that the rectification application made is pending with the CIT(A) in respect of the quantum appeal decided by him while passing his order requesting him to give decision on the ground of appeal remained to be decided - HELD THAT:- CIT(A) was of the opinion that the impugned addition with respect to which penalty has been levied has attained finality by virtue of the order passed by the Tribunal and therefore, the application u/s 154 against the CIT(A) s order contending that some grounds have not been decided by the CIT(A) lacks merit. The same has no relevance to the appeal proceeding against the penalty order based on addition sustained by the Tribunal. Such contention made by the assessee, therefore, has been rejected by the FAA in the order impugned before us. The decision on the issue out of which the penalty proceeding has been initiated has already attained finality by virtue of order passed by the ITAT [ 2012 (10) TMI 1119 - ITAT RAJKOT] which is reflecting at paragraph 6 of the order passed by the ITO in imposing penalty. Therefore, asking for adjournment on the plea of rectification application pending before the Ld. CIT(A) seems to be frivolous and misleading, thus, rejected. Assessee s appeal is dismissed. Genuineness of cash credit has been disproved even during the appellate proceeding - Taking into consideration the entire aspect of the matter, the confirmation of the order of penalty passed by the Ld. CIT(A), on the fact of addition u/s 68 of the Act by invoking Section 271(1)(c) by the CIT(A), in our considered opinion, is, therefore, found to be just and proper so as to warrant interference. Assessee s appeal is dismissed.

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• 2023 (4) TMI 948
  Approval u/s 80G - application of the assessee was rejected by Ld.CIT(Exemption) by making various observations and drawing adverse conclusion about the accounts of assessee society - HELD THAT:- CIT(Exemption) has given a specific finding regarding accounts of the assessee society which gives a distorted picture and does not inspire confidence about the genuineness of the activity of the assessee society. The assessee society is under legal obligation to satisfy the CIT(Exemption) about the genuineness of its activity. CIT(Exemption) has given finding regarding two sets of accounts related to donation being maintained by the assessee. In the absence of any rebuttal by the assessee society, we do not see any reason to interfere in the findings of authorities below, the same is hereby affirmed. Grounds raised by the assessee in this appeal are hence, dismissed.

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• 2023 (4) TMI 947
  Revision u/s 263 - assessment u/s 153A completed - Deemed dividend addition u/s 2(22)(e) - assessee is a beneficial owner of shares holding 12% of the voting power in company granting loan - contradictory views - HELD THAT:- There is also no dispute that nothing incriminating was found to suggest the applicability of the provisions of section 2(22)(e) of the Act. Since no incriminating material was found in relation to the deeming provisions of section 2(22)(e) of the Act, the ratio laid down by the Hon ble Delhi High Court in the case of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] squarely apply We are of the considered view that there are several decisions of the Hon ble High Courts which are in favour of the assessee and some decisions may be in favour of the revenue. This shows that multiple views are possible on the same set of facts. The AO has followed one plausible view and the Pr. CIT is of different view. When two views are possible assumption of jurisdiction u/s. 263 of the Act is unwarranted and bad in law as held by the Hon ble Supreme court in Malabar Industries Company[ 2000 (2) TMI 10 - SUPREME COURT] Respectfully following the ratio laid down by the Hon ble Supreme Court (supra) on the facts of the case in hand we set aside the order of the Pr. CIT framed u/s. 263 of the Act and restore that of the assessing officer dated framed u/s.153A r.w.s. 143 (3) of the Act. Decided in favour of assessee.

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• 2023 (4) TMI 946
  Transfer of capital asset being land - during the year under consideration or in the preceding year - Date of transfer of asset - event of transfer of title - reliance on registered agreement to transfer the impugned property - HELD THAT:- As relying on BALBIR SINGH MAINI, CS ATWAL [ 2017 (10) TMI 323 - SUPREME COURT] Transaction of transfer of the immovable property is completed when the title deed is registered as per registration Act, 1908, after amendment in 2001. There is no dispute in the case in hand that the sale deed transferring the title of the land in question was registered on 22.02.2010 and therefore, any draft title deed written on a prior date will not change the event of transfer of title vide registered deed. Hence, we do not find any error or illegality in the impugned order of the Ld. CIT(A). Adopting the full value of consideration u/s 50C - assessee has objected the adopting of full value consideration u/s 50C of the Income Tax Act being the Stamp Duty Valuation taken at the time of registration of sale deed - As per the first and second proviso to section 50C(1) the Stamp Duty valuation on the date of agreement if the amount of consideration or part thereto has been received by way of account payee cheques or other electronics mode may be adopted as full value consideration - once the assessee has disputed the adoption of deemed full value of consideration the the AO is bound to refer the determination of the fair market value of the capital asset to the DVO. The issue of determination of fair market value of the land in question is set aside to the record of the AO for fresh adjudication after consideration the objections of the assessee as well as the determination of fair market value by referring to the DVO. Legal expenses claimed as cost of purchase - AO recorded the fact that there was some legal dispute with the respect to the purchase of property and purchase deed was registered on the order of the Court. Accordingly, the AO estimated the expenses at Rs.50,000/- - HELD THAT:- It is manifest from the record that except making a claim of Rs.3 lac as legal expenses regarding the purchase of the property the assessee has not furnished any details of such expenses nor any evidence in support of the said claim. Accordingly, in the facts and circumstances of the case, we find that estimation of Rs.50,000/- made by the AO is reasonable and proper.

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• 2023 (4) TMI 945
  Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of clear charge - HELD THAT:- Perusal of the notice shows that AO has mentioned both the charges in the notice rather than raising a specific charge on the assessee. Such type of notices where specific charges are not leveled against the assessee, are found to be defective by various Hon ble Courts. AO has not specified the default and limb for which the penalty was proposed to be levied. Therefore, the AO has initiated the penalty proceedings for concealment of particulars of income or furnishing inaccurate particulars of income. The AO was not sure about the default of the assessee whether it was concealment of particulars of income or furnishing inaccurate particulars of income.s Necessity of recording satisfaction - Satisfaction recorded by the AO in the assessment order, it does not support the case of the revenue as the AO has stated that the penalty proceedings are initiated for inaccurate particulars whereas in the case in hand when the income was not at all declared in the return of income, then it is a case of concealment of particulars of income and not furnishing inaccurate particulars of income. AO Statement that the assessee has consciously made the concealment by furnishing inaccurate particulars of his income is very vague and mixing up both the default of concealment as well as furnishing inaccurate particulars of income. Therefore, the finding of the AO even in the impugned penalty order passed under section 271(1)(c) is not definite or correct. Decided in favour of assessee.

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• 2023 (4) TMI 944
  Disallowance u/s. 14A r.w.r. 8D - suo motto disallowance made by the assessee - HELD THAT:- It is settled proposition of law that disallowance under section 14A read with Rule 8D cannot be more than the exempt income earned by the assessee. In the instant case the assessee has suo-moto disallowed an amount u/s 14A r.w.r. 8D which is more than the dividend income earned by the assessee. This issue has successfully been decided by cases of HSBC Invest Direct (India) Ltd. [ 2019 (2) TMI 731 - BOMBAY HIGH COURT ] and Nirved Traders Pvt Ltd [ 2019 (4) TMI 1738 - BOMBAY HIGH COURT ], Oil Industry Development Board [ 2019 (3) TMI 1571 - SC ORDER ] and State Bank of India [ 2018 (11) TMI 1565 - SC ORDER ] that disallowance u/s 14A should be restricted to amount of exempt income of assessee only and not a higher income. Decided in favour of assessee.

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• 2023 (4) TMI 943
  Assessment u/s 143(3) instead of section 153A - disallowance to 10% of the claim out of foreign travel expenses of the directors - Whether action of the assessing officer of making assessment u/s 143(3) instead of section 153A since the satisfaction note was prepared by the Assessing officer on 29/01/2014, which became the substituted date of search u/s 153C of the Act and the AY 2013-14 fell within the six preceding assessment years, i.e., from AY 2008-09 to 2013-14 for the purpose of assessment u/s, thus, the assessment framed u/s 143(3) is not legally valid and should be annulled? - HELD THAT:- We have gone through the decision of Delhi E Bench of the Tribunal in assessee s own case in [ 2020 (1) TMI 725 - ITAT DELHI] whereby the orders of the authorities below have been set aside and the assessment order passed under section 143(3) of the Act has been quashed We hold that the impugned assessment order is illegal and bad in law and is not sustainable in law. Accordingly, the orders of the Ld. AO/CIT(A) are set aside and the assessment order passed by the Ld. AO under section 143(3) of the Act is hereby quashed - Appeal of the assessee is allowed.

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• 2023 (4) TMI 942
  Accrual of income in the hands of dissolved partnership firm - Interest accrued for the period subsequent to dissolution - AR submitted that interest cannot be assessed in the hands of the assessee being a partnership firm which dissolved - HELD THAT:- Form 26AS reflects the receipt of interest by the assessee firm from ING Vysya Bank Ltd. on which the bank has deducted tax at source. It shows that the bank has credited the entire amount of interest of the year in the account of the assessee partnership firm in whose name the accounts stand in the books of the bank. CIT(A) has recorded a finding of fact that the fixed deposit in the bank continued in the name of the firm and interest income was received for the entire previous year and utilised by the firm. This finding has not been controverted by the Ld. AR. Section 189 mandates that where a firm is dissolved the AO shall make an assessment of the total income of the firm as if no such dissolution had taken place and all the provisions of the Act including the provisions relating to levy of a penalty or any other sum chargeable under any provisions of this Act shall apply to such assessment. It is thus obvious that section 189 keeps the firm alive for the purposes of assessment despite its dissolution. It ensures that the firm which is dissolved does not escape the liability to tax after its dissolution - No substance in the argument of the Ld. AR that the entire amount of interest received by the firm during the previous year cannot be assessed in the hands of the assessee firm - Decided against assessee. Assessment u/s 153A - Search under section 132 - whether no incriminating material has been found/seized during search? - AR did not advance any arguments in order to refute the findings of the Ld. CIT(A). It is not in dispute that the assessee had not filed its original return for AY 2016-17 under section 139(1) of the Act leading to the legitimate legal inference that the entire income pertaining to AY 2016-17 would be regarded as undisclosed income in a case where search under section 132 of the Act has been conducted. In such a scenario, in our view the CIT(A) has rightly held that the Ld. AO would get the jurisdiction to assess the entire income similar to that in regular assessment u/s 143(3) of the Act as assessment for AY 2016-17 is unabated. We endorse the finding of the Ld. CIT(A) and decide ground No. 1 against the assessee.

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• 2023 (4) TMI 941
  Rectification of mistake u/s 254 - Validity of Revision order u/s 263 without mentioning DIN - manual order upload functionality, a DIN is generated and such manual order is communicated to the concerned assessee automatically through registered email along with a DIN intimation letter - Non satisfaction of compliance requirement of the CBDT circular - order under section 263 is passed manually and its body does not contain DIN nor any notation in the prescribed format that it is issued manually without quoting DIN by obtaining prior approval of Chief Commissioner/Director General - HELD THAT:- On a specific query by the Bench to the ld. Senior DR to point out how a DIN intimation letter along with the manual order as explained by ld. CIT(Exemption) in his reply fulfils the categorical requirement mandated by CBDT circular in its para 2 that the body of the communication (order u/s 263 in the present case) must contain the fact that the communication is issued manually without a DIN and the date of obtaining of the written approval of the Chief Commissioner/Director General of Income-tax for issue of manual communication in the prescribed format, nothing was placed to substantiate the same. Revenue has sought to rectify the order by submitting in its miscellaneous application that the DIN Number has been generated on 3103/2021 while passing the order . We understand that powers u/s 254(2) are limited only to rectify/correct any mistake apparent from the records. We do not find any mistake apparent from record in the order passed by the Bench, more particularly when nothing could be brought on record by the Revenue on specific queries made by the bench in reference to compliance requirements mandated by the CBDT circular no. 19/2019 dated 14.08.2019. Accordingly, miscellaneous application by the Revenue is dismissed.

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• 2023 (4) TMI 940
  TDS u/s 194C - disallowance u/s.40(a)(ia) - Additions u/s 68 - CIT(A) deleted the additions - payment made to the transporters being freight and transport charges - information to be furnished - to whom - prescribed authority not nominated - HELD THAT:- the provisions as provided under subsection (6) and (7) to section 194C of the Act are independent to each other and therefore they cannot be read in conjunction. In other words, non-compliance of the provisions of sub-section (7) to section 194C of the Act, the claim of the assessee cannot be denied as there was the compliance on the part of the assessee for the provisions as provided under subsection (6) to section 194C of the Act. - Decided in favor of assessee. Additions u/s 68 - Cash Credit - admission of additional evidence - HELD THAT:- The learned CIT-A called for the remand report from the AO who did not doubt on the genuineness of the details furnished by the assesse but only contended that the document should have not been admitted by the learned CIT-A as there is contravention to the provisions of rule 46A of Income Tax Rule. However, on perusal of the grounds of appeal raised by the Revenue, we note that there is no grievance to the Revenue that the learned CIT-A erred in admitting the additional evidences. Accordingly, we hold that there was no contravention of the provisions of rule 46-A of Income Tax Rules as alleged by the AO in the remand report. - Decided in favor of assessee.

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• 2023 (4) TMI 939
  TDS u/s 195 - Disallowance u/s 40(a)(i) - assessee had paid professional fee to various overseas entities without withholding tax at source - payment made to a German entity - Reliance on preceding assessment years - Assessee submitted that the payments made are taxable at the hands of the overseas entities as profit of business and profession - CIT-A observed payment made is consultancy services, hence, has to be treated as FTS under Article 12(4) of India-Germany DTAA - HELD THAT:- On careful reading of the provisions relating to Independent Personal Services in treaties considered by the Tribunal in the preceding assessment years in contrast to Article 14 of India- Germany Treaty, we find a marked difference. While, in all other treaties considered Articles governing Independent Personal Services refer to both individual and partnership firm, however, Article 14 of India- Germany Treaty is quite restricted in its scope as paragraph 1 of Article 14 refers only to income earned by an individual. Decisions of the Tribunal in preceding assessment years would not apply, qua, the payment made to a German entity, which no doubt, is a partnership firm. Therefore, the assessee cannot take the benefit o Article 14 of India-Germany Treaty. Whether the payment made can be treated as FTS under Article 12(4) of the India-Germany Treaty?- From the nature of services for which payment was made, it can very well be said that neither it is managerial, nor technical nor consultancy services. Even, AO has admitted that it is in the nature of professional fee. Thus, undoubtedly, payment made by the assessee to CA firm is for professional services rendered. The fact that payment made for professional services will not fall within the definition of FTS under Article 12(4) of the treaty is evident from putting it under Article 14 of the treaty, though, it applies to Individuals only. Once the payment does not fall either under Article 12 or Article 14, in absence of any other provision in the treaty specifically dealing with such payment, it has to be treated as business profit at the hands of the recipient. Thus in absence of a PE or fixed base, the payment is not taxable at the hands of the recipient. That being the case, there was no obligation on the assessee to withhold tax at source on such payment. Therefore, we delete the disallowance made u/s 40(a)(i) - Assessee appeal is allowed.

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• 2023 (4) TMI 938
  Unexplained money u/s. 69A - deemed income - Receipts on account of booking of flats as income from undisclosed sources, by concluding that the percentage of completion method is not applicable and therefore, assessed the amount on receipt basis in the respective years, in which have been received - HELD THAT:- Commissioner categorically held that section 69 is not applicable to the instant addition. In fact, the income from unaccounted/undisclosed business transactions is to be treated on different footings and taxed under the head income from other sources . Commissioner also held since the amount was not recorded in the books, it did not form the part of the Revenue Receipts of the Assessee. The amount was enjoyed by the Assessee on receipt basis and never recorded in the regular books of accounts, therefore, the amount has to be taxed on receipt basis and not on the basis of POC method. No reason and/or material to contradict the findings recorded by the ld. Commissioner in taking into consideration the peculiar facts and circumstances of the case and the relevant provisions of law as applicable to the issue in hand, hence we are inclined not to interfere in the decision of the Commissioner in holding the amount as taxable u/s. 56 of the Act under the head other sources . As we have already upheld the addition hence not dwelling into the controversy raised by the Ld. DR to the effects that the ld. commissioner wrongly held that provisions of section 69A of the Act are not applicable. Consequently, Ground No. 1 stands dismissed. Bogus purchases - AO on the basis of the statement made by the third party made this addition - HELD THAT:- The statement of third party was not confronted to person who supplied cement and steel to the Assessee, therefore, adverse statement by third party could not be held against the Assessee. Commissioner further held that it is undisputed that the material was actually used as per the certificate of the Architect and the quantity of purchase and consumption of steel in the projects has not been found to be incorrect or assailed by the Revenue. In these circumstances, it cannot be held that the purchases were bogus or unexplained. Commissioner though deleted the addition under consideration, however, goes beyond by directing the Assessing Officer to make necessary reference to the Assessing Officer of the said two persons/proprietors. The ld. Commissioner directed that adverse inference can be drawn against the Assessee only, if it is established from this inquiry that the purchases were indeed bogus or the material so supplied was not actually consumed. Commissioner thoroughly examined the peculiar facts and circumstances of the case and not only deleted the addition in hand, but also directed the Assessing Officer for taking appropriate actions. Assessee before us did not appear inspite of sending notice, hence, failed to substantiate its ground of appeal and even otherwise, we do not find any reason and/or material to contradict the findings of the ld. Commissioner on the issue in hand. As the Assessee got substantive relief on merits, hence, adjudication of the ground under consideration would be academic exercise only. Accordingly, ground No. 2 also stands dismissed. Validity of assessment order passed by AO u/s. 143(3) read with section 153A is illegal and without jurisdiction and the ld. commissioner of Income-tax (Appeals) should have held so - HELD THAT:-The Assessee failed to substantiate the present ground and even otherwise we do not find any infirmity in the decision of the Ld. Commissioner on the issue under consideration, hence Ground no. 3 stands dismissed. Disallowance being 50% of the commission paid as excessive - advance booking received during the year and the commission paid is very high at almost 10% which is against the normal industries norms of 2-3% of total sales - HELD THAT:- Commissioner by thoroughly considering the assessment order and the aforesaid explanation made by the Assessee came to the conclusion that the calculation of the figure of advance from customer is factually wrong and cannot form the basis of any disallowance. Commissioner further held that this could have been clarified, if the issue had been brought to the notice of the Assessee by the AO. The Assessee was never informed of the adverse conclusion reached by the Revenue. The addition made is flawed and is deleted. In our considered view, the ld. Commissioner based his decision on peculiar facts and circumstances of the case and even otherwise we do not find any reason and/or material to contradict the findings of the ld. Commissioner in deleting the addition under consideration. Consequently, ground No. 4 raised by the Revenue Department stands dismissed. Disallowance on account of interest free advance given by the Assessee - HELD THAT:-We observe that the ld. Commissioner by considering the peculiar facts and circumstances and the submissions made by the Assessee and the assessment order, came to the conclusion that the interest free advance given pertains to earlier years. The interest expenditure of the Assessee in this year relates to interest on bank loan for vehicle and other interest which have no direct nexus with the advances given earlier. Therefore, the addition made is unfounded and is deleted. Unexplained loan credit - HELD THAT:- Commissioner by considering the peculiar facts and circumstances that the amount was not borrowed during the year under consideration, but only the repayment was made during the year, as the credit does not pertain to the previous year, no addition can be made in this year. The Assessee has discharged its primary onus of establishing the transaction. No defect is found in the evidences filed by the Assessee. As the confirmations had been filed, reference could have been made to the Assessing Officer of the creditor company for further verification. The addition appears to have been hurriedly made without proper application of law and procedure and cannot be sustained. We observe that the ld. Commissioner duly considered the peculiar facts and circumstances of the case and correctly adjudicated the facts pertaining to the addition under consideration.

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• 2023 (4) TMI 937
  Validity of the assessment order passed u/s 143(3) - alleged failure of the AO in issuing and serving the notice u/s 143(2) of the Act within the prescribed period of limitation - HELD THAT:- It is trite law that intimation issued under Section 143(1) of the Act cannot be treated as an assessment order. There are plethora of judicial precedents propounding the aforesaid legal position. Suffice to say, in case of ACIT vs. Rajesh Jhaveri Stock Broker (P) Ltd. [ 2007 (5) TMI 197 - SUPREME COURT] has laid down the aforesaid ratio. Thus, the contention of learned Authorized Representative, that the revised return of income filed after completion of assessment u/s 143(1) is to be treated as non est, is unacceptable. Revised return of income was filed within the time prescribed u/s 139(5) of the Act, in our view, it is a valid return. Proviso to section 143(2) makes it clear that no notice under Section 143(2) of the Act shall be served on the assessee after expiry of six months from the end of the financial year in which the return is furnished. To my understanding, section 139 used in section 143(2) of the Act is wide enough to include a revised return filed u/s139(5) of the Act. Therefore, the Assessing Officer has time to issue notice before expiry of six months from the end of the financial year wherein the revised return of income was filed. Admittedly, the revised return of income was filed on 10.11.2014. Whereas, the notice under Section 143(2) of the Act was issued on 28.08.2015 i.e. before expiry of six months from the end of the financial year (F.Y. 2014-15) wherein the revised return of income was filed. The notice issued u/s 143(2) of the Act is within the period of limitation - Thus, ground no.1 and additional ground are dismissed.

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• 2023 (4) TMI 936
  Disallowance of leave encashment u/s 43B (1) - On perusing Form 3CD, AO noticed that assessee has shown leave encashment payable but had not disallowed the same in its computation of income - contention of the assessee that during the year under consideration, assessee had make provision for leave encashment but the payments have been made in subsequent years and therefore if the payment is disallowed in the year under consideration, it be allowed as deduction in the year of payment - HELD THAT:- Identical issue arose in the case of group concern of the assessee in the case of TV Today Network Ltd. [ 2021 (12) TMI 1435 - ITAT DELHI] As in view of the contentions of the assessee that the payments of leave encashment has been made in subsequent years, we direct the AO to verify and allow the deduction u/s 43B of the Act being the provision made for leave encashment on actual payment basis in the year of its payment as held in the case of Exide Industries Ltd. [ 2007 (6) TMI 175 - CALCUTTA HIGH COURT] - Ground of assessee is allowed for statistical purposes. Disallowance u/s 14A - Suo moto disallowance - HELD THAT:- Hon ble Delhi High Court in the case of Cargo Motors (P.) Ltd [ 2022 (10) TMI 571 - DELHI HIGH COURT] has held that for purpose of making disallowance of expenses under section 14A as per Rule 8D, only those investments were to be considered for computing average value of investments which yielded exempt income during relevant year. AO was not justified in working out the disallowance on account of administrative expenses u/s 14A r.w. Rule 8D(2)(iii) by computing the average value of investments on the basis of entire investment. We therefore direct the AO and direct him to work out the disallowance u/s 14A r.w. Rule 8D(2)(iii) on considering the investments which have yielded tax free income. We accordingly restore the issue back to the file of AO to rework the disallowance u/s 14A r.w. Rule 8D in accordance with law. This ground of the assessee is partly allowed for statistical purposes.

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• 2023 (4) TMI 935
  Unabsorbed depreciation carried forward - Period beyond 8 Years - AR submitted that unabsorbed depreciation could be allowed to the assessee to be carried forward and set off even after 8 years without any limit in accordance with section 32(2) as amended by Finance Act, 2001 - HELD THAT:- Gujarat High Court in the case of General Motors India Pvt. Ltd. [ 2012 (8) TMI 714 - GUJARAT HIGH COURT ] as held that unabsorbed depreciation from AY 1997-98 up to 2001-02 got carried forward to AY 2002-03 and became part of it came to be governed by the provisions of section 32(2) as amended by the Finance Act, 2001 and were available for carry forward and set off against income of subsequent years without any limit. Decided in favour of assessee. Disallowance of store purchase - assessee could not produce necessary bills/vouchers during the assessment proceedings before the AO - HELD THAT:- Assessee has submitted most of the bills of expenditure before the ld. AO but due to fire in the office of the assessee, balance bills could not be produced at the time of hearing. Besides that the books of accounts were subject to audit at various levels and its final accounts were also audited by Comptroller and Auditor General of India and no adverse comments has been made by such Govt. Authority. In such a situation, disallowance made under the head of store purchases cannot be sustained. Decided in favour of assessee. CIT(A) enhanced disallowance made by AO - enhancement notice u/s 251(1) read with section 251(1)(2) to show cause that if TDS was not deducted - Non deduction of TDS u/s 194C - Disallowance under the head contractual expenses - HELD THAT:- Appellant correctly objected to such notice issued by the ld. CIT(A) stating that it is barred by limitation as no fresh enquiry could be done by the ld. AO since the ld. CIT(A) powers are co-terminus with that of assessing officer and requested for dropping of such proceeding. TDS on such persons were duly deducted at the time of making such payment in the subsequent years and they have filed complete evidence in this regard to prove the fact. As relying on case of Sri Binay Kumar Singh [ 2020 (7) TMI 825 - ITAT KOLKATA] as held that enhancement of fresh issue or new section cannot be made at appellate stage. Therefore, enhancement made by the ld. CIT(A) needed to be set aside. Decided in favour of assessee. Allowability of allowance of grant to schools, IICM expenses and Directors salary/remuneration mentioned u/s 40A(2)(b) - HELD THAT:- We find that the assessee has added these expenses and disallowed while computing its income due to mistake whereas none of these expenditures were to be disallowed as per the Income Tax Act. In our considered view these expenses are to be allowed considering the decision of case of CIT Ranchi vs Central Coalfields Ltd. [ 2012 (11) TMI 1329 - JHARKHAND HIGH COURT ] held that expenditures under the head community development, sports, recreation, game, guest house were allowable revenue expenses which are similar to grant of school. However for verification, we are restoring the issues to the file of the AO.

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• 2023 (4) TMI 934
  Deduction u/s 80-IA(4) denied - return of income was filed beyond due date prescribed u/s 139(1) - return of income so filed was late by one minute - HELD THAT:- We note that in the assessee s case, there is a delay in filling the return of income by one minute only. The Co-ordinate Bench of ITAT, Surat [ 2022 (5) TMI 1536 - ITAT SURAT] on the similar and identical facts, has condoned the delay in filling the appeal for eleven minutes, vide order of Co-ordinate Bench in the case of M/s. Veekay Rayon. We note that delay of one minute in filing of the return was due to technical snags in the website of department, and therefore return could not be uploaded. There is only a negligible delay (one minute only) which is due to bonafide reasons as has explained above, therefore, delay in Filling return of income is hereby condoned. We direct the AO to examine the eligibility of the claim of the assessee and terms and conditions under section 80IA of the Act - Decided in favour of assessee.

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• 2023 (4) TMI 933
  Claim of foreign tax credit (FTC) u/s 90 - belated filling of Form 67 for claiming FTC - Credit for taxes paid in USA on the income earned in USA, which is again taxed in India - claim was rejected by the AO in intimation passed u/s 143(1) on the ground that in terms of Rule 128 of the Income Tax Rules, 1962 the assessee was required to file Form 67 for claiming FTC on or before the due date of furnishing return of income u/s 139(1) - assessee filed Form 67 on 26.10.2019 after the due date of filing the return of income mentioned u/s 139(1) of the Act but before the intimation u/s 143(1) of the Act dated 23.03.2021 HELD THAT:- Rule 128 of the Rules cannot override the provisions of DTAA and impose an additional condition that credit will not be given if Form 67 is not filed on or before the due date of filing the return of income as prescribed under section 139(1) Form 67 for claiming FTC -filing of Form No.67 is only a procedural and directory requirement and not mandatory requirement for claiming credit for foreign taxes paid. Thus as undisputed fact that Form 67 was filed by the assessee prior to the intimation under section 143(1) of the Act issued by the AO on 23.03.2021, the assessee is entitled to credit for foreign taxes paid and the AO is directed to allow the claim of the assessee in this regard. Appeal of the assessee is allowed.

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• Customs

• 2023 (4) TMI 932
  Rejection of revision application - Refund of the duty drawback - opportunity of hearing not provided (audi alterem partem) - violation of principles of natural justice - writing off the unrealised bills in terms of the RBI Circular dated 12.03.2013 - it was also contended that the petitioner was not required to refund the duty drawback in terms of Rule 16A(5) of the Drawback Rules. Principles of natural justice - opportunity of hearing not provided - HELD THAT:- There are no merit in the contention that the impugned order in original was passed in violation of the principles of natural justice. The petitioner was afforded adequate opportunity to be heard. It is not disputed that the hearings were scheduled on 22.05.2016, 25.07.2016 and 28.08.2016. However, the appellant had not appeared on either of the hearings. Recovery of duty drawback - HELD THAT:- The ground now sought to be urged was not urged before the Adjudicating Authority, the Appellate Authority, or the Revisional Authority. The order-in-appeal indicates that the petitioner had challenged the order-in-original dated 17.08.2016 on three grounds. First, that the same was passed in violation of the principles of natural justice as the petitioner was not afforded any opportunity of being heard. Second, that the petitioner had received remittances against most of the Shipping Bills in question but the reconciliation of BRCs with the Shipping Bills was taking some time. Third that receipts were adequately protected by the cover provided by Export Credit Guarantee and the duty drawback was not recoverable in terms of Rule 16A(5) of the Drawback Rules. It was not the petitioner s case that drawback is not an export incentive. The Revision Application filed by the petitioner indicates that the principal ground urged by the petitioner was in terms of Rule 16A(5) of the Drawback Rules, duty drawback is not available. The petitioner also claimed that on a conjoint reading of Rule 16A(5) of the Drawback Rules and the RBI Circular dated 12.03.2013, the petitioner was entitled to write off unrealised portion of the drawback. On plain reading of sub-rule (5) of Rule 16A of the Drawback Rules, it is apparent that duty drawback paid to an exporter is not required to be recovered if three conditions are satisfied. First, that non-realisation of the sale proceeds is compensated by the Export Credit Guarantee Corporation of India Ltd. (ECGC) under an insurance cover; second, that the RBI writes off the requirement of realisation of sale proceeds on merits; and third, that the exporter produces certificates from the concerned Foreign Mission of India about the fact of non-recovery of sale proceeds from the buyer - In the present case, the statement of facts, as stated in the Revision Application filed by the petitioner, does not set out the factual details for claiming the benefit of Rule 16A(5) of the Drawback Rules. It is not disputed that the petitioner has not received compensation from the ECGC. Thus, Rule 16A(5) of the Drawback Rules is not applicable. There are no ground to interfere with the impugned order - petition dismissed.

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• 2023 (4) TMI 931
  Rejection of revision application - Refund of the duty drawback - opportunity of hearing not provided (audi alterem partem) - violation of principles of natural justice - writing off the unrealised bills in terms of the RBI Circular dated 12.03.2013 - it was also contended that the petitioner was not required to refund the duty drawback in terms of Rule 16A(5) of the Drawback Rules. Principles of natural justice - opportunity of hearing not provided - HELD THAT:- There are no merit in the contention that the impugned order has been passed in violation of the principles of natural justice. The petitioner was afforded adequate opportunity to be heard. It is not disputed that the hearings were scheduled on 09.12.2019 and 30.12.2019. However, the appellant admittedly did not appear on either of the two hearings. Recovery of duty drawback - HELD THAT:- The ground now sought to be urged was not urged before the Adjudicating Authority, the Appellate Authority, or the Revisional Authority. The order-in-appeal indicates that the petitioner had challenged the order-in-original dated 11.11.2016/23.11.2016 on three grounds. First, that the same was passed without affording further time to prepare a reply. Second, that the petitioner was entitled to write off unrealised export bills in terms of the RBI Circular dated 12.03.2013; and third, that the penalty cannot be imposed as the export proceeds were not realised for no fault on the part of the petitioner. It was not the petitioner s case that drawback is not an export incentive or that it is not refundable under Rule 16A(5) of the Drawback Rules. The Revision Application filed by the petitioner indicates that the principal ground urged by the petitioner was that in terms of Rule 16A(5) of the Drawback Rules, no recovery of drawback is to be effected. The petitioner also claimed that on a conjoint reading of Rule 16A(5) of the Drawback Rules and the RBI Circular dated 12.03.2013, the petitioner was entitled to write off unrealised portion of the drawback. On plain reading of sub-rule (5) of Rule 16A of the Drawback Rules, it is apparent that duty drawback paid to an exporter is not required to be recovered if three conditions are satisfied. First, that non-realisation of the sale proceeds is compensated by the Export Credit Guarantee Corporation of India Ltd. (ECGC) under an insurance cover; second, that the RBI writes off the requirement of realisation of sale proceeds on merits; and third, that the exporter produces certificates from the concerned Foreign Mission of India about the fact of non-recovery of sale proceeds from the buyer - In the present case, the statement of facts, as stated in the Revision Application filed by the petitioner, does not set out the factual details for claiming the benefit of Rule 16A(5) of the Drawback Rules. It is not disputed that the petitioner has not received compensation from the ECGC. Thus, Rule 16A(5) of the Drawback Rules is not applicable. There are no ground to interfere with the impugned order - petition dismissed.

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• 2023 (4) TMI 930
  100% EOU - diversion of imported/indigenous goods procured duty free - entire edifice built upon wrong calculation on an approximate ratio based on wrong facts - burden to prove the entitlement to an exemption notification - shortage of raw material - Penalties - HELD THAT:- M/s Kansal Texo Tubes (P) Ltd was not a 100% EOU on the basis of the invoices issued under Rule 52(A) and 173(G); we find that learned adjudicating authority has totally ignored the assertion in the show cause notice that M/s Kansal Texo Tubes (P) Ltd was a 100% EOU; learned adjudicating authority has not carried out or got conducted any enquiry to come up such a conclusion - When the very basis of the calculation is wrong, we find that there is no way, such figures and calculation can be upheld. On this point alone, we find that the calculations arrived at by the adjudicating authority are not based on any factual matrix and therefore, are incorrect. To this extent, we are inclined to accept the contention of the Revenue and the submissions of learned Authorised Representative. The learned adjudicating authority has not examined the fact whether the respondent have achieved a positive NFEE and whether the realization for deemed export was in convertible currency in EEFC; we also find that the learned Commissioner has not bothered to verify whether the respondent had any permission granted by the competent authority i.e. Development Commissioner to sell the goods manufactured by the EOU in domestic market - learned adjudicating authority was not correct in extending the benefit of Notification No. 2/95-CE dated 04.01.1995 to the respondents without verifying the relevant facts. In respect of shortage of raw material received during the period from 19.08.2001 to 25.03.2002, learned adjudicating authority appears to have accepted the contention of wrong recording of 4000 kgs in the Form IV Register on the basis of submissions of the respondents. However, it is quite clear in para I(2) on page 5 of show cause notice that such adjustment of 4000 kgs has been resorted to by the respondents twice and therefore, the balance was shown as 22650 kgs instead of 26650 kgs; thus it is found that on this account also, learned adjudicating authority is incorrect in calculation. Penalties - HELD THAT:- The learned Commissioner has imposed penalty only on Shri Vinod Kumar Garg, proprietor of M/s Annchal Export, Ludhiana and dropped penalties on other noticees; it is found that the reason given by the adjudicating authority for not imposing penalties on Shri Harbhajan Singh Sandhu, Shri Sushil Kumar Sharma, Shri Ramesh Kumar Jain etc are also applicable to Shri Vinod Kumar Garg. It was incorrect on the part of the adjudicating authority to hold that Shri Vinod Kumar Garg was hand in glove with Shri Harbhajan Singh Sandhu in the evasion of customs duty by indulging in paper transactions only, while letting of Shri Harbhajan Singh Sandhu himself. Though there is no appeal filed by Shri Vinod Kumar Garg. On looking into the facts and circumstances of the case, imposition of penalty on Shri Vinod Kumar Garg is also not justified. It is reported that Shri Harbhajan Singh Sandhu is no more and therefore, it would not be proper to impose any penalty on Shri Harbhajan Singh Sandhu at this juncture. Regarding penalties not imposed on other noticees, we are in agreement with conclusion of learned adjudicating authority, therefore, while accepting the contention of the department, in so far as duty evasion by M/s Punjab Exports is concerned, we are not inclined to impose any penalties on any other persons. We set aside the penalty imposed on Shri Vinod Kumar Garg also. The appeal is partly allowed confirming the duty of Rs. 5,62,20,888/- against M/s Punjab Exports along with interest and equal penalty; maintaining the redemption fine of Rs. 25 lakhs imposed on M/s Punjab Exports and by setting aside the penalty on Shri Vinod Kumar Garg. Rest of the order of dropping penalties by the adjudicating authority are being left untouched.

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• 2023 (4) TMI 929
  Refund of Customs duties paid at the time of assessment - goods short shipped - Export took place or not - HELD THAT:- It is undisputed that the impugned quantity of 7833 MT did not leave the shores of this country and were not exported. Therefore, to impute realization in terms of contractual obligation for the said quantity not exported per se does not arise. It may be pointed out that the importer paid export duty at a specified rate for the specified quantity of goods under export, and at that very specified rate for the imputed short shipped quantity, they have been refunded the amount of duty, which otherwise was recovered from them at the time of provisional assessment. Since the goods under question were not exported, there is no relevance in bringing into consideration the contractual obligations towards realization of export proceeds, as there are no export proceeds realized for the said 7833 MTs of goods not exported. There is no merit in the present case - the appeal filed by the appellant is dismissed.

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• 2023 (4) TMI 928
  Exemption to High Density Polyethylene (HDPE) - Disallowance of benefit of Notification No. 21/2002-Cus. dated 01.03.2022 - Import of High Density Polyethylene Container 2-2.5% Carbon Black - HELD THAT:- The issue is squarely covered by the decision of Tribunal in appellant s own case M/S PSL LTD VERSUS COMMISSIONER OF CUSTOMS, KANDLA [ 2013 (9) TMI 548 - CESTAT MUMBAI] , and also in another decision in appellant s own case PSL LIMITED VERSUS COMMISSIONER OF CUSTOMS, KANDLA [ 2022 (9) TMI 808 - CESTAT AHMEDABAD] . Similar decision has also been given in the case of RATNAMANI METAL TUBES LTD. VERSUS CC KANDLA [ 2013 (8) TMI 851 - CESTAT AHMEDABAD] . In Ratnamani Metals and Tubes, the Tribunal observed that In the absence of any support for the conclusion that the product imported by the appellant has been chemically modified or it is not known as HDPE in the market, the benefit of exemption under Sr. No. 477 has to be extended to the appellant. The issue is no longer res integra. The appeal is consequently dismissed.

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• 2023 (4) TMI 927
  Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - mis-use of licence to smuggle narcotic drugs and psychotropic substances - impersonation of appellant and filing of papers (offence under section 419 of IPC) - case of the Revenue is that by allowing Ashish to use its credentials, the appellant violated several provisions of the CBLR, 2018 - HELD THAT:- The printouts of the emails annexed as A18 to the appeal do not support the stand of the appellant that the Shipping Bill was filed by the appellant after obtaining approval of the exporter. If that was indeed the case, there was no good reason as to why the appellant had not produced printouts of the emails before the Inquiry officer (as recorded by him). When one is faced with the possibility of the licence being revoked, it is unthinkable that one would not produce the copies of emails which would support one s case. If such emails existed, there was no reason as to why the appellant did not produce them in this appeal and instead produced some communication between emails IDs which, as per the appeal itself, are not the email IDs of either the appellant or the exporter. The appellant tried to mislead by producing irrelevant emails claiming them to be the emails regarding the Shipping Bill dated 17.5.2018 between the appellant and the exporter. Based on the evidence, that the position of the Revenue that the Shipping Bill and other papers were filed by Ashish Sharma using the credentials of the appellant is correct. This is also one of the two contradictory stands taken by the appellant - that Ashish impersonated him. However, according to this stand of the appellant, Ashish impersonated him without his consent and to so impersonate, the credentials of the appellant were not required. When login ID, password and digital signature are required to file papers as Customs Broker in the Customs EDI system, it would be impossible for Ashish or anyone else to do so unless the credentials and the digital signature are provided by the appellant. It is found based on the facts available on record, Ashish Sharma filed the Shipping Bill dated 17.5.2018, using the credentials of the appellant which would not have been possible without the appellant lending his licence to him by providing the login credentials as well as the digital signature. It is true that the appellant was not involved in attempted trafficking of the drugs. Had he been involved, action would have been taken by the police under NDPS Act. It is equally true that the goods were not in the Customs area. It is for this reason, that there is no case under the Customs Act. The only case in this appeal is that the appellant violated CBLR, 2018 and we have found that the appellant violated Regulations 1(4), 10(a), (b) and (d). The appellant attempted to prove that it itself had filed the Shipping Bill and claimed reliance on some emails which, according to the enquiry report, were not produced before the officer. In this appeal, the appellant enclosed some irrelevant emails at Annexure A18 as the correspondence between it and the exporter to support its claim that it had filed the Shipping Bill. The emails which were enclosed do not mention the Shipping Bill number and they were not from or to the email ID of the appellant or the exporter - the revocation of the licence, forfeiture of security deposit and imposition of penalty on the appellant are just and fair and proportionate to the serious nature of the violations by the appellant. The impugned order is upheld and the appeal is dismissed except that no violation of Regulation 10 (e) of CBLR, 2018 is found.

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• Insolvency & Bankruptcy

• 2023 (4) TMI 926
  Liquidation proceedings - settlement dues of Corporate Debtor - locus standi - whether the liquidation proceedings should be allowed to proceed or whether an opportunity with a strict time-frame can be given to the Appellant to settle the dues of the Corporate Debtor in the interest of justice, fairness and equity? HELD THAT:- There is no quarrel over the fact that the Corporate Debtor had taken a loan of Rs.36,59,250/- from ICICI on 30.04.2004 for acquiring the subject property and that the said asset is registered in the name of present Appellant though he was only a co-applicant of the loan. It is also a factual statement that the forensic audit report while estimating the value of subject property at Rs. 4 crore had also observed that the subject property should be transferred to the Corporate Debtor so that Service Tax due could be recovered from sale of the subject property to safeguard the interests of stakeholders particularly the Service Tax Department, Government of India. All the four creditors of the Corporate Debtor in the present case are statutory creditors being government departments. In respect of two statutory creditors, namely, EPFO and Income Tax Department, the amounts due and payable by the Corporate Debtor have been settled by the Appellant and the payments made. A copy of the settlement dated 21.01.2023 submitted to the EPFO office on 27.09.2023 is at Annexure A-2 in Appeal Paper Book No.275 of 2023. As regards, the third statutory creditor namely ESIC, the settlement proposal was placed before the Hon ble High Court of Delhi for taking on record. Thus, prima-facie, the claim of three statutory creditors appears to have been settled and therefore can be considered to have been more or less extinguished. The sole surviving statutory creditor is the Department of GST which undisputedly happens to be the creditor with majority share. Keeping in view that the reserve price for auction of the subject property has been kept at Rs.1.75 crore by the liquidator, while the claim of the GST department is Rs.8.04 crore, prima- facie, it appears that even after liquidation, there is a likely possibility that the dues of this statutory creditor may remain unmet. We are also inclined to accept the contention of the Appellant that there is no material on record to show that visible steps have been taken by the liquidator with the GST department to reduce the interest component on Service Tax/penalty liability of the Corporate Debtor - the Appellant having successfully met the dues of three statutory creditors, there is no reason to deny an opportunity to the Appellant to settle the dues of the fourth statutory creditor. It has also weighed that if the dues of GST Department are also cleared by the Appellant, no useful purpose will be served by pressing ahead with liquidation. Locus standi - HELD THAT:- It has been the contention of the Respondent that the Appellant lacks the authority to offer settlement proposals to the statutory creditors. In support of their contention, they have relied on a judgment in delivered by this Tribunal. In so far as facts of that case is concerned it related to CIRP proceedings and not to liquidation proceedings and thus clearly distinguishable. Thus the ratio are not of help the Respondent in taking the stand that the Appellant has no role to play in settling the dues of the statutory creditors and in discharging the liabilities of the Corporate Debtor - Furthermore, when the present creditors are Govt. Departments which have well laid down mechanism to recover their dues and for this purpose and they have been following up with the Appellant for clearing of liabilities due from the Corporate Debtor, it does not stand to reason for the liquidator to question the locus of the Appellant. For the same reasons, we hold that the Adjudicating Authority has committed an error in rejecting the request of the Appellant to take on record the settlement proposal with EPFO on grounds of locus standi. The liquidator should assume a more positive approach in resolving the distressed position of the Corporate Debtor and not shun the bona-fide efforts being made by the Appellant in this direction to clear the debt of the Corporate Debtor - The e-auction notice published by the liquidator in the newspapers and warrant of attachment of subject property is stayed. In the interim, the Appellant is allowed to settle all dues of the statutory creditors by complying with the directions imposed.

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• 2023 (4) TMI 925
  Restoration of appeal - condonation of delay of 194 days in filing application - sufficient reason for delay was given or not - HELD THAT:- Although, it is not necessary that the Applicant should explain every days delay but there is a huge delay of 194 days in filing of the application for condonation of delay for which the reasons, are not sufficient for the purpose of condonation of delay. Therefore, in our considered opinion, the application for condonation of delay i.e IA No. 1215 of 2023 which has though been dismissed because of dismissal of IA No. A41 of 2023 deserves to be dismissed independently. Be that as it may, even if we consider that the application i.e. IA No. A41 of 2023 is duly constituted even then there has been continues lapse on the part of the Appellant in perusing the applications before the Adjudicating Authority and for that matter there is no error committed by the Adjudicating Authority in passing the impugned order - Insofar as, the decision relied upon, in the case of RAFIQ AND ANOTHER VERSUS MUNSHILAL AND ANOTHER [ 1981 (4) TMI 255 - SUPREME COURT ], is concerned, there is no dispute about it but each case has to be decided on its own facts and the facts of this case are such in which discretion for the purpose of restoration of the application by recalling of the order dated 27.02.2023, cannot be exercised. Appeal dismissed.

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• Service Tax

• 2023 (4) TMI 964
  Maintainability of fresh proceedings for assessment or recovery of service tax under Chapter-V of the Finance Act - Chapter-V of the Finance Act stands omitted - petitioner contends that the proceedings now initiated by issuance of the impugned SCN and the impugned letters are not saved under Section 174 of the CGST Act - HELD THAT:- It is apparent from a plain reading of Section 174(2) of the CGST Act that the amendment to the Finance Act by omission of Chapter-V of the Finance Act would not affect the operation of the amended Act (Finance Act) and it would also not affect any obligation or liability accrued or incurred under the Finance Act - Clause (d) of Section 174(2) of the CGST Act also expressly provides that the amendment to the Finance Act would not affect any duty, tax, surcharge, fine, penalty or interest as due or may become due under the amended Act. Thus, on a plain reading of Section 174 of the CGST Act, it is clear that the obligation of the petitioner to pay the service tax due in respect of the Financial Years 2014-15 to 2017-18 (April June) is not affected in any manner by the omission of Chapter-V of the Finance Act by enactment of Section 173 of the CGST Act. In VIANAAR HOMES PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER (CIRCLE-12) , CENTRAL GOODS SERVICES TAX, AUDIT-II, DELHI ORS. [ 2020 (11) TMI 150 - DELHI HIGH COURT] , this Court had rejected the contention that Rule 5A of the Service Tax Rules, 1994 did not survive the omission of Chapter V of the Finance Act in respect of the period prior to the enactment of the CGST Act. Any legal proceeding for enforcement of a right would be unaffected by the repeal of the statute. However, any hope or expectation of acquiring a right under a repealed provision may be affected. In the present case, there is no dispute that the impugned SCN was issued in exercise of the duty to ensure compliance with the provisions of Chapter-V of the Finance Act. As stated above, the petitioner has an obligation to correctly pay the service tax under Chapter-V of the Finance Act and the proceedings initiated by the impugned SCN are merely to ensure discharge of the said obligation. Petition dismissed.

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• 2023 (4) TMI 924
  Classification of Service Tax - Erection, installation and Commissioning service - laying of underground cable providing three phase earthing box and providing connected accessories - eligibility for concessional exemption in terms of notification no. 1/2006-ST dated 01.03.2006 - HELD THAT:- This tribunal considering the identical facts held in ROYAL ELECTRICALS VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2017 (11) TMI 298 - CESTAT MUMBAI] that laying of cable, shifting of cable for the purpose of widening, renovation of roads, etc is not taxable. This identical service of laying of cable was also considered by this tribunal in COMMISSIONER OF C. EX. S.T., JAIPUR-II VERSUS RISHABH TELELINKS [ 2017 (4) TMI 647 - CESTAT NEW DELHI] wherein, the tribunal relying on the CBEC Circular No. 123/05/2010- ST dated 24.05.2010 held that the laying of cable is not liable to service tax, in the said case the revenue s appeal was dismissed. The activity of the appellant that is pre-dominantly laying of underground cable is not eligible to service tax - Appeal allowed.

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• 2023 (4) TMI 923
  Levy of Service Tax - Cosmetic or Plastic Surgery (as per Show Cause Notice) / Bariatric Surgery (as per the Appellant) - Business Support Service - Renting of Immovable Property - HELD THAT:- It is seen that the same amount has been paid by the Appellant by valuing the service as inclusive of Service Tax. In the absence of any evidence that the invoices were clearly showing the amount collected was inclusive of Service Tax, this submission cannot be accepted - Appellant are required to pay Service Tax on the full value of Rs.2,50,000/- received by them. The Department should verify the already paid amount and the Appellant should pay the balance amount and pay the interest on the entire Service Tax amount along with equal amount of penalty. Business Support Service - reverse charge mechanism - HELD THAT:- The Appellant is not in a position to provide any documentary evidence to the effect that the service provided by them was liable for Service Tax by their client on Reverse Charge Mechanism basis. Therefore, the confirmed demand of Rs.1,27,308/- along with interest and penalty thereon stands confirmed and their Appeal stands rejected to this extent. Cosmetic/ plastic surgery - HELD THAT:- The issue is no more res integra and this issue is squarely covered by the decision of the Delhi Bench in the case of M/S. MOHAK HI TECH SPECIALITY HOSPITAL VERSUS PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, INDORE MP [ 2020 (11) TMI 152 - CESTAT NEW DELHI] . The Tribunal has dealt with an identical issue in this case and has considered the activity involved in detail in respect of Asian Bariatrics, Rajkot. In that case, the demands are dropped by the Additional Commissioner and this decision was accepted by the Department without any further Appeal being filed - It was held in the case that bariatric surgery performed by the appellant on patients suffering from morbid obesity coupled with life-taking diseases like Type- II diabetes and Hypertension, arthritis, lipid disorder or obstructed sleep apnea or disease of a like nature, cannot not be subjected to service tax under section 65(105)(zzzzk) of the Finance Act - following this decision of the CESTAT Delhi which is on identical issue wherein no further Appeal has been preferred by the Department, as can be observed from the letter issue by the Assistant Commissioner, Indore, the confirmed demand of Rs.2,22,78,812/- on account of cosmetic/ plastic surgery is set aside. Appeal disposed off.

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• 2023 (4) TMI 922
  CENVAT Credit - business support services - taxable service provided or not - invoices were issued without specifying the actual nature of services provided by the dealers - Rule 4A of the Service Tax Rules, 1994 - when the disputed service tax amount has admittedly been paid by the provider of service to the Government exchequer, can the benefit of such tax element be denied to the appellants, as the receiver of such taxable service? HELD THAT:- Sub-rule (1) of Rule 3 ibid is the enabling provision, which entitles a manufacturer or a provider of output service to take Cenvat credit on various duties and taxes paid on any inputs or capital goods received in the factory of manufacture of final product and on any input service received by the manufacturer of final product or by the provider of output service. The Cenvat credit availed as per the provisions of sub-rule (1) ibid, can be utilized for payment of various duties and taxes, itemized in sub-rule (4) of Rule 3 ibid. Further, the documents based on which the credit has to be availed has also been prescribed in Rule 9 ibid - In this case, it is an admitted fact on record that the automobile dealers are registered with the service tax department for providing the taxable services and that the disputed service tax amount was paid by them into the government exchequer. When that is the admitted position, then denial of the benefit of such tax amount as cenvat credit to the appellants as the recipient of such service, cannot be questioned by the jurisdictional service tax authorities. In the present case, the department has mainly proceeded against the appellants for confirmation of the adjudged demands on the ground that no services were provided by the automobile dealers and therefore, Cenvat credit is not available to the appellants, based on the invoices issued by such dealers - Since, the issue regarding payment of service tax and compliance of the statutory provisions, more specifically as contemplated under Rule 4A of the Service Tax Rules, 1994 have not been disputed by the jurisdictional service tax authorities at the service provider s end, in our considered view, the same cannot be questioned or objected to by the service tax authorities, having jurisdiction over the premises of the appellants, as the recipient of such taxable service, at the time when the Cenvat credit of service tax was availed by them. An identical issue came up for consideration by the Hon ble Madras High Court, in the case of M/S. MODULAR AUTO LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [ 2018 (8) TMI 1691 - MADRAS HIGH COURT] where it was held that unless and until the assessment made on BIL was revised, which obviously could have been done, at this juncture, on account of the expiry of the period of limitation, the interpretation given by the Commissioner (Appeals) as well as the Tribunal with regard to the nature of invoice raised on the assesses is unsustainable. It is observed that by placing reliance on the judgement of Hon ble Madras High Court, this Tribunal in the cases relied upon by the learned Counsel for the appellants has held that unless and until the assessment made at the dealer s end is revised or altered, the Cenvat credit availed on the basis of invoices by the recipient s unit cannot denied/whittled down. There are no force in the impugned order, insofar as it has confirmed the adjudged demands on the appellants - appeal allowed - decided in favor of appellant.

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• 2023 (4) TMI 921
  Levy of Service Tax - Joint venture - expenditure incurred by the appellant, in respect of its employees and assets which were deployed for undertaking joint operations at the blocks, where it was acting as the Operator - consideration for rendering taxable services of supplying manpower and as also providing support services - period April 2014 to June 2017? - HELD THAT:- The PSC is a classic example of a public private partnership, where each of the co-venturers contributes to the success of the venture in their own way and work towards enhancing the benefits flowing therefrom. Under the PSC, the Government of India brings on the table the block which could potentially hold crude and/or natural gas, while the technical and financial contribution is made by the PI Holders. There is also a management committee which is constituted comprising of members from the Government of India as also the PI Holders which has to interalia approve the annual work programs as also the budgets for undertaking the same. Further, the profits arising from the venture are to be shared between the Government and the PI Holder in accordance with the pre-defined percentage computed with reference to an investment-multiple on the cost incurred for undertaking the joint operation. This Tribunal has in the case of B.G. EXPLORATION PRODUCTION INDIA LTD. VERSUS COMMISSIONER OF CGST CEX., NAVI MUMBAI [ 2021 (10) TMI 306 - CESTAT MUMBAI] has considered a similar arrangement under another PSC between the Government of India and B.G. Exploration and Production India Ltd., ONGC and the appellant and after taking note of the policy underlying the execution of the PSCs as also the terms and conditions of the same, concluded that there was a joint venture between the GOI and the PI Holders. It is also agreed with the observations of the findings of this Tribunal in the other decision of BG EXPLORATION PRODUCTION INDIA LTD VERSUS COMMISSIONER OF SERVICE TAX (AUDIT-I) MUMBAI [ 2020 (10) TMI 579 - CESTAT MUMBAI] wherein, it has been held that the joint operations undertaken under the PSC does not result in rendition of any service as there is no beneficiary entity outside the PSC to which the joint operation are subordinated. It has been held that the cost incurred towards the employees which has been deployed towards the joint operation is a capital contribution to the venture and not a consideration to the rendition of any service. There is neither any service rendered by the Appellant nor is there any consideration involved in the appellant s deploying its man power and assets for furtherance of the operation of the joint venture - It is not as if the joint venture had specifically for a consideration engaged the appellant to provide manpower. Infact, the appellant had as a co-venturer, in furtherance of the venture as its capital contribution to the venture, deployed manpower and assets for its own benefit and in the furtherance of the venture. This cannot, by any stretch of imagination, be regarded as a service being provided, so as to attract levy of service tax. The demand raised in the impugned order cannot be sustained - Appeal allowed - decided in favour of appellant.

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• 2023 (4) TMI 920
  Levy of service tax - Construction of Residential Complex Service - construction of complex service provided to Surat Municipal Corporation for construction of houses under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and construction of housing for Gujarat State Police Housing Corporation Ltd. - HELD THAT:- This identical issue has come up in many cases before this tribunal and this tribunal taking a consistent view that the Construction of Residential Complex under JNNURM Scheme and construction of residential housing for Gujarat State Police Housing Corporation Ltd. is not liable to service tax. Reliance can be placed in the case of M/S GANPATI MEGA BUILDERS (INDIA) PVT. LTD. VERSUS COMMISSIONER, CUSTOMS, CENTRAL EXCISE SERVICE TAX, AGRA [ 2021 (8) TMI 294 - CESTAT ALLAHABAD] where it was held that The various construction works carried out for Mandi Parishad are not liable to service tax and are exempted in view of the Education Guide dated 20 June, 2012 by the Board, read with Circular No.89/7/2006 dated 18 December, 2006, read with the Mega Exemption Notification No.25/2012-ST. This issue is no longer res integra - appeal allowed.

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• 2023 (4) TMI 919
  Levy of service tax with interest and penalty - consideration received by them on account of liquidated damages - reimbursement of expenses paid to foreign entity - Circular No. 214/1/2023-ST dt. 21.02.2023 - HELD THAT:- This Bench in the case of M/S BHARAT DYNAMICS LTD. VERSUS COMMISSIONER OF CENTRAL TAX, HYDERABAD. [ 2022 (9) TMI 1445 - CESTAT HYDERABAD] on this issue, wherein it was held such amounts collected by way of penalty/liquidated damages for non-compliance of contract, cannot be considered as consideration for tolerating an act and hence, not leviable to service tax under section 66E (e) of the Finance Act. While the above Orders have been passed by the Tribunal in 2022, subsequently, CBIC has issued Circular No. 214/2023-Service Tax dt. 28.02.2023. In this Circular, the issue of leviability of Service Tax on Liquidated Damages has been considered in elaborate details - The Department has not disputed in the present case that the amount received by the Appellant is on account of Liquidated Damages only. Service Tax on reimbursement of expenses paid to foreign entity and equal amount of penalty under section 78 - HELD THAT:- The appellant has not been able to prove that they have followed the procedure so as to be eligible for abatement on account of reimbursable expenses. Since the statute is very clear and they have been following the other procedures correctly, the escapement of Service Tax on account of this aspect of reimbursements of expenses cannot be considered as a bonafide mistake since the same erroneous system was followed by them for more than two years till the issue was pointed out by the Audit in the 4th year. Accordingly, the appeal towards confirmed demand of Rs. 13,28,164/- along with interest is rejected - the Penalty is to be paid @ 25% of this amount, if the confirmed demand, interest and Penalty are paid within 30 days from date of communication of this Order. Appeal allowed in part.

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• Central Excise

• 2023 (4) TMI 918
  Process amounting to manufacture - labelling or relabelling the parts, components and assembly of Hydraulic Excavators, Dozer, Wheel Loaders, Motor Graders, Tippers and Dumpers - earth moving equipment like Hydraulic Excavators, Dozer, Wheel Loaders, Motor Graders, Tippers and Dumpers are automobiles or not - Whether provisions of section 2(f)(ii) are applicable to unpacked parts and components of earth moving equipment like Hydraulic Excavators, Dozer, Wheel Loaders, Motor Graders, Dumpers and Tippers? HELD THAT:- When the appeal came up on board on 27 February 2023, the same was adjourned at the request of learned counsel for the Respondent as a praecipe was filed by the Appellant for remand of the proceedings to the Tribunal in the light of order of the Hon ble Supreme Court in JCB INDIA LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [ 2023 (2) TMI 1130 - SUPREME COURT] . Thereafter on 30 March 2023, order came to be passed. In view of this position and the fact that the impugned judgment and order is based almost entirely on the decision in the case of JCB India Limited, which is being considered by the larger bench of the Tribunal, it is opined that the impugned judgment and order needs to be quashed and set aside and the appeal filed by the Appellant bearing Appeal No. E/86741 of 2013 stands restored to the file of the Tribunal - the questions of law framed are answered accordingly. Appeal disposed off.

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• 2023 (4) TMI 917
  Process amounting to manufacture or not - fabrics (semi-finished goods) - failure to produce any evidence to show that the loose quantity reflected in the RG-1 Register consisted of grey fabrics which was yet to under go several process - HELD THAT:- Though there is an assessment of facts by both, the Commissioner (Appeals) and the Appellate Tribunal, it is quite clear that the basic position of law has revolved around the decision in the case of M/s. Vishnu Dyeing and Printing Works. The Commissioner (Appeals) relied on the same in order to identify the nature of the goods as to whether they are finished or semi finished based on the entries in the RG-1 register. The Appellate Tribunal relied on its own decision in the same case to hold it otherwise. It is clear from the order of the Appellate Tribunal that the Appellate Tribunal has been heavily influenced by the decision rendered in the case of M/s. Vishnu Dyeing and Printing Works. The contentions of the learned counsel for the Respondent cannot be accepted that the discussion of the Tribunal should be severed to uphold certain findings. Since the manner in which one of the main findings sought to be scrutinized is reversed, the submission of the learned counsel for the Appellants, needs to be accepted that the matter needs reconsideration by the Appellate Tribunal. Appeal filed by the department remanded for reconsideration.

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• 2023 (4) TMI 916
  Carry forward of unutilized cenvat credit - lapsed credit or not - CENVAT credit reversed in the stock of materials/inputs contained in their finished goods WIP - Clearance of goods under exemption from whole of the duty of excise in terms of Notification no. 30/2004-CE - denial of carrying forward of balance credit on the ground that the same shall stand lapsed as the appellant have opted for full exemption under notification no. 30/2004-CE - HELD THAT:- From the careful reading of the Rule 11(3), it makes clear that in case if assessee opts for the exemption from whole of the duty of excise leviable on the said final product under a notification issued under Section 5(A) of the Act and the said final product has been exempted absolutely under Section 5A of the Act, after deducting the cenvat credit in respect of inputs lying in stock or in process or contained in the final product, the remaining amount shall lapse. The said rule provides that in any case, the cenvat credit on stock of input lying in stock, in process and contained in finished goods needs to be reversed however, as regard the balance cenvat credit after such reversal shall lapse only in a case where the exemption notification is absolute. In the present case, notification no. 30/2004-CE is not a absolute notification - Since the above condition in such case in terms of clause (ii) of Rule 11(3) of Cenvat Credit Rules, 2004, the provision of lapsing of balance cenvat credit was not applicable in the present case. The issue is no longer res-integra accordingly, the impugned order being not sustainable in law - Appeal allowed.

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• 2023 (4) TMI 915
  Cenvat credit reversed - imposition of penalty - capital goods were used for manufacture of goods by the appellant - availment of cenvat credit by Unit-II - Extended period of limitation - HELD THAT:- The credit reversal on which has been demanded has already been reversed by the appellant and subsequently availed in Unit-I. The admissibility of said credit in Unit-I has already been decided by Tribunal in M/S EIMCO ELECON INDIA LTD. VERSUS C.C.E. S.T. -VADODARA-I [ 2019 (1) TMI 173 - CESTAT AHMEDABAD] where it was held that In the instant case, before availing the cenvat credit the appellant had applied for common registration and it is seen that no response was given by the Revenue on the application for common registration made by the appellant. The said application was neither accepted nor rejected. In these circumstances, it is apparent that the appellant had sought to follow all the requirements of the cenvat credit Rules, before availing the cenvat credit. Extended period of limitation - HELD THAT:- It is also noticed that show cause notice has been issued more than 5 years after the availment of credit and therefore, is clearly beyond the limitation. Taking note of the fact that the said credit has already been reversed, there are no merit in the order, the same is set aside - appeal allowed.

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• 2023 (4) TMI 914
  MODVAT Credit - capital goods - appellant have neither claimed depreciation on the value representing the MODAT Credit amount under Section 32 of the Income Tax Act, 1961 nor claimed it as revenue expenditure as alleged in the Show Cause Notice - willful suppression of facts - extended period of limitation - HELD THAT:- In the Chartered Accountant s Certificate it is clearly mentioned that the Appellant had neither claimed depreciation under Section 32 of the Income Tax Act, 1961 nor as revenue expenditure under any other provisions of the Income Tax Act, against the capital goods namely Ball Bearings, Laminator Dies, Timing Belt etc. during the period April 1994 to March 1998. It is also found that the Chartered Accountant s Certificate even though placed before the Adjudicating authority, the same has not been considered. Besides, the term revenue expenditure has been substituted retrospectively by the Finance Act, 2003. The issue is no more res integra and is covered by the decisions of the Tribunal in the cases of HONDA SIEL CARS (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [ 2003 (9) TMI 596 - CESTAT, NEW DELHI] and NAIHATI JUTE MILLS COMPANY LTD. VERSUS COMMISSIONER OF C. EX., KOL. III [ 2015 (1) TMI 1182 - CESTAT KOLKATA] . The facts of the present case are squarely covered by the aforesaid decisions of the Tribunal - It was held in Naihati Jute Mills Company that Undisputedly, during the relevant period, in accordance with sub-rule (5) of Rule 57R and/or sub-rule (8) of Rule 57R, the assessee, who avails Modvat credit on capital goods and claim the value of such capital goods as revenue expenditure, then, they were barred from availing the benefits of Modvat credit on the capital goods. I also find that this position has been changed retrospectively by virtue of Section 149 of the Finance Act, 2003. In view of the above retrospective amendment, I do not find any merit in the impugned order and accordingly, the same is set aside. The impugned order cannot be sustained and is accordingly set aside - Appeal allowed.

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• CST, VAT & Sales Tax

• 2023 (4) TMI 913
  Legislative competence - power to amend repealed Gujarat VAT act with retrospective effect - denial of interest on delayed refund - Impermissible Judicial Overiride - Infringement of doctrine of separation of powers - petitioner contended that the State legislature could have never amended the repealed GVAT Act, 2005 without even bothering to revive the same, assuming such revival was possible after 16.09.2017 - whether the impugned Amendment Act is an instance of impermissible judicial override to reverse or set at nought the judicial decisions of this Court even after SLPs against the same were dismissed by the Hon ble Supreme Court? - HELD THAT:- The Constitution Bench has held that the Court examining the validity of a validating statute must first examine the issue of legislative competence. Secondly, granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind, for that would tantamount to reversing the decision in the exercise of judicial power, which the Legislature does not possess or exercise. A Court s decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances - the validity of a validating law depends upon whether the Legislature possesses the competence that it claims over the subject matter and whether, in making the validation, it removes the defect that the Courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax. The super-session of judicial verdicts through legislation sometimes involves the violation of the separation of powers doctrine under the Constitution of India. The Hon ble Supreme Court considered this issue in Government of Kerala, Irrigation Department and Ors, vs James Varghese and Ors. [ 2022 (6) TMI 97 - SUPREME COURT ], and State of Tamil Nadu vs State of Kerala [ 2014 (5) TMI 1110 - SUPREME COURT ] - the Hon ble Supreme Court held that even without the express provision of the separation of powers, the doctrine of separation of powers is an entrenched principle in the Constitution of India. This doctrine informs the Indian Constitutional structure and is an essential constituent of the rule of law. In other words, the doctrine of separation of powers though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of the Indian Constitution. The impugned Amendment Act is an impermissible legislative override. Therefore, based upon the impugned Amendment Act, the respondents cannot decline to implement this Court s decisions in Writ Petition No. 424/2018 and connected matters. These decisions have attained finality after SLPs against the same were dismissed by the Hon ble Supreme Court. Accordingly, notwithstanding the impugned Amendment Act, which is an instance of impermissible legislative override, the respondents will have to comply with the directions in this Court s decisions in Writ Petition No. 424/2018 and connected matters. Amendment to a repealed/lapsed statute without its revival - HELD THAT:- The impugned Amendment Act purports to amend the GVAT Act, 2005, with retrospective effect. This Amendment was made in 2020. Before that, the Goa State Legislative passed the Goa GST Act, 2017, which entered force on 01.07.2017. The impugned Amendment Act of 2020 concerning goods other than those included in Entry 54 of the State List of Seventh Schedule to the Constitution is ultra vires, unconstitutional and void. - The impugned Amendment Act, 2020, in so far as it applies to goods other than those included in amended Entry 54, would be ultra vires, null and void. Therefore, based upon the impugned Amendment Act, the relief granted to the petitioners in Writ Petition No.23/2021 and 229/2022 could not have been withheld. Legislative Competence - HELD THAT:- The primary Amendment in the Maharashtra Act was enacted within one year of the coming into force of the Constitution (101st Amendment) Act, 2016. However, Gujarat and the Goa amendments were after one year, i.e., 2018 and 2020 respectively. Further, there is a similarity between Section 174 of the Gujarat GST Act, 2017 and Section 174 of the Goa GST Act, 2017. The Maharashtra VAT Act, 2002 was never formally repealed after the Constitution (101st Amendment) Act, 2016, entered into force though some exercise was undertaken to align its provisions with the constitutional amendments. Manifest arbitrariness - HELD THAT:- The State of Goa does not dispute liability to refund the excess tax amount in the present cases. The State does not even dispute the liability to pay interest at 8% per annum. However, the State contends that interest would not become payable from the 91st day of the refund order but the 91st day of the sanction order. As noted earlier, no time limit for making the sanction order is fixed. No reasons are required to be provided for any delay in making the sanction order. Thus, the State contends that it can, based upon its Officers tardiness or procrastination, retain the excess tax amount for an indefinite period or at least an unreasonably lengthy period without obligation for payment of any interest - prima facie, such a provision would be arbitrary and unreasonable given the reasoning in the decisions of the Hon ble Supreme Court on the issue of the necessity to pay interest by way of compensation where tax refunds are unduly delayed. Deprivation of vested constitutional rights with retrospective effect - HELD THAT:- The provisions providing interest on delayed refund of excess tax collected by the Revenue created statutory and constitutional rights. Even though Article 19(1)(f) is no longer a fundamental right under the Constitution, Article 300-A provides that no person shall be deprived of his property save by the authority of law - by depriving the Assessee of interest on excess tax paid, the State is depriving the Assessee of his property save by authority of law. Besides, there is a constitutional bar under Article 265 about the levy and collection of taxes except by the authority of the law. Even Article 14 would shun the retention of excess taxes determined as refundable either indefinitely or for unreasonably lengthy periods only due to the tardiness of revenue officers making sanction orders without liability to pay any interest on the delayed periods. Therefore, this is also a case of taking away vested constitutional rights with retrospective effect. The grant of retrospective effect is consequently liable to be interfered with. Thus, the impugned Amendment Act is an impermissible judicial override defying the doctrine of separation of powers. Moreover, by granting retrospective effect to the impugned Amending Act, the vested constitutional rights of the petitioners have been taken away - petition allowed.

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• 2023 (4) TMI 912
  Input Tax Credit (denied retrospectively) - denial on account of cancellation of the VAT registration of the dealers (who have effected sale of the goods to these petitioners/appellants) - denial in absence of transport documents and other documents to prove movement of goods to these petitioners/appellants from the dealers who effected sale of goods to these petitioners/appellants - amendment to Section 19(1) of TN VAT Act, 2006 vide Tamil Nadu Act, 13 of 2015 with effect from 29.01.2016 is prospective or retrospective? - levy of penalty. HELD THAT:- Under the scheme of the TN VAT Act, 2006, the credit that is availed on the strength of the original invoice containing the details specified in Rule 10(2) of the TN VAT Rules, 2007 is provisional. Such input tax credit can be denied to a dealer, if the dealer fails to discharge the burden of proof as under Section 17(2) of the Act. As long as credit was availed validly where there is not only a transaction of sale as defined in the Act but also incidence of tax being borne, input tax credit was to be allowed to be utilized as a set-off against the tax liability declared in the self assessment in the monthly/annual return under the Scheme of the Act. If tax is not paid by the seller, machinery is prescribed to recover the tax from such dealer. A close reading of the provisions indicates that for a dealer to validly avail Input Tax Credit, the dealer should be in possession of the original invoice containing the details prescribed under Rule 10(2) of the TN VAT Rules, 2007. However, credit availed was always provisional under Section 19(16) of the TN VAT Act, 2006 and could be denied under any of the circumstances specified and situations contemplated in Section 19(13), 19(15) and 19(16) of the TN VAT Act, 2006 and recovered under the machinery provided under Section 27(2) of TN VAT Act, 2006. However, before denying input tax credit under Section 19(13) of the TN VAT Act, 2006, the assessing authority has to make an enquiry as it thinks fit and give a reasonable opportunity of being heard to a dealer who has availed such input tax credit being denying the benefit of such input tax credit to such registered dealer. Enquiry has to be in consonance with the machinery under Section 27(2) of TN VAT Act, 2006. If on enquiry the dealer fails to discharge the proof, it has to be construed that there was jurisdictional fact to deny credit under Section 27(2) of the TN VAT Act, 2006. If there is a cancellation of registration, the assessing officer can call upon the dealer to repay to the input tax credit availed and utilized if indeed there was no evidence of sale. It may result in denial in the credit. However, it cannot be helped, where registration itself was obtained by such dealer to facilitate input tax credit being availed on such bogus invoice without a corresponding transaction of sale. It was incumbent on the part of a registered dealer like petitioner/appellants availing input tax credit to prove that indeed a transaction of sale had taken place. They should not only preserve but also produce collateral evidence in the form of transport documents, such lorry receipts or consignment note, etc. when called upon failing which it cannot be said they have discharged the burden of proof required to be discharged under Section 17(2) of the TN VAT Act, 2006. Section 19(15) in the TN VAT Act, 2006 was an innovation which was not contemplated in under Section 70 of the Karnataka Value Added Tax Act, 2003.Under Section 70 of the Karnataka Value Added Tax Act, 2003, the consequence was on the dealer issuing such false invoice to cheat revenue by imposing penalty. If there was indeed a sale but the registered dealer who had sold goods but had failed to pay the tax from his end, notwithstanding cancellation of registration of such dealer, a dealer who has availed input tax credit on the strength of the original invoice and has documents to establish the transaction of sale, credit cannot be denied. The remedy that is available to the authorities under the Act is only to recover the tax not paid under Section 27(1) of the TN VAT Act, 2006 from such dealer. Therefore a dealer claiming ITC has to prove the actual transaction of sale by furnishing the name and address of the selling dealer, details of the vehicle which was/were used for delivery of the goods, tax invoices and payment particulars etc. The above information would be in addition to tax invoices, particulars of payment etc., as held by the Hon ble Supreme Court in M/s.Ecom Gill Coffee Trading Private Limited. [ 2023 (3) TMI 533 - SUPREME COURT ] Main issue decided in largely favor of Revenue.

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• 2023 (4) TMI 911
  Exemption from levy of Entry Tax - coal imported by petitioners for generation of electricity in it s Thermal Power Plant - applicability of notification dated 13.12.2010 - Whether provisions of Odisha VAT Act, 2004 are pari materia to the provisions of M.P. VAT Act, 2002, to enable petitioners to take advantage of Division Bench judgment of Orissa High Court in ODISHA POWER GENERATION CORPORATION LTD. VERSUS STATE OF ODISHA ANOTHER [ 2015 (5) TMI 62 - ORISSA HIGH COURT] whereby in similar facts and circumstances the contention of petitioners therein (which were similar to the petitioners herein) was upheld by treating coal as the raw material brought in the course of business for generation of electricity? Whether coal imported by petitioners for generation of electricity by Thermal Power Plant is exempted from Entry Tax on the anvil of notification dated 13.12.2010 by virtue of being raw material purchased in the course of business? - HELD THAT:- Bare perusal of the charging provision Section 3 of M.P. Entry Tax Act reveals that the levy of Entry Tax is on the entry in the course of business of a dealer of goods specified in Schedule II into each local area for consumption, use or sale. However, no levy of entry tax can be made over goods specified in Schedule III which are for sale - The State is vested with power to exempt certain goods from levy of entry tax subject to such restrictions and conditions and on such terms and conditions as it thinks fit. In the instant case, the State by notification dated 13.12.2010 Annexure P/3 in W.P. No.16965/2016 exempted in whole payment of Entry Tax on coal which is brought by dealers into the local area as raw material in the manufacture of goods. Petitioners or all dealers bring coal into local area for being consumed by their thermal power stations for generation of electricity - In absence of coal which is the very primary source for generation of heat leading to creation of steam resulting in turning of turbines, no electricity can be produced by any thermal power station. Whether coal can be termed as raw material as defined in Section 2(g) of M.P. Entry Tax Act? - HELD THAT:- Bare reading of expression raw material reveals that the definition is not only generic in nature but wide enough to include all articles used as ingredients in the process of manufacturing of goods or articles consumed in the process of manufacturing including fuel required for the process of manufacture - Since manufacture is not defined in M.P. VAT Act, resort is made to the definition of manufacture u/S 2(p) of the M.P. VAT Act which is exhaustive in nature due to its inclusive characteristic. The said expression manufacture u/S 2(p) in the MP VAT Act includes any activity of brings out change in an article as a result of some process, treatment, labour and leads to transformation into an article which is new and different in commercial parlance having distinct name, character, etc. - In the definition of manufacture there is nothing to imply that unless and until any traces or element of raw material are found in the finished product, the requirement of the process of manufacturing is not satisfied. Merely because coal gets burnt out in the initial process of creation of heat for making steam and thereby turning the turbine leading to production/manufacture of electricity and thus coal is not found in any physical form in the finished product i.e. electricity, does not mean that coal cannot be treated as raw material for generation/manufacture of electricity. The other aspects which need to be satisfied is that coal is brought into the local area by petitioners in the course of its business as per Section 3 of M.P. Entry Tax Act - the expression course of business is not defined in M.P. Entry Tax Act and therefore, resort is made to M.P. VAT Act which though does not defined the expression course of business but defines expression business in Section 2(d) of the M.P. Tax Act. The definition of expression business in M.P. VAT Act is generic, inclusive and thus exhaustive in nature. This expression business includes the process of manufacture - it is obvious that coal is raw material as defined in Section 2(g) of M.P. Entry Tax Act required for the process of manufacturing/generation of electricity. More so coal is also one of the items mentioned in Schedule II appended to the Entry Tax Act. Once it has been held that coal is raw material for manufacturing/generating electricity and thus is exigible to Entry Tax Act, the exemption/concession notification issued by the State u/S 10 of M.P. Entry Tax Act vide Annexure P/3 in W.P. No.16965/2016, and Annexure P/4 in W.P. No.3109/2015 are available to be availed by petitioners exempting them from payment of Entry Tax on coal brought into local area where the thermal power station of petitioners are situated on such terms and conditions as mentioned in the notification. Applicability of judgement in the case of Odisha Power Generation Corporation Ltd. vs. State of Odisha and another - HELD THAT:- Bare perusal of the aforesaid comparison of provisions in Madhya Pradesh and Orissa reveal that textually as well as contextually the provisions are para materia and are not materially different and distinct as contended by the State. Thus, there is no substance in the State s objection about applicability of Division Bench judgment of Orissa High Court in the case of Odisha Power Generation Corporation Ltd . This Court has no manner of doubt that submissions of State deserve to be rejected and petitions with regard to exemption as well as concession deserve to be allowed.

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• 2023 (4) TMI 910
  Validity of assessment orders - Jurisdiction - Constitution of Advance Ruling Authority (comprising three officials not below the rank of Joint Commissioner) - HELD THAT:- The Respondents are agreed upon that the decision of the Tribunal in the case of IN RE: B.U. BHANDARI PVT. LTD., B.U. BHANDARI AUTOMOTIVE PVT. LTD., B.U. BHANDARI MOTORS PVT. LTD. [ 2018 (6) TMI 1830 - MAHARASHTRA APPELLATE TRIBUNAL] , though it provides relevant legal guidance for the Petitions under consideration, this decision cannot be applied directly to each Petitioner to quash the assessment orders. It is necessary to conduct an enquiry to determine whether the Petitioners can be considered similarly situated persons. The Assessing Officers based their decision on the law the Advance Ruling Authority laid down in the case of M/s. B.U. Bhandari Auto. If this order is reversed, the implication of the order passed by the Tribunal will have to be considered in each case of the Petitioners. Therefore, an enquiry must be conducted to determine whether the facts of each Petitioner case warrant similar treatment. The Writ Petitions are disposed off by quashing and setting aside the impugned assessment orders in each of these Petitions - Commissioner would examine the issue pending before the Commissioner in light of the decision rendered by the Tribunal in the case of M/s. B.U. Bhandari Auto and in the context of the provisions of Section 55 of the Act referred and take the decisions as per law. Petition disposed off.

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• Indian Laws

• 2023 (4) TMI 909
  Initiation of recovery proceedings - recovery of amount towards the ESI dues of another company M/s.Jeetstex Engineering Limited - company declared as sick company - grievance of the petitioner is that as per the Sanctioned Scheme, the contribution towards ESI as on the date of merger got nullified and all the departments including ESI shall waive interest, penal interest, damages, liquidated damages and penalty for late payments, if any - overriding provisions of SICA - HELD THAT:- Reliance placed upon a judgment of a Division Bench of Delhi High Court in Director General of Income Tax Vs. BIFR [ 2011 (3) TMI 1467 - HIGH COURT OF DELHI ], where it was held that a draft scheme is sanctioned under the provisions of Sub-section (4) of Section 18 of the SICA. Once a draft scheme is sanctioned it is binding on those concerned as is reflected in Sub-section (8) of Section 18 and Section 19(3) of SICA. Thus, once a sanctioned scheme or any of its provisions is made operable it binds the sick industrial company, and the entities referred to in Section 18(8) and 19(3) of SICA. In these circumstances, the Department cannot surely be head to argue that the provisions of the scheme are not binding on it. The above judgment is directly on the issue. By virtue of Section 19 (2) of SICA, the consent can be inferred. Therefore, it is not open to the ESI Corporation to revive the liability of a sick company by operation of statutory discharge. The impugned order passed by the third respondent is quashed - Petition allowed.

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• 2023 (4) TMI 908
  Rejection of plaint - claiming the relief of specific performance of the agreement dated 30.12.2009 - whether the trial Court erred in rejecting the plaint, despite showing that the property shown in the sale agreement and the properties listed out in the plaint are one and the same or different, is a matter for trial? HELD THAT:- As rightly pointed out by the learned Counsel for the plaintiff, the learned trial Judge himself has given a finding against the defendants with respect to the limitation plea. As rightly contended by the learned Counsel for the plaintiff, the points 2 and 4 are matter for trial and by no stretch of imagination, the same can be considered as grounds for rejection of plaint. As regards the contention of the defendants that though the sale agreement was entered into between the parties with respect to one item of the property, the plaintiff has filed the suit with respect to five items of properties and as such, he has no cause of action. No doubt, as rightly pointed out by the learned Counsel for the defendants, in the suit sale agreement, parties have mentioned one item of suit property. But in the plaint, the plaintiff has listed out five items of properties running four pages. As already pointed out, the defendants have filed an elaborate written statement running to 27 pages, but it is settled law that the averments raised in the plaint and the documents filed along with the plaint alone are to be considered, while deciding an application under Order 7 Rule 11 C.P.C. - Recently, the Hon ble Supreme Court in H.S. DEEKSHIT ANR VERSUS M/S. METROPOLI OVERSEAS LIMITED ORS [ 2022 (8) TMI 1365 - SUPREME COURT] , has specifically held that while considering an application under Order 7 Rule 11 C.P.C., the averments in the plaint alone are to be examined and no other extraneous factor can be taken into consideration. It is the specific defence of the defendants that the properties are not one and the same and the plaintiff has included some other properties which are not belonging to the defendants 1 to 5. As already pointed out, the defence pleaded in the written statement cannot be considered at this point of time. As rightly contended by the learned Counsel for the plaintiff, whether the property shown in the suit sale agreement and the present suit properties are one and the same or different properties can be gone into only at the trial. Order 7 Rule 11 of the Code of Civil Procedure elaborates on the rejection of the plaints in certain circumstances. It has mentioned certain grounds on the basis of which, the plaints are rejected by the Courts. One of them is not mentioning the cause of action that the plaintiff seeks against the defendant. Cause of action is a set of allegations or facts that make up the basis of filing a civil suit in Court. A plaint can very well be rejected by the Court, if the plaint does not disclose any cause of action. The cause of action has been mentioned in various places in C.P.C. Without a cause of action, a civil suit cannot arise. The cause of action is necessary because it discloses the facts that led the plaintiffs to take such action. This Court has no hesitation to hold that the learned trial Judge, without considering the plaint pleadings and the scope of Order 7 Rule 11 C.P.C., in proper perspective, has rejected the plaint mechanically. Hence, this Court concludes that the impugned order is liable to be set aside and the trial Court is to be directed to proceed with the trial. Since the suit was filed in the year 2013, this Court is of the further view that the trial Court is to be directed to complete the trial within the time stipulated by this Court. The Appeal Suit is allowed.

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