Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 27, 2022
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
Insolvency & Bankruptcy
Service Tax
CST, VAT & Sales Tax
TMI Short Notes
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
-
Ocean Freight-A Brief study of Recent Supreme Court Judgement dismissing petition of Union of India in case of RCM.
-
Demand and Recovery u/s 74 - Cross state adjustment of unutilized input tax credit - input service distributor (ISD) - It is pertinent to notice that in view of definition of “Input Service Distributor” contained in Section 2(61), it is necessary that the ISD as an office is required to receive tax invoices towards inward supply. Since no such supply being shown to have been made by JSW Steel Ltd. of Odisha to JSW Steel Ltd. of Maharashtra, no prima facie case is made out by the Petitioner. Thus transactions in question prima facie amount to siphoning of tax amounts, therefore, apparently warrant invocation of proceeding under Section 74 of the OGST/CGST Act - No interim relief - HC
-
Validity of SCN - Denial of Input Tax Credit - complete mismatch between the supplier and the petitioner - mismatch rectified or not - Section 42(3) of the GST Act - the technical reason that under Section 42(3) it should have been communicated at the earliest point of time and therefore the show cause notice cannot be treated as communication intimating the mismatch between the supplier and the petitioner, cannot be countenanced. Therefore, on that ground this Court feels that the impugned order cannot be successfully challenged. - HC
-
Condonation of delay in filing appeal - requirement of mandatory pre-deposit - Since this Court had directed the Appellate Authority to exclude the period spent by the petitioner in pursuing the litigation in W.P.(C) No.2963 of 2018, and the said judgment became final, the Appellate Authority was bound to abide by it. Failure to abide by the binding directions in the said judgment has rendered the impuned order perverse. - HC
-
Classification of services - rate of GST - (Training Academy) Fire Prevention & Emergency Training and Awareness Programmes - Serial No.69 of the Notification No. 12/2017-Central Tax (Rate) - the applicant has not furnished any information whether they are a training partner approved by the National Skill Development Corporation or the Sector Skill Council and hence the activity of providing training to the trainees on fire prevention is not covered under this entry. - Taxable @18% of GST - AAR
-
Seeking grant of Bail - input tax credit - non-existent suppliers - non receipt of goods - Considering the gravity of the alleged offence, severity of the punishment provided for the alleged offence and the aforesaid reasons, this Court is of the opinion that the applicant-accused Saurabh Srivastava is not entitled to bail at this stage - Bail application dismissed. - DSC
Income Tax
-
Disallowance u/s. 43B - Electricity Duty deposited into designated bank Account as per direction of this Court - under the interim orders passed by this Court as much as nearly Rs.100 crores has been released to the State Government. In other words, the amount has not only been parted with by the Assessee but also has been received by the Government. Consequently, the deduction under Section 43B of the Act as claimed by the Assessee cannot be denied to it. - HC
-
Addition u/s 69A - unexplained investment in the bank account - Though there is no specific evidence but the circumstances of the assessee and his lifestyle do suggest that the expression “may” used in Section 69A of the Act, has to be used here. This expression “may” infused discretion in the Assessing Officer to treat such an investment as explained or unexplained investment - Additions deleted - AT
-
Levy of penalty u/s 272A(1)(C) - Failure to comply to the summon issued u/s 131(1) - AO has rightly acted as per the provision of sub-Section 3 of Section 272A of the Act by making a reference to Joint Commissioner of Income Tax for initiation of penalty and the same was levied at Rs. 10,000/- u/s 272A(1)(C) of the Act. The ground of the assessee that notice of demand u/s 156 of the Act should be under the signature of the ld. AO and not Joint Commissioner of Income Tax has no merit because the issue before us is the penalty levied u/s 272A(1)(C) of the Act. - AT
-
Deemed dividend under section 2(22)(e) - assessee claimed that advances were received as business advances, however, the assessee failed to produce any documentary evidence in support of this submission - the basic conditions of section 2(22)(e) of the Act are satisfied in the present case. - Additions confirmed - AT
-
Disallowing excess directors remuneration - sum paid towards directors remuneration and that is to the extent of 80% of the net profit - the AO has not carried out any exercise for holding the payment of remuneration to the directors that the same is unreasonable or not in consonance with the payment of directors or remuneration. - Even it is accepted position that the directors have paid taxes on these remunerations on maximum margin rate and there is no revenue loss to the Department. - AT
-
Nature of expenditure - Disallowing revenue expenditure on product testing prototyping and verification expenses - Expenditure was incurred only up-gradation of existing products, we are of the considered opinion that the expenditure is not in the nature of capital but revenue expenditure. - AT
-
Correct head of income - Characterization of income - rental income as 'business income' or 'income from house property' - there is no doubt that assessee has object of renting out of the properties as per its object in Memorandum of Association (MOA) - income from property earned by the assessee is chargeable to tax as business income and not as income from house property. - AT
-
Gain on sale of plot - capital Income or business income - assessee is engaged in the business of real estate on part-time basis - the transaction undertaken qualifies as ‘adventure in the nature of trade’ and hence provisions of section 50C would not apply to the instant set of facts. - AT
Customs
-
Seeks to amend notification No. 27/2011 dated 1st March, 2011 to increase export duty on certain goods. - Notification
-
Effective rate of Agriculture Infrastructure and Development Cess for specified goods - Seeks to further amend notification No. 11/2021- Customs dated 1 st February, 2021 to reduce duty on Anthracite/Coking Coal - Notification
-
Seeks to amend Second Schedule of the Customs Tariff Act, 1975 to increase and levy Export duty. - Notification
-
Effect rate of Customs Duty on import of goods - Seeks to further amend notification No. 50/2017- Customs dated 30th June, 2017. - Notification
DGFT
-
Amendment in import policy of Paper and incorporation of policy condition in Chapter 48 of ITC (HS), 2022, Schedule - I (Import Policy) - Notification
-
Import of Oxytocin reference standards is permitted exclusively for the purpose of test and analysis subject to submission of Test License issued by the DGCI / CDCSO. - Amendment in import policy condition under Chapter 29 and 30 of ITC (HS) 2022, Schedule – I (Import Policy) - Notification
FEMA
-
Guidelines on import of gold by Qualified Jewellers as notified by – The International Financial Services Centers Authority (IFSCA) - Circular
IBC
-
Review of circulars - it has been decided to rescind circulars listed in the Annexure - Circular
-
Initiation of CIRP - Period of limitation - Article 137 of the Limitation Act, 1963 - Under Article 137, time from which period begins to run is “when the right to apply accrues” the right to apply accrues when invoices issued by the Appellant to the Corporate Debtor were not paid. Invoices on the basis of which payment is claimed are more than three years earlier from the date of filing of Section 9 Application which is the basis for rejection of the Application of the Appellant by the Adjudicating Authority. - AT
SEBI
-
Simplification of procedure and standardization of formats of documents for issuance of duplicate securities certificates - Circular
-
Circular on Development of Passive Funds - to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
VAT
-
Requirement of pre-deposit - Rejection of appeal - Since statutory deposits as discussed in the foregoing paragraphs were not made, the appeals were rejected summarily. Summary rejection orders were carried in revision before the Commissioner of Sales Tax, Odisha who has upheld the rejection orders of the appellate authority. It appears the petitioner has been bona fide pursuing its matter before different fora. Since the counsel for the petitioner has prayed for grant of opportunity to make statutory deposit, it is, therefore, pertinent to observe that the appellate authority shall not raise any objection as to limitation in view of the fact that the petitioner has been pursuing its matter diligently - HC
Case Laws:
-
GST
-
2022 (5) TMI 1239
Seeking release of detained goods - appealable order or not - Section 129 (1)(b)/129 (3) of CGST Act, 2017 read with IGST Act - HELD THAT:- An order under Section 129 (1)(b)/129 (3) of CGST Act, 2017 read with IGST Act, has been passed on 14.05.2022, pursuant to the impugned notice. The order is appealable under Section 107 of the Act, 2017. The petition is dismissed.
-
2022 (5) TMI 1238
Demand and Recovery u/s 74 - Cross state adjustment of unutilized input tax credit - input service distributor (ISD) - modality in claiming adjustment of unutilized input tax credit is objected to by the Revenue on the premise that such a device to facilitate other units of JSW Steel Ltd. located in other States to claim input tax credit arising in the State of Odisha is contrary to the statutory mandate - HELD THAT:- It is apparent that JSW Steel Ltd., public limited company, has units located in different States including the State of Odisha with its Head Office at Mumbai. The Head Office at Mumbai is registered as ISD bearing GSTIN 27AAACJ4323N2ZF. It is also registered as normal taxpayer being GSTIN 27AAACJ4323N3ZE in the State of Maharashtra. No doubt JSW-Company from its Head Office at Bombay had applied and participated in the tender process, however it cannot be lost sight of that its JSW-Company, and not Head Office, Bombay, which has been granted the mining lease for the four Iron mines situated within the State of Odisha. The Company to undertake the process of mining had to get itself registered in State of Odisha as per the statutory provisions of CGST/OGST to undertake the execution of the mining lease - the excess input tax credit has been sought to be utilized by raising tax invoices in favour of JSW Steel Ltd. in the State of Maharashtra, declared ISD, in the garb of support service. That apart, it is not clear at all as to what is support service which has been provided by JSW Steel Ltd.(Odisha) to JSW Steel Ltd.- ISD at Mumbai, much less any common services which could be utilized by other units located in other parts of the country. It also emerges that JSW Steel Ltd. in Odisha has utilized JSW Steel Ltd.- ISD Mumbai as wrongful conduit and facilitated the utilization of input tax credit by other units of JSW Steel Ltd., which in this manner have availed input tax credit twice, i.e. , once on the strength of the purchase invoices of supply of iron ore and the other on the strength of the tax invoices for alleged services issued by JSW Steel Ltd.-ISD at Mumbai. It is pertinent to notice that in view of definition of Input Service Distributor contained in Section 2(61), it is necessary that the ISD as an office is required to receive tax invoices towards inward supply. Since no such supply being shown to have been made by JSW Steel Ltd. of Odisha to JSW Steel Ltd. of Maharashtra, no prima facie case is made out by the Petitioner. Thus transactions in question prima facie amount to siphoning of tax amounts, therefore, apparently warrant invocation of proceeding under Section 74 of the OGST/CGST Act - List this matter on 12th August, 2022.
-
2022 (5) TMI 1237
Validity of SCN - Denial of Input Tax Credit - complete mismatch between the supplier and the petitioner - mismatch rectified or not - Section 42(3) of the GST Act - HELD THAT:- After receipt of the show cause notice, if at all the petitioner wants to rectify the mismatch between the petitioner and the supplying dealer, the supporting documents to substantiate that the output tax had been paid by the supplying dealer at their end should have been procured and filed along with the reply submitted by the petitioner, which they failed to do. Therefore, the technical reason that under Section 42(3) it should have been communicated at the earliest point of time and therefore the show cause notice cannot be treated as communication intimating the mismatch between the supplier and the petitioner, cannot be countenanced. Therefore, on that ground this Court feels that the impugned order cannot be successfully challenged. This Court is not inclined to entertain this writ petition and it is liable to be dismissed - Petition dismissed.
-
2022 (5) TMI 1236
Maintainability of appeal - condonation of delay in filing appeal - requirement of mandatory pre-deposit - HELD THAT:- Since this Court had directed the Appellate Authority to exclude the period spent by the petitioner in pursuing the litigation in W.P.(C) No.2963 of 2018, and the said judgment became final, the Appellate Authority was bound to abide by it. Failure to abide by the binding directions in the said judgment has rendered the impuned order perverse. Requirement of mandatory pre-deposit - HELD THAT:- As rightly pointed out by the learned counsel for the petitioner, since the bank guarantee furnished by the petitioner is alleged to have been invoked, the said matter ought to have been considered by the Appellate Authority. Once the entire tax and penalty imposed on the petitioner and secured by the Bank Guarantee was fully satisfied by invoking the guarantee, there cannot be any insistence of a further payment contemplated under section 107(6)(b). This aspect was not considered in Ext.P5. Failure to consider the alleged encashment of bank guarantee has also rendered the impugned order perverse. Petition allowed.
-
2022 (5) TMI 1235
Classification of services - rate of GST - (Training Academy) Fire Prevention Emergency Training and Awareness Programmes - Serial No.69 of the Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 - HELD THAT:- As per entry No. 69 of Notification No. 12/2017, GST is exempt on any services provided by a training partner approved by the National Skill Development corporation or the Sector Skill Council in relation to- (i) the National Skill Development Programme implemented by the National Skill Development Corporation; or (ii) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (iii) any other Scheme implemented by the National Skill Development Corporation. However the applicant has not furnished any information whether they are a training partner approved by the National Skill Development Corporation or the Sector Skill Council and hence the activity of providing training to the trainees on fire prevention is not covered under this entry. Whether the activity of providing training to the trainees on fire prevention is covered under Serial No.30 of the Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017? - HELD THAT:- Since the Applicant is providing training to the trainees on fire prevention, the same is covered under SAC 999293 and is liable to GST at 18% as per Serial No.30 of the Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017.
-
2022 (5) TMI 1234
Seeking grant of Bail - input tax credit - non-existent suppliers - non receipt of goods - cognizable and non-bailable or not - offence punishable under Section 132(1)(b)(c) (i)(3)(5) of the CGST Act, 2017 - HELD THAT:- The applicant-accused was arrested on 16.02.2022. The investigation is at a nascent stage. Allegedly, the accused availed input tax credit by creating fake bills and during the transaction no goods were actually supplied. When the chain of suppliers were explored, most of the premises were found either closed or their GST registration cancelled. The accused has no material to show physical movement of goods. As per the complaint, the applicant-accused was the proprietor and the master mind of the alleged crime. It was him who had orchestrated the crime to camouflage the fraud into the nexus of trusted accomplices who acted as suppliers. Considering the gravity of the alleged offence, severity of the punishment provided for the alleged offence and the aforesaid reasons, this Court is of the opinion that the applicant-accused Saurabh Srivastava is not entitled to bail at this stage - Bail application dismissed.
-
Income Tax
-
2022 (5) TMI 1233
Attachment of property passed under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 - challenge, amongst others is violation of the procedure, including the requirement to arrive at a satisfaction before forming an opinion that the property in question may be alienated during the period specified in the notice - HELD THAT:- On a specific query as petitioners has submitted that apart from the lack of satisfaction, there is no intention on the part of the petitioners to alienate the property in question and in this regard, attention of this Court has been invited to an undertaking contained in paragraph 24 of the petition whereby the petitioners have undertaken not to alienate the said property and the averments have also been properly verified in the accompanying affidavit. Shri Goswami, learned Senior Counsel further submits that the petitioners are ready and willing to submit the reply to the show cause notice which is an obligation under Section 24(1) of the Act and prays for time of two weeks for the said purpose. This Court is of the view that interest of justice would be served if a period of 10 days is granted to the petitioners to submit the reply to the show cause notice dated 30.03.2022. In the event, the reply is filed within 10 days from today i.e., 06.06.2022, the respondent authorities would consider the same strictly in accordance with the provisions laid down in Section 24 of the Act. The proceedings impugned in this writ petition, namely, order dated 31.03.2022 will not be given effect to in view of the clear undertaking given by the petitioners in the writ petition supported by an affidavit and the process will start afresh from the stage of the procedure laid down in Section 24(1) of the Act which will be done strictly in accordance with law.
-
2022 (5) TMI 1232
Disallowance u/s. 43B - Electricity Duty deposited into designated bank Account as per direction of this Court - HELD THAT:- On the issue of electricity duty, there is merit in the contention of Mr. A.U. Senapati that the facts of the present case are different from the case of Indian Metal and Ferro Alloys Ltd. [ 2022 (3) TMI 390 - ORISSA HIGH COURT] . In that case the differential electricity duty paid in the loan lien account remained there and therefore, was inaccessible to the Government. In the present case, however, under the interim orders passed by this Court as much as nearly Rs.100 crores has been released to the State Government. In other words, the amount has not only been parted with by the Assessee but also has been received by the Government. Consequently, the deduction under Section 43B of the Act as claimed by the Assessee cannot be denied to it. It requires to be mentioned here that against the order passed by this Court in [ 2010 (5) TMI 952 - ORISSA HIGH COURT] and the State Government filed an SLP before the Supreme Court of India [ 2015 (3) TMI 1414 - SC ORDER] an order was passed by the Supreme Court on 23rd March, 2015 recoding a settlement between the parties, pursuant to which full payments have in fact been made by NALCO to the State Government. In that view of the matter, question No.(i) is answered in favour of the Assessee and against the Department by holding that the AO, the CIT(A) and the ITAT were not justified in sustaining the addition/disallowance under Section 43B of the Act in respect of electricity duty deposited in the SBI Bank account under the direction of this Court. On this issue, the matter is remanded to the AO for a fresh computation keeping in view the amounts already released by the Petitioner to the State Government. Additional depreciation under Section 32(1)(iia) - components/parts of a plan which were acquired prior to 31st March, 2005 but all such components/parts fitted into the plant after 31.03.2005 and installed after 31.03.2005 - HELD THAT:- The decision in PCIT v. IDMC Ltd. [ 2017 (2) TMI 644 - GUJARAT HIGH COURT] of the Gujarat High Court squarely applies to this issue. There it was held that machines that might have been acquired before 31st March, 2005 but installed after 31st March, 2005 would be eligible for grant of additional depreciation under Section 32(1)(iia) of the Act for the AY 2006-07. That decision of Gujarat High Court has been upheld by the Supreme Court by dismissal [ 2017 (10) TMI 732 - SC ORDER] Accordingly, in the present case question No.(ii) is answered in favour of the Assessee and against the Department by holding that the component/parts of a plant acquired prior to 31st March, 2005 but fitted to the plant thereafter would be eligible for additional depreciation under Section 32(1)(iia).
-
2022 (5) TMI 1231
Validity of Reopening of assessment u/s 147 - Mandation of considering objections raised by the writ applicant - HELD THAT:- We should remit the matter to the Assessing Officer for fresh consideration of the objections raised by the writ applicant. We are not convinced with the manner in which the Assessing Officer has dealt with the objections raised by the writ applicant assessee. The writ applicant in so many words has tried to explain that the difference between the cash deposited and the sales shown is due to the VAT component in the cash deposited. According to the writ applicant, it is not a part of sales but shown separately as a liability. Whatever may be the worth of the explanation put forward by the writ applicant, it is expected of the Assessing Officer to apply his mind and decide the same accordingly. All that the Assessing Officer has said while disposing of the objections is that it is not an appropriate time to discuss the genuineness of the transactions on merits. We partly allowed this writ application. The impugned notice and the order disposing of the objections are hereby quashed and set aside. The matter is remitted to the Assessing Officer for fresh consideration of the objections.
-
2022 (5) TMI 1230
Revision u/s 263 - notice for demand made by the assessing officer against the assessee till the disposal of the appeal - HELD THAT:- As against the order under Section 263 of the Act, the appeal has been admittedly filed, which is pending before the ITAT, though attempt has been made to seek for a stay, that has been negated for the reasons stated. Be that as it may, once the appeal has been entertained and unless it is decided one way or other, if the Assessing Officer is permitted to go ahead pursuant to the order passed by the authority concerned under Section 263 of the Act, then that will make the very challenge in the appeal before the ITAT otiose. We are inclined to dispose this writ petition with the following orders: 1.That the assessing authority can go ahead with the assessment proceedings pursuant to the notice dated 26.03.2022 on the basis of the order passed by the revisional authority under Section 263 of the Act for which the petitioner shall cooperate by filing any reply or evidence or documents as sought for in the notice dated 26.03.2022 within a period of two weeks from the date of receipt of a copy of this order. 2. It is made clear that, once an order is passed by the assessing authority and if it goes against the interest of the assessee, then pursuant to which no further proceedings including the notice for demand shall be made by the assessing officer against the assessee till the disposal of the appeal which is pending before the Income Tax Appellate Tribunal, for which already date of hearing is given as 12.04.2022. 3. In view of the above, the ITAT is hereby directed to complete the hearing of the appeal proceedings and pass orders in the appeal on or before 31.05.2022 on its own merits and in accordance with law.
-
2022 (5) TMI 1229
Addition u/s 69A - unexplained investment in the bank account - best judgment assessment order u/s 144 - Scope of expression may used in Section 69A - whether the assessee has explained the source of such deposit with the help of reliable piece of evidence? - HELD THAT:- Assessee belongs to a non-organized sector of the society. The ld. Sr. D/R is expecting the maintenance of accounts and other details in a meticulous manner as are being maintained by the big business houses, but here it has to be appreciated that the assessee is running a small shop in a rural area. He has explained the source as contribution from his father and brother towards the marriage of his daughter as well as for purchase of some items for the shop. A sum of Rs.6,01,600/- was deposited in the bank account of the assessee on 21/12/2016 and a RTGS was issued on 22/12/2016. It was transferred in the account of M/s. Triven Tracom Pvt. Ltd. According to the assessee, it was given for the purpose of purchasing sugar for trading. If we appreciate the explanation of the assessee by looking at his bank account, then, we find force in his submissions. In day to day behavior, nobody kept the details in a meticulous manner, more particularly the section of the society which is struggling for survival. We could have appreciated the case of the revenue authorities if they were able to lay their hands on other assets of the assessee in shape of house property, land etc. or on details of any unexplained expenditure. Quantum in question is concerned, to this extent, there can be a saving from the father and brother who would have contributed to the assessee towards the marriage of his daughter. The might have saved this money for that purpose and because of demonetization, it was deposited in the bank account. Similarly, the assessee has demonstrated that a sum of Rs.6,10,600/- out of the total deposit was used for the purpose of his business. Though there is no specific evidence but the circumstances of the assessee and his lifestyle do suggest that the expression may used in Section 69A of the Act, has to be used here. This expression may infused discretion in the Assessing Officer to treat such an investment as explained or unexplained investment - Assessee appeal allowed.
-
2022 (5) TMI 1228
Legality of the assessment proceedings - assessee was not intimated about the notice issued for selection of scrutiny as to whether the case of the assessee falls under limited scrutiny or complete scrutiny and the notice issued u/s 143(2) of the Act is defective as observed by ld. CIT(A) in the impugned order - HELD THAT:- CIT(A) has himself mentioned in the impugned order that the notice u/s 143(2) of the Act is defective is devoid of any merit because in para 9.4 of the impugned order ld. CIT(A) has given his finding and before giving his finding he has mentioned the issue as the notice u/s 143(2) of the Act was defective. Nowhere ld. CIT(A) has stated that the notice u/s 143(2) of the Act was defective. Limited scrutiny or a complete scrutiny - We find that the ld. AO has specifically mentioned that the case of the assessee has been selected for complete scrutiny for two reasons i.e. mismatch in sales turnover reported in audit report and second is cash deposit in saving bank account is more than the turnover. Though it gives an impression that the assessee s case has been selected for limited scrutiny specifically for two reasons but due to lack of any other contrary material we are inclined to find that the case of the assessee has been selected for complete scrutiny. Had the case been selected for limited scrutiny then while converting the same into complete scrutiny an approval is required. Ample opportunities were provided to the assessee but there was no compliance. A perusal of the assessment order shows that ld. AO confined his examination only to the extent of gross turnover and profit disclosed by the assessee. No other issue has been taken up nor any addition has been made which shows that ld. AO has not exercised his jurisdiction beyond the two reasons for which scrutiny notice was issued. Now, this being the case then there hardly remains any grievance of the assessee as to whether the scrutiny was complete or limited, and the fact remains undisputed that a valid notice u/s 143(2) of the Act dated 02.09.2014 was issued and duly served upon the assessee and since the additions made in the assessment order (which have not been challenged by the assessee) either before the first appellate authority nor before this Tribunal, there remains no reason for the assessee raising grievance about the limited/complete scrutiny. We, therefore, under the given facts and circumstances of the case find no reason to interfere into the finding of the ld. CIT(A). Thus, the appeal of the assessee is dismissed. Levy of penalty u/s 272A(1)(C) - Since the assessee did not comply to the summon issued u/s 131(1) of the Act dated 05.12.2016 requiring his personal appearance on 08.12.2016 along with certain details and documents the ld. AO made the reference to Joint Commissioner of Income Tax, Range-39 for initiation of the penalty - HELD THAT:- The assessee has not denied the fact that summon u/s 131(1) of the Act dated 05.12.2016 was issued and he did not appear on the date of hearing i.e. on 08.12.2016 and did not furnish any application stating any reasonable cause for not appearing on the given date nor requested any adjournment. Thus, there is a clear violation of provision of Section 131 of the Act and penalty u/s 272A(1)(C) of the Act is attracted. Further ld. AO has rightly acted as per the provision of sub-Section 3 of Section 272A of the Act by making a reference to Joint Commissioner of Income Tax for initiation of penalty and the same was levied at Rs. 10,000/- u/s 272A(1)(C) of the Act. The ground of the assessee that notice of demand u/s 156 of the Act should be under the signature of the ld. AO and not Joint Commissioner of Income Tax has no merit because the issue before us is the penalty levied u/s 272A(1)(C) of the Act. Therefore, under the given facts and circumstances of the case, we find no infirmity in the finding of the ld. CIT(A) and the same is confirmed. Thus, the assessee s appeal dismissed.
-
2022 (5) TMI 1227
Addition made under section 68 - bogus long term capital gains claimed as exempt by the assessee - HELD THAT:- The sheer denial by the assessee, at the time of recording of his statement under section 131 about any of the information in respect of the transaction also does not provide any basis to allow the claim of exemption under section 10(38) of the Act, in view of the details furnished by various independent bodies about the conduct of the company in whose shares the assessee had transacted and earned long term capital gains. Further, submission of the assessee before lower authorities that the transaction was made through RTGS on the Recognised Stock Exchange also does not prove that the company, whose shares were purchased by the assessee and later on sold, was not engaged in providing bogus long term capital gains to its beneficiaries and its shares were not penny stocks. In view of the above, we find no infirmity in the order passed by the learned CIT(A), inter-alia, upholding the addition made by the Assessing Officer under section 68 of the Act in respect of the long term capital gains claimed as exempt by the assessee and also the commission paid by the assessee in respect of the said transaction. As a result, ground Nos. 3 and 4 raised in assessee s appeal are dismissed. Deemed dividend under section 2(22)(e) - assessee claimed that advances were received as business advances, however, the assessee failed to produce any documentary evidence in support of this submission - HELD THAT:- As is evident from the fact as available on record, it is not in dispute that the assessee is holding 25.34% of shares in M/s A.R. International Private Limited from which the assessee has received advance of Rs. 28,53,251. Further, it has not been claimed that the said company is a company in which the public is substantially interested. Thus, the basic conditions of section 2(22)(e) of the Act are satisfied in the present case. Further, such a payment for the purpose of section 2(22)(e) of the Act should be to the extent to which the company possesses accumulated profits. As noted by the Assessing Officer accumulated profit of the company was Rs. 34,92,721. Thus, in view of the above, we do not find any infirmity in the order passed by the learned CIT(A) affirming the addition on account of deemed dividend. As a result, ground No. 5 raised in assessee s appeal is dismissed.
-
2022 (5) TMI 1226
Delayed payments of Employee s contribution to ESI/Provident Fund - addition by way of adjustment and intimation u/s 143(1) - payments made after stipulated dates prescribed under relevant laws governing provident fund and ESI, but before due date of filing of return prescribed u/s 139(1) - HELD THAT:- It is well settled that any adjustments u/s 143(1) of Income Tax Act by way of intimation u/s 143(1) of Income Tax Act, on debatable and controversial issues, is beyond the scope of Section 143(1) Adjustments made by Revenue on 31.10.2018, whereby the aforesaid amount was added to assessee s income, were unfair, unjust, and bad in law. For this view, we respectfully take support from the order of Agra Bench of ITAT, in the case of Mahadev Cold Storage [ 2021 (6) TMI 506 - ITAT AGRA ] At the very least, Revenue should have given due consideration to the fact that the issue was highly debatable and controversial. As already discussed earlier, adjustments u/s 143(1) of Income Tax Act by way of intimation u/s 143(1) of Income Tax Act, on debatable and controversial issues, is beyond the scope of section 143(1) of Income Tax Act. Revenue was clearly in error, in making the aforesaid adjustments u/s 143(1) of Income Tax Act on 31.10.2018 a debatable and controversial issue. We would like to make respectful mention of order of Jabalpur Bench of ITAT in the case of Nikhil Mohine vs. DCIT [ 2021 (12) TMI 1289 - ITAT BANGALORE ] in which similar view has been taken. As it is also well settled that retrospective amendment cannot be invoked to make addition by way of adjustment and intimation u/s 143(1) of Income Tax Act. Thus we are of the view that the aforesaid additions by way of adjustment and intimation u/s 143(1) of Income Tax Act, were beyond the scope of Section 143(1) of Income Tax Act; and further, that the Ld. CIT(A) erred in law in confirming the aforesaid addition on a debatable and controversial issue.
-
2022 (5) TMI 1225
Deduction u/s. 80IA(4) (iii) - eligibility of interest on land premium for deduction under section 80IA - As per AO interest income shown by the assessee was the part of profit attributable to the business of the assessee and it was not derived from eligible business activities - assessee submitted that the claim for deduction included interest on land premium on some industrial parks, in respect of which deduction under section 80IA had been claimed - CIT(A) deleted the addition - HELD THAT:- As the issue boils down to as to whether the receipts from the clients of the assessee who choose to make lumpsum upfront payment and who choose to make deferred installment payments along with interest are to be treated alike or not it is held that since the receipt of interest is intrinsically linked to the primary activity of allotment of plots in the industrial park, it is hereby held that the interest is derived from the eligible business and thus, eligible for the purpose of direction u/s. 80 IA of the Act. Ergo, we hereby affirm the decision of Ld. CIT(A).- Decided in favour of revenue.
-
2022 (5) TMI 1224
Reopening of assessment u/s.147 r.w.s. 148 - non deduction of tds u/s 194C on loading / sorting expenses and towards container stuffing charges - Reopening beyond period of four years - Argument of violation of first proviso to section 147 of the Act as the original assessment was completed u/s.143(3) of the Act and there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of the assessee for the relevant assessment year - HELD THAT:- AO in the reasons recorded noted that there is no evidence for deduction of TDS as per column 27(a) of the Form No.3CD i.e., audit report filed by the assessee along with the return of income. It means that the assessee has filed the complete details of particulars before the AO and from very return of income the AO has chosen these reasons. We noted that this issue is squarely covered in favour of assessee assessee and against the Revenue by the decision of Hon ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. [ 2010 (1) TMI 11 - SUPREME COURT] as considered that there cannot be change of opinion based on the material which was already available with the AO at the time of original assessment. The Hon ble Supreme Court further held that there should be some tangible material came to the notice of the AO after completion of assessment and on that basis reopening can be done. In the present case, reopening is beyond 4 years and the assessee s case falls under the proviso to section 147 of the Act and there is no failure on the part of the assessee to disclose material facts necessary for its assessment truly and correctly for the relevant assessment year as the assessee has filed details towards loading / sorting expenses and towards container stuffing charges. Hence, even otherwise there is change of opinion in view of the decision of Hon ble Supreme Court in the case of Kelvinator India Pvt. Ltd., supra. Hence, we quash the reopening and allow this jurisdictional issue in favour of the assessee.
-
2022 (5) TMI 1223
Disallowing excess directors remuneration - sum paid towards directors remuneration and that is to the extent of 80% of the net profit - HELD THAT:- We noted that the Tribunal in the case of The Bombay Samachar Pvt. Ltd. [ 2018 (11) TMI 1113 - ITAT MUMBAI] has considered the issue of applicability of provisions of section 40A(2)(b) of the Act to the directors remuneration and held that this provision will not apply to the directors payment for holding that the payment is excessive or unreasonable in the absence of any material brought on record to demonstrate that the payment is actually excessive or unreasonable having regard to market rate for the goods, services or facilities availed or the business need of the assessee or commensurate with the benefit derived by the assessee. In the present case before us also the AO has not carried out any exercise for holding the payment of remuneration to the directors that the same is unreasonable or not in consonance with the payment of directors or remuneration. We note that in this year the turnover is at Rs.1,42,13,393/- and profit earned is at Rs.84,40,020/- and remuneration paid to these three directors are at Rs.75,07,380/-. Even it is accepted position that the directors have paid taxes on these remunerations on maximum margin rate and there is no revenue loss to the Department. In view of the above, we are of the view that in the absence of any findings by the AO that the directors remunerations are excessive and unreasonable, we reverse the orders of lower authorities and allow the appeal of assessee.
-
2022 (5) TMI 1222
Nature of expenditure - Disallowing revenue expenditure on product testing prototyping and verification expenses - HELD THAT:- The true nature of the expenditure had not been doubted by the AO. Undisputedly, the appellant is in the business of manufacturing of automotive components since 1999. As result of this expenditure, no new asset has been created nor new product did actually materialize. The expenditure was only incurred for the purpose of facilitating the existing business of manufacturing of automotive components and enabling the management to conduct the business operations more efficiently and productively. The Hon'ble Supreme Court in the case of (i) Empire Jute Co. Ltd. [ 1980 (5) TMI 1 - SUPREME COURT] and (ii) Alembic Chemical Works Co. Ltd. [ 1980 (5) TMI 1 - SUPREME COURT] held that expenditure incurred on the existing business incurred in connection with the existing business. Updating existing products should be allowed as revenue expenditure. Expenditure was incurred only up-gradation of existing products, we are of the considered opinion that the expenditure is not in the nature of capital but revenue expenditure. Accordingly, we direct the Assessing Officer to allow the expenditure as revenue nature. Accordingly, this ground of appeal filed by the assessee stands allowed.
-
2022 (5) TMI 1221
Deduction u/s 80IB - Claim allowed for initial initial year - Whether once the deduction is allowed in the initial year then the revenue cannot deny the same in the subsequent years? - HELD THAT:- We note that that the appeal of the assessee has been allowed by ld CIT(A) by holding that Act on the ground that deduction was allowed in the initial year i.e. AY 2003-04 after carrying due verification and enquiry and similar deduction was allowed in AY 2004-05 2005-06. CIT(A) has also recorded a finding a fact that deduction allowed in AY 2003-04, 2004-05 and 2005-06 have not been disturbed and therefore the deduction claimed in the subsequent year cannot be rejected by following the ratio as laid down in decisions of various by various High Courts namely Paul Brothers [ 1992 (10) TMI 5 - BOMBAY HIGH COURT ] Simple Food Product Pvt. Ltd. [ 2017 (8) TMI 646 - BOMBAY HIGH COURT ] as discussed in the appellate order. Accordingly we are inclined to uphold the same by dismissed the appeal of the revenue.
-
2022 (5) TMI 1220
Revision u/s 263 - Validity of assessment orders completed u/s 143(3) r.w.s. 153A - eligibility of deduction u/s 80IB - HELD THAT:- Admittedly, there is no incriminating material found during the course of search u/s 132 and the assessment orders for the relevant assessment years, namely, A.Y. 2011-2012 and 2012-2013 had already been concluded as on the date of search. Hence, deduction u/s 80IB which is already allowed in the assessments completed u/s 143(3) (for assessment year 2011-2012 the assessment completed vide order dated 10.05.2013 and for assessment year 2012-2013, the assessment u/s 143(3) was concluded on 14.08.2014) cannot be denied unless incriminating material is found during the course of search, warranting disallowance. Therefore, on the fact of the instant case, in an assessment completed u/s 143(3) r.w.s. 153A pursuant to search u/s 132 A.O. could not have disallowed the claim of deduction u/s 80IB - Pr.CIT is seeking to revise the assessment orders completed u/s 143(3) r.w.s. 153A of the I.T.Act. When the Assessing Officer u/s 143(3) r.w.s. 153A of the I.T.Act, cannot deny the claim of deduction u/s 80IB of the I.T.Act (in absence of incriminating material), the Pr.CIT in a revisionary proceeding cannot direct the AO to disallow the claim of deduction. In other words, there is no error in the assessment orders completed u/s 143(3) r.w.s. 153A (since there is no incriminating material found during the course of search pertaining to the claim of deduction u/s 80IB of the I.T.Act), warranting interference by Pr.CIT u/s 263. In the light of the aforesaid reasoning and the ITAT order in the case of Shri S.R.Ravishankar v. Pr.CIT [ 2022 (2) TMI 1238 - ITAT BANGALORE] we quash the impugned orders u/s 263 of the I.T.Act, since the assessment orders passed u/s 143(3) r.w.s. 153A of the I.T.Act cannot be stated to be erroneous. Appeal of assessee allowed.
-
2022 (5) TMI 1219
LTCG - Co-ownership on land - ancestral property - whether Shri Bhagwan Pathare was the sole owner of the land or whether his sons, daughter-in-law, grandsons and grand-daughters were entitled for sales consideration? - HELD THAT:- As AR submitted ample evidences to demonstrate that the said land is an ancestral property where the assessee, along with his two sons has offered 1/3rd each in their returns of income. A.O in this case has added the entire capital gain in the hands of the assessee alone though the ideal course would have been that the income should have been taxed in the hands of HUF but in this case since 1/3rd has been declared in the respective return of the assessee and his two sons, it is not therefore, justified to include the entire capital gain in the hands of the assessee alone. We are of the considered view that the A.O should assess the capital gain at 1/3rd as shown by the assessee and delete rest of the addition. In view thereof, we set aside the order of the ld. CIT(A) and restore the matter to the file of the A.O with a direction to give effect to our order as per terms aforestated. Appeal of the assessee is allowed for statistical purposes.
-
2022 (5) TMI 1218
Rectification of mistake u/s 154 - Ex-parte appeal Decided by CIT-A - disallowances u/s 43B of the Act as well as under section 40A(7) - whether adjustment so made by the CPC cannot be taken up in appeal against the order passed by the CPC under section 154 as against 143(1) - As submitted assessee has deposited the employees contribution towards PF/ESI before the due date of filing of the return of income and provision of Gratuity disallowed under section 40A(7) of the Act while processing the return of income, the CPC has failed to take into consideration the fact that the assessee has suo moto disallowed the said sum under section 43B - HELD THAT:- Given the fact that the case of the assessee has been decided ex-parte qua the assessee and we do not have the benefit of findings of the ld. CIT (A) in this case, we deem it fit to set aside the matter to his file to decide the same afresh as per law after providing opportunity to the assessee. Before parting, we would like to state that against the adjustments which have been made by the CPC while processing the return of income under section 143(1), the assessee has claimed to have moved rectification application under section 154 of the Act. Given the fact that the adjustment relates to disallowances under section 43B of the Act as well as under section 40A(7) of the Act which are clearly apparent from the tax audit report filed by the assessee along with its return of income, these matters are clearly apparent from the record and clearly fall within the domain of rectification under section 154 of the Act. Therefore, we direct the ld. CIT(A) to examine this matter afresh after providing reasonable opportunity to the assessee.
-
2022 (5) TMI 1217
Correct head of income - Characterization of income - rental income as 'business income' or 'income from house property' - HELD THAT:- Assessee is a company engaged in the business of real estate development. According to Memorandum of Association, main object of the assessee company is to acquire properties such as land and building lease hold or free hold and also to earn rental income from these properties and to develop them. This is contained in main objects of the company clause A (1). Further, in B (5) also the assessee is having incidental and ancillary object of renting out of the properties. Therefore, there is no doubt that assessee has object of renting out of the properties as per its object in Memorandum of Association. Honourable Bombay High court in principal commissioner of income tax v. City centre mall nashik pvt. Ltd.[ 2020 (1) TMI 872 - BOMBAY HIGH COURT] has also held that when main objects of assessee, over and above real estate development as main clause has renting of property there in and assessee is also providing certain other services as mentioned in Annexure B of leave and License agreement, income derived is to be taxed as Business Income and not income from house property. Also see M/S CHENNAI PROPERTIES INVESTMENTS LTD VERSUS THE COMMISSIONER OF INCOME TAX [ 2015 (5) TMI 46 - SUPREME COURT] Therefore looking at the facts of the case and the decision of honorable Supreme Court and Honorable Bombay High court, we hold that income from property earned by the assessee is chargeable to tax as business income and not as income from house property. Accordingly, we direct the learned Assessing Officer to tax the above income under the head of business income and not as income from house property - Appeal of assessee allowed.
-
2022 (5) TMI 1216
Assessment u/s. 44AD on presumptive basis - Estimation of profit - assessee before us made statement at bar that he has maintained books of account, which were produced before the AO during scrutiny assessment proceedings and even now he is ready to produce before the AO, in case the matter is remanded back to the file of the AO - HELD THAT:- As it is clear that the assessee can declare lower profit also in case the assessee has maintained books of account and in this case, as claimed by the assessee before Bench that he has maintained books of account, in that eventuality we are of the view that the orders of lower authorities needs set aside. Hence, the orders of lower authorities are set aside and matter remanded back to the file of the AO for making assessment on the basis of books of account. Accordingly, the AO will reframe the assessment after allowing reasonable opportunity of being hearing to the assessee. Appeal of the assessee is allowed for statistical purpose.
-
2022 (5) TMI 1215
Disallowance u/s. 36(1)(va) in respect of Contribution made to PF ESI - contribution before the filling of return - HELD THAT:- As relying on DEVENDER YADAV C/O PANKAJ MAHESH CO [ 2021 (12) TMI 1251 - ITAT DELHI] AND RAJ KUMAR [ 2022 (2) TMI 1224 - ITAT DELHI] employees Contribution towards PF ESI made before due date of filing the return u/s. 139(1) have to be allowed as deduction. - Decided in favour of assessee.
-
2022 (5) TMI 1214
Gain on sale of plot - capital Income or business income - assessee is engaged in the business of real estate on part-time basis - HELD THAT:- By merely showing the aforesaid pieces of land as stock-in-trade in own books does not substantiate that the assessee is real estate agent, when the totality of facts gives a different picture. The assessee s real estate business did not have a Firm Name, Proprietorship Name or business address, from where he has been conducting business after office hours. The assessee has not mentioned anything about his Firm name in the return of income nor is the Firm name mentioned in the letter dated 15/09/2007 addressed by SPIL to the assessee. Also, it is a commonly known facts that real estate agents normally earn commission on purchase and sale of land and not business income on sale of entire property, which again supports the view that the assessee is not a real estate agent. Further, for a real estate agent, it is not common to buy the piece of land in his own name and then selling the same to his own employer. Rather, real estate agents earn commission income, which the assessee has never earned throughout his professional career though he claims to be a real estate broker. It is common for a real estate agent to maintain office, cash book, bank book, ledger accounts, vouchers, bills, copy of bank statements etc. which are all missing in the instant set of facts, which leads to the inescapable conclusion that the assessee is not a real estate agent. Whether the assessee can be said to have engaged in adventure in the nature of trade ? - As the assessee has engaged in the transaction to make profit, although the transaction was entered into at the request of his employer, SPIL. Hence, from an analysis of facts, it is apparent that the assessee has entered into a transaction with the intent to sell land at a profit by undertaking the necessary steps to convert their land use from non-agricultural to agricultural, which in our considered view would qualify as an adventure in the nature of trade . We are of the considered view that the transaction undertaken qualifies as adventure in the nature of trade and hence provisions of section 50C would not apply to the instant set of facts. We therefore hold that Ld. CIT(A) has not erred in facts and in law in holding that the present transaction qualifies as adventure in the nature of trade and hence section 50C does not apply. Disallowance of interest expenses claimed and set off of earlier year's brought forward business loss - Having held that the aforesaid transaction qualifies as an adventure in the nature of trade , we are of the view that assessee is entitled to claim interest expenses on account loan taken to give effect to the transaction and also set off of earlier year's brought forward business loss as per law. We are therefore of the view, that Ld. CIT(A) has not erred in facts and in law in holding that assessee is entitled to claim interest expenses on loan taken and allowing set off of earlier year's brought forward business loss - In the result, Ground Nos. 2 and 3 of Department s appeal are dismissed.
-
2022 (5) TMI 1213
Dismissal of assessee appeal - none appeared for the assessee and application seeking adjournment is also not filed, and therefore, the Ld. CIT(A) dismissed the appeal - HELD THAT:- Since the Appeal before the CIT(A) has been decided without hearing the assessee and assessee has urged the said grievance in the present appeal, in the interest of justice and to render the substantial justice by looking to the facts and circumstances of the case, we are inclined provide an opportunity to the assessee to canvas the appeal before the CIT(A). Accordingly, we set aside the order of the Ld. CIT(A) dated 16-01-2017 and remit the matter to the file of the Ld. CIT(A) for fresh consideration of the Appeal. Needless to say that the assessee shall be provided sufficient and reasonable opportunity of being heard on the statement of facts and the grounds raised in the appeal and pass appropriate order in accordance with law. Appeal of the assessee is allowed for statistical purposes.
-
2022 (5) TMI 1186
Revision u/s 263 - difference in cash in hand - AR filed copy of assessment order giving effect to the revision order and stated that the above subject matter was not added by the AO in the order giving effect to the order of revision passed by PCIT u/s.263 - HELD THAT:- As there is no addition made by AO in the order giving effect to the revision order passed by PCIT u/s.263 of the Act, the appeal filed against revision order of PCIT becomes academic and infructuous.
-
Corporate Laws
-
2022 (5) TMI 1212
Seeking grant of anticipatory bail - Conspiracy - tracing of money trail - recovery of cheated amount - HELD THAT:- Undoubtedly, the State has verified the factum of the applicant having undergone targeted Chemotherapy on 20.01.2021 with he having been diagnosed with Prostate Cancer, Stage-4 in March 2019, as per the synopsis filed on 26.02.2021 by the State and the applicant he has been taking medicines for the said Chemotherapy and undergoing Chemotherapy sessions since 2019. The documents of the Action Cancer Hospital that the applicant has placed on record indicates that as on 20.01.2021, the applicant had been admitted for Chemotherapy and was scheduled for Chemotherapy on 21.01.2021. The said document annexed to the written submissions of the applicant dated 08.02.2021 also indicates that the applicant was being discharged in a stable condition - In the instant case, the allegations levelled against the applicant relate to his alleged involvement with other accused Directors of M/s Prabhu Shanti Real Estate Pvt. Ltd., i.e. the company as being a signatory to resolutions of the said company resulting into the multivictim cheating and duping of innocent flat buyers. Furthermore, as has been observed hereinabove, the applicant was discharged from the Action Cancer Hospital in a stable condition. The applicant seeking the grant of anticipatory bail in relation to FIR No.59/2019 dated 04.04.2019 Police Station, Economic Offences Wing, Mandir Marg, New Delhi under Sections 406,420 120B of Indian Penal Code, 1860, is thus declined and the interim protection granted to the applicant vide order dated 24.11.2020 and extended till date vide order dated 01.03.2021 is thus, withdrawn - Application is disposed off.
-
2022 (5) TMI 1211
Seeking restoration of the name of the company - Section 252 of Companies Act - HELD THAT:- On perusing the material and submissions of the Appellant and the Respondent made available on record, it would be just and equitable to revive the name of the company BIH Technologies Private Limited in the statutory register as being maintained by the Registrar of Companies, Guwahati. In exercise of the powers conferred on the Tribunal under section 252(3) of the Companies Act,2013, the present appeal is partly and conditionally allowed.
-
Insolvency & Bankruptcy
-
2022 (5) TMI 1210
Initiation of CIRP - Period of limitation - Article 137 of the Limitation Act, 1963 - NCLT rejected the application - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is well settled that the Limitation Act is applicable in IBC Proceedings and IBC does not exclude the application of Sections 6 to 14 or 18 and any provision of the Limitation Act - The question to be considered in the present case is as to whether Appellant can take benefit of Article 1 of the Limitation Act, 1963. Hon ble Supreme Court in the matter of B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [ 2018 (10) TMI 777 - SUPREME COURT ] after considering the provisions of IBC and the Limitation Act had laid down that for filing application under Section 7 and 9, it is Article 137 which is attracted. In the present case, the Appellant has placed reliance on Article 1 of the Limitation Act which we have extracted above. A similar provision akin to Article 1 of the Limitation Act came for consideration before the Hon ble Supreme Court in Hindustan Forest Company case. Article 1 is in Part-I of the Schedule of the Limitation Act dealing with suits, under the suit relating to accounts . The Application filed under Section 9 by the Appellant cannot be said to be a suit relating to accounts. The Ledger of Operational Creditor has been brought on record including the Bank Statement which clearly mentions that last payment received by the Appellant was on 26th September, 2016. From the last payment, the Application could have been filed within three years. Application under Section 9 filed by the Appellant was on the basis of 174 invoices as has been noticed by the Adjudicating Authority in the Impugned Order. We are satisfied that for the limitation for filing Section 9 application it is Article 137 of the Limitation Act, 1963 which is attracted. Under Article 137, time from which period begins to run is when the right to apply accrues the right to apply accrues when invoices issued by the Appellant to the Corporate Debtor were not paid. Invoices on the basis of which payment is claimed are more than three years earlier from the date of filing of Section 9 Application which is the basis for rejection of the Application of the Appellant by the Adjudicating Authority. Appeal dismissed.
-
2022 (5) TMI 1209
Liquidation of Corporate Debtor - Section 33(2) read with Section 34 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The primary object of the Code is resolution and liquidation is the last resort. At the same time keeping the timelines prescribed under the Code is paramount, lest asset value is deteriorated. Therefore, taking into consideration of the provisions of law as well as the documents on record, this Adjudicating Authority is of the view that as there is no viable resolution plans received for the Corporate Debtor and the time period for the completion of CIRP process, the only option left under the circumstances being early liquidation process, hence this application directing the liquidation for the Corporate Debtor is allowed. This Adjudicating Authority hereby orders liquidation of the Corporate Debtor, i.e., Anjali Waterford Hospitality and Infra Limited, which shall be conducted in the manner as laid down in Chapter III of Part II of the Code - application allowed.
-
2022 (5) TMI 1208
Seeking enforcement of order - section 60(5) of the Insolvency and Bankruptcy Code 2016 - HELD THAT:- The fact that Respondent No. 2 has filed an appeal against the impugned order does not have any bearing on the obligation of the Respondent No. 1 to obey the impugned order and as on date there is also no stay from any superior court against the impugned order. Accordingly, the said order is fully enforceable as against it (Respondent No. 1) as on date. Application as filed by the Applicant/Resolution Professional stands allowed with the directions to Respondent No. 1 to make full compliance of this Tribunal order dated 23.8.2021 within two weeks' time, failing which the Applicant shall be at liberty to move appropriate application seeking further orders/directions as per law. Petition disposed off.
-
2022 (5) TMI 1207
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtors - existence of debt and dispute or not - Section 94 read with section 122 of the Insolvency and Bankruptcy Code, 2016 under rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors), Rules, 2019 - HELD THAT:- In the present matter the respondents has already demonstrated that the recovery proceedings are already under process against the corporate debtor, applicant and other guarantors, even notice to arrest has already been issued against the applicant. In these circumstances, the applicant has filed present application with the ulterior motive to stall the recovery proceedings, which will result in loss of public money involved. In view of the facts of the present case it is apparent that the present application is filed only to misuse the protection of interim moratorium u/s. 96 of the Code. Application dismissed.
-
2022 (5) TMI 1206
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 evidence placed by the financial creditor is sufficient to ascertain the existence of a default on the part of the Corporate Debtor as the Corporate Debtor has failed to honour the terms of the agreement, further, the Cheque provided by the corporate debtor towards principal amount also bounced. The Financial Creditor has fulfilled all the requirements of law. Accordingly, this Adjudicating Authority is inclined to admit this application and initiate the process of CIRP of the Corporate Debtor. The financial Creditor has also proposed the name of the Resolution Professional for appointment of IRP. Application admitted - moratorium declared.
-
2022 (5) TMI 1205
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- There is a clear admission of the corporate debtor in its reply that the default has occurred and it is unable to make payments due to lack of funds. Therefore, it is most appropriate that CIRP must be initiated and the management of the company shall be vested in the hands of a professional agency. The Scheme of the code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Apparently, since there is no dispute raised by the Corporate Debtor, in fact the corporate debtor has clearly admitted that a default has occurred. This bench is of the view that the prayer of the applicant deserves to be allowed. This Tribunal is of the affirm view that there was default on the part of the respondent in pursuance of invoices raised on behalf of the applicant, accordingly, the present application stands admitted in terms of Section 9(5) of the Code and CIRP is hereby ordered to be initiated against the respondent Corporate Debtor, forthwith. Application admitted - moratorium declared.
-
2022 (5) TMI 1204
Maintainability of CIRP - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- An application under Section 7 of the Code is maintainable if the debt is proved to be due and there is default. In view of the Section 4 of the Code, the moment a default is of Rupees One Crore or more, an application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. The applicant clearly comes within the definition of Financial Creditor. The material placed on record as stated in the paras above further confirms that respondent has debt due and has committed default in repayment of the outstanding financial debt. On a perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional. The present application is complete in all respect. The applicant financial creditor is entitled to move the application against the corporate debtor in view of outstanding financial debt and default of the same by the corporate debtor. The default in repayment of the financial debt is not refuted by the Corporate Debtor - Application admitted - moratorium declared.
-
2022 (5) TMI 1203
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is clear from the pleadings that the Operational Creditor has supplied the goods to the Corporate Debtor as evident from invoices annexed, furthermore, admittedly there is no dispute raised by the corporate debtor before the filing of reply to the present petition, which cannot be taken into consideration at this time. Moreover, the production rejection report is also doubtful as evident from the instances brought to our knowledge by the counsel of Operational Creditor as discussed in the preceding paragraph. Also there is an amount outstanding which corporate debtor has defaulted in payment as evident from the ledger account. It is also pertinent to mention that the Notification regarding the enhancement of minimum amount of default to one crore for the purpose of Section 4 was issued by the Ministry of Corporate Affair on 24th March, 2020 and the amount defaulted by the Corporate Debtor and filing of the petition was much before the said date. Since any notification issued by the Government is generally prospective in nature unless specifically expressed, therefore the notification is not applicable to the present case. Hence, this authority is inclined to initiate the CIR Process of Corporate Debtor, therefore, the captioned petition is admitted. Application admitted - moratorium declared.
-
2022 (5) TMI 1202
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- To prove the existence of debt and its default by the Corporate Debtor, the Corporate Debtor, the Operational Creditor relied on certificate of debt and its default issued (from information utility, Annex.- L ) All relevant invoices are produced at Annex.-K. A copy of demand notice served under Section 8 of IBC is also annexed at Annex.- F . It has been delivered to the Corporate Debtor by post. The postal track report is also on record as Annex- G - It is not in dispute the Corporate Debtor did not reply the demand notice. Although, the Corporate Debtor submitted and contended that nothing is due and payable but the record reveals that is has sent an email dated 11.07.2019 to the Operational Creditor admitting that certain money is due and payable. There is sufficient evidence and materials on record to hold that the Corporate Debtor has committed default in paying the operational debt of more than rupees one crore in-spite of receipt of the demand notice - It is also noted that certain orders passed in daily proceedings wherein, the Corporate Debtor made statement and sought time to make that it will settled that the dispute and sought some time to make the payment. Be that as it may, the evidence and material on record has proved that, in-spite of receipt of the demand notice, the Corporate Debtor committed default in paying the operational debt of more than rupees one crore. The Corporate Debtor did not produce defense worth to contest this application. This application is free from defects - application allowed.
-
2022 (5) TMI 1201
Dissolution of Corporate Debtor - Section 54 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 14 of the Insolvency Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- It is declared that not only it is just and equitable but as all the assets of the Corporate Debtor is sold and disposed of, no asset is available for the purpose of Liquidation as reported by Learned Liquidator, this is a fit case of a Corporate Debtor to be dissolved as prescribed under Section 54 of The Insolvency and Bankruptcy Code, 2016. Ordered accordingly, stood Dissolved from the date of this Order. Since the Debtor Company stood Dissolved vide this order and no proceedings are now pending, therefore the Registry is directed that the case file be consigned to records. Application allowed.
-
2022 (5) TMI 1200
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is pertinent to note that the Operational Creditor has placed on record the demand notice along with invoices, with its Application. Once the debt is shown as due, it is for the Corporate Debtor to prove that there are no outstanding dues to be paid to the Operational Creditor. Also, no such payment has been made by the Corporate Debtor - The Applicant has filed an affidavit in compliance of Section 9(3)(b) of the Code, stating that no notice of dispute has been received by it. The present application is complete and the Operational Creditor is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Hence, the present application is admitted - application admitted - moratorium declared.
-
Service Tax
-
2022 (5) TMI 1199
CENVAT Credit - Input Service Distribution - excess availment of Cenvat credit of more than 20% of credit - Rule 7 of the CCR, 2004 - levy of interest and penalty on the amount of Cenvat credit availed by it on Capital Goods to the full extent in the first year of purchase instead of 50% - HELD THAT:- The issue regarding availment of ISD credit by the Tirupati unit for materials used in other units, the Appellant has submitted that there was no restriction in availment of Cenvat credit as distributed by the ISD unit under Rule 7 of the CCR, 2004. The issue is settled by the judgment of the Hon ble Karnataka High Court in the case of COMMISSIONER OF C. EX., BANGALORE-I VERSUS ECOF INDUSTRIES PVT. LTD. [ 2011 (2) TMI 1130 - KARNATAKA HIGH COURT] wherein it was held by the Court that Merely because the input service tax is paid at a particular unit and the benefit is sought to be availed at another unit, the same is not prohibited under law. It is in this context, the manufacturer is expected to register himself as a input service distributor and thereafter, he is entitled to distribution of credit of such input in the manner prescribed under law - in the instant case of the Appellant also there is no dispute as to the availment of Cenvat credit by the Appellant and the distribution by ISD. The only allegation raised in that the said services are not used by the Appellant and hence Cenvat credit should not be allowed. Utilisation of excess Cenvat credit by ignoring the provisions of Rule 6(3)(c) of the CCR, 2004 - HELD THAT:- The Appellant has produced certain reconciliations by way of additional submissions which were not produced before the lower authorities. Since the entire issue in this regard revolves around the calculations as submitted by the Appellant, it is deemed fit to remand the matter to the Adjudicating authority to verify the correctness of the calculations of the Appellant after providing an opportunity of being heard and thereon pass a reasoned and speaking order for the same. The Appellant will be at liberty to produce all relevant statements and records as may be required during such remand proceedings. Thus to the above extent the appeal is allowed by way of remand to the adjudicating authority. Interest on the excess Cenvat credit availed by the Appellant on capital goods in the first year of purchase - penalty in violation of Rule 4(2)(a) of the CCR, 2004 - HELD THAT:- The matter is squarely covered by the judgment of the Hon ble Karantaka High Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT] where it was held that Section do not stipulate interest is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly - In the instant case of the appellant it is not disputed that the said amounts has been utilised by the Appellant also, hence considering the above we are of the opinion that interest is payable by the Appellant for the amounts utilised towards payment of service tax from the date of availment till the due date of availment and for the purposes of computation of the same, we remand the matter to the adjudicating authority. Penalty - HELD THAT:- Since the demand of Cenvat credit itself has been dropped in the adjudication proceedings, the question of imposition of penalty under Rule 14 of the CCR, 2004 does not arise. Appeal disposed off.
-
2022 (5) TMI 1198
Rejection of rebate claim - export of service or not - rejection on the ground that the same does not qualify as export of service as well as on the ground of unjust enrichment - period from January 2010 to November 2010 - HELD THAT:- This Tribunal in a similar matter pertaining to MRAS services in M/S MEDALLION CONSULTING PRIVATE LIMITED VERSUS CST, DELHI [ 2017 (4) TMI 96 - CESTAT NEW DELHI] has held that Part performance of service outside India shall be treated as performed outside India. In the instant case, on perusal of the invoices issued by the Appellant to various overseas customers, it is clear that the benefit of these services are accruing to the customer located outside India. Thus, there is no doubt that the services will qualify to be export of services under the provisions of the Export of Service Rules, 2005. Unjust enrichment - HELD THAT:- The services to be export of services, then the issue of unjust enrichment does not require our consideration as it is a settled issue that unjust enrichment principles are not applicable to export transactions as held by this Tribunal in the case of VODAFONE CELLULAR LTD AND VODAFONE ESSAR CELLULAR LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2014 (3) TMI 117 - CESTAT MUMBAI] . Appeal allowed - decided in favor of appellant.
-
CST, VAT & Sales Tax
-
2022 (5) TMI 1197
Claim of interest Refund of VAT - delay in furnishing the declaration i.e. C-Forms to be factored in while calculating interest - Section 38(3)(a)(ii) of the DVAT Act. - HELD THAT:- The respondent/revenue has carried the matter in appeal to the Supreme Court. The Supreme Court, via order dated 01.02.2017, passed in VIZIEN ORGANICS, M/S MUNSHI RAM RAM PARKASH, MANGLA ENTERPRISES, DHANJAL ENGG. WORKS, M/S GOEL OIL COMPANY, M/S ARUN ELECTRONICS, POWER INDUSTRIES PROPRIETO SH. TARUN BANSAL, M/S. LUDHIANA AUTO SUPPLY CO., VERSUS COMMISSIONER, TRADE TAXES ANR. [ 2017 (1) TMI 1168 - DELHI HIGH COURT] has stayed the operation of the aforementioned judgment rendered by the coordinate bench. The present writ petition is disposed off, with the caveat that the petitioner s claim concerning the remaining interest would be processed and shall be paid, in case the respondent/revenue was to fail in the aforementioned SLP.
-
2022 (5) TMI 1196
Exemption from Sales Tax - Whether the carpets dealt with by the Petitioner on which 1st point sales tax has been paid to the selling dealer, are exempted from sales tax at the last point of sale? - HELD THAT:- The taxing provision in the OST Act is Section 5 (1) which prescribes the rate of tax. The point of levy of tax on different goods are in accordance with Section 8 of the OST Act. Therefore, the reference to entry 23 of the rate of tax for determining amenability to tax is not relevant. The schedule of taxable goods under List- C not only covers the goods notified as 1st point tax paid items but all other residual items unless the goods were notified as tax free - There is merit in the contention of the Petitioner that pile carpets are also known as carpets. In common parlance, pile carpets are also understood as carpets. The carpets entered into the books of account of the Petitioner are in fact pile carpets . In the present case, the Petitioner having already paid to the seller, the 1st point sales tax, should not be asked to pay again sales tax on the last point of sale of the same commodity. Consequently, the question framed by the Court is answered in favour of the Assessee and against the Department by holding that carpets on which 1st point sales tax has already been paid by the Petitioner to the selling dealer would not again be amenable to sales tax at the last point of sale - the corresponding orders of the ACST and STO are hereby set aside. The revision petitions are allowed.
-
2022 (5) TMI 1195
Exemption from Sale Tax - sale of finished products manufactured by the industrial unit under the diversification scheme - order of enhancement of assessment passed by the Ld. Tribunal without compliance of the provisions of Rule-50 (3) of the Orissa Sales Tax Rules is lawful and valid or not - error of jurisdiction or is error in law while deciding issues which are not before him in the appeal filed by the Petitioner in absence of cross objection filed by the State - HELD THAT:- According to the Tribunal, the production and sale under the diversification scheme could not be construed to be increased commercial production over and above the installed capacity of the Unit and that the Petitioner had violated the stipulation laid down in the Finance Department Notification vide entry No.26-FF and 30-FFF (ii) of the Tax Free Schedule of the IPR, 1989. It was thus held that the Petitioner was not entitled to enjoy the benefit of exemption of tax on purchase of raw materials and sale of finished products under the diversification scheme - the Tribunal further held that the levy of sales tax on the raw materials and sale of finished products @4% and 12% respectively and surcharge @ 10% on the tax on finished products was leviable. Accordingly, the order of the ACST was set aside and the case was remanded to the ACST to make good the deficiency by issuing appropriate notice to the Appellant/Petitioner as to why the taxes as mentioned above would not be levied. The correctness of the remand of the case by the Tribunal for levy of enhanced tax on the Assessee, the Court is of the view that the Tribunal exceeded its jurisdiction. In SHYAMSUNDER SAHOO VERSUS STATE OF ORISSA [ 1993 (2) TMI 314 - ORISSA HIGH COURT] , this Court explained that the power of the Tribunal under Section 23(3)(c) of the OST Act to enhance the assessment is relatable to appeal or cross objection filed by the Revenue. In the present case, there is no such cross appeal by the Revenue and therefore, there was no occasion for the Tribunal to have remanded the issue of tax on raw materials and finished products including surcharge on finished products to the ACST for a fresh determination. Disallowance of tax exemption on sale of finished products manufactured by the industrial unit under the diversification scheme - HELD THAT:- Once it was clear that the Petitioner had stopped manufacturing the products in terms of the original installed capacity and was manufacturing only under the diversification unit, there is no justification in withdrawing the exemption - The plain dictionary meaning of expression 'over and above' would mean 'in addition to' or 'as well as'. Here there is no finished product of the original installed capacity and only under the diversification unit and therefore it was erroneous on the part of the Department to reject the claim of the Petitioner for exemption. The Tribunal erred in law by disallowing the tax exemption on sale of finished products manufactured by the Petitioner's industrial unit under the diversification scheme. The impugned order of the Tribunal to that extent is set aside as are the corresponding orders of the STO and the ACST - The revision petition is disposed off.
-
2022 (5) TMI 1194
Benefit of sales tax exemption - excess production and sale of cement of a quantity of 1670 MT - HELD THAT:- The industrial unit was to avail tax exemption in terms of I.P.R.1989. The installed capacity of the unit is that which stands certified under Annexure-2 and 3 and it cannot be changed or modified unless there is expansion/modernization/diversification. In other words, the installed capacity can be altered subject to the justification by amending the registration certificate. In the instant case, the claim of the Petitioner s case is not based on any such expansion etc. Of course, no bar lies for excess production which may be accomplished with more than one shift but the exemption which the Petitioner is entitled would stand restricted to 15000 MT and cannot cover the excess production. Admittedly, no expansion has been undertaken by the Petitioner and notwithstanding the fact that there is excess consumption of power and raw materials during the impugned period, such exemption can only be made available only to the extent of production of 15000 MT that being the installed capacity and for the excess production of 1670 MT, the unit is ineligible for the concession and hence, in the considered view of the Court, the Tribunal rightly upheld the assessment for the year 1995-96 and concluded that the Petitioner is required to pay sales tax thereon @ 12%. The revision stands disposed of with the question answered in favour of the Department and against the Petitioner.
-
2022 (5) TMI 1193
Jurisdiction - whether D.I.C. has authority in law to issue the eligibility certificate for expansion and or modernization with retrospective effect - HELD THAT:- The period in question is the same i.e. 1994- 95 but the gross turnover (GTO) is noted in the said order of suo moto revision order dated 6th December, 2006 is different. In the order dated 30th May, 2002 of the STO, Dhenkanal Circle the GTO was noted as Rs.11,25,000/- which had escaped turnover and the Petitioner's exemption was disallowed insofar As it pertained to the excess production. On the other hand, the order dated 6th December, 2006 of the CTO appears to deal with supplies made to the Railways - it is plain that the Assessee claimed exemption on the strength of an earlier DIC certificate which did not authorise production beyond 2,70,187 cft. There is no power in the DIC to issue a certificate granting exemption retrospectively from an earlier date. Therefore, the certificate dated 2nd September, 1997 could not have possibly been used for calming exemption from payment of sales tax on the excess production year in the year in question i.e. 1994- 95. The Court is not satisfied that the concurrent findings of the STO, the ACST and the Tribunal on this aspect suffer from any legal infirmity that warrants interference. The question framed by this Court is answered in the affirmative i.e. in favour of the Department and against Assessee by holding that the Tribunal in the impugned order was justified in holding that the DIC had no authority in law to issue the eligibility certificate for exemption for expansion on modernisation with retrospective effect. The Revision Petition is dismissed.
-
2022 (5) TMI 1192
Violation of principles of natural justice - non-affording of reasonable and adequate opportunity to represent before the Commissioner - HELD THAT:- This Court is satisfied that the Petitioner has been diligently pursuing its matter (apparent from documents act Annexure-8 series. It was given short notice for appearing before the Commissioner of Sales Tax in connection with hearing and the nonappearance was on account of non-availability of his lawyer in the station, which fact remained uncontroverted at the time of hearing of present petition. The Petitioner is directed to appear before the Commissioner of Sales Tax on 31st May, 2022 along with the certified copy of this order. The Commissioner of Sales Tax may hear the matter on the said date or adjourn the matter to any other date for hearing - Petition disposed off.
-
2022 (5) TMI 1191
Levy of Sales Tax - sale of Gudakhu - Gudakhu being tobacco covered under Additional Duties of excise (Goods of Special importance) Act (ADE Act) is exempted from sales tax under Entry 38 of the exempted list or not - Orissa Sales Tax Act, 1947 (OST Act) - HELD THAT:- Entry-38 of the Exempted List A of the OST Act clearly includes Tobacco as described in column 3 of the first schedule to the ADE Act. If one turns to the ADE Act in the first schedule under Chapter Heading 2404.99 the Entry is Tobacco used for smoking through hookah or chillum commonly known as hookah tobacco or Gudakhu . It is therefore, plain that for the purpose of ADE Act Gudakhu is also recognized as a tobacco product - It may be noted here that even in subsequent amendments to the OST Act, there is an express recognition of Gudakhu being a tobacco product. Likewise, even in the ADE Act by an amendment in 2005 Gudakhu is treated as other manufactured tobacco. Gudakhu is also another form of manufactured tobacco, this Court answers the two questions framed for consideration in favour of the Assessee against the Department. In other words, it is held that the Tribunal was not justified in holding that the sale of Gudakhu by the Petitioner was amenable to sales tax under the OST Act. The conclusion is that Gudakhu is tobacco covered by the ADE Act and is exempt from sales tax under Entry 38 of the exemption list i.e. List-A of the OST Act. The impugned orders of the Tribunal and the corresponding orders of the ACST and the Assessing Officer are accordingly set aside. The revision petitions are disposed of.
-
2022 (5) TMI 1190
Levy of Sales Tax - hire charges collected by the Assessee for letting out on lease its aircraft would amount to sales and the amenable to the sales tax under the Orissa Sales Tax Act, 1947 or not - HELD THAT:- Whether in the present case the transaction in question is a sale, it is seen that in the present case there is no actual transfer of the possession of the aircraft in question to the user of the aircraft. The aircraft is at all times in control of the Pilot who is an employee of the Assessee. Even the maintenance of the aircraft is undertaken by the Assessee as are the statutory compliances in terms of the permit granted to the Assessee. Therefore, there is no real transfer of the right to use the aircraft in the manner as envisaged in 20TH CENTURY FINANCE CORPN. LTD. AND ANOTHER VERSUS STATE OF MAHARSHTRA [ 2000 (5) TMI 980 - SUPREME COURT] and as explained in the subsequent decision in BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [ 2006 (3) TMI 1 - SUPREME COURT] . The impugned order of the Tribunal to the above extent as well as the corresponding assessment order of the STO are hereby set aside and the order of the ACST is restored to file - revision petition disposed off.
-
2022 (5) TMI 1189
Requirement of pre-deposit - Whether the revisional authority-Commissioner of Sales Tax is legally justified in sustaining the orders rejecting appeals summarily by the appellate authority-Joint Commissioner of Sales Tax for want of deposit of 10% of the amount of tax in dispute under the OVAT Act and 20% of the amount of tax under the OET Act? - HELD THAT:- In JINDAL STAINLESS LTD. VERSUS STATE OF ORISSA AND OTHERS [ 2014 (9) TMI 372 - ORISSA HIGH COURT] this Court delved into the question as to whether the condition precedent for pre-deposit of 20% [reduced to 10% vide OVAT (Amendment) Act, 2017] of tax or interest or both in dispute in addition to payment of admitted tax for entertaining an appeal as provided under Section 77(4) of the OVAT Act read with proviso to Rule 87 of the OVAT Rules is unreasonable, oppressive, violative and ultra vires of Article 14 of the Constitution of India - for entertainment of appeal , appeal under the OVAT Act is required to be accompanied by satisfactory proof of payment of admitted tax in full and ten per centum of the tax or interest or both, in dispute and that appeal under the OET Act is required to be accompanied by satisfactory proof of payment of admitted tax in full and twenty per centum of the tax or interest or both, in dispute. In THE BENGAL IMMUNITY COMPANY LIMITED VERSUS THE STATE OF BIHAR AND OTHERS [ 1955 (9) TMI 37 - SUPREME COURT] , the Hon ble Supreme Court has observed that if there is any hardship, it is for the Parliament to amend the law, but the Court cannot be called upon to discard the cardinal rule of interpretation for mitigating a hardship. If the language of an Act is sufficiently clear, the Court has to give effect to it, however, inequitable or unjust the result may be. As is said, dura lex sed lex which means the law is hard but it is the law . Even if the statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal enactment must be interpreted in its plain and literal sense as that is the first principle of interpretation. Since statutory deposits as discussed in the foregoing paragraphs were not made, the appeals were rejected summarily. Summary rejection orders were carried in revision before the Commissioner of Sales Tax, Odisha who has upheld the rejection orders of the appellate authority. It appears the petitioner has been bona fide pursuing its matter before different fora. Since the counsel for the petitioner has prayed for grant of opportunity to make statutory deposit, it is, therefore, pertinent to observe that the appellate authority shall not raise any objection as to limitation in view of the fact that the petitioner has been pursuing its matter diligently - So far as stay of recovery of demand of tax and penalty under the OVAT Act is concerned, in view of Section 77(5) as amended by virtue of the Odisha Value Added Tax (Amendment) Act, 2017, realization of the balance tax and penalty under dispute shall remain stayed till disposal of the appeal. The present writ petition stands disposed of.
-
2022 (5) TMI 1188
Validity of assessment order - failure to file return - Revenue issued notice twice, despite that, no reply had been given by the petitioner - HELD THAT:- Every month return has to be filed, knowing well with that position, the petitioner dealer has not come forward to file the return and pay the tax. Therefore, notice was issued twice, despite that, no reply has been given and thereafter, assessment order has been passed, the tax component as well as the interest and penalty having been quantified was imposed against the petitioner, which the petitioner had paid only in January 2020 except the penalty. Penalty - HELD THAT:- Section 73 of the Act since has been invoked for imposing penalty that is a wrong invocation and if at all the petitioner case is to be considered and it should be considered only under Section 61 of the Act and in that, Section 61(2) enables the Revenue to make only the tax as well as the collection of interest and not for penalty. Therefore, the penalty imposed against the petitioner is not inconsonance with the said provisions of the Act. After the assessment order is made, within thirty days if the petitioner comes forward to file the return, then the order of assessment can be withdrawn. However, the late fee and the interest imposed on the dealer shall be paid by him. Here in the case in hand, even that chance was not utilised by the petitioner, as admittedly, he has not filed the return and paid the tax within thirty days from the date of receipt of the assessment order. Therefore, Section 62(2), as claimed by the petitioner counsel, would not come to the rescue of the petitioner dealer - Insofar as the invocation of Section 73 is concerned, no doubt it is a correct provision which has been invoked by the respondent Revenue as so many components are provided under 73 like determination of tax not paid, short paid, erroneously refunded or no tax credit are utilised etc. The determination of tax which has not been paid as one of the factor which can be gone into by the Revenue under the provisions of Section 73, hence such an invocation cannot be found fault with. Therefore, that ground also urged by the learned counsel appearing for the petitioner is untenable, hence, it is liable to be rejected. Therefore, for all these reasons, this Court is not inclined to entertain this writ petition as the impugned orders are tenable - Petition dismissed.
-
2022 (5) TMI 1187
Restoration of application which was dismissed for default - HELD THAT:- The present application is allowed. The order dated 13th September 2019 is recalled and STREV No.41 of 2002 is restored to its original file.
|
9911796707
