Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 11, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
DGFT
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05/2015-2020 - dated
10-5-2021
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FTP
Amendment in import policy of Integrated Circuits (1 Cs) and incorporation of policy condition for HS Codes 85423100, 85423900, 85423200, 85429000, and 85423300, of Chapter 85 of ITC (HS), 2017, Schedule - 1 (Import Policy)
GST - States
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13894 - FIN-CT1-TAX-0002/2020 - dated
7-5-2021
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Orissa SGST
Odisha Goods and Services Tax (Third Amendment) Rules, 2021
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13538 - FIN-CT1-TAX-0036/2020 - dated
4-5-2021
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Orissa SGST
Appointment of Revisional Authority under Odisha Goods and Services Tax Act, 2017
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13534 - FIN-CT1-TAX-0001/2020 - dated
4-5-2021
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Orissa SGST
Odisha Goods and Services Tax (Second Amendment) Rules, 2021
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Grant of Bail - Validity of section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 - power under Section 69 of the CST Act - arrest for alleged non-payment of GST and alleged illegal availment of ITC - Bail granted subject to conditions - HC
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Validity of SCN - Carried forward Input Tax Credit in TRAN-1 from the era of Service Tax - Let the petitioner put forth its objections in regard to the proposed reversal of carried-forward of input tax credit within a period of four weeks from today. - HC
Income Tax
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DTVSV Act - declaration of the petitioner under the Direct Tax Vivad Se Vishwas rejected - it appears that the submissions on behalf of the petitioner carry lot of weight and it is difficult to consider the authority under the DTVSV Act would be able to go into the merits/grounds or legality of the appeal filed by the declarant. - The rejection of declaration of the Petitioner is set aside. - HC
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Revision u/s 263 - deduction u/s 80IA(4)(iii) - Even the coordinate benches of this Tribunal in assessee’s own case in earlier AYs has allowed the assessee’s claim of deduction u/s 80IA(4) of the Act. In view of this, in our considered opinion, the order passed by the AO is not erroneous and prejudicial to the interests of revenue as alleged by Pr. CIT.- AT
Customs
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Smuggling - Gold - baggage goods - As no such investigation has been done to establish that the goods in question are of foreign origin, therefore, the provision of Section 123 of the Customs Act is not applicable to the facts of this case - Further, the appellant has never admitted that the goods are of foreign origin or has been smuggled. - The proceedings against the appellant are bad in law - AT
Corporate Law
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Oppression and Mismanagement - illegal allotment of shares - the allegations that there has been an illegal allotment of Petitioner's shares, exclusion of Petitioner from the management of the Company, siphoning off funds from Respondent No. 2 to Respondent No. 4, illegal resolution passed by the Company, non-sending of notices to the board and general meetings of the Company is not tenable as they have been actions taken pursuant to execution of MOU/family arrangement between the Petitioner and Respondent No. 2 to 4. - Tri
IBC
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Initiation of CIRP - the nature of Debt is a "Financial Debt" as defined under section 5 (8) of the Code. It has also been established that there is a "Default" as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of 'debt' and 'default', for admission of a petition under section 7 of the I&B Code, have been met in this case.- Tri
PMLA
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Seeking grant of anticipatory bail - Taking into consideration the entire facts and scenario and without commenting anything on the merits of the case irrespective of the quantum of financial loss which has been caused to the State Exchequer, the overall act and conduct of the applicant/accused leads this Court to a definite conclusion that affording the benefit of anticipatory bail will deny the investigating agency a fair right to investigate the case properly by effectively interrogating the accused and this denial will scuttle the investigation. - DSC
Service Tax
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Principles of natural justice - service of order in original - levy of service tax - This Court is of the view that the dispute, as to whether the petitioner was earlier communicated or not communicated the order dated 20.3.2017 cannot be considered by this Court in writ jurisdiction, particularly when it has been recorded in Annexure 11 that the same was earlier delivered to the petitioner at their business address as well as residential address. - HC
Central Excise
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Recovery of excess cash refund - submission of the learned counsel for the petitioner is that the notice is devoid of any merit, inasmuch as, no such recovery can be made in exercise of powers under Section 11A of the Act as under the said provision only an amount which has been erroneously refunded can be refunded - HC refused to interfere at SCN stage
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Refund of CENVAT Credit - amount was paid under protest or not - the contesting the reversal of cenvat credit by the appellant shall amounts to reversal under protest as per the various judicial decisions discussed - the refund claim filed by the appellant is not barred by limitation prescribed under Section 11B(1) - AT
Case Laws:
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GST
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2021 (5) TMI 291
Grant of Bail - Validity of section 132(1)(b) and (c) of the Central Goods and Services Tax Act, 2017 - power under Section 69 of the CST Act - arrest for alleged non-payment of GST and alleged illegal availment of ITC - HELD THAT:- The court having regard to factual position that the petitioners therein had responded to the summons and attended the dates, in the circumstances found that there could not have been justification to arrest the petitioner. Apart from that the court also found that there had not been any evidence about petitioner s tampering with the documents or trying to influence the witnesses, observing that mere allegation is not sufficient. The court also went on to consider section 167 and had considered that under said provision a person cannot be kept in detention beyond a total period of 60 days where investigation relates to offence punishable with imprisonment for a term not less than 10 years and that the Magistrate is authorized to detain beyond 15 days period if satisfied that the grounds are made out. However, he would not be able to authorize detention for a total period exceeding 60 days. In the present matter, petitioner has filed an affidavit dated 28.04.2021 that he has already paid an amount of ₹ 45,00,000/- and that he would deposit ₹ 5,00,00,000/- under protest towards the alleged amount of tax evasion to demonstrate bona fides and that it would be subject to, adjudication of the amounts alleged and rights and remedies of the petitioner. Bail application allowed subject to conditions imposed.
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2021 (5) TMI 285
Validity of SCN - Carried forward Input Tax Credit in TRAN-1 from the era of Service Tax under Finance Act, 1994 to the era of GST - Eligible services or not - HELD THAT:- A perusal of the notice indicates that there was a verification of the Form TRAN-1 by the Audit Department of the GST and it was noticed that Cenvat credit had been availed on various services relating to investments in shares, debentures, mutual fund, securitization etc. The officer was of the opinion that since the receipts from the aforesaid avenues was exempted, the availment of the credit was itself not in order. The availment of Cenvat credit on services related to the provision of food, accommodation and travels was also questioned by the Officer on the ground that it is not eligible. The same goes with regard to the credit related to registry operations, custodial services, trustee for debenture and convertible note issues, securitization facilities as well as services related to parking and auction seized vehicle. Thus the Officer classifies the aforesaid services as those in respect of which Cenvat credit ought not to have been transitioned in terms of Section 141 of the Act, per se. Let the petitioner put forth its objections in regard to the proposed reversal of carried-forward of input tax credit within a period of four weeks from today. Petition dismissed.
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2021 (5) TMI 268
Grant of Anticipatory Bail - fraudulent ITC - Fake invoices - evasion of GST - HELD THAT:- In this case when accused has already joined the investigation, he is not required for any custodial interrogation and on being inquired it is also submitted by the IO that as on today, there is no requirement of the arrest of the accused. There is no arrest since the recording of his statement on 15.12.2020. The firms which obtained the fraudulent ICT are not booked as they have deposited some of the amount. Any amount which is required to be deposited by the applicant is not disclosed. Applicant's involvement is not being the office bearer or the employee of these firms which have availed fraudulent ICT. There is no allegations from the side of the department of tampering of evidence or hampering the investigation by the accused after the grant of interim bail on 31.12.2020. In these circumstances, it is directed that in the event of arrest one week prior notice shall be served upon the applicant/accused Nitin Singhania and he is directed to join the investigation as and when directed by the IO and shall not leave the country without the permission of the Trial Court. . Application disposed off.
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Income Tax
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2021 (5) TMI 290
Assessment u/s 153C - denial of natural justice - statement of Mr. Prasesh Arya, Chief General Manager of the JBM Group of companies, qua which search was being carried out under Section 132 of the Act, was not furnished - HELD THAT:- As perused the record, the petitioner has, according to us, at least at this stage, established a prima facie case in his favour concerning infraction of the principles of natural justice by the revenue. The record shows that the petitioner was served with only an extract of the statement made by Mr. Prasesh Arya. Mr. Sharma, in this behalf, when queried, submitted that the crucial part of the statement was furnished to the petitioner, and therefore, the petitioner can have no grievance. Even if we assume that, the stand taken by Mr. Sharma is sustainable, what concerns us at this stage, is the absence of any material furnished to the petitioner, which would link Mr. Mathur to him. In our view, the matter requires further examination.Accordingly, issue notice. Mr. Sharma accepts service on behalf of the revenue. Counter-affidavit will be filed within four weeks. Rejoinder thereto, if any, will be filed before the next date of hearing.
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2021 (5) TMI 289
DTVSV Act - declaration of the petitioner under the Direct Tax Vivad Se Vishwas rejected - HELD THAT:- Having regard to the provisions and the scheme of the DTVSV Act, it appears that the submissions on behalf of the petitioner carry lot of weight and it is difficult to consider the authority under the DTVSV Act would be able to go into the merits/grounds or legality of the appeal filed by the declarant. The Petition is allowed. The rejection of declaration of the Petitioner is set aside. The declaration of petitioner be processed in accordance with the DTVSV Act and the rules thereunder.
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2021 (5) TMI 286
Bogus LTCG - Penny stock purchases - Tribunal remitting the issue back to the file of the Assessing Officer wherein the onus has been shifted to the Revenue with a direction that the Assessing Officer is to bring on record the role of the assessee in promoting the company and the relation of the assessee, if any with that of the promoters and role of inflating of prices, etc. - HELD THAT:- An identical issue has been considered by a Division Bench of this Court in the case of CIT Vs. Manish D.Jain [HUF] [ 2020 (12) TMI 740 - MADRAS HIGH COURT ] and held Not only the Assessing Officer, but also the CIT(A) examined the modus operandi of the assessee and held that the shares were purchased through off market and not through Stock Exchange and that the selling rates were artificially hiked later on. The above findings have not been set aside by the Tribunal and there is no reason for the Tribunal to remand the matter to the Assessing Officer for a fresh consideration. - Issue has been answered in favour of the Revenue.
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2021 (5) TMI 280
Revision u/s 263 - deduction u/s 80IA(4)(iii) - HELD THAT:- We find force in the contention of the ld. AR of the assessee that when deduction u/s 80IA(4) has been granted in first year of claim the same cannot be denied in subsequent years, unless the assessee has changed the original terms and conditions in the first year while fulfilling for the granting deduction in the first year of operation. On perusal of the documents, we did not notice any deviation from the first year of operation. The revenue side also could not bring any such deviation to establish that the assessee has changed the original terms and conditions from the first year of operation. Even the coordinate benches of this Tribunal in assessee s own case in earlier AYs has allowed the assessee s claim of deduction u/s 80IA(4) of the Act. In view of this, in our considered opinion, the order passed by the AO is not erroneous and prejudicial to the interests of revenue as alleged by Pr. CIT. Therefore, we quash the order passed by the Pr. CIT u/s 263 of the Act in the impugned AY and restore the order of AO. Appeal of the assessee is allowed.
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Customs
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2021 (5) TMI 282
Maintainability of appeal - Smuggling - Gold - baggage goods - Absolute Confiscation - HELD THAT:- It is a fact on record that the gold in question has been seized when the appellant was travelling in domestic flight from Jammu to Srinagar, in that circumstances, the goods in question cannot be said as imported goods. The revenue is heavily relying on Section 123 of the Customs Act say that when any goods on the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the appellant. Admittedly, if revenue is having a reasonable belief that they are smuggled goods, then the burden of proof that the goods are not imported lies on the appellant. But firstly, there should be a reasonable belief that the gold in question is smuggled one is to be established by the revenue to invoke Sec. 123 of the Customs Act.In the impugned order as well as adjudication order, nowhere it has been established that there was a reasonable belief that the goods in question are smuggled goods which is the bone contention to invoke Section 123 of the Customs Act, 1962. Revenue has failed to discharge that they are initial burden that on reasonable belief that the goods in question are smuggled goods. Further, it has been found that only market enquiry was done for valuation and purity of the goods in question. No fact has been brought on record by way of testing of the goods in question that the marking made on the goods are genuine or not. As no such investigation has been done to establish that the goods in question are of foreign origin, therefore, the provision of Section 123 of the Customs Act is not applicable to the facts of this case - Further, the appellant has never admitted that the goods are of foreign origin or has been smuggled. The proceedings against the appellant are bad in law - Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2021 (5) TMI 278
Oppression and Mismanagement - illegal allotment of shares - exclusion of petitioner from the management of the company - siphoning of funds - illegal resolution passed by the company - non sending of notices to the board and general meetings of the company - HELD THAT:- In terms of the MOU, it is clear that Keer Hotels Pvt. Ltd. will be operated jointly by Mr. Sarabjeet Singh Keer and Amarjeet Singh Keer. The ownership rights in Fulcrum property shall be equally shared by Jaswinder Singh Keer and Sawinder Singh Keer. The MOU also talks about division of other properties. The sanction of demerger on 07.03.2019 further demonstrates or acknowledges the intention of the parties for filing an application for demerger in the Tribunal. According to sanction, in terms of the demerged scheme, it cannot be disputed that the MOU dated 18.02.2019 creates rights inter se between the parties and records the complete partition of the parties between the family members and the same has acted upon by all the parties except the Petitioner who chooses to file complains before the Police Station, Dindoshi and Appeal before the Hon'ble Bombay High Court and now has chosen to come before this Tribunal being aggrieved by the acts of Oppression and Mismanagement by the Respondent No. 2 to Respondent No. 4 herein. The Petitioner has failed to establish any acts of Oppression and Mismanagement by the Respondent No. 2 to Respondent No. 4 herein. But in fact, the record demonstrates and establishes the fact that there has been an MOU between the parties acted upon by the parties. In pursuance of the family discussion, an Application was filed seeking a demerger of the Company's business and the said demerger scheme was sanctioned by the Hon'ble NCLT after passing the order of holding/dispensing with holding of meetings, order of admission and order of final sanction of demerger by the Tribunal on 07.03.2019 under Section 230-232 of the Companies Act, 2013. The entire crux of disputes revolve around the fact that the leave and license fees which is being paid to all the partners equally before December, 2018 is not being paid and paid pursuant to the execution of the MOU between the parties. The action of opening bank accounts by the Respondent No. 2 to Respondent No. 4 thus does not violate any rights of the Petitioner. There has been a sanction of demerger and the properties were transferred legitimately among all the family members. The Petitioner is bound by the said family arrangement and has not been able to make out the case of Oppression and Mismanagement against Respondent No. 1 to 8 - the allegations that there has been an illegal allotment of Petitioner's shares, exclusion of Petitioner from the management of the Company, siphoning off funds from Respondent No. 2 to Respondent No. 4, illegal resolution passed by the Company, non-sending of notices to the board and general meetings of the Company is not tenable as they have been actions taken pursuant to execution of MOU/family arrangement between the Petitioner and Respondent No. 2 to 4. Petition dismissed.
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Insolvency & Bankruptcy
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2021 (5) TMI 279
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time limitation - service of notice - HELD THAT:- The notice was not delivered to the Corporate Debtor. It has been mentioned in the track-report Out for delivery. In-short, there is not clear and convincing evidence produced on record by the Operational Creditor to prove the fact that before filing this application against the Corporate Debtor, the demand notice under Section 8 of the IB. Code was being served. For want of such evidence, it is held that this application is not maintainable. Time Limitation - HELD THAT:- It is a time barred debt because, according the Operational Creditor himself, the debt was due on 23.01.2013 when default occurred. This application is filed three years beyond that period and hence, it is time barred. This application is not maintainable on two grounds that there is no evidence of service of demand notice under Section 8 of the IB. Code and the debt is time barred - petition dismissed.
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2021 (5) TMI 277
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Assignment of debt - existence of debt and dispute or not - HELD THAT:- The Petitioner being the assignee under the assignment deed dated 30.03.2019 and 05.11.2019 have taken over the loan the term loans of DNSB(original Lender), cash credit facilities granted by DNSB. The said term loan and cash credit loan accounts of the Corporate Debtor were declared as NPA as on 31.01.2019 and 31.03.2019. The Petitioner post assignment of debt issued Recall Notice dated 10.01.2020 to the DNSB demanding the outstanding liabilities of ₹ 8,60,09,164.14/- in the term loan and outstanding dues of cash credit dues of ₹ 27,83,07,159.48/-. The Corporate Debtor filed its reply admitting the liability and granted loan by the Petitioner by the DNSB which has assigned the Petitioner herein and further requested the time of 6 months for the repayment of entire monies. In view of the admission of liability by the Corporate Debtor on 16.04.2021 and the fact that there is a debt and default of non-payment of amounts under the term loan and the cash credit facility, both the loan accounts were thus declared as NPA as on 31.01.2019 and 31.03.2019. The Corporate Debtor in its reply sought six months' time to repay the debt, there is no denial of sums borrowed and default of non-payment. This bench is of the opinion that all the ingredients of Section 7 are satisfied and that the amounts disbursed by Petitioner to the Corporate debtor under two different facilities (term loan and Cash Credit facility) remain outstanding, owing to the default of non-payment by the Corporate Debtor. Hence, the Petition is admitted. The nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e., existence of 'debt' and default', for admission of a Petition under Section 7 of the I B Code, have been met in this case. Besides, the Company Petition is well within the period of limitation. This petition is admitted. Petition admitted - moratorium declared.
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2021 (5) TMI 276
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - pre-existing dispute or not - HELD THAT:- It is seen that the Petitioner had entered into Directors on Employment Agreement dated 01.08.2015 and worked as a Director in the Board of the Respondent Company. The present application has been filed for claiming unpaid 15 months' salary. The Petitioner has filed minutes of the meeting which has not been dated but has been signed by various parties. Pre-existing dispute between the parties based on the settlement has been arrived at. Since this matter is ex-parte, there are no complete facts before this Adjudicating Authority. On perusal of documents, it is clear that various meetings between both parties were held, to arrive at amicable settlement. Since the respondent has not filed reply, the responsibility of the applicant to prove 'debt' and 'default' is very high. The onus is on the Applicant to satisfy that there is no pre-existing dispute between the both. From the documents, it is clear that there were lot of discussions and meetings between both. The outcome of the same is not before this Adjudicating Authority. Since the IBC is rigorous statue, abundant caution ought to be exercised, before passing order. Application dismissed.
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2021 (5) TMI 275
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Bench is of the view that the contention of the Corporate Debtor that 51% approval of Debenture-holders should have been taken in writing is incorrect. The very fact that the Debenture Trustee has written to all debenture-holder to give their consent and that a non-receipt of any response would constitute as 'deemed approval', is totally correct. Hon'ble Supreme Court in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK ANR. [ 2017 (9) TMI 58 - SUPREME COURT] has clearly mentioned that in case where a Corporate Debtor commits a default of financial debt, the Adjudicating Authority has to merely see the records of the Information Utility and other evidence produced to satisfy itself that a default has occurred. The facts clearly reveal that the Corporate Debtor who has defaulted in making the payment to the Petitioner is liable to pay the Petitioner - the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of 'debt' and 'default', for admission of a petition under section 7 of the I B Code, have been met in this case. Besides, the Company Petition is well within the period of limitation. Petition admitted - moratorium declared.
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2021 (5) TMI 274
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - Financial Debt or not - existence of debt and dispute or not - time limitation - HELD THAT:- The nature of transaction pursuant to the Investment Agreement and all other collateral transactions are that of investment based upon an 'Approved Business Plan' - It appears that as an Investor, the applicant herein had explored the possibility of making investment by taking calculated business risk. Many of the Clauses contained in the Investment Agreement demonstrate the fact that the Applicant is an 'Investor' and not a Financial Creditor within the meaning of the definition contained in the IBC. The allegation that the Corporate Debtor Company has not utilized the proceeds of investment in accordance with the approved business plan does not carry any merit in as much as the Board of the investee company consists of two nominee directors and an observer nominated by the investor in order to oversee the entire corporate documentation pertaining to various meetings and activities including meetings of the Board of Directors in order to safeguard the interest of the Investor Company. Therefore, the Investor cannot be and need not be treated as a Financial Creditor . Whether the alleged debt is a 'financial debt' and applicant as a financial creditor under the provisions of Section 5(8) of the IBC? - HELD THAT:- Admittedly, the entire amount due and payable under the application arises out of Investment-cum-Shareholders Agreement dated 07.09.2013 which was subsequently and mutually agreed between the parties and a Settlement Agreement dated 06.09.2016 was arrived at. Further, the applicant admits that the entire amount as agreed between the parties has been repaid by the Corporate Debtor. This alleged amount mentioned in the application is only towards the outstanding interest between the parties arising out of the Settlement Agreement dated 06.09.2016. Hence, an Investment Agreement which subsequently converted into a Settlement agreement with a payment schedule between the parties fails to fall within the definition of a 'financial debt' and the Applicant herein is a not a Financial Creditor as per the provisions of the IBC. The Applicant has also hopelessly failed to satisfy, regarding date of default . The alleged claim is not a 'financial debt' - Application dismissed.
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2021 (5) TMI 273
E-auction for the sale of assets of the Corporate Debtor as a going concern by the Liquidator - seeking permission to the Applicant to pay/adjust the Sale Consideration by way of investment into the equity shares of the Corporate Debtor - HELD THAT:- The Liquidator can sell the assets of the Corporate Debtor during liquidation in any of the modes stated in Regulation 32 of Liquidation Process Regulations. The Applicant purchased the Corporate Debtor as a going concern with a view to run the business and that in order to run the Company as a going concern, the Purchaser/Applicant herein is entitled to have certain reliefs stated above. The Liquidator has filed his reply stating that the assets of the Corporate Debtor is ordered to be sold as on going concern as it will fetch more value. The Liquidator also stated that the bid amount is more than the liquidation value. Already Applicant has deposited ₹ 1,07,96,456/-. In order for the Applicant to kick start the business and follow the law laid down under the Companies Act, 2013, it is imperative for the Tribunal to grant necessary reliefs. Since the decision to sell the Corporate Debtor as a going concern is taken by the Liquidator in consultation with the creditors/stakeholders and the proceeds from the sale of assets are going to be utilized for distribution to the creditors in the manner specified under Section 53 of the Code, all the creditors of the Corporate Debtor get discharged and the assets are transferred free of any encumbrances. Permission is accorded to Applicant to pay/adjust the sale consideration of ₹ 109,964,559/- by way of investment into the equity shares of the Corporate Debtor and upon payment of consideration, the following shall be deemed to have occurred and become effective and operative in the sequence and order mentioned - Corporate Debtor shall allot 10,996,456 shares at a face value of ₹ 10/- each to the Applicant and its shareholders which shall constitute 100% of the equity of the Corporate Debtor and such allotment to be made in accordance with Applicable laws - Application disposed off.
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2021 (5) TMI 272
Maintainability of application - availability of alternative remedy - Seeking reference of dispute or difference to arbitration - HELD THAT:- The availability of the alternative remedy cannot be the reason for not considering the application before us as regards to the debt and default of the corporate debtor as laid down by the NCLAT. The existence of pre-existing dispute as laid down by the corporate debtor is being demonstrated that a suit was pending in respect of operational debt, in respect whereof corporate debtor was alleged to have defaulted the adjudicating authority would not be drawing a conclusion in respect of alternative remedy available to the parties for settlement of the matter, even though the agreement between the parties provide for the same. Further, section 238 of the IBC which has an overriding effect over the existing laws or any other law or contract would not admit of the alternative remedy to seek resolution of the dispute in the light of Section 238 of IBC. The Adjudicating Authority is only to satisfy itself whether there is debt and default in the instant application. The alternative remedy that is available may not be of much help to the corporate debtor as long as there is debt and default in regard to the operational debt. Application filed by the corporate debtor/applicant has no substance - application dimissed.
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2021 (5) TMI 271
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - application has been filed on 29.05.2018 whereas period of supplies and invoices is 28.08.2015 to 31.03.2016. However, in the Form No. 5, it is mentioned that debt fell due between May 2015 to March, 2016 though two invoices are of the date of 28.08.2015 - typographical error - pre-existing dispute or not - Service of demand notice - principles of parity - HELD THAT:- It is an admitted fact that this application has been filed by the Resolution Professional and subsequently, pursued by liquidator of the Corporate Debtor and this has been done with the approval of the CoC. The amount claimed in this application is more than the threshold limit of ₹ 1 lakh. The debt is due and payable both in law as well as in fact because the same is neither barred by limitation nor premature. Notice under Section 8 of IBC, 2016 has also been delivered to the Corporate Debtor. As regard to plea of Corporate Debtor that reply to such notice of demand had been given, there are proofs of dispatch of such reply to notice which are not at all readable and clear, hence, it does not establish the fact of delivery of such reply. Thus, claim of the Corporate Debtor is liable to be rejected that it had replied to the notice of demand under 8 of IBC, 2016. Accordingly, we hold that no reply to Demand Notice has been given by the Corporate Debtor within the statutory period of 10 days from the receipt of such notice and no reasonable cause has been shown even during the course of hearing for not doing so. Hence, in our opinion, this application is liable to be admitted for this reason alone on the principle of parity i.e. whom delivery of notice under Section 8 of IBC, 2016 is mandatory for the Operational Creditor to make an application under Section 9 maintainable, similar obligation is on the Corporate Debtor to avoid itself being admitted into CIRP to give reply to such notice of demand within 10 days. Pre-existing dispute or not - HELD THAT:- No material has brought on record by the Corporate Debtor as regard to what work was done by Operational Creditor till termination and what work remained to be completed. As per claims of Operational Creditor outstanding invoice pertain to work already done by the Operational Creditor only. Further, in the reply to notice of demand, assuming that it was given, slow rate of completion of project as alleged in letters of 15.03.2016 and 01.04.2016 has not been mentioned but issue of variation in rates applied in the invoice has only been mentioned, hence, such reply of Corporate Debtor contradicts nature of its claim as regard to pre-existing dispute. Thus, for this reason also, this claim of Corporate Debtor is rejected - The Corporate Debtor has failed to make out a triable case. However, considering the general importance of this issues as this please is taken almost in all case where aspect of pre-existing dispute is involved and even in above discussion, it has been held that Adjudicating Authority has briefed jurisdiction and proceedings before Adjudicating Authority are of summary nature. This situation has prompted us to look into legal mechanism which has been in operation for resolution of commercial disputes before IBC, 2016 was enacted. It is pertinent to mention that the tribunalisation or creation of institutions of Adjudication Authority is a modern practice which is evolved, firstly, for the purpose of expeditious disposal of the matters, of social importance and in particular of matters of the nature of the commercial disputes having economic significance for the parties in dispute as well as for the society and the National Economy as a whole and secondly to deliver justice with the help of technical experts along with legal experts. For these reasons also, there are no substance in the claims made by the Corporate Debtor. The application is otherwise complete and defect free - The application deserves to be admitted - application admitted - moratorium declared.
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2021 (5) TMI 270
Alteration of distribution matrix with respect to the resolution plan of the successful applicant - inclusion of success fee approved by the Committee of Creditors payable to Respondent - HELD THAT:- It is clear that the CoC has unanimously approved the Resolution Plan submitted by Prestige Estates Projects Ltd. The RP had also filed an application bearing No. 3714 of 2020 for approval of the said Resolution Plan. It is pertinent to note here that this application has been approved today by this Bench but the success fees has not been approved being unreasonable. This Bench has relied on the judgment of the Hon'ble NCLAT passed in the matter of MR. DEVARAJAN RAMAN, RESOLUTION PROFESSIONAL, POONAM DRUM CONTAINERS PVT. LTD. VERSUS BANK OF INDIA LTD. [ 2020 (7) TMI 758 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] that the fees of the RP is not the commercial wisdom of the CoC. This Bench hereby directs to proportionately distribute the said amount of ₹ 3 Crores among the employees/operational creditors/unsecured creditors - Application dismissed.
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PMLA
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2021 (5) TMI 269
Seeking grant of anticipatory bail - Commission of offences punishable under section-420 IPC and section-10 of the Haryana Development and Regulation of Urban Areas Act, 1975 - violating the terms conditions of the licence granted for the development of a colony - HELD THAT:- Grant of anticipatory bail at this stage of investigation is likely to frustrate the right of investigating agency to interrogate the accused and collect the useful information as well as material which might have been concealed - success in such interrogation would elude if the accused knows that he is protected by the order of the Court and therefore, hold that with regard to the instant offence which comes within the category of economic offence the very purpose of the investigation will stand materially hampered. Taking into consideration the entire facts and scenario and without commenting anything on the merits of the case irrespective of the quantum of financial loss which has been caused to the State Exchequer, the overall act and conduct of the applicant/accused leads this Court to a definite conclusion that affording the benefit of anticipatory bail will deny the investigating agency a fair right to investigate the case properly by effectively interrogating the accused and this denial will scuttle the investigation. Therefore, hold that the applicant/accused is not entitled for the benefit of anticipatory bail and his request for anticipatory bail deserves to be declined. Hence, the instant application for anticipatory bail is hereby dismissed. However, any observation recorded in this order shall not be treated as an expression of opinion on the merits of the case. File be consigned to the record room after due compliance.
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Service Tax
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2021 (5) TMI 287
Principles of natural justice - service of order in original - levy of service tax - refund of amount paid under protest - HELD THAT:- This Court is of the view that the dispute, as to whether the petitioner was earlier communicated or not communicated the order dated 20.3.2017 cannot be considered by this Court in writ jurisdiction, particularly when it has been recorded in Annexure 11 that the same was earlier delivered to the petitioner at their business address as well as residential address. However, if the petitioner is disputing the delivery, it is for the petitioner to demonstrate the same before the appropriate authority. This Court is not inclined to entertain the present writ petition against the order in original dated 20.3.2017 Accordingly, the present writ petition is dismissed as not maintainable.
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2021 (5) TMI 283
Reversal of excess availed CENVAT Credit - inadvertent mistake/clerical mistake of the appellant while filing ST-3 return ending March 2014 - HELD THAT:- It is a fact on record that for the period ending 31.03.2014, the appellant shown the balance in cenvet credit as 1,05,705/- in their ST-3 return and opening balance on 01.04.2014 was shown as 4,71,397/-. In these circumstances, it is crucial to examine the records of the appellant pertaining to cenvet credit account whether the appellant has inadvertently made a mistake while filing the ST-3 return for the quarter ending March 2014 or intentionally has taken the excess cenvet credit on 01.04.2014. These facts can be verified from the records of the appellant. The said ascertainment of the said fact was to be done by the adjudicating authority which the adjudicating authority has not done at the time of adjudication after issuance of show cause notice to the appellant. The adjudicating authority is directed to verify the records of the appellant within a reasonable time. The matter is remanded back to the adjudicating authority to verify the records and pass an appropriate order - Appeal disposed off by way of remand.
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Central Excise
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2021 (5) TMI 288
Recovery of excess cash refund - submission of the learned counsel for the petitioner is that the notice is devoid of any merit, inasmuch as, no such recovery can be made in exercise of powers under Section 11A of the Act as under the said provision only an amount which has been erroneously refunded can be refunded - HELD THAT:- It is not the case of the petitioner that the show cause notice has been issued by an authority which is not competent under law to issue the same. In such a situation, we decline to exercise our discretionary jurisdiction and dismiss the petition with liberty to the petitioner to show cause pursuant to the impugned show cause notice whereupon necessary action in accordance with law would be taken. It is made clear that it will be open for the petitioner to take up all legal pleas available to him in law in response to the show cause notice and the dismissal of this petition would not come in his way - petition dismissed.
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2021 (5) TMI 281
Refund of CENVAT Credit - amount was paid under protest - denial of refund on the ground of time limitation - Applicability of time limit prescribed for one year - HELD THAT:- The said issue has been examined by this Tribunal in the case of HUTCHISOM MAX TELECOM PVT. LTD. VERSUS COMMISSIONER OF C. EX., MUMBAI [ 2004 (1) TMI 114 - CESTAT, NEW DELHI] where on identical issue, it was held that the refund of the duty paid by the Appellants cannot be denied to them on the ground of claim being time barred. Further in the case of M/S. TAMILNADU EX-SERVICEMEN S CORPORATION LIMITED VERSUS COMMISSIONER OF G.S.T. AND CENTRAL EXCISE, CHENNAI [ 2019 (12) TMI 185 - CESTAT CHENNAI] it was held that even when Service Tax was paid under mistake of law, the period of limitation cannot be invoked to deny the refund. Thus, the contesting the reversal of cenvat credit by the appellant shall amounts to reversal under protest as per the various judicial decisions discussed - the refund claim filed by the appellant is not barred by limitation prescribed under Section 11B(1) of the Central Excise Act, 1944 - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2021 (5) TMI 284
Concessional rate of tax - C Form could not be obtained due to default on the part of the other State dealers - validity of reversal of input tax credit when there was no input tax credit - HELD THAT:- There can be no dispute that the issue on hand is squarely covered by TVL. BHARATH TRADERS VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE COMMERCIAL TAX OFFICER, SOUTH AVANI MOOLA STREET CIRCLE, MADURAI [ 2019 (8) TMI 1699 - MADRAS HIGH COURT] where it was held that Since the substitution in the present case only seeks to set right an anomaly it necessarily has to be effective from the date of inception of the Act itself, retrospectively. The respondents erred in effecting reversal of input tax credit - Petition allowed - decided in favor of petitioner.
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