TMI Tax Updates - e-Newsletter
May 6, 2024

Case Laws in this Newsletter:

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

Articles

1. Collection of Entry Fee from visitors for Temple Hall Exempt under GST

   By: Bimal jain

2. State-wise Professional Tax Payment Deadlines in India: A Comprehensive Guide

   By: Ishita Ramani

3. Low tax effect in pending appeals- The administrative role to withdraw appeal can be carried by officers of appellant and / or by the Advocate on Record of appellant ( revenue) and Registry office without engaging counsels by appellant and respondent.Appeals with low tax effect must be withdrawn to avoid wastage of public money, brain drain of honorable judges and counsels and to achieve purpose for prescribing minimum tax effect limit for filing appeals.

   By: DEVKUMAR KOTHARI

4. How to become a crorepati via SIP

   By: Vaibhav Fotedar

Notifications

Customs

1. 24/2024 - dated 3-5-2024 - Cus

Seeks to amend specified customs tariff notifications to exempt applicable import duty on imports of desi chana (HS 0713 20 20) up to 31.03.2025; to impose export duty of 40% on exports of Onions (HS 0703 10); to extend the specified condition of exemption to imports of Yellow Peas (HS 0713 10 10) to bill of lading issued on or before 31.10.2024.

DGFT

2. 10/2024-25 - dated 4-5-2024 - FTP

Amendment in the Export policy of Onions

Circulars / Instructions / Orders

DGFT

1. 03/2024-25 - dated 3-5-2024

Suspension of inoperative SIONs

2. Policy Circular No. 02/2024 - dated 3-5-2024

Clarification on the applicability of 3% amount on account of non-achievement of minimum Value Addition as mentioned in para 4.49 (b) and amount equivalent to 10% of the CIF value in Para 4.49 (a) (ii) of HBP 2023

Highlights / Catch Notes

GST

• Mango Pulp for Export Subject to 12% GST After Court Ruling; Clarifications Deemed as Existing Law, Not New Tax.

  Case-Laws - HC : Applicable rate of tax (GST) - Classification of goods - mango pulp supplied to 100% Export Oriented Unit which further exports such pulp outside the country after minor processing / re-packing - The court clarified that mango pulp does not fall under the category of fresh mangoes (exempt from GST) or solely under "mangoes sliced, dried" (5% GST rate). Instead, it is part of a broader category of mangoes that includes forms other than sliced and dried, thus justifying a 12% GST rate as per the latest GST Council clarifications. The court rejected the petitioners' arguments against retrospective application, noting that the notifications and circulars were clarificatory in nature and did not impose a new tax but clarified the existing law as intended by earlier GST Council decisions.
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• Vapi Notified Area Authority Not Exempt from GST for Pure Services, Not a Local or Governmental Authority.

  Case-Laws - HC : Exemption from GST - pure services or supply of goods to the Notified Area Authority, Vapi - Notified Area Authority, Vapi is a “local authority” or “governmental authority”? - The court found that the Notified Area Authority, Vapi, does not qualify as a "local authority" or "governmental authority" under GST legislation. It noted that while the Authority performs municipal-like functions, it is established under the Gujarat Industrial Development Act and does not fulfill the criteria specified in GST laws for being treated as a municipal entity. The court acknowledged that the petitioner does provide "pure services" involving no supply of goods. However, since the services are rendered to an entity that does not qualify as a "local authority" or "governmental authority," these services cannot be exempt from GST.
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• Interest on Delayed Tax Payments Depends on Timing Relative to Return Filing, Not Payment Source.

  Case-Laws - HC : Interest Liability on Electronic Credit Ledger Payments - Seeking levy of interest only on that part of the tax which is paid in cash - The High court concluded that the levy of interest depends not on the type of ledger used (cash or credit) but on the timing of the tax payment relative to the filing of returns. Interest is applicable on delays in tax payments made after the due date of return filing, regardless of whether the payment is from the Electronic Credit Ledger or the Cash Ledger. The court found that while the Monitoring Committee can issue guidelines, its decisions are not binding on the Proper Officer in the context of tax recovery. The Proper Officer retains autonomy in assessing and executing recovery based on individual case assessments.
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• High Court Dismisses Challenge on Duty Recovery, Citing Alternative Remedies Under GST Act 2017.

  Case-Laws - HC : Recovery of short paid duty alongwith interest and penalty - The petitioner contested the amounts confirmed as due, penalties imposed, and procedural aspects of the case. However, the High Court dismissed the challenge, emphasizing the availability of alternate remedies under the GST Act, 2017.
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• Assessment Order Overturned Due to Overlooked Reply, Violating Natural Justice; Conditional on 10% Payment and Timely Response.

  Case-Laws - HC : Validity of assessment order - reply to the ASTM-10 notice was not taken into consideration - violation of principles of natural justice - Acknowledging the importance of providing the petitioner with an opportunity to contest the tax demand on merits, the High Court decides to set aside the impugned order. However, this is conditional on the petitioner remitting 10% of the disputed tax demand within two weeks and submitting a reply to the show cause notice within the same period.
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• Refund of Unutilized ITC on GST Cess Denied Due to Time Limits; Court Upholds Appeal Filing Rules, Rejects Petitioner's Claim.

  Case-Laws - HC : Refund of the unutilized ITC of GST Compensation Cess on coal - zero rated supply - rejection of refund on the ground of time limitation - Vires of Clause 5 of the impugned Notification No. 53/2023 – The court held that the notification’s Clause 5 is clear in its stipulation that no appeal can be filed for issues not involving tax. The court found no grounds to challenge the clause’s constitutional validity. - The court determined that the order was indeed communicated when uploaded on the portal, thus initiating the statutory period for filing appeals. It rejected the petitioner’s claim that the physical receipt of the order marked the start of the appeal period.
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• High Court Questions GST Classification of Mixed Spices, Protects Petitioner from Coercive Actions.

  Case-Laws - HC : Classification of the mixed spices - classification accepted under the heading 09109100 of the GST Tariff - The High Court finds merit in the petitioner's argument and questions the deviation from the established classification by the Additional Commissioner in the impugned order. It grants an opportunity for respondent no. 5 to present their viewpoint and adjourns the proceedings. Additionally, the Court orders that no coercive action shall be taken against the petitioner until the adjourned date of the hearing.
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• Court Overturns GST Order on Vouchers; Remands Case for Further Review of Petitioner's Intermediary Claim.

  Case-Laws - HC : Imposition of GST on vouchers - The petitioner, involved in managing corporate reward programs, contested an assessment order imposing GST on vouchers they dealt with. They argued that they were intermediaries, not suppliers, relying on relevant provisions of the CGST Act and previous court rulings. However, the High Court found the assessing officer's order lacking in reasoning for rejecting the petitioner's arguments. Consequently, the court set aside the order pertaining to GST on vouchers and remanded the issue for reconsideration.
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• High Court Rules Against Direct Intervention, Advises Petitioner to Use GST Act Appeal Process for Assessment Order Challenge.

  Case-Laws - HC : Validity of assessment order - The High Court opined that the challenge to the assessment order did not warrant interference under Article 226 of the Constitution of India. Instead, the petitioner was advised to pursue the statutory appeal process under Section 107 of the GST Act before the appellate authority.
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• Court Overturns Order, Remands Refund Case for Fresh Decision on Turnover Calculations Under New GST Circular.

  Case-Laws - HC : Refund claim - determination of the turn over for the purpose of refund - After considering the submissions, the High Court found merit in the petitioner's argument that the issue could be re-examined in light of Circular No. 197/09/2023-GST. The court noted the clarification provided in paragraph 3 of the circular regarding the calculation of adjusted total turnover for the purpose of refund. Therefore, the High Court set aside the impugned order and remitted the case back to the respondent to pass orders afresh on merits and in accordance with law.
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• Gujarat High Court Upholds Bail for Accused in Major Financial Scam, Dismissing State's Petition for Cancellation.

  Case-Laws - HC : Grant of Regular Bail - In a case where the State sought to challenge the grant of regular bail to the respondent-accused, the High Court of Gujarat considered the arguments presented by both parties. While the State vehemently argued for bail cancellation, citing the failure to consider relevant factors and objections, the respondent's counsel supported the impugned order, pointing to the precedent of a co-accused being granted bail without challenge. Despite serious allegations leveled by the State regarding a significant financial scam, the Court found no such circumstances affecting the fairness of the trial or breaching bail conditions. - Consequently, the High Court dismissed the petition, affirming the impugned order and discharging the rule.
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• Appeal Delay: Court Upholds Strict Time Limits, Allows Extension Only Under Specific Conditions with Payment Requirements.

  Case-Laws - HC : Delay in filing the appeal - Time Limitation - petition delayed for almost one year - extension of period for filing a delayed appeal - The Court held that when a statute provides a specific period within which an appeal must be filed, neither the Appellate Authority nor the High Court has the power to condone delays beyond that period. - It noted that the Notification No. 53 of 2023 extended the time for filing appeals under certain conditions, including the payment of specified amounts. - The Court directed the petitioner to file an appeal satisfying the conditions outlined in the notification before the stipulated time. It clarified that if the appeal met the conditions, it would be taken up and considered on its merits.
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• Court Annuls GST Registration Cancellation Due to Lack of Transparency and Procedural Fairness in Show Cause Process.

  Case-Laws - HC : Cancellation of GST registration of the petitioner - The High Court examined the discrepancy between the grounds cited in the show cause notice and those in the cancellation order. It found that the reasons for cancellation, invoking clause 29(2)(e) alleging fraud or misstatement, were not adequately communicated to the petitioner. Moreover, the contents of the crucial email relied upon were not disclosed to the petitioner, denying them the opportunity to refute the allegations. - The Court observed that the respondents' actions, such as scheduling a personal hearing before the petitioner had a chance to respond fully, indicated a lack of procedural fairness. This, coupled with the failure to provide essential documents and information to the petitioner, reinforced the perception of predetermined action. - Consequently, the Court set aside the cancellation order.
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• Applicant Denied ITC Claim on Vehicle Purchase Due to Previous GST Payment and Supplier's July 2023 Sale Report.

  Case-Laws - AAR : Availing and utilization of Input Tax Credit - The applicant had initially opted to pay GST at a lower rate without availing full ITC on goods and services used in their supplies. Consequently, they forfeited the right to claim ITC on purchases made during that period. The supplier reported the sale of the motor vehicle in their GSTR-01 for July 2023, while the applicant claimed that the invoice was dated August 4, 2023. However, the Authority concluded that the supply occurred in July 2023, during the period when the applicant was still availing the lower rate of tax without full ITC. - The AUTHORITY FOR ADVANCE RULING (AAR) ruled that the applicant was not eligible to claim input tax credit on the purchase of the motor vehicle due to the timing of the supply and their previous tax payment and ITC policy.
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Income Tax

• Court Confirms Validity of Share Application Money, Dismissing Revenue's Appeal Over Unexplained Funds.

  Case-Laws - HC : Addition u/s 68 - unexplained share application money - genuineness and creditworthiness of the share capital subscription challenged - ITAT deleted addition - The Delhi High Court upheld the decisions of the ITAT, which had favorably considered the assessee's appeals against the substantial additions imposed by the Assessing Officer. The court found that the ITAT had correctly applied the legal principles to the facts, which were thoroughly vetted and substantiated by adequate evidence. Thus, no substantial questions of law arose from the ITAT’s decisions, leading to the dismissal of the Revenue's appeals
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• Court Nullifies Reassessment Order Due to Lack of Justification and Higher Authority Scrutiny in Income Disclosure Case.

  Case-Laws - HC : Validity of reopening of assessment - The High Court notes that certain incomes were raised for the first time in the impugned order, without prior mention. Despite Petitioner's explanations and evidence, the Assessing Officer (AO) failed to justify dissatisfaction with the disclosures. The Court concludes that the impugned order was passed without proper application of mind, as evident from the lack of scrutiny by higher authorities. Consequently, the Court quashes the impugned order and the notice issued under Section 148 of the Act.
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• Revenue's Appeal Dismissed Due to 1085-Day Delay; Court Stresses Accountability for Government Negligence.

  Case-Laws - HC : Condonation of delay of 1085 days in filing the appeal u/s 260-A - Revenue's appeal - The court found that the appellant failed to provide a valid explanation for the delay of 1085 days in filing the appeal. Despite the previous appeal being declared infructuous, the court held that it had no relevance to the current appeal, as they pertained to different orders. The court cited a precedent to emphasize that negligence in prosecuting the matter cannot be condoned merely because the government is a party. It highlighted the need for plausible and acceptable explanations for delays.
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• Mobile Service Providers Not Required to Deduct Tax on Distributor Discounts, Court Rules Principal-to-Principal Relationship.

  Case-Laws - HC : TDS u/s 194H - assessee is a cellular mobile service providers - Aligning with the Supreme Court's judgment, the Gujarat High Court ruled in favor of the appellant, stating that the discounts given to distributors are not commissions and that the relationship between the parties is of principal to principal. Consequently, the appellant is not required to deduct tax at source under Section 194H of the Income Tax Act concerning the discounts offered to distributors.
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• Reopening Tax Assessment Invalid: Court Rules No New Material Justifies Revisiting Section 14A Disallowance After Four-Year Limit.

  Case-Laws - HC : Reopening of assessment u/s 147 - The High Court noted that the issue of disallowance under Section 14A of the Act had been thoroughly examined during the original assessment proceedings. It observed that the impugned notice was issued based on the same issue already considered during the original assessment and lacked any fresh tangible material for reopening. The High Court held that the Assessing Officer failed to assume jurisdiction to issue the notice, especially considering that it was issued after four years from the end of the assessment year and after the framing of the original assessment.
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• Court Invalidates Reassessment Notice for J&K Bank Due to Lack of New Material and Explained Remittance Discrepancies.

  Case-Laws - HC : Validity of reopening of assessment - The High Court found that the Assessing Officer issued the notice based on the survey action on Jammu & Kashmir Bank, conducted after the original assessment order. The Court concluded that the notice was not issued due to any fresh tangible material but rather on the basis of the same material already available during the original assessment proceedings. The Court noted that the discrepancies in remittance amounts were explained by the bank's practice of applying notional and actual rates during transaction processing. The High Court quashed the notice issued under Section 148 of the Income Tax Act, 1961.
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• Court Invalidates Tax Reassessment Notice: No New Material Justified Reopening, MAT Provisions Upheld, No Income Escapement Found.

  Case-Laws - HC : Reopening of assessment u/s 147 - Reasons to believe - The High Court examined the submissions and found that the notice for reopening the assessment lacked jurisdiction. It noted that the reasons for reopening were not based on any fresh material but were already considered during the regular assessment process. Additionally, the Court highlighted that reopening the assessment solely on the basis of audit party objections was invalid. Moreover, the Court agreed with the petitioner's argument regarding the applicability of MAT provisions, stating that even if there were additions to income under normal provisions, it would not impact the MAT computation significantly. Therefore, the Court concluded that there was no escapement of income under normal provisions.
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• Tribunal's Decision Overturned for Ignoring Precedent; Case Remanded for Correction Aligned with Higher Court Rulings.

  Case-Laws - HC : Rectification application u/s 254 - Tribunal not followed the decision on the identical facts by the Coordinate Bench which is confirmed by this Court - The Court emphasized the principle of judicial consistency and the hierarchical nature of judicial decisions, reiterating that lower tribunals are bound by the decisions of their supervisory jurisdictions. As such, ignoring these precedents constituted a mistake apparent from the record, necessitating a review and correction of the Tribunal's decision. The Court remanded the case back to the Tribunal, directing it to amend its decision in alignment with the precedents highlighted by the petitioner.
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• Court Criticizes Revenue for Issuing Notice Without Examining Returns Post-Amalgamation, Stresses Fair Procedures.

  Case-Laws - HC : Reopening of assessment against entity ceased to exist/amalgamating entity - The court observed that the Revenue had not considered the income tax return filed by the petitioner that included the transactions of the amalgamated entities. The notice was thus issued without a proper examination of available records and without application of mind. Highlighting the legislative intent behind section 148A of the Income Tax Act, the court noted that the reassessment provisions aim to reduce frivolous litigation and ensure fair proceedings. The court criticized the mechanical issuance of the notice without proper scrutiny of the facts and records.
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• Tribunal Rules Individual Liable for Capital Gains Tax on Land Sale Due to Lack of Company Authorization.

  Case-Laws - AT : Capital gain arising on transfer of land - STCG arising out of the transfer of non-agricultural land - real owner - The appellant asserts that the land was purchased on behalf of the company, as evidenced by a development agreement executed between the appellant and the company. However, the Tribunal finds no explicit indication in the documents that the appellant was authorized by the company to purchase the land on its behalf. The absence of a memorandum of understanding or any explicit authorization leads the Tribunal to conclude that the land was purchased by the appellant individually, not on behalf of the company.
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• Tribunal Supports Lenient Rule Interpretation for Charitable Tax Benefits, Remands Case for Fair Reconsideration.

  Case-Laws - AT : Grant of approval u/s 80G(5) - Delay in filing From No. 10AB for approval - final approval to be filled within a period of six months from date of grant of provisional registration - The Tribunal ultimately concluded that the discrepancies in deadlines between different sections were unreasonable and that a more lenient interpretation favoring the taxpayer should prevail. They remanded the matter back to the CIT for a re-decision, emphasizing a more equitable application of rules meant to facilitate charitable activities and donations.
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• Tribunal Remands Case for Reevaluation of Assessee's Status as Developer or Contractor for Tax Deductions.

  Case-Laws - AT : Deduction u/s.80IA(4)(i) - assessee business is in the nature of work contract - The Tribunal engaged in a thorough analysis to determine whether the assessee acted as a contractor or a developer. It highlighted the legal and functional distinctions between the two, noting that developers are involved in the comprehensive design, financing, and execution of projects and bear substantial risks beyond mere completion of work. Despite the Tribunal's inclination to recognize the assessee as a developer, it noted deficiencies in the appellate record regarding detailed analyses of each project undertaken by the assessee. As such, the Tribunal remanded the case to the Commissioner of Income-tax (Appeals) for a comprehensive reevaluation of each project to conclusively determine the nature of the assessee's activities with respect to the criteria for a developer under Section 80IA(4).
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Customs

• High Court Rules on Jurisdiction: Nullifies Order, Directs Revision to Central Government for Duty Drawback Case.

  Case-Laws - HC : Jurisdiction of the Tribunal to entertain the appeal related to duty drawback - confiscation of goods - The High Court referred to a precedent where it was held that an order passed by a court lacking subject matter jurisdiction is null and void. It concurred with the appellant's interpretation of the law, acknowledging that the remedy for impugning such orders lies in Revision to the Central Government, not by appeal to the Tribunal. The High Court set aside the impugned order and granted the respondent an opportunity to file a Revision under Section 129(DD) of the Act within two months.
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• Court Dismisses Petition for Cargo Release; Customs Act and Sea Cargo Rules Deemed Inapplicable to Dispute.

  Case-Laws - HC : Seeking release of the original bill of lading and release of the cargo - Imports of the shipment of Soda Ash Dense (Grade-A) - Payment of the requisite duty - The High court analyzed Section 143AA of the Customs Act, which empowers the Board to facilitate trade by prescribing separate procedures or documentation. It noted that none of the conditions specified under this section applied to the petitioner's case. Regarding Rule 11(2) of the Sea Cargo Manifest and Transshipment Regulations, the court observed that the Commissioner of Customs is not obligated to intervene in internal disputes between parties unless specific conditions, such as failure to comply with regulations or misconduct, are met. - Ultimately, the court concluded that the dispute between the petitioner and Respondent No. 3 falls outside the purview of the Commissioner of Customs. It dismissed the petition
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• High Court dismisses petitions, directs appeals to CESTAT; no penalty for delays due to court proceedings.

  Case-Laws - HC : Power of High Court to entertain writ petition - alternative efficacious remedy u/s 129A - The court decided not to entertain the petitions on the basis of the alternative remedies available and the non-fulfillment of the requests for procedural rights not resulting in substantial prejudice that couldn't be remedied through the appeals process. The court dismissed the petitions but allowed the petitioners to appeal to the CESTAT, instructing the tribunal to consider their appeals without regard to the delay caused by the High Court proceedings.
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• Appellate Tribunal Rules for Revised Valuation of Import Vessel After Discrepancy in Light Displacement Tonnage.

  Case-Laws - AT : Valuation - Assessable value of import vessel - Revised Price - Initially, a Memorandum of Agreement (MOA) was entered into with a declared Light Displacement Tonnage (LDT) of 10,386 MT for a certain price. However, upon inspection at the time of import, it was found to be 10,200 MT. The appellant argued that they paid the revised price based on the actual LDT found on the ship, which was lower than initially declared. Citing legal precedents, including a Supreme Court case and a Tribunal decision, the appellant contended that the revised price should be accepted for customs duty payment. After considering the submissions and legal precedents, the Appellate Tribunal found merit in the appellant's argument and allowed the appeal, setting aside the impugned order rejecting the revised value.
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Indian Laws

• High Court Acquits Accused in Cheque Dishonor Case, Citing Lack of Evidence for Alleged Debt and Petitioner's Lending Capacity.

  Case-Laws - HC : Dishonour of Cheque - insufficient funds - discharge of legal liability - A scenarios involving financial transactions with potentially fraudulent undertones - The High court noted that this presumption is rebuttable and that the defense had successfully cast doubt on the existence of the alleged debt. - Significant to this case was the finding on the financial capacity of the petitioner. Evidence and circumstances suggested that the petitioner’s financial status was inconsistent with the ability to lend the amounts claimed. - The High Court upheld the appellate court’s decision to acquit the accused, emphasizing the lack of concrete evidence on the petitioner's ability to lend such an amount and the improbability of the debt’s existence.
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IBC

• Disputed Funds Ordered into Escrow Pending Appeal to Ensure Fair Play and Protect Interests of Petitioners.

  Case-Laws - AT : Reconsideration of Resolution plan - The petitioners/appellants seek an order directing the respondents to place an amount equivalent to the difference between their entitlement and the amount approved by the Committee of Creditors in an Escrow Account until the final adjudication of the appeal. - After considering the submissions and the interim order, the Appellate Tribunal orders the respondents to hold the disputed amount in Escrow to safeguard the petitioners' interests and prevent any injustice. This decision is made in line with principles of fair play and good conscience, with the aim of ensuring a just outcome in the case.
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• Appellate Tribunal affirms Recovery Certificate as financial debt under IBC, allowing CIRP application within limitation period.

  Case-Laws - AT : Maintainability of application u/s 7 - time limitation - The Appellate Tribunal referenced recent Supreme Court judgments, affirming that a liability arising from a Recovery Certificate constitutes a financial debt under the IBC. Thus, the application filed within the limitation period was deemed valid. The Tribunal upheld the FC's status as a Financial Creditor based on recent Supreme Court rulings, which clarified that a Recovery Certificate gives rise to a fresh cause of action under the IBC. - After thorough consideration of legal arguments and precedents, the NCLAT affirmed the NCLT's decision to admit the application for CIRP.
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PMLA

• Money Laundering Charge Invalid Without Proven Predicate Offense; Court Orders Release of Seized Assets.

  Case-Laws - HC : Money Laundering - scheduled offences - predicate offence - The High Court confirmed that the offense under Section 3 of the PMLA depends on the existence of proceeds from a criminal activity related to a scheduled offense. Following the respondents' acquittal in the predicate offense, the foundational basis for the money laundering charges was negated. The Court ordered the release of the attached properties and bank accounts, stating that since the underlying crime was not proven, the properties could not be considered proceeds of crime. The High Court observed that the mere filing of an appeal against an acquittal does not continue the conditions for criminal proceedings under the PMLA. Thus, until an acquittal is overturned, the discharged individuals should not be subject to the constraints of the charges initially brought against them.
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Service Tax

• Tribunal Rules No Service Tax on Dry Leasing; Delhi Unit Complied, Raipur Notice Lacks Jurisdiction.

  Case-Laws - AT : Non-payment of service tax - aviation services - The Tribunal acknowledged that the appellant's Delhi unit had discharged its service tax liability for chartering aircraft and dry leasing arrangements. It observed that the income shown in the returns and balance sheets represented two separate activities, one being the supply of tangible goods by chartering aircraft and the other being dry leasing arrangements. The Tribunal concluded that the income from dry leasing arrangements, considered a deemed sale under Article 366(29A) of the Constitution, was excluded from the scope of service tax. - The Tribunal found merit in the appellant's argument regarding the vagueness of the show cause notice. - The Tribunal agreed with the appellant's contention regarding jurisdiction, since the services were provided outside the jurisdiction of the Raipur commissionerate and the tax was already discharged by the Delhi unit, the show cause notice lacked jurisdiction.
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• Service Tax Exemption for Road Construction Applies to Both Private and Public Roads, Tribunal Rules.

  Case-Laws - AT : Exemption from Service Tax - Road construction services in private commercial premises - The Tribunal analyzed the wording of Notification No. 24/2009 and its retrospective amendment introduced by the Finance Act, 2012. It noted that the notification did not specify that the exemption applied only to public utility roads. Referring to legal precedents, including the cases of Rajendra Singh Bhamboo and NMC Industries Private Ltd, the Tribunal affirmed that the exclusion clause in the definition of taxable services did not differentiate between private and public roads. Thus, the benefit of the exemption should extend to road construction services provided to commercial entities, as in the appellant's case.
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Central Excise

• Factory's Refund Claim Rightfully Sanctioned in Ghaziabad, Tribunal Confirms Correct Jurisdiction Based on Location and Duty Payment.

  Case-Laws - AT : Territorial jurisdiction to Grant Refund - The Appellate Tribunal found that the factory of the appellant was situated in Ghaziabad, thus the territorial jurisdiction for the refund claim rested with the Assistant Commissioner in Ghaziabad. The Tribunal emphasized that the clearance of electric meters and payment of Central Excise duty occurred in Ghaziabad Division. Despite an endorsement to Noida authorities, the Tribunal ruled it to be a mistake and stated that jurisdiction should be determined based on the location of the factory and payment of duty. Furthermore, the Tribunal noted that the Revenue did not raise jurisdictional objections earlier, and therefore, the refund was rightfully sanctioned by the Assistant Commissioner in Ghaziabad.
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• Refund Claim Denied: Tribunal Upholds Rejection of Cenvat Credit on Education Cess as Ineligible Under CGST Act 2017.

  Case-Laws - AT : Refund of Cenvat credit availed on Education Cess and Higher Secondary Education Cess carried forward as on the appointed day i.e. 30.06.2017 in terms of Section 142(3) of the CGST Act 2017 - The Tribunal upheld the department's decision to reject the refund claim, citing Section 142(3) of the CGST Act, 2017. It noted that the entire refund claim amount had been carried forward by the appellant, making them ineligible for the refund.
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• Refund Claim Dismissed for Late Filing Beyond One-Year Limit Under Central Excise Act; Tribunal Upholds Decision.

  Case-Laws - AT : Refund claim - Reduction in price subsequently resulting in payment of duty in excess - Can refund be claimed without opting of provisional assessment? - Time limitation - Despite clear evidence of overpayment, the refund claim was dismissed solely on the grounds of time bar, as it was filed beyond the one-year limit prescribed by Section 11B of the CEA. The tribunal analyzed the statutory provisions and rejected the appellant's argument that the use of "may" in Section 11B implied discretionary filing within the one-year timeframe. Without precedent supporting the appellant's stance, the tribunal upheld the decision of the lower authorities, affirming the dismissal of the appeal.
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• Refund Approved for Unutilized CVD & SAD Credits Due to GST Transition; Tribunal Confirms Appellant's Entitlement.

  Case-Laws - AT : Refund of CVD/SAD paid - Unable to avail and utilize the credit of CVD/SAD paid by them as payment was made on 30.09.2020 when no provision exist in GST regime to avail such credit - The Appellate Tribunal observed that since the duty payments were made prior to the implementation of the GST regime, during the period when the Cenvat Credit Rules, 2004, were in force, the appellant was entitled to avail Cenvat credit for the duties paid. Section 142(3) of the CGST Act, 2017, provided a remedy for situations where taxpayers couldn't avail or utilize Cenvat credit due to the transition to the GST regime. It allowed refunds for duties that were cenvatable under the previous law, i.e., Central Excise Act, 1944, and rules made thereunder. - The Appellate Tribunal upheld the refund claim of the appellant.
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VAT

• Auction Buyer Holds Clear Title Over Tax Claims in Mumbai Apartment Sale; Secured Creditors' Rights Upheld Under SARFAESI Act.

  Case-Laws - HC : Attachment by the sales tax authorities over an apartment in Mumbai - priority of charges - The High Court concludes that the petitioner, as the auction purchaser, holds a valid and marketable title to the apartment, free from encumbrances claimed by the sales tax authorities. This determination is based on the priority of security interests established under the SARFAESI Act. - Despite attachment orders issued by the sales tax authorities, the absence of registration with CERSAI and the failure to issue a proclamation of sale invalidate their claims to priority over the secured creditor. By analyzing relevant statutory provisions and legal precedents, the court clarifies that the sales tax authorities cannot supersede the rights of secured creditors.
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Case Laws:

• GST

• 2024 (5) TMI 269
  Violation of principles of natural justice - impugned order does not take into consideration the reply submitted by the Petitioner and is a cryptic order - demand including penalty - HELD THAT:- The impugned order, however, after recording the narration records that no satisfactory reply and no substantial documents were submitted by the taxpayer - The Proper Officer has opined that the taxpayer has not filed a satisfactory reply nor substantial documents. The observation in the impugned order dated 29.12.2023 is not sustainable for the reasons that the reply dated 23.12.2023 filed by the Petitioner is a detailed reply with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is not satisfactory and no substantial documents have been submitted by the taxpayer which ex-facie shows that the Proper Officer has not applied his mind to the reply submitted by the petitioner - Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its reply or furnish further documents/details. The impugned order dated 29.12.2023 cannot be sustained and is set aside. The Show Cause Notice is remitted to the Proper Officer for re-adjudication. The Proper Officer is directed to withdraw all punitive actions taken against the petitioner pursuant to impugned order dated 29.12.2023, inter-alia, blocking of credit ledger and the provisional attachment of property including bank account, if any - Petition disposed off.

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• 2024 (5) TMI 268
  Violation of principles of natural justice - impugned order does not take into consideration the replies submitted by the Petitioner and is a cryptic order - HELD THAT:- The impugned order after recording the narration records that the reply uploaded by the taxpayer is incomplete, not duly supported by adequate documents and unable to clarify the issue - The observation in the impugned order dated 30.12.2023 is not sustainable for the reasons that the replies dated 25.10.2023, 02.11.2023 and 14.11.2023 filed by the Petitioner are detailed replies with supporting documents. Proper Officer had to at least consider the reply on merits and then form an opinion. He merely held that the reply is unsatisfactory, incomplete, not duly supported by adequate documents and unable to clarify the issue which ex-facie shows that Proper Officer has not applied his mind to the reply submitted by the petitioner. Further, if the Proper Officer was of the view that any further details were required, the same could have been specifically sought from the Petitioner. However, the record does not reflect that any such opportunity was given to the Petitioner to clarify its replies or furnish further documents/details. The impugned order dated 30.12.2023 cannot be sustained and is set aside. The show cause notice is remitted to the Proper Officer for re-adjudication - Petition disposed off.

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• 2024 (5) TMI 267
  Scope of SCN - adjudicating authority has traveled beyond the scope of adjudication notice inasmuch as against show cause notice issued proposing to create demand of GST - Violation of essential requirements of rules of natural justice - HELD THAT:- No useful purpose may be served either in keeping the present petition or calling for a counter affidavit or relegating the petitioner to the forum of appeal. Once the Act requires by way of a mandatory provision that the demand arising under an adjudication order may not exceed the demand for which show cause notice may have been issued, there is no room to entertain any doubt as to that. Also, rules of natural justice are far too well established to allow any exception to be made in that regard. Unless, the petitioner had been put to notice with respect to the demand proposed to be created by the adjudication order and unless he had been given adequate opportunity to present his case, the order that may arise may remain procedurally defective. The writ petition is disposed off.

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• 2024 (5) TMI 266
  Applicable rate of tax (GST) - Classification of goods - mango pulp supplied to 100% Export Oriented Unit which further exports such pulp outside the country after minor processing / re-packing - to be classified under residuary entry No. 453 or not - HELD THAT:- Prior to the 22nd meeting of the GST Council, so far as mango sliced and dried are concerned, the GST rate was applicable at 12% from 1st July 2017 as per Notification No. 1/2017 in Schedule II which was reduced to 5% as per recommendations of the GST Council as per Notification No. 34/2017 dated 13th October 2017. While the GST Council in its 47th meeting has clarified that only mangoes sliced and dried are liable to reduction of rate of tax at the rate of 5% from 12% and therefore, to clarify that mangoes other than sliced and dried, the third category of entry was inserted in the category vide Entry No. 16 of Schedule II as per Notification No. 6/2022 dated 18th July 2022. Therefore, for all purposes and intention Entry of rate of 12% would govern the product mango pulp , which was not specifically included in Entry No. 30A, which provides for mango sliced, dried. The impugned circular dated 3rd August 2022 only clarifies the insertion of Entry No. 16 vide Notification No. 6/2022 and therefore, the argument and contention raised by the petitioner that by the impugned circular, the GST rate of 12% sought to be introduced is without any basis. For mango pulp , the GST rate was 12% from 1st July 2017 as per Notification No. 1/2017 - The mango pulp was not included in the Entry No. 30A of the Schedule II, which came into effect by Notification No. 34/2017. Therefore, there was a need for clarification by the GST Council in its 47th meeting held on 28th June 2022 to clarify that the third category of mango in HSN 0804 other than fresh and dried mangoes are required to be clarified to be taxed at the rate of 12%. The impugned Notification and circular are not in the nature of amending the tax rate with increasing the tax rate with retrospective effect. In fact, they are clarificatory so far as the product mango pulp is concerned, as admittedly, Entry No. 30A does not include the mango pulp . Therefore, the stand of the respondents that mango pulp would fall in the residuary category as the same was not included either in the Notification No. 1/2017 or covered by the Entry No. 30A is also not as per clarification made by the GST Council. Therefore, the respondents are also not justified to apply rate of 18% GST as per residuary Entry No. 453 as mango pulp would be falling under HSN 0804, which broadly categorized fresh and dried mangoes. Therefore, naturally, mango pulp would go with the mango sliced, dried and would be covered by mango sliced, dried attracting 12% rate prior to Notification No. 34/17. The GST Council has only clarified that the third category of mangoes other than mango sliced and dried would attract 12% of GST. Therefore, the contention of the respondents to tax on mango pulp at 18% is also not tenable. The case of the petitioners that word mango was removed from Entry No. 16, the petitioners would be liable to pay tax at 5% on mango sliced and dried as the mango pulp is neither mangosteens nor dried as per Serial No. 16 in Schedule II under Chapter Heading 0804 nor the petitioners are entitled to exempted category as per Serial No. 51 of exemption Notification No. 2/2017, which pertains to mango fresh is very attractive at the first blush, however, considering the Notification nos. 1/2017, 34/0217 and 6/2022 together, the mango pulp , as per the recommendations of the GST Council, was to be taxed at the rate of 12% only as the same would not be falling in Entry No. 30A as mango sliced or dried. There is no retrospective amendment of Entry No. 16, but the same is clarificatory only inserted by Notification No. 6/2022 and the impugned circular dated 3rd August 2022 where Entry No. 16 in Schedule II has included mangoes other than sliced, dried which includes mango pulp. Therefore rate can be said to be reduced from 12% to 5% only on mango sliced, dried and rate of 12% would continue to be applied to mangoes other than mangoes sliced, dried as per notification no. 6/22 as per the clarification of the GST Council as per minutes of the 47 th meeting - the GST Council has clarified in its 47th meeting that tax rate would continue to apply at 12% other than mango sliced, dried for which the GST rate was reduced to 5% as per the recommendations of 27th meeting of the GST Council. The petitioner is, therefore, liable to pay GST at the rate of 12% as per Entry no. 16 from 01.07.2017 and not 5% as per Entry No. 30A, which provides for mangoes sliced, dried only. The contention of the petitioners that there was an amendment to the rate Notification with effect from 18th July 2022 is not tenable. As such the Notification is only clarificatory and would apply with effect from 1st July 2017 as per Notification No. 1/2017. It is true that Section 9 of the CGST Act does not grant power to amend the rate Notification - The contention of the petitioner that as per HSN 0804, mango pulp would be covered by mangoes as per General Chapter Note, which includes fruits and dates, and therefore, only mangoes other than fresh mangoes is required to considered and as mango pulp is not a fresh mango and would be covered by entry No. 30A mango sliced, dried is not tenable in view of clarification made by the GST Council in its 47th meeting, wherein it is clearly mentioned that only mangoes sliced, dried would attract GST at 5% and remaining mango would be attracted GST at 12%. Therefore, the Notification No. 6/2022 is only inserting the word mango other than mango sliced, dried so as to clarify that all mangoes would fall in the same category other than mango sliced, dried . Thus, as mango pulp would fall under the third category of mangoes (other than mango sliced, dried) would be liable to levy at the rate of 12% as per Entry No. 16 which was amended so as to clarify the intention of council to continue to levy GST at 12% on mangoes (other than mango sliced, dried) which would include mango pulp from 1st July 2017. The impugned show cause notice is hereby quashed and set aside and the petitioners would be liable to pay GST at the rate of 12% from 1st July 2017 on the product mango pulp and not at the rate of 5% (as claimed by the petitioners) or 18% (as claimed by the respondents) for the period from 01.07 2017 to 18.07.2022 - petition allowed in part.

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• 2024 (5) TMI 265
  Exemption from GST - pure services or supply of goods to the Notified Area Authority, Vapi - Notified Area Authority, Vapi is a local authority or governmental authority ? - N/N. 12/2017-Central Tax (Rate) dated 28th June 2017 and the N/N. 12/2017-State Tax (Rate) dated 30th June 2017 - HELD THAT:- The contention of the petitioner that the Notified Area Authority, Vapi is discharging the function that like of the municipality, is not acceptable in view of the decision of the Hon ble Apex Court in the case of NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY VERSUS CHIEF COMMISSIONER OF INCOME TAX ORS. [ 2018 (7) TMI 137 - SUPREME COURT] where it was held that the appellant is not covered by the definition of local authority as contained in Explanation to Section 10(20) . In view of the conspectus of law, the Hon ble Supreme Court held that the Area Development Authority is not akin to the municipality constituted under Article 243Q(1) of the Constitution of India. The Hon ble Apex Court, in the case of SAIJ GRAM PANCHAYAT VERSUS STATE OF GUJARAT AND OTHERS. [ 1999 (1) TMI 531 - SUPREME COURT] , held that the Gujarat Industrial Development Act operates in a totally different sphere from Parts IX and IXA of the Constitution and the Gujarat Panchayats Act, 1961. Considering the conspectus of law laid down by the Hon ble Apex Court in the case of New Okhla Industrial Development Authority, the Notified Area Authority, Vapi cannot be considered as local authority or Governmental Authority . Therefore, the Notified Area Authority, Vapi is neither a local authority nor a Governmental Authority carrying out any activity in relation to any function entrusted to Panchayat under Article 243G of the Constitution or in relation to any function entrusted to Municipality under Article 243W of the Constitution. Petition dismissed.

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• 2024 (5) TMI 264
  Interest Liability on Electronic Credit Ledger Payments - Seeking levy of interest only on that part of the tax which is paid in cash - Peremptory recovery sought as against two objections raised on audit, relating to interest payable for the assessment years 2017-18 and 2018-19 - interpretation placed on the proviso fully absolving a debit from the Electronic Credit Ledger from the liability of interest - HELD THAT:- The audit report as was pointed out by the learned counsel for the petitioner at paragraph no. 1 speaks of non-payment of the amount of interest amounting to Rs. 82,57,170/- on delayed payment through DRC-3 in the financial years 2018-19. The taxpayer was found to have offset the GST liabilities only on 12.05.2020 when the last date of furnishing monthly returns was on the succeeding month. The offsetting of GST liabilities occurs only on furnishing of return and the credit to the input tax ledger also occurs only on such furnishing of returns. The order specifically speaks of a personal hearing afforded at the Monitoring Committee Meeting (MCM) and the Committee having rejected the submissions made and required the assessee to make the deposit of the interest amounts into the government account under the proper head of CGST/SGST interest. The objections made under audit and the decisions of the Monitoring Committee does not oblige the Proper Officer to follow it verbatim and the Proper Officer is the person who has to consider the matter and arrive at a decision insofar as the final assessment is concerned as also process and effect recovery - The availability of input tax in the Electronic Credit Ledger would be inconsequential since the tax payment is only on furnishing of returns. The credit available in the Electronic Credit Ledger would be set off against output tax only on the furnishing of returns for the tax period, when debit is made from the Credit Ledger. The writ petition is dismissed.

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• 2024 (5) TMI 263
  Time limitation for filing appeal - recovery of short paid duty alongwith interest and penalty - HELD THAT:- There is no dispute that the subject matter of the show cause notice dated 30.06.2023, which has culminated in the order of the first respondent dated 14.02.2024, was the subject matter, in respect of which the petitioner wanted a clarification by filing an application before the second respondent on 05.06.2023, which has now culminated in the order passed by the second respondent dated 26.02.2024. Therefore, the challenge to the order passed by the second respondent on 26.02.2024 cannot be countenanced. The petitioner is directed to file an appeal before the Appellate Commissioner as mentioned above within the period of limitation under Section 107(2) of the GST Act, 2017 - the writ petition is dismissed.

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• 2024 (5) TMI 262
  Validity of assessment order - reply to the ASTM-10 notice was not taken into consideration - violation of principles of natural justice - confirmed tax demand relates to the discrepancy between the petitioner s GSTR 1 and 3B returns - HELD THAT:- On perusal of the impugned order, it is clear that the confirmed tax demand relates to the discrepancy between the petitioner s GSTR 1 and 3B returns. It is also clear from the order that the petitioner s reply to the notice in Form ASMT-10 was not taken into account. In these circumstances, albeit by putting the petitioner on terms, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand on merits. The impugned order dated 25.09.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice. The petition is disposed off.

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• 2024 (5) TMI 261
  Validity of assessment order - petitioner did not have a reasonable opportunity to contest the tax demand on merits - violation of principles of natural justice - tax demand arose entirely on account of belated filing of returns - HELD THAT:- On perusal of the impugned order, it is evident that such order was issued entirely on the basis that returns were filed belatedly by the petitioner. It also follows from the order that the petitioner did not participate in proceedings and that the tax demand was confirmed in view of the petitioner s failure in reply. In these circumstances, solely for the purpose of providing an opportunity to the petitioner to contest the tax demand on merits, interference with the impugned order is warranted. The impugned order dated 03.03.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice. Petition disposed off.

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• 2024 (5) TMI 260
  Challenge to assessment order and bank attachment notice - assail on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits - mismatch between the GSTR 1 and GSTR 3B - violation of principles of natural justice - HELD THAT:- The orders impugned herein reveal that tax liability was imposed on the basis of a mismatch between the GSTR 1 and GSTR 3B. These orders were issued without the petitioner being heard. In these circumstances, albeit by putting the petitioner on terms, it is just and appropriate that the petitioner be provided a reasonable opportunity to contest the tax demand. Therefore, the impugned assessment order and the consequential attachment notice are set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice. Petition disposed off by way of remand.

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• 2024 (5) TMI 259
  Validity of assessment order - violation of principles of natural justice - tax liability on outward supplies after setting off the ITC - HELD THAT:- The tax liability was imposed because the petitioner replied without annexing documents. As a consequence of such order, ITC to the extent of about Rs. 1.04 crore was reversed. In the petitioner s reply, the petitioner has stated that outward supplies do not give rise to tax liability after setting off ITC. The petitioner has also asserted that proper bills and other documents are available. In these circumstances, it is just and appropriate that an opportunity be provided by the petitioner to contest the tax demand on merits albeit by putting the petitioner on terms. The impugned order dated 29.12.2023 is set aside on condition that the petitioner remits a sum of Rs. 5,00,000/- towards disputed tax liability as agreed to within three weeks from the date of receipt of a copy of this order - Petition disposed off.

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• 2024 (5) TMI 258
  Refund of the unutilized ITC of GST Compensation Cess on coal - zero rated supply - rejection of refund on the ground of time limitation - Vires of Clause 5 of the impugned Notification No. 53/2023 Central Tax dated 02.11.2023 issued by the Central Board of Indirect Taxes Customs - Rejection of Appeal for Delay - HELD THAT:- It is the case of the petitioner-Company itself that the notification was issued by the Government of India as various orders were being passed by the authorities and they were being uploaded on the web portal of the Department. However, since the orders were uploaded but could not be communicated to the parties concerned, delay was caused in preferring appeals against those orders and the appeals were being dismissed on the ground of delay. To overcome such situation, the impugned notification was brought in so that the appeals could be heard and the delay if any caused in preferring the appeal could be condoned. In the case in hand, admittedly, the appeals were filed by the petitioner-Company before the Joint Commissioner (Appeals), State Tax with some delay and the said appeals stood dismissed vide order dated 05.12.2023 (Annexure P/1) in light of clause 5 of the impugned notification. The learned Joint Commissioner has observed that the appeal was filed by the petitioner Company after a delay of 1 year and 1 month from the prescribed time limit and no cogent reason was afforded for such an inordinate delay. There are no error in the order (Annexure P/1) passed by the respondent No. 4. So far as declaring clause 5 of the impugned notification is concerned, a plain reading of the said clause would make it amply clear that no appeal would lie under this Notification in respect of a demand not involving tax. It is a case where the petitioner-Company is claiming refund of tax which was rejected and the appeal before the Joint Commissioner also stood dismissed on the ground of limitation. No cogent reason has been assigned as to how the said clause is ultra vires the Constitution of India. The appeal filed by the petitioner-Company is barred by limitation and it is not in a position to avail the benefit of extension of time period which has been granted by the Notification and as such, the relief sought for by the petitioner-Company to declare clause 5 of the impugned Notification, does not merit acceptance. All the writ petitions are dismissed.

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• 2024 (5) TMI 257
  Classification of the mixed spices - classification accepted under the heading 09109100 of the GST Tariff - HELD THAT:- There are substance in the contention of petitioner that the approach of the Additional Commissioner appears to be perverse, to say the least. However, an opportunity given to respondent no. 5 to take an appropriate view of the matter and place his reply affidavit on record. Let this be done on or before the adjourned date of hearing - the proceedings placed on 15th April 2024, High on Board.

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• 2024 (5) TMI 256
  Imposition of GST on vouchers - Validity of assessment order - unreasoned impugned order - violation of principles of natural justice - HELD THAT:- The respondent summarized the contentions of the petitioner. After doing so, the sweeping conclusion that the argument was not valid is recorded. The respondent also records that vouchers are in the nature of actionable claims, which are included within the definition of goods under Section 2(52) of the CGST Act. Conspicuous by its absence in the impugned order, is the recording of reasons as to why the contentions of the petitioner were rejected. Since the impugned order is unreasoned in this respect, such order is unsustainable. The impugned order is set aside only insofar as it relates to the imposition of GST on vouchers. As a consequence, this issue is remanded for re-consideration by the respondent. After providing a reasonable opportunity to the petitioner, including a personal hearing, the respondent is directed to issue a fresh speaking order after duly taking note of and dealing with each contention raised by the petitioner in this regard. Petition disposed off by way of remand.

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• 2024 (5) TMI 255
  Validity of assessment order - demand confirmed for the assessment year 2017-2018 contrary to the limitation prescribed under Section 73 (10) of CGST Act, 2017 - HELD THAT:- The challenge to the impugned assessment order does not call for any interference under Article 226 of the Constitution of India. If the petitioner is aggrieved, the petitioner can only file a statutory appeal under Section 107 of the GST Act before the appellate Authority. In case, it is the case of the petitioner that the assessment that has been confirmed for the assessment year 2017-2018 thus fell under the VAT regime, unless the assessment order was completed as is contemplated under the provisions of the TNVAT Act, 2006, the demand cannot be said to be time barred, in which case appropriate demand notice under Section 27 of the TNVAT Act, 2006 can be issued. These are aspects, which will have to be considered by the appellate Commissioner on merits and in accordance with law. Petition dismissed.

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• 2024 (5) TMI 254
  Refund claim - determination of the turn over for the purpose of refund - Rule 89(4) of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- The issue can be re-examined in the light of the circular No 197/09/2023-GST, dated 17.07.2023, the impugned order is set aside and the case remitted back to the second respondent to pass orders afresh on merits and in accordance with law, in the light of the submissions made by the learned counsel for the petitioner and in the light of the paragraph 3 of the above circular. This exercise may be carried out by the second respondent within a period of 8 weeks from the date of receipt of a copy of this order. Petition allowed by way of remand.

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• 2024 (5) TMI 253
  Cancellation of registration of petitioner - assessment order was made on best judgment basis because the petitioner continued to carry on business during the relevant period - HELD THAT:- The impugned order was issued on 30.11.2022. By that time, the order of cancellation was issued and such order took effect from 31.07.2022. On perusal of the impugned assessment order, it is evident that liability was imposed entirely on the basis of the petitioner s turnover for the month of March 2022 as per the GSTR 3B return. Learned counsel for the petitioner points out that 12.5% of the disputed tax demand was remitted when the petitioner endeavoured to avail of an amnesty scheme for filing of appeals - Since liability was imposed on the petitioner entirely on the basis of the petitioner s turnover of March 2022 and the petitioner asserts that no business was carried on in August 2022, it is just and necessary that the petitioner be provided an opportunity to contest the tax demand. The matter is remanded for reconsideration - Petition disposed off by way of remand.

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• 2024 (5) TMI 252
  Validity of assessment order under TNGST Act - opportunity that has been granted is inadequate and not in compliance with Section 75(4) of TNGST Act - HELD THAT:- Considering the fact that the petitioner s request on 01.04.2021 for 15 days was limited to a week and also during the relevant period there was covid pandemic, which caused unprecedent difficulties. This Court is inclined to accede to the request of the petitioner for one final opportunity. The impugned orders of assessment are set aside. The petitioner is at liberty to file their objections, along with the documents, within a period of 6 weeks from the date of receipt of a copy of this order - the writ petition is disposed off.

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• 2024 (5) TMI 251
  GST on seigniorage fee and mining lease amounts paid by the petitioner to the Government - HELD THAT:- The Division Bench of this Court in TVL. A. VENKATACHALAM VERSUS THE ASSISTANT COMMISSIONER (ST) [ 2024 (2) TMI 488 - MADRAS HIGH COURT] has held that It is made clear that there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench takes a decision. In view of the said judgment, this petition is liable to be disposed of on the same terms. Consequently, in this case, the petitioner is permitted to submit his reply to the intimation within a maximum period of four weeks from the date of receipt of a copy of this order.

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• 2024 (5) TMI 250
  Maintainability of petition - non-constitution of Tribunal - appropriate protection available under Section 112(8) of the Rajasthan Goods and Services Tax, 2017 - HELD THAT:- This petition, at this stage, is disposed off with a direction that in case petitioner makes payment as per provisions contained in Sub-section(8) of Section 112 of the Act, further proceedings shall not be drawn for recovery of the balance amount, provided that the petitioner avails statutory remedy of appeal within a period of three months from the date of the constitution of the Tribunal.

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• 2024 (5) TMI 249
  Ex-parte order - in spite of sufficient opportunity being given, the petitioner did not appear - whether the State is interested to earn revenue for the State or adhering to technicalities the authority is keen to harass? - HELD THAT:- Considering the interest of the State for augmentation of revenue, this Court is of the opinion that the order dated 31.01.2024 passed by the appellate authority in Appeal is liable to be quashed and is, accordingly, hereby quashed. Accordingly, the matter is remitted to the appellate authority to reconsider afresh by giving opportunity of hearing to the petitioner. As such, to short cut the time, this Court fixes 15.03.2024 on which date the petitioner shall appear along with all the records and also reply before the appellate authority, i.e., Joint Commissioner of State Tax (Appeal), Balasore, Odisha so that the very same authority shall consider and pass appropriate order. The writ petition is disposed off by way of remand.

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• 2024 (5) TMI 248
  Cancellation of petitioner s registration - non-filing of return - Petitioner submits that after the cancellation of its registration, it has paid all the revenue due and he further agrees to pay if any revenue due which is required to be paid for restoring of its registration. HELD THAT:- This writ petition is disposed of by setting aside the impugned order of the adjudicating authority and by directing the respondent GST authority concerned to restore the petitioner s registration and open the portal for a period of 30 days from date to enable the petitioner to make the payment of revenue due if any to be indicated by the respondent authority concerned within seven working days.

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• 2024 (5) TMI 247
  Maintainability of petition - availability of appellate remedy which the petitioner availed with gross delay - Cancellation of GST registration - HELD THAT:- An appeal was to be filed on or before 30.06.2022 as permitted by the Hon ble Supreme Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER] and if necessary with a delay condonation application within one month thereafter. The appeal is said to have been filed only on 05.11.2023, after about one year five months from the date on which even the extended limitation period expired. In the above circumstances, there are no reason to invoke the extraordinary jurisdiction under Article 226, especially since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. The law favours the diligent and not the indolent. Further, the Government had come out with an Amnesty Scheme by Circular No. 3 of 2023, by which the registered dealers, whose registrations were cancelled were permitted to restore their registration on payment of all dues between 31.03.2023 to 31.08.2023. The petitioner did not avail of such remedy also. The petitioner does not have any case that the show-cause notice was not received by him. Further, it is also pertinent that the reason stated in the show-cause notice for cancellation of registration is that the petitioner has not filed returns for a continuous period of six months. The petitioner does not have a case that he had in fact filed a return in the continuous period of six months. The writ petition stands dismissed.

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• 2024 (5) TMI 246
  Seeking revocation of cancelled petitioner s GST registration - HELD THAT:- Considering the fair stand as taken by the respondents further adjudication of the petition is not called for. The impugned show cause notice as also the impugned orders cancelling the petitioner s registration is quashed and set aside with liberty to the respondents to issue a fresh show cause notice within two weeks from today. The show cause notice be adjudicated after following due procedure and after an opportunity to the petitioner of filing a reply and a personal hearing to be accorded to the petitioner. All contentions of the parties on the proposed proceedings are expressly kept open. The petition stands disposed of.

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• 2024 (5) TMI 245
  Grant of Regular Bail - bogus documents created in the form of e-way bills, though, no actual transaction had taken place - HELD THAT:- This Court finds no circumstances, more particular, when the co-accused is granted bail by the Coordinate Bench of this Court and such order has remained un-challenged, till date, to adjudge the impugned order as unjust and contrary to the settled principles of law. As held earlier, the petitioner has failed to point out supervening circumstances, which may interfere with the fair trial. Reference made to the observations made in the recent decision by the Hon ble Apex Court in case of KEKHRIESATUO TEP ETC. VERSUS NATIONAL INVESTIGATION AGENCY [ 2023 (4) TMI 1320 - SUPREME COURT] where it was held that the learned Special Judge has himself distinguished cases of the persons who have indulged into extortion for furthering the activities of the organization and the persons like the present appellants, who were government servants, and compelled to contribute the amount. We, therefore, find that it cannot be said that the prima facie opinion, as expressed by the learned Special Judge, could be said to be perverse or impossible. The present petition fails and stands dismissed.

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• 2024 (5) TMI 244
  Violation of principles of natural justice - cancellation of registration of the petitioner four times without assigning any reason - for the fifth time also, neither the SCN nor the order of cancellation of registration contained any reason whatsoever except the standard reason of misrepresentation and fraud committed by the petitioner - HELD THAT:- The impugned order of cancellation of registration dated 24.02.2021 is hereby quashed and set aside and the matter is remitted back to the respondent no.2- Assistant Commissioner of State Tax, Ghatak- 75 (Bhavnagar) for issuance of a fresh show- cause notice with detailed reasons for cancellation of registration of the petitioner and proceed with such show-cause notice in accordance with law. Petition disposed off by way of remand.

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• 2024 (5) TMI 243
  Rejection of delayed appeal - rejection of the appeal having not been filed within the period of limitation - HELD THAT:- An appeal against an order under Section 73 or 74 has to be filed on or before 31.01.2024, and any appeal filed which is pending before the authority could also be considered as properly filed, even if there is delay in such filing - However, the maintainability of the appeal is further regulated by paragraph no. 3 of N/N. 53 of 2023- Central Tax, dated 02.11.2023 (S.O. 4767(E), which require that the admitted tax, interest, fine, fee and penalty arising from the impugned order is paid up along with a sum equal to 12.5% of the remaining amount of tax in dispute arising from the said order subject to a maximum of twenty-five crore rupees; out of which 12.5%, 20% should have been paid by debiting from the Electronic Cash Ledger. The further conditions in paragraph no. 4 to 6 also shall be applicable. In the present case, the appeal was filed and was dismissed by the first Appellate Authority. In such circumstances, it is only proper that the appeal be restored to the files of the Authority subject to the conditions under paragraph no. 3 being satisfied - Hence the petitioner would be entitled to satisfy paragraph no. 3 of the aforesaid Notification by paying up the deficient amounts as would be required to maintain the appeal under the notification. The impugned order is set aside on condition of the assessee satisfying the aforesaid conditions before the time stipulated in Notification; i.e. 31.01.2024, in which event, the appeal would be taken up and considered on merits. And if the conditions are not satisfied, then necessarily the impugned order would stand restored - petition allowed.

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• 2024 (5) TMI 242
  Delay in filing the appeal - Time Limitation - petition delayed for almost one year - extension of period for filing a delayed appeal - HELD THAT:- This Court and the Hon ble Supreme Court have held that when there is a specific period provided in the statute, within which period a delayed appeal could be filed; then neither the Appellate Authority nor this Court under Article 226 of the Constitution of India could condone the delay beyond the period provided. The Central Board of Indirect Taxes and Customs has by Notification No. 53 of 2023- Central Tax, dated 02.11.2023 (S.O. 4767(E)) extended the time for filing appeal against an order passed by the Proper Officer on or before 31.03.2023 under Sections 73 and 74 of the BGST Act . This in fact extends the period for filing a delayed appeal beyond the one month period as provided under Section 107(4) of the BGST Act , on following the special procedure prescribed under the said Notification. Hence an appeal against an order under Section 73 or 74 has to be filed on or before 31.01.2024, and any appeal filed which is pending before the authority could also be considered as properly filed, even if there is delay in such filing - In the present case, the appeal was not filed. In such circumstances, it is only proper that an appeal be filed satisfying the conditions in paragraph no. 3 of N/N. 53 of 2023- Central Tax, dated 02.11.2023. Hence the petitioner would be entitled to satisfy paragraph no. 3 of the aforesaid Notification by paying up the amount as would be required to maintain the appeal under the notification - Let an appeal against the impugned order dated 20.11.2021 be filed satisfying the aforesaid conditions before the time stipulated in Notification; i.e. 31.01.2024, in which event, the appeal would be taken up and considered on merits. Petition disposed off.

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• 2024 (5) TMI 241
  Maintainability of petition - availability of alternative remedy - time limitation to file appeal - Cancellation of GST registration of petition - HELD THAT:- An appeal was to be filed on or before 30.06.2022 as permitted by the Hon ble Supreme Court and if necessary with a delay condonation application within one month thereafter. The appeal is said to have been filed only on 18.10.2023, after about one year three months eighteen days from the date on which even the extended limitation period expired. In the above circumstances, there are no reason to invoke the extraordinary jurisdiction under Article 226, especially since it is not a measure to be employed where there are alternate remedies available and the assessee has not been diligent in availing such alternate remedies within the stipulated time. The law favours the diligent and not the indolent. The petitioner does not have any case that the show-cause notice was not received by him. Further, it is also pertinent that the reason stated in the show-cause notice for cancellation of registration is that the petitioner has not filed returns for three consecutive tax periods. The petitioner does not have a case that he had in fact filed a return, in the three consecutive tax periods. Petition dismissed.

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• 2024 (5) TMI 240
  Challenge to SCN/assessment orders issued by the respondent-GST Department - levy of GST on royalty paid to the respondent-Mining Department towards mining lease - HELD THAT:- In SUDERSHAN LAL GUPTA CONTRACTOR VERSUS UNION OF INDIA, STATE OF RAJASTHAN, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, DEPUTY COMMISSIONER OF STATE TAX, CIRCLE KARAULI, RAJASTHAN [ 2022 (10) TMI 43 - RAJASTHAN HIGH COURT] , the Division Bench of this Court has held that the action of respondents with regard to imposition of GST on royalty is not liable to be interfered with. This writ petition is dismissed in terms of the orders passed by this Court in Sudershan Lal Gupta s case - Petition dismissed.

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• 2024 (5) TMI 239
  Cancellation of GST registration of the petitioner - petitioner has not been issued with any SCN - Violation of principles of natural justice - Predetermined action - HELD THAT:- A bare perusal of the aforesaid contents of the impugned order would clearly reflect that the reasons assigned for cancellation of registration is invoking clause No.29(2)(E) whereby it alleged that the registration has been obtained by means of fraud, willful misstatement or suppression of facts. It also reveals that the cancellation was based preliminarily on e-mail received on 28.06.2023 from the office of the Director General of Goods and Service Tax (Intelligence), Hyderabad Zonal Unit. However, the contents of the e-mail dated 28.06.2023 from the Director General were never made available to the petitioner. The petitioner is not aware of the contents of the said e-mail. It is apparently clear that for the reasons for which the registration stands cancelled by the impugned order dated 04.07.2023, the petitioner has not been put to notice or has been granted an opportunity to give an explanation to the same. For this reason alone, the impugned order is liable to be interdicted. The impugned order is not sustainable and the same deserves to be and is accordingly set aside/quashed - Petition allowed.

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• 2024 (5) TMI 238
  Refund of GST for the period April, 2022 to March, 2023 - deficiency memo issued and date fixed for personal hearing - petitioner submits that deficiency memo has not been received - HELD THAT:- The petition is disposed of granting liberty to the petitioner to approach this Court afresh in case need so arises. Keeping in view the fact that the application for refund was submitted on 08.10.2023 for the subject period, respondents are directed to expedite the adjudication of the application and endeavour to disposed it of within four weeks from today.

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• 2024 (5) TMI 237
  Maintainability of petition - availability of alternative remedy - penalty and fine has been imposed under Sections 130(1) and 130(2) of the Central/Punjab Goods and Service Tax Act, 2017 - HELD THAT:- Keeping in view the fact that there is a remedy of appeal which is provided under Section 107 of the Act on a nominal payment of 10% of the amount imposed, the petitioner has an alternate and efficacious remedy available. Keeping in view the law laid down by the Apex Court in THE STATE OF PUNJAB VERSUS M/S SHIV ENTERPRISES ORS. [ 2023 (1) TMI 842 - SUPREME COURT] , it is opined that it is not for this Court to go into the disputed questions which are now sought to be raised as to whether the vehicle had stopped at Khanna to unload the goods or whether it was in transit as such. The present writ petition is disposed of.

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• 2024 (5) TMI 236
  Appeal rejected as being not maintainable - rejection of refund claim - Rule 108 of the Haryana Goods Service Tax Rules, 2017 - HELD THAT:- A co-ordinate Bench in GO DADDY INDIA DOMAINS AND HOSTING SERVICES PVT. LTD. VERSUS STATE OF HARYANA AND OTHERS [ 2023 (4) TMI 1283 - PUNJAB AND HARYANA HIGH COURT] came to the conclusion that it is a highly technical ground for dismissing the appeal and set aside the said order and issued directions to hear the appeal on merits after giving opportunity of hearing to both the parties. A perusal of the said judgment would also go on to show that the wording of the Rule had been taken into consideration since it is provided electronically or otherwise and, therefore, the manual filing as such has also been accepted. Petition disposed off.

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• 2024 (5) TMI 235
  Availing and utilization of Input Tax Credit - supply of car was made in the month of July 2023 when the applicant was still availing the lower rate of tax on his supplies by forfeiting is right to claim input tax credit on purchase of goods and services - HELD THAT:- The applicant is paying tax at the rate of 6% CGST + 6% SGST after availing input tax credit under the same sub entry as provided by notification 31 of 2017 dated 13-10-2017 and 20 of 2017 dated 22/8/2017. The applicant purchased a motor vehicle and the details of purchase were reported in GSTR-2B in the month of July 2023. The applicant avers that the original invoice was issued on 4/8/20123 that is in the month of August and therefore they would like to claim input tax credit on this invoice which was raised on them in the month of August 2023 that is during the month in which they have opted to pay higher rate of tax with ITC. The applicant by opting to pay tax at a lower rate by not availing input tax credit on the goods and services used in his supplies has forfeited his right to avail input tax credit on the goods and services procured by him during the earlier period. The car purchased by him was reported by the supplier in his GSTR-01 in the month of July under section 37 of the CGST Act and the applicant was communicated this invoice in his GSTR-2B return - Therefore it is concluded that the supply of car was made in the month of July 2023 when the applicant was still availing the lower rate of tax on his supplies by forfeiting is right to claim input tax credit on purchase of goods and services and hence the ITC pertaining to the purchase of car is not available to the applicant.

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• Income Tax

• 2024 (5) TMI 234
  Validity of order passed by the Settlement Commission - Revenue submits that the Settlement Commission has wrongly allowed deductions u/s 80-IA (4) as the returns were filed after the period prescribed by law - As decided by HC [ 2019 (7) TMI 2019 - MADHYA PRADESH HIGH COURT] contention of petitioner that the Settlement Commission has wrongly allowed deductions under Section 80- IA (4) of the Act, without taking into consideration the aspect of delay, has no merit and does not survive for either being raised or adjudicated. HELD THAT:- We are not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed.

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• 2024 (5) TMI 233
  Addition u/s 68 - unexplained share application money - genuineness and creditworthiness of the share capital subscription challenged - ITAT deleted addition - Revenue has challenged the order of the ITAT as it failed to appreciate that the Director, Tushar Kumar, had clearly admitted the receipt of the accommodation entries by the respondent-assessee and the respondent-assessee had failed to substantiate genuineness and creditworthiness of the share capital subscription - HELD THAT:- With regard to the first contention relating to the genuineness and creditworthiness of the share capital subscription, the ITAT has noticed that the CIT(A) had duly recorded its satisfaction relating to identity, genuineness and creditworthiness of the amounts received along with confirmations, address, cheque number and PAN and therefore, the ITAT declined to interfere with the order of CIT(A) in deleting the addition. We may allude to the order of ITAT, wherein, while affirming the deletion of additions carried out by CIT(A) towards unexplained share application money under Section 68 held that CIT (A) has duly satisfied himself as the assessee and the parties could provide documents relating to identity, genuineness and creditworthiness of the amounts received along with confirmations, address, cheque number and PAN. Hence, we decline to interfere with the order of the ld. CIT (A). Finance received from M/s Arha Buildcon Pvt. Ltd., the ITAT, in our view, has correctly delved into the facts to come to the conclusion that there have been direct finance arrangements between M/s Arha Buildcon Pvt. Ltd. and the respondent-assessee. ITAT had rendered a finding of fact with respect to the statement and held it to be factually incorrect observing that the bank statement of the assessee reflects the amounts received and paid with regard to M/s Arha Buildcon Pvt. Ltd. Receipt from each of 48 flats concerning Bhagwanti CGHS ITAT has made a categorical finding that the addition was made on theoretical premise on the basis of presumptions and there was no evidence gathered, collected or investigated by the Revenue to support the addition. ITAT has examined the facts in great detail. It may be noted that the ITAT is the final arbiter of the facts and appeal can be entertained by the High Court only if any substantial question of law arises. A conspectus of the proposed substantial questions of law signify that they only relate to the findings of fact and the order of the ITAT cannot be construed in any manner to be ex-facie perverse. Thus no substantial question(s) of law arises for our consideration. Unexplained investment in properties - Cash component of the consideration paid by assessee for Two projects - ITAT deleted addition - HELD THAT:- ITAT has held that there was no scope to treat the amount as paid in cash to be brought under unexplained investment under Section 69 of the Act and came to a conclusion that there was no material to corroborate the addition as made by the AO. Addition of unexplained investment in Kashipur land for the project designated as GTM Kashipur-II, the ITAT, in our view, has correctly delved into the facts to come to the conclusion that the nature and contents of the seized material do not reflect any unexplained investment in the land purchased at Kashipur and the addition has been made on a presumptive basis. Amounts received from Haryana CGHS and the alleged illegal link between the respondent-assessee and Haryana CGHS, the ITAT, after analysing the facts has held that there was no link between the respondent-assessee and Haryana CGHS and it was not a benami concern of the respondent-assessee company. Undisclosed investment in Wings CGHS for taking its control via an MoU, the ITAT, after carefully analysing the facts, held that the MoU cannot be treated as executed since during the search itself, it was conveyed that Tushar Kumar did not want to enter into an agreement with Ajay Jain as per the MoU and the said MoU was also not signed by Tushar Kumar. Unexplained investment in the shares of M/s. Sargam Estate Pvt. Ltd ., the ITAT concurred with the findings as returned by the CIT(A) in deleting the additions as share capital remained constant as at 31.03.2007 and as at 31.03.2006. The share application money as at 31.03.2006 was Rs. 32,18,000/- which was refunded to the assessee company after receipt of fresh share application money of Rs. 53,86,000/- by M/s Sargam Estate Pvt. Ltd. Instead of enquiring, the source of application money, the AO brought to tax the amount of share application money refunded to the assessee by M/s Sargam Estate Pvt. Ltd. Hence, the addition made has been rightly deleted by the ld. CIT (A). Unexplained advertisement expenditure , ITAT again concurred with the findings rendered by the CIT(A) in deleting the additions as the total expenditure debited on account of advertisement was Rs. 3.19 Cr. as against Rs. 2.85 Cr. alleged by the Assessing Officer. Undisclosed investment in the stock of jewellery ITAT held that since there is a panchnama drawn in the case of M/s GTM Jewellery Mart Pvt. Ltd., stock inventory was made in the said company and keeping in view the fact that M/s GTM Jewellery Mart Pvt. Ltd. is a separate assessable entity, keeping in view the fact that the difference is due to difference in price but not in quantity, we hold that the addition cannot be made in the hands of the assessee in the instant year. Thus ITAT has minutely examined and marshaled the facts. It cannot be gainsaid that the proposed substantial questions of law are merely based on the findings of fact by the ITAT. The order of the ITAT on the concerned issues which stand raised before us, in our opinion, does not suffer from any perversity as claimed by the Revenue. Revenue appeal dismissed.

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• 2024 (5) TMI 232
  Gross profit determination - addition of undisclosed profit in the hands of the assessee while framing the assessment u/s 143(3) - credibility of books of accounts of the assessee - substantial question of law or fact - Addition u/s 40-A(3) as the assessee had made cash payments of expenses exceeding Rs. 20,000/- under different heads - disallowance relating to unverified consignment sales expenses - Tribunal has dismissed the appeal filed by the revenue - HELD THAT:- There no finding was recorded by the AO to doubt the credibility or correctness or completeness of the books of accounts of the assessee. Yet, since the books of accounts of the assessee came to be rejected the Assessing Officer further proceeded to disturb the gross profit rate for the assessment year in question. Relying on gross profit rate achieved by the assessee in the previous three years, addition of about Rs. 3 crores was made. We find no error on part of the Tribunal in recording either of the above findings. Once the CIT (Appeals) looked into the vouchers of cash expenses and recorded a clear finding that those were duly vouched except for two expenditures, in absence of any material shown to establish that that finding was perverse, there survives no room to interfere with the confirmation of such finding by the Tribunal (the last fact finding authority). As to the issue of ad hoc disallowance of expenditure of consignment sale the Tribunal has rightly concluded the same to be an academic issue. Seen in that light, in absence of any other objection found in the books of accounts of the assessee as may have been pressed before the Tribunal, there survives no room to reject the books of accounts of the assessee. Consequently, there is no intrinsic evidence to enhance the gross profit rate. Once the books of accounts of an assessee are found accepted the Assessing Officer may have remained within the confines of his powers ad not disturbed the gross profit rate as that would remain in the nature of the result of the book entries and not an original entry by itself. Settled principle in this regard being that the assessing officer may never step into the shoes of the assessee to infer more profit than may have been derived by the assessee and further his jurisdiction being confined to examine the correctness and completeness of the books of account, it never became open to the Assessing Officer to reject the gross profit rate disclosed by the assessee. It is also shown, the finding on acceptance of books of accounts of the assessee recorded to by the CIT (Appeals) was not even specifically challenged. Tribunal has not erred in confirming the order of the CIT (Appeals) - Decided against revenue.

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• 2024 (5) TMI 231
  Validity of reopening of assessment - Petitioner had not filed its ROI and no reply also has been filed against notice under Section 148A (a) - Valid approval u/s 151 provided or not? - another notice was issued u/s 148A (b) stating that the submissions made were not satisfactory and Petitioner failed to reconcile each and every entry in the notice with ITR filed by it - HELD THAT:- We agree with Petitioner contractual receipts and interest earned on securities have been raised for the first time in the impugned order passed under Section 148A (d) of the Act. Also, Petitioner, in the letter dated 14th April 2023, has explained the rent receipt and source and nature of foreign remittances and if the AO was not satisfied with the explanation, he ought to have, in the impugned order dated 20th April 2023, made out a case as to why he does not agree with the explanation given by Petitioner than making a bald and incorrect statement that Assessee has failed to demonstrate that these items have been disclosed. In the circumstance, in our view, the impugned order under Section 148A (d) of the Act has been passed without application of mind. It is obvious that even the sanction that is accorded under Section 151 of the Act, has been issued without application of mind. We say this because if only the Range Head or the PCIT had bothered to read the file together with the notices issued under Section 148A (b) of the Act, they would have not recommended or approved issuance of the notice under Section 148 of the Act. In our view, the impugned order cannot be sustained. The same is hereby quashed and set aside. Decided in favour of assessee.

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• 2024 (5) TMI 230
  Condonation of delay of 1085 days in filing the appeal u/s 260-A - application seeking condonation of delay filed u/s 5 of the Limitation Act, 1963, the applicant/appellant contended that the appeal has to be treated as one within time from 28.06.2022, when Income Tax Appeal [ 2022 (8) TMI 1506 - HIMACHAL PRADESH HIGH COURT] was disposed of as infructuous by this Court and also contended that the delay is neither willful nor intentional. HELD THAT:- We may point out that Income [ 2022 (8) TMI 1506 - HIMACHAL PRADESH HIGH COURT] had no doubt become infructuous in view of modification of the order challenged therein [ 2019 (1) TMI 421 - ITAT CHANDIGARH] by the Income Tax Appellate Tribunal by passing a fresh order on 11.10.2019. The appellant had a right to question the order passed on 11.10.2019, by filing appeal under Section 260-A of the Act, within the period of 120 days prescribed under the Income Tax Act. The said period ended on 08th February, 2020. Thereafter from around 15th March, 2020 the Covid Pandemic started, and in view of the same, the Hon ble Supreme Court titled Re: Cognizance for Extension of Limitation [ 2022 (1) TMI 385 - SC ORDER] directed that the period from 15.03.2020 till 28.02.2022 would stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. It further stated that if limitation had expired during the period between 15.03.2020 till 28.02.2022 notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the instant case, the limitation having expired prior to 15.03.2020 on 08.02.2020 itself, the applicant cannot get the benefit of the said period of 90 days on 28.02.2022. Admittedly, the instant appeal has been preferred on 12.10.2022, 224 days after 28.02.2022. No valid explanation for this period of delay is mentioned in the application. We are also of the opinion that the date on which Income Tax Appeal No. 10/2019 was disposed of as infructuous on 28.06.2022 had no relevance, since the order impugned in that ITA and in the instant ITA would be different orders. Since we are satisfied that there has been negligence on the part of the applicant/appellant in filing the appeal within the time prescribed by law, this application is dismissed.

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• 2024 (5) TMI 229
  TDS u/s 194H - assessee is a cellular mobile service providers - discount offered by assessee to its distributors on the payment made by the distributors towards pre-paid sim-cards/recharge coupons - - whether appellant assessee and its distributors enjoy legal relationship of principal and agent and not of principal to principal basis? - HELD THAT:- As decided in [ 2024 (3) TMI 41 - SUPREME COURT] the term agent denotes a relationship that is very different from that existing between a master and his servant, or between a principal and principal, or between an employer and his independent contractor. Although servants and independent contractors are parties to relationships in which one person acts for another, and thereby possesses the capacity to involve them in liability, yet the nature of the relationship and the kind of acts in question are sufficiently different to justify the exclusion of servants and independent contractors from the law relating to agency. The term agent should be restricted to one who has the power of affecting the legal position of his principal by the making of contracts, or the disposition of the principal s property; viz. an independent contractor who may, incidentally, also affect the legal position of his principal in other ways. This can be ascertained by referring to and examining the indicia mentioned in clauses (a) to (d) in paragraph 8 of this judgment. It is in the restricted sense in which the term agent is used in Explanation (i) to Section 194-H of the Act. We hold that the assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or while selling/transferring the pre-paid coupons or starter-kits to the distributors. Section 194-H is not applicable to the facts and circumstances of this case . Decided in favour of assessee.

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• 2024 (5) TMI 228
  Reopening of assessment u/s 147 - Disallowance u/s 14A r.w.r. 8D - concept of change of opinion - as per assessee no exempt income earned during the relevant assessment year and the assessee had made investment in long term, non-trade (unquoted investment) in private limited companies being carried forward from earlier years - HELD THAT:- As respondent has failed to assume jurisdiction to issue such notice on the basis of the material which was available on record even during the course of original assessment proceedings and in absence of any fresh tangible material for reopening, the respondents could not have formed any reason to believe that the income has escaped assessment, more particularly, when the impugned notice is issued after four years from the end of the assessment year and after framing assessment u/s 143(3), wherein the issue for which the reopening sought to be made is already considered by the AO. Therefore, as per proviso to section 147 of the Act, as the petitioner has disclosed truly and fully all material facts during the regular assessment, no notice could have neem issued under section 148 of the Act. Moreover, in view of scrutiny of the issue of disallowance u/s 14A of the Act read with Rule 8D of the Rules during the regular assessment proceedings, reopening on the same issue would amount to mere change of opinion of the assessing officer. Decided in favour of assessee.

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• 2024 (5) TMI 227
  Validity of reopening of assessment - reasons to believe - survey conducted in Jammu Kashmir Bank u/s. 133A and only because the petitioner assessee has transacted with the said bank made a total of transaction of inward and outward remittance, thus concluded that the income has escaped the assessment - material in form of Survey report of the Jammu Kashmir Bank that there was a mismatch of the remittance amount as the bank has calculated two remittance amount one on the notional basis and other on the actual realization basis and it is not known as to which amount is taken for accounting purpose by the assessee - HELD THAT:- When the Jammu Kashmir Bank has clearly stated in the reply that there are two different entries captured in the statement of account and remittance sheet have two different types of rate one is notional and one is actually realized and statement of account submitted to the petitioner, the same is duly recorded in the books of accounts reflecting the actual realized rate of foreign exchange. In such circumstances, on application of the basic accounting principles, when the petitioner has produced all the material before the assessing officer during the course of the regular assessment, AO could not have formed a prima facie belief that there is escapement of income in view of the material available on record in form of details of bank accounts along with the bank statement for the month of March-2016 of the Jammu Kashmir Bank, details of exchange, difference/ net loss in foreign exchange transaction and translations along with the copies of the ledger account of the exchange difference, details of expenditure in foreign currency, copy of Form-15CA filed by the petitioner-company, wherein all details of foreign remittance are reflected. When such record was already available with the respondent Assessing Officer, which was produced by the petitioner assessee during the original assessment proceedings, he ought to have considered the same and applied his mind with regard to the material made available by the survey action u/s. 133 of the Act, which was conducted on Jammu Kashmir Bank coupled with the explanation tendered by the Jammu Kashmir Bank reflected in the reasons recorded. The impugned notice issued u/s. 148 of the Act is nothing but amounts to change of opinion on the part of the respondent assessing officer and he has issued the impugned notice only on the borrowed satisfaction without there being any fresh tangible material to come to the prima facie conclusion that the income has escaped assessment. Thus the impugned show cause notices u/s. 148 of the Act are hereby quashed and set aside. Assessee appeal allowed.

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• 2024 (5) TMI 226
  Violation of principle of natural justice - non-granting opportunity of hearing to the petitioner - adjournment prayer made by the petitioner ignored - HELD THAT:- AO has not granted opportunity of hearing to the petitioner though petitioner has prayed for same which is not in dispute as per the screenshot placed on record . It appears that the petitioner has also personally met the respondent Assessing Officer and requested for time to file reply to the show-cause notice, however the same is not reflected in the impugned order nor the AO has referred to in the affidavit-in-reply. In view of the above undisputed fact of not granting opportunity of hearing to the petitioner, the impugned assessment order is hereby quashed and set aside and the same is remanded back to the Assessing Officer to pass fresh de novo order after giving opportunity of hearing to the petitioner from the show-cause notice stage. Such exercise shall be completed within 12 weeks from the date of receipt of copy of this order.

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• 2024 (5) TMI 225
  Reopening of assessment u/s 147 - Reasons to believe - reopening on the basis of the audit party objections - claim made towards the notional guarantee commission - HELD THAT:- The notice u/s 142(1) clearly indicates the break-up of any other amount allowable as deduction, in which in reply the petitioner has submitted that the claim made towards the notional guarantee commission and the same is deemed to have been considered by the AO while framing the assessment. Moreover, it is settled legal position that the reopening on the basis of the audit party objections is invalid and on bare perusal of the reasons recorded, it is apparent that there was no material available with the respondent - AO to form a reason to believe that the income has escaped assessment. In such circumstances, the impugned notice issued u/s 148 of the Act is held to be without jurisdiction and accordingly, the same is quashed and set aside. Rule is made absolute to the aforesaid extent.

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• 2024 (5) TMI 224
  Rectification application u/s 254 - Tribunal not followed the decision on the identical facts by the Coordinate Bench which is confirmed by this Court - as per the view of the Tribunal, the interest earned on the staff loan and advances incidental to the assessee s business is factually incorrect as the loan advances given to the employees are not mandatory incentive given to the staff and cannot be termed as incidental to the business, but Tribunal could not have taken different view than what was already taken by the Coordinate Bench which is confirmed by this Court in [ 2020 (3) TMI 1468 - GUJARAT HIGH COURT] . Thus, there is a mistake apparent on the face of the record HELD THAT:- When the Tribunal has not followed the decision on the identical facts by the Coordinate Bench which is confirmed by this Court, there is mistake apparent on the record which ought to have been considered by the Tribunal when it is pointed out being a mistake apparent on record. As decided in Air Conditioning Specialities (P.) Ltd [ 1995 (3) TMI 14 - GUJARAT HIGH COURT] as held no doubt in our minds that when a point is concluded by a decision of this court, all subordinate courts and inferior Tribunal within the territory of this State and subject to the supervisory jurisdiction of this court are bound by it and must scrupulously follow the said decision in letter and spirit. Since the second respondent has not decided the matter in accordance with law laid down by this court in the case of Bharat Textile Works [ 1978 (2) TMI 72 - GUJARAT HIGH COURT] the order passed by him requires to be quashed and set aside. In such circumstances, not following the binding decision is mistake apparent on record. The impugned orders are accordingly quashed and set aside. The matter is remanded back to the Tribunal to pass fresh orders in Misc. Application preferred by the petitioner.

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• 2024 (5) TMI 223
  Reopening of assessment against entity ceased to exist/amalgamating entity - petitioner has not declared its return of income for AY 2016-17 - as contended that the notices were addressed to SIPL and SRPL, which are the predecessor companies that ceased to exist as on the date of issuance of notice - HELD THAT:- AO neither before passing of the show cause notice u/s 148A(b) of the Act nor before the impugned order u/s 148A(d) has considered the ITR filed by the petitioner which duly captures the income earned by the amalgamated entity. As noted that the statutory authority which is entrusted with the wide powers is also casted with the responsibility that those powers should not be used unwarrantedly and that the due procedure infused with concomitants of principles of fairness should be adhered to before passing of the impugned notice u/s 148A(b) of the Act As understanding of the legislative intent and the cardinal duty entrusted upon the authority to duly apply its mind before the issuance of the notice u/s 148A(d) of the Act, clearly elucidates that it is pertinent for the AO to consider the material before it to even form a prima facie opinion. In the present case, the petitioner vide its ITR filed on 08.09.2016 and reply to the show cause notices has already intimated the Revenue regarding the amalgamation of the entities. It is evident that the bone of contention in the instant case i.e., sale transaction undertaken by the amalgamating entity, which is solitary rationale for issuance of the show cause notice under section 148A(b) of the Act, has also been rightly reflected in the ITR filed by the petitioner. Therefore, it is crystal clear that the Revenue has not considered the ITR filed by the petitioner and issued the impugned notice without due application of mind and in a mechanical manner, without adhering to the statutory responsibilities envisaged under section 148 of the Act. Unable to accept Revenue, to remit the matter back to the concerned AO for the simple reason that on a bare examination of the facts, we find that the reason for the issuance of the notice under section 148A(b) of the Act is itself de hors the available record. WP allowed.

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• 2024 (5) TMI 222
  Applicability of provisions of Section 144C - AO proceeded to frame a Draft Assessment Order to form the opinion that the income as shown was liable to be taxed at the rate of 20% as per the provisions of Section 115A - assessee chose not to file any objections before the DRP against the aforesaid order, thus Final Assessment Order came to be framed - ITAT noticed that Respondent was an eligible assessee in terms of Section 144C(15)(b)(ii) - HELD THAT:- As has been noticed by the ITAT, and which fact remained uncontested even before us, there was no variation in the income as returned. The only point of disputation was with respect to whether the respondent was entitled to claim the benefits under Article 11 of the DTAA. It was that claim of the respondent which alone came to be negated by the AO. Accordingly, while the income offered became subject to tax at the rate of 20%, the total income as declared remained unvaried. As we read Section 144C of the Act as it stood at the relevant time, it would have empowered the AO to frame a Draft Assessment Order only if a variation in the income returned was suggested. This was clearly not the case which obtained. No error in the view as expressed by the ITAT. The appeals thus raise no substantial question of law.

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• 2024 (5) TMI 221
  Penalty levied u/s 271(1)(c) - estimation of income on bogus purchases - addition to an extent of 12.5% of the total suspicious purchases - CIT(A) deleted penalty levy - HELD THAT:- We find that the coordinate bench of the Tribunal in Mun Gems [ 2024 (1) TMI 209 - ITAT MUMBAI ] held that ad hoc GP rate applied on alleged bogus purchases to factor in the suppression of alleged gross profit could not be the basis of levying penalty for furnishing of inaccurate particulars of income or concealing particulars of income. Thus the impugned order deleting the penalty levied under section 271(1)(c) of the Act is upheld. As a result, grounds raised by the Revenue are dismissed.

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• 2024 (5) TMI 220
  Denying advance tax liability because of applicability of sec. 80P - Assessee s case that it is admittedly a cooperative society eligible for sec. 80P deduction and therefore, it could not have been held liable for payment of advance tax regarding an income which was not assessable under the provisions of the Act - HELD THAT:- No merit in assessee s case denying it s advance tax liability because of applicability of sec. 80P of the Act. This is for the precise reason that such a deduction has to be claimed in a return going by sec. 80A(5) of the Act which has been held to be a mandatory condition as per EBR Enterprises vs. Union of India [ 2019 (6) TMI 484 - BOMBAY HIGH COURT] . It is made clear that there is no material in the case file indicating the assessee to have raised the foregoing sec. 80P claim in a return in above terms. That being the case, find no merit in assessee s instant sole substantive grievance seeking to reverse NFAC s lower appellate findings dismissing it s appeal u/sec. 249(4)(b) of the Act. Ordered accordingly.

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• 2024 (5) TMI 219
  Capital gain arising on transfer of land - STCG arising out of the transfer of non-agricultural land - real owner - main foundation of the argument of the assessee in the instance case is that he was the director of the said company and the said land was purchased by him through registered deed - Whether the appellant assessee purchased the said land on behalf of the company? - HELD THAT:- A perusal of this deed shows that the said land was purchased from about 10 persons on the name of the appellant assessee as sole vendee for the consideration - According to Para 4 of the registered deed, it transpires that the consideration was paid by the company through different cheques to the different vendors to the extent of their shares in the respective piece of land but does not contain any citation in the deed that the said land was purchased on behalf of the company only. The English translation copy of registered development agreement dated 23.03.2016, written in Marathi language, shows that this document is titled at its top as To Develop Property to sell purpose Agreement . Appellant assessee has been described as owner and in possession over the said land and after converting the land in question from agricultural to non-agricultural purposes, appellant assessee executed the said agreement in favour of the company by the delivery of possession along with rights of construction in order to prepare plots with intent to sell to third party purchasers. Para 3 of aforesaid agreement further states that the appellant owner also executed power of attorney with irrevocable rights in favour of the company on the same date i.e on 23.03.2016 itself. However, no such power of attorney is on record. The perusal of the entire contents of the aforesaid development agreement shows that it contains all ingredients of a sale. None of the aforesaid two documents speak as to whether the appellant assessee was authorized by the said company to purchase the said land on behalf of the company. The account books of the company merely indicate the name of the appellant along with 4 others with different amount as long term borrowings and do not clarify the above fact in specific terms. Undisputedly, the Maharashtra State Laws, agricultural land could be acquired only by farmers. The appellant assessee purchased the said land as a farmer on 23.03.2016. The appellant could not show any memo of understanding with the company so as to infer that he purchased the said land on behalf of the company. The facts of the referred cases of this Tribunal in Voltas [ 2016 (10) TMI 936 - ITAT MUMBAI] and the facts order in Ram Kumar Duhan, [ 2018 (2) TMI 981 - PUNJAB AND HARYANA HIGH COURT] are not identical to the facts of the instant case. The first point is accordingly decided in negative against the appellant assessee. Applicability of section 50C - Whether short term capital gain arising out of such transfer of land, be computed only with regard to the actual consideration received by the assessee and section 50C of the Act is not applicable? - HELD THAT:- The facts of M/s Dattan Development and Bharat Raojibhai Patel were decided by the coordinate benches of this tribunal, are similar to the facts of the instant appeal. The short term capital gain cannot, therefore, be computed on the basis of actual consideration which is too less than the value, assessed by the state valuation authority. The AO has, thus, rightly determined the short term capital gain for the relevant AY 2016-17 as Rs. 1,45,60,000/- exclusive of stamp duty of Rs. 5,00,000/- and registration fee of Rs. 30,000/-, which has been arrived at for the purpose of section 48 of the Act in accordance with the aforequoted section 50C(1) of the Act. Hence, section 50C of the Act is clearly applicable in the facts of the instant case. The second point is thus decided in negative against the appellant assessee. We do not find any error of fact or law in the impugned order passed by the Ld. CIT(A) in confirming the addition as short-term capital gain, arising out of the transfer of non-agricultural land by the appellant assessee. The impugned order dated 02.08.2023 is accordingly confirmed. The appeal is liable to be dismissed.

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• 2024 (5) TMI 218
  Penalty u/s 271(1)(c) - addition on account of transfer pricing adjustment - HELD THAT:- As in the case of Chegg India (P) Ltd. [ 2020 (11) TMI 776 - ITAT DELHI] wherein the Tribunal has held that if AO did not apply his mind to satisfy as to which limb of section 271(1)(c) of the Act, penalty was being initiated then penalty levied by AO and confirmed by CIT(A) is not sustainable in eye of law and should be deleted. Undisputedly, addition made by AO in the account of transfer pricing adjustment. The assessee has filed the appeal against the order and in appeal CIT(A) has confirmed the addition on account of Arm s Length price and has deleted disallowances on account of foreign exchange fluctuation loss. Revenue has filed the appeal before ITAT against the order of CIT(A) and learned ITAT allowed the appeal against which assessee has filed an appeal before the Hon ble Delhi High Court [ 2024 (1) TMI 1274 - DELHI HIGH COURT] in which substantial question of law has been framed. In the present case, substantial question of law has been framed by the Hon ble Court in the appeal filed by the assessee challenging the addition confirmed by the Tribunal. The issue become debatable, no penalty in such consideration can be levied against the assessee. Assessee appeal allowed.

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• 2024 (5) TMI 217
  Reopening of assessment u/s 147 - Bogus LTCG of shares - reason to believe - general finding of Kolkata Investigation Directorate in 84 penny stock companies and modus operandi and second paragraph mentioned that assessee is one such person who has taken accommodation entry of bogus long term gain - HELD THAT:- As brought on record that assessee has earned short term capital loss as these shares were purchased on 16/03/2015 17/03/2015 and were sold on 18/03/2015 19/03/2015. The said short term capital loss has not been set off against any income or has been carried forward by the assessee. So there was no benefit to the assessee on this transaction which can lead to any inference that assessee must have engaged in some clandestine bogus entry for some benefit. There is no co-relation between the reasons recorded and the addition which has been made by the ld. AO. If ld. AO had such a belief during the course of assessment proceedings, he could have recorded the reasons on investment made in the purchase of shares. Thus, there is no link between the information and the reasons recorded and the assessment which has been made by the ld. AO. It is sine-qua-non that for reopening the assessment, AO should have reason to believe that income chargeable to tax has escaped assessment and such reason to belief should be based on material and information having live link nexus or direct nexus with the income escaping assessment, which here in this case is purely lacking. In fact the reasons have been recorded on a wrong premise and on a wrong information and ld. AO has not even applied his mind on such information or verified the records before issuing notice u/s. 148. Such reasons cannot be sustained or give jurisdiction to the ld. AO to reopen the case and accordingly, we hold that the entire reopening is bad in law and consequently entire assessment proceeding is quashed. Appeal of the assessee is allowed.

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• 2024 (5) TMI 216
  Grant of approval u/s 80G(5) - Delay in filing From No. 10AB for approval - final approval to be filled within a period of six months from date of grant of provisional registration - distinction / different timeline for accepting application for grant of final approval in respect of grant of registration in Form No. 10AB for registration u/s 12AB - as per CIT(E) as applicant was required to file application in Form No. 10AB on or before 30.09.2022, which it failed to submit and as the date of commencement of activities in the case of the assessee should also be six months prior to the date of filing of From 10AB - HELD THAT:- As decided in Chennai ITAT in the case of Periyar Maniammai Academy of Higher Education and Research [ 2024 (5) TMI 184 - ITAT CHENNAI] while passing the order the Chennai Tribunal has held that where timeline for filing Form 10AB under section 12A was extended due to genuine hardship faced by charitable institutions that extension should apply to renewal form under section 80G(5)(iii) as well and application for renewal could not be rejected solely on basis of late filing. Since in the instant facts, as it evident from the various dates mentioned above, the assessee / Applicant Trust had filed application for grant of final approval under Section 80G(5) of the Act within a period of six months from date of grant of provisional registration on 06.04.2023 (whereas date of grant of provisional approval u/s 80G(5) of the Act was 30.03.2023 and as noted by us in the preceding paragraph, the assessee could have filed application for grant of approval on or before 30.09.2023 which stands further extended to 30.06.2024 vide Circular No. 7/2024 dated 25.04.2024) i.e. within a period of six months from date of grant of provisional registration, further coupled with the fact that the Ld. CIT(E) on analysis from same set of facts had granted final approval to the assessee / Applicant Trust under Section 12AB of the Act vide order dated 04.11.2023, then, in our considered view, there is no substantive reason as to why the assessee should not be granted final registration under Section 80G(5) of the Act as well. Assessee appeal allowed.

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• 2024 (5) TMI 215
  Refund of the excess DDT paid - assessee declared and paid dividend to its parent share-holders Genpact India Investment[a tax resident of Mauritius] - as per assessee DDT paid by it u/s 115-O of the Act is in excess of the rate of 5% provided under Article 10 of the Indo Mauritius DTAA - HELD THAT:- We find that the issue raised in the additional ground has been recently decided by the Special Bench of Mumbai Tribunal in the case of Total Oil India Pvt. Ltd. [ 2023 (4) TMI 988 - ITAT MUMBAI (SB)] wherein very same issue has been decided against the assessee stating where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder(s), which attracts Additional Income Tax (Tax on Distributed Profits) referred to in Sec.115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115 O of the Act and not at the rate of tax applicable to the non-resident shareholder(s) as specified in the relevant DTAA with reference to such dividend income. Accordingly, the additional ground raised by the assessee is hereby dismissed. Computation of deduction u/s 10A and 10AA - Reduction of freight Telecommunication charges and recovery of expenses in respect of migration/ on-the-job training services from total turnover while computing deduction - HELD THAT:- This issue is no longer resintegra in view of the decision of HCL Technologies Ltd reported [ 2018 (5) TMI 357 - SUPREME COURT] wherein it was held that the items that are subject matter of reduction from export turnover in the numerator need to be reduced in the denominator from the ambit of total turnover also as admittedly total turnover is nothing but the sum total of export turnover and domestic turnover. Hence, the export turnover reflected in the numerator cannot be different from the export turnover figure reflected in the denominator. Hence, for the purpose of computing the deduction u/s 10A/10AA/10B/80HHC/80HHE etc. all items that were sought to be excluded from export turnover need to be excluded from total turnover also in order to bring parity. Decided in favour of assessee. Eligibility for claiming benefit of deduction u/s 10A - 95% of cost recovered of shared costs to be set off against the expenses of 5% of recovery to be taken as non-eligible profit - CIT(A) as argued that assessee ought to have deducted tax at source of expenses incurred by it which were subject matter of reimbursement and, therefore, disallowance u/s 40(a)(ia) would also come into operation in the instant case - HELD THAT:- AO had not disputed the basic fact that recovery of expenses is nothing but reimbursement of expenses on actual cost to cost. Non deduction of tax at source on the expenses incurred was never the case of the ld. AO. Hence the ld. CIT DR cannot make out a fresh case before this Tribunal. This matter is very well settled by the decision of Mahindra Mahindra Ltd. reported in [ 2020 (6) TMI 564 - ITAT MUMBAI] wherein it was categorically held that ld. DR while arguing the case before Tribunal can only support the order of ld. AO and cannot make out a new case by pointing out flaws, if any, in the order of ld. AO. Hence, the argument advanced by the ld. CIT(DR) on the aspect of applicability of provisions of section 40(a)(ia) of the Act stands dismissed. For workings of recovery of expenses the details of cost recoveries were indeed filed before the ld. AO itself for the year under consideration together with the accounting practice followed by the assessee thereon. Hence, fairly the order of ld. CIT(A) for A.Y. 2002-03 needed to be followed even for the year under consideration i.e. to say where details are filed by the assessee estimate of 5% of cost recovery is to be construed as not eligible for deduction u/s 10A of the Act. When this was put to ld. AR, the ld. AR fairly agreed for the same. Thus, we hold that order of ld. CIT(A), in holding 5% of cost recoveries as not eligible for deduction u/s 10A of the Act, is to be sustained. Eligibility of interest income from fixed deposits, inter-corporate deposits and the employees loans for claim of deduction u/s 10A and 10AA - HELD THAT:- Entire argument of the ld. CIT(DR) need not be gone into at all in view of the fact that the ld. AO himself had treated the said mentioned receipts as only business income and not income from other sources , which is evident from the computation of total income, enclosed in page 20 of the assessment order. Once it is treated as business income , the assessee would be automatically eligible for deduction u/s 10A 10AA. Also the provisions of Section 10A(4) are very clear to state that the entire profits of the business of the undertaking in proportion of export turnover to total turnover would be eligible for deduction u/s 10A of the Act. Hence, subject mentioned receipts constitute business receipts would fall within the ambit of Section 10A(4) of the Act, thereby making the assessee eligible for deduction thereon. Similar is the provision in Section 10AA(7) of the Act with the same words. Hence, in view of the explicit provisions of Section 10A(4) and 10AA(7) of the Act, the arguments advanced by the ld. CIT(DR) deserve to be dismissed and we do not find any infirmity in the order of the ld. CIT(A) in this regard. Accordingly, ground nos. 1 to 3 raised by the Revenue are dismissed. Deduction u/s 10A 10AA - foreign exchange gain and forward contract gain earned by the assessee - HELD THAT:- The gain / loss arises because of the fact that at the time of booking the sales in the accounts, the exchange rate on the date of raising the invoice is taken into account. Whereas when the actual payment is received from the customer, directly or through bank under a forward contract, the exchange rate may be different. Thus the impact of the difference of the two rates is recorded in the books separately as an exchange gain/ (loss). Hence the nature of receipt has been completely explained by the assessee. The ld. AR submitted that forward contract outstanding at the end of the year exceeding export receivables at the end of the year is of no consequence or relevance as to that extent, the sales would happen in next year. We find that in the case of Pentasoft Technologies Ltd. [ 2010 (7) TMI 75 - MADRAS HIGH COURT] had categorically held that gains arising out of foreign exchange fluctuations are having direct nexus over the export sales of the assessee and would be eligible for deduction u/s 10A of the Act. Decided against revenue. Disallowance of customer discount - AO disallowed the said provision made for discount stating that the assessee has not provided any details to the effect that the said discounts get crystallized in the current year whereas these discounts are passed on to the customers in subsequent years by adjustments from future collections - CIT(A) deleted addition - HELD THAT:- CBDT Circular no. 12 of 2022 dated 16.06.2022 had replied that discounts allowed to customers would only represent lesser realization of sale price. Though the Circular has been issued in the context of applicability of deduction of TDS u/s 194R of the Act pursuant to the amendment brought in by the Finance Act, 2022 w.e.f. 01.07.2022, the analogy that discount is only a lesser realization of sale price has been accepted and agreed by the CBDT. Drawing support from this Circular and considering the fact that the export sale price declared by the assessee has been accepted to be at arm s length price (ALP) by the ld. TPO in the order passed by him u/s 92CA(3) of the Act dated 27.01.2015 and also considering the fact that the provision of discount has been made on a rational basis as detailed supra, we do not find any infirmity in the order of ld. CIT(A) deleting the disallowance made thereof by the ld. AO. Disallowance of Excess depreciation on computer peripherals - HELD THAT:- The assets like printers, routers along with other accessories/ peripherals form one integrated system and would be of no use independently of each other. Therefore, all such facilities from part of computers and hence eligible for depreciation at the rate applicable for computers. This issue is duly covered by the decision of BSES Yamuna Powers [ 2010 (8) TMI 58 - DELHI HIGH COURT] and in the case of Orient Ceramics [ 2011 (1) TMI 26 - DELHI HIGH COURT] - ground raised by the Revenue is dismissed.

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• 2024 (5) TMI 214
  Addition on protective basis - commission income on issuing the bogus accommodation entry bills - AO treated the assessee as engaged in issuing accommodation entry bills and accordingly assessed the commission income on bogus unsecured loans/bogus purchase/sales etc - along with the commission income, the Assessing Officer also assessed not only assessed the trading results appearing in the books of account but also enhanced the profit from such trading activity - HELD THAT:- Since, the issue in dispute in present case being identical, following the finding of the Tribunal in the case of Rare Diamonds Pvt. Ltd.( 2022 (6) TMI 1472 - ITAT MUMBAI] as held CIT(A) cannot confirm an addition on protective basis. He is required to decided the issue either way and cannot proceed with keeping an addition on substantive in one case and protective in other case that too even after a finding of the higher appellate forum i.e. ITAT - thus the addition made on protective by the AO and sustained by the Ld. CIT(A) is deleted. The ground No. 2 of the appeal of the assessee is accordingly allowed. Addition being 8.05% of turnover - assessee was engaged in issuing bogus accommodation entry bills and therefore, claim of the assessee that it is a trader and quantity tally of the goods submitted in the tax audit report had no meaning and those were devoid of truth and genuineness and not reliable - HELD THAT:- We find that the Ld. CIT(A) on one hand as held that the entity has been utilized by Shri Bhanwarlal Jain for issuing bogus accommodation entry bills however on other side he has upheld the profit from said business activity in addition to commission income sustained on bogus accommodation entries. The Tribunal in the case of Rare Diamond Pvt. Ltd. (supra) in similar circumstances has deleted the addition made in respect of trading activity. Addition for the trading payables - difference of preceding years trade payables and the current year trade payables - HELD THAT:- We are of the opinion that once the Assessing Officer is of the view that the assessee has been used or misused for providing accommodation entry bills of unsecured loans and bogus purchase and sale entries and addition of commission income for same has already been made, then separate addition for the trade payables in terms of section 68 is not justified as held by us while adjudicating the ground No. 3 of the appeal. Accordingly the ground No. 4 of the appeal of the assessee is allowed. Enhancement of the commission income by CIT(A) u/s 251(2) - HELD THAT:- As decided in RARE DIAMONDS PVT LTD,[ 2022 (6) TMI 1472 - ITAT MUMBAI] there is no mention of any opportunity provided to the assessee by way of issue show cause notice, before making the addition and therefore this addition is unsustainable on the ground of violation provision of section 251(2).

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• 2024 (5) TMI 213
  Deduction u/s.80IA(4)(i) - assessee business is in the nature of work contract - as per AO assessee has entered into contract agreements as a Contractor and earned income as Contract receipts which income is not entitled for deduction - determination of role and responsibilities of the assessee in execution of the projects - CIT(A) deleted the disallowance of deduction - HELD THAT:- Assessee is claiming that it is a developer who has built roads, flyovers, Road over bridges(ROB), railway systems, water intake well etc. wherein a claim is made by the assessee that the new infrastructure facility was created, and we have also observed that the assessee total receipts are to the tune of Rs. 26.60 crores which is not substantial keeping in view the claim of the assessee having been involved in execution of new infrastructure facilities by way of bridges, roads, Road over bridges , flyovers , water intake well, etc. Thus, it is all the more necessary to analyse as to the role and responsibilities of the assessee in execution of these projects and other parameters as culled out above, in order to arrive at conclusive finding whether the assessee has created a new infrastructure facility as a Developer or have undertaken a contract work to execute work order as a Contractor. We could have decided the issue ourselves as these appeals are old appeal pending for almost 7-10 years, but the material filed before us vide paper books are not sufficient for us to decide the issue . Even evidences such as tender documents, agreements with the Government for executing the work, details of the work executed vis- -vis creation of new infrastructure facility created, PERT chart, financial statements, Men, material and machines deployed by the assessee , the roles and responsibilities performed by the assessee, details of deployment of funds, details of statutory clearances obtained , penal provisions in the agreements etc. were all not provided in the paper book filed by the assessee. The brief summary of the project is submitted which is not sufficient to adjudicate this issue. Each and every project requires detailed and indepth analysis on several parameters as culled out above, before holding whether the assessee is a developer or contractor. Thus, it would be fit and appropriate in the interest of justice and fair play that the matter be restored back to the file of ld. CIT(A) for fresh adjudication of this issue after making detailed analysis of all the specific work executed by the assessee in which the assessee has claimed that it acted as developer and claimed to be eligible for deduction u/s 80IA(4). The appeal of the Revenue on this issue is allowed for statistical purposes

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• Customs

• 2024 (5) TMI 212
  Jurisdiction of the Tribunal to entertain the appeal related to duty drawback - confiscation of goods - HELD THAT:- As per the appellant, in terms of Section 129(DD) of the Customs Act, 1962 [ the Act ], the remedy of impugning the order was by way of a Revision to the Central Government and an appeal to the Tribunal was not maintainable. Said position is not disputed by learned counsel for respondent who concedes that in terms of Section 129(DD) of the Act, the remedy was only by way of a Revision and not by way of Appeal to the Tribunal. Learned counsel, however, submits that since the objection was not raised at an appropriate stage, respondent could not approach the Revisional Authority within the time prescribed by the statute. She submits that an opportunity be granted to the respondent to now file a Revision in terms of Section 129(DD) of the Act before the Central Government. Thus, the impugned order dated 25.05.2023 is set aside. An opportunity is granted to the respondent to prefer a Revision u/s 129(DD) of the Act against the Order-in-Appeal dated 14.10.2022, passed by the Commissioner of Customs (Appeal) within a period of two months from today. Appeal is disposed of in the above terms.

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• 2024 (5) TMI 211
  Power Of Board for the purposes of facilitation of trade u/s 143AA - Seeking release of the original bill of lading and release of the cargo - Imports of the shipment of Soda Ash Dense (Grade-A) - Payment of the requisite duty - HELD THAT:- None of the conditions prescribed in 143AA of the Act applies to the facts of the present case and, therefore, the Commissioner is not required to take any action under Rule 11(2) of the Rules as prayed by the petitioner. We are of the opinion that dispute is between the petitioner and the Respondent No. 3 for which Commissioner of Customs is not concerned and accordingly the petitioner is required to sort out such disputes with Respondent No. 3 in accordance with law. No interference is required to be made in this petition. The petition being devoid of merits is accordingly dismissed.

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• 2024 (5) TMI 210
  Power of High Court to entertain writ petition - alternative efficacious remedy u/s 129A - time limitation including extended period of limitation - Smuggling of huge quantity of gold into India - Seizure - confiscation - Penalty u/s 112(a) and 112(b) and 114AA read with section 123 of the Customs Act, 1962 ( the Act ) - Denial of opportunity to cross-examine the witnesses and co-noticees - breach of the principle of natural justice - Whether the petitioners can raise such issue of cross-examination, supply of documents before the appellate authority or not - HELD THAT:- The petitioners have mainly rebutted the preliminary objection raised on behalf of the respondent-authority for entertaining these writ petitions on the ground of having alternative remedy and violation of principle of natural justice as the respondent-authority has not decided the application/request of the petitioners to grant cross-examination of two co-noticee viz. Ms. Nita Parmar and Mr. Rutugna Trivedi and rejected such request in the impugned order. Another ground for preferring these petitions with request to entertain the same is for not supplying the relied upon documents in the pend drive which is according to the petitioner is a basis for passing the impugned order. The facts of the case are so gross to the effect that the petitioners are involved in smuggling of Gold in contravention of the provision of the Customs Act. Therefore, without going into merits of the case, it would be in the interest of justice to relegate the petitioners to avail the alternative efficacious remedy as held by the Apex Court in case of Assistant Commissioner (CT) LTU v. Glaxo Smith Kline Consumer Health Care Limited [ 2020 (5) TMI 149 - SUPREME COURT] from time-to-time and to enable the petitioners to raise all the contentions before the appellate authority in the appeal which may be filed by the petitioners. It would be also necessary to mention here that the adjudicating authority had already taken a decision to deny the cross-examination to the petitioners of the co-noticee. Even if the matter is sent back to the adjudication authority, it would be a futile exercise for the adjudicating authority to again pass a separate order rejecting the demand for cross-examination. Therefore, we are of the opinion that such a course would result into an empty formality so as to comply with the principles of natural justice. Even if the matter is remanded back to the adjudicating authority, there is a fait accompli of rejection of the request of the petitioners as stated by the adjudicating authority in the impugned order and no fruitful purpose would be served except setting aside the order and putting the clock back for such empty formality. If the appellate authority is of the opinion that the cross-examination is required to be given to the petitioners on the basis of the contention which may be raised by the petitioners after considering the observations made by the adjudicating authority in the impugned order, it is for the appellate authority to consider such request by calling for remand report from the adjudicating authority to that extent. However, simply because the right of cross-examination is denied to the petitioners, we are of the opinion that the matter should not be remanded back to the adjudicating authority in the facts of the case which are glaring and resulting into the impugned adjudication order which is liable for challenge before the appellate authority. Thus, these petitions are not entertained as though it may be maintainable under Article 226 of the Constitution of India with liberty to the petitioners to approach to the appellate-authority. The time spent by the petitioners before this Court be considered as bona fide by the appellate authority if the petitioners file appeals before the appellate authority in accordance with law within four week from today without raising an issue of delay. Thus, the petitions are disposed of. Notices are discharged. Interim relief stands vacated forthwith.

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• 2024 (5) TMI 209
  Valuation - Assessable value of import vessel - Valuation of revised (reduced) price - Duty demand - HELD THAT:- We find that in the instant case the price was declared on the basis of the first MOA entered between the appellant and the cash buyer wherein it was believed that the LDT of the ship is 10386 MT. However, at the time of import it was found that the LDT of the ship was 10,200 MT. Thus, there was a short fall of approximately 186 MT in the LDT as compared to the originally agreed LDT. Consequently, the price was revised by entering into fresh MOA. The facts regarding the original and fresh MOAs were explained by the learned counsel as already recorded in his submission. We do not find any merit in the impugned order rejecting the value based on the revised MOAs when the LDT declared in original MOA was found to be different from the actual LDT. In these circumstances, ratio of decisions in Chaudhary Ship Breakers) [ 2023 (6) TMI 1200 - CESTAT AHMEDABAD] squarely apply. Consequently, demand is set aside and appeal allowed.

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• 2024 (5) TMI 208
  Imports Cyanuric Chloride - Rejection of declared value of import - contemporaneous import - Revenue not produced the necessary documents - HELD THAT:- We find that the Revenue has failed to fulfil the requirement of producing evidence of contemporaneous import. The basis of rejection of declared value and revision thereof is contemporaneous import. The Revenue does not seem to have the said evidence of contemporaneous import as they have failed to produce despite large number of opportunities. In that circumstances the appeal has to be allowed. The appeal is allowed with consequential relief.

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• Insolvency & Bankruptcy

• 2024 (5) TMI 207
  Failure to deregister Aircraft(s) in contravention of Sub-Rule (7) of Rule 30 of the Aircraft Rules, 1937 - requirement of consent of the lessee prior to deregistration and export of an Aircraft - mandate of Rule 30(7) of the Aircraft Rules - termination arising out of or as a consequence of Insolvency or not - applicability of provisions of the IBC or not - disturbance to possession during moratorium - applicability of principles of Dura lex sed lex - HELD THAT:- IDERA is an acronym for an Irrevocable De-Registration and Export Request Authorisation. It operates under Article XIII of the Cape Town Protocol and provides that the Petitioner/Lessor is the sole person entitled to procure the deregistration of the Aircraft by the Respondent/DGCA and to procure and physically export the Aircraft from India. The table in Paragraph 3.2 above, contains the date on which each IDERA has been furnished by Respondent/Go Air to the Petitioners/Lessors. Undisputedly, the Petitioners/Lessors in the present case are the IDERA Holders in respect of all 54 Aircraft which form the subject matter of the present Petitions. The purport of Rule 30 (7) of the Aircraft Rules has been dealt with by a Coordinate Bench of this Court in the Awas case [ 2015 (3) TMI 1427 - DELHI HIGH COURT] . After analysis of the provisions of the Aircraft Rules, the Court in the Awas case, held that the Respondent/DGCA has to proceed in accordance with Rule 30 (7) of the Aircraft Rules which is a mandatory requirement and the Court cannot interfere even on grounds of equity; keeping in mind, the protection of private business transaction law in India, international conventions such as Cape Town Convention must be followed. It was held that the disputes qua validity of the termination of the lease are not relevant for the purposes of deregistration and the contention that public interest will be impinged if the deregistration is granted is not a valid ground for refusal - An argument made in the Awas case that the entitlement of the Petitioners/Lessors to terminate the Lease Agreements would require determination by a competent Court of law, was also repelled by the Court as being misconceived in view of the provisions of the Cape Town Convention and Cape Town Protocol. While Rule 30(6) of the Aircraft Rules uses the term may , Rule 30(7) of the Aircraft Rules uses the term shall be cancelled . This signifies that the legislative intent that by use of the word shall , the intention was to make Rule 30(7) of the Aircraft Rules, mandatory. This Court concurs with the judgment of a Coordinate Bench of this Court in the Awas case. The Respondent/DGCA is thus, mandatorily required to cancel the registration subject to the fulfilment of the documents and conditions as set forth in Rule 30(7) of the Aircraft Rules. Jurisdiction of High Court under Article 226 of the Constitution vis- -vis NCLT/NCLAT a creature of Statute No power of Judicial Review - HELD THAT:- The NCLT and the NCLAT are statutory bodies constituted under the provisions of Sections 408 and 410 respectively of the Companies Act, 2013 and have the powers to adjudicate upon matters which relate to the IBC. The NCLT is created under the IBC and its jurisdiction therefore is limited to the extent as provided under the IBC. The NCLT cannot assume control over other government authorities in the realm of public law. The scope of Section 63 and Section 231 of the IBC is restricted to matters which the NCLT or the NCLAT have jurisdiction. In fact, recognising this limitation, the NCLAT has in a judgment, titled as Canara Bank v. Deccan Chronicle Holdings Limited [ 2017 (10) TMI 856 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] , while modifying an order passed by the NCLT, held that the power of the Supreme Court and the High Court under Article 32 and 226 of the Constitution, respectively, cannot be curtailed by any provision of an Act or Court and further held that the moratorium would not affect the High Court under Article 226 of the Constitution - The NCLT does not have the authority to assume the jurisdiction exclusively conferred on the High Courts and the Supreme Court and which cannot be curtailed by any statute. No Nexus between Deregistration and Insolvency - HELD THAT:- On an analysis of the GUJARAT URJA VIKAS NIGAM LIMITED VERSUS MR. AMIT GUPTA AND ORS. [ 2021 (3) TMI 340 - SUPREME COURT] case, it is clear that the primary reason for termination of the agreement between the parties in that case was the initiation of insolvency proceedings. Paragraph 71 of the Gujarat Urja case, has held that in the absence of the insolvency of the corporate debtor, there was no ground to terminate the Power Purchase Agreement between the parties - The Supreme Court in the Gujarat Urja case further clarified that where a decision of a private party has been taken solely on account of the initiation of the insolvency, such a decision, not being one taken, in the public law domain, such as in the Embassy case, is distinguishable. The proceedings before this Court, indisputably are the Applications for deregistration and export (in some cases) of the Aircraft. Various prayers have also been made for the protection of the Aircraft. These do not solely arise from the insolvency of the Respondent/Go Air. Breach of Binding Lease Agreements Non-payment of Lease Rentals - HELD THAT:- The fact that there was default of payment by Respondent/Go Air has not been disputed by Respondent/RP of Go Air. In fact, Respondent/RP of Go Air has laid the blame for non-payment of lease rentals in time on an American Company called Pratt and Whitney and on account of their supplying defective engines for the Aircraft. This averment was, however, not supported by any document. In any event, this cannot absolve the Respondent/Go Air of its obligations under the Lease Agreements entered into by them for each of the 54 Aircraft - Thus, clearly Respondent/Go Air had failed to fulfil its obligations under the Lease Agreements which resulted in the issue of default notices to them and subsequently to the termination of the Lease Agreements. The termination has neither arisen out of nor relating to the insolvency but on account of breaches to the Lease Agreements which occurred much prior in time to the Insolvency Commencement Date - concededly, as per Respondent/RP of Go Air as well, the insolvency has arisen out of defaults in payment and the inability of Respondent/Go Air to continue its commercial operations in view of these defaults. Applicability of the TATA Consultancy case - HELD THAT:- While holding that it is settled law that the IBC is a complete code, it was held in TATA CONSULTANCY SERVICES LIMITED VERSUS VISHAL GHISULAL JAIN, RESOLUTION PROFESSIONAL, SK WHEELS PRIVATE LIMITED [ 2021 (11) TMI 798 - SUPREME COURT] that the NCLT in its residuary jurisdiction has the power to stay the termination of the Agreement albeit, only if it satisfies the criteria laid down in the Gujarat Urja case - The Supreme Court in the TATA Consultancy case has also observed that while examining prayers for interim relief, the NCLT and NCLAT must keep in mind the exception crafted by the Court in the Gujarat Urja case. The order of NCLT does not indicate that the NCLT had applied its mind to the centrality of the facilities agreement and the corporate debtor survival as a going concern. Concededly, the termination has not been challenged by Respondent/Go Air or by Respondent/RP of Go Air in any judicial forum. As discussed above, the termination of the Lease Agreements between the Petitioners/Lessors and Respondent/Go Air was on account of breaches of the Lease Agreements which included non-payment of the lease rentals over extended period of time - The ratio of the Tata Consultancy case thus, squarely applies in the facts of the present case. The termination thus, does not arise out of the insolvency and is certainly not a consequence of the insolvency. The provisions of Section 60(5) of the IBC cannot be deemed to be applicable in the present case. Cape Town Convention vis- -vis the IBC - HELD THAT:- There is no inconsistency between the provisions of moratorium under Section 14 of the IBC and the Aircraft Rules. The Cape Town Convention and the Cape Town Protocol on Aircraft as applicable to India in terms of the Declaration of Accession adopts a procedure for insolvency and the steps to be taken with respect of any Aircraft, Airframes and related objects. In any event, my ambiguity on this issue has been done away with by the MCA Notification, which makes it abundantly clear that aircraft, aircraft engines and airframes are excluded from the purview of the provisions of the IBC. This is, therefore a moot issue now which does not require to detain this Court further. MCA Notification dated 03.10.2023 - Prospective or Retrospective - HELD THAT:- The MCA Notification has been issued to cure a lacuna in the existing law which will benefit the community. The legislative intent of the MCA Notification can also be seen from a reference to the Cape Town Convention and Cape Town Protocol and the date of accession by India all of which form part of this notification. The timing of the notification also assumes significance here. It cannot be deemed to be a co-incidence that the MCA Notification is close upon the heels of the controversy at hand. This is, thus, clearly to cure a lacuna which has been highlighted by the disputes between the Petitioners/Lessors and Respondent/Go Air. The circumstances surrounding the MCA Notification thus, all point to its retrospectivity. Keeping in mind the scope and purview of the Aircraft Act and Rule 30(7) of the Aircraft Rules and given the fact that India is a signatory to the Cape Town Convention and Cape Town Protocol since 31.03.2008 and at the time of its adoption of the Declaration of Accession has clearly agreed to the adoption of Alternative A of Article XI of the Cape Town Protocol for remedies on insolvency , this Court is of the considered view, for the reasons stated herein, that the words aircraft, aircraft engines, airframes ought to have been included in sub-Section (3) of Section 14 of the IBC from the date the sub-Section came into force, so as to ensure implementation of procedure set forth therein for remedies on insolvency in relation to Aircraft which form the subject matter of these Petitions. Effect of Delay in the MCA Notification - HELD THAT:- A combined reading of Article XI Alternative A of the Cape Town Protocol along with Rule 30(7) of the Aircraft Rules reflects that aircraft, aircraft objects, airframes and aircraft engines are be kept out of the purview of other legislations, and the provisions in relation to insolvency as set forth in Article XI Alternative A be applied in its entirety. The MCA Notification, thus in that sense was delayed. In light of the judgment of the Nasa Finelease case [ 2013 (9) TMI 733 - DELHI HIGH COURT] , this delay cannot come in the way of a beneficiary to such a notification. Thus, the MCA Notification merits acceptance and should be given retrospective effect - this Court holds that the MCA Notification is held to be retrospective in its effect. NCLT has no power to deregister the Aircrafts, powers can only be exercised by a High Court - HELD THAT:- The Petitioners/Lessors are the IDERA holders in respect of all Aircraft. Indisputably, the Cape Town Convention and Cape Town Protocol apply to these Aircraft. The Respondent/DGCA has not placed on record any communication setting forth the deficiencies in the documents filed by the Petitioners/Lessors for deregistration. The Respondent/DGCA is bound to act within the mandate of the Aircraft Act and Aircraft Rules to deregister the Aircraft - since all the pre-conditions as set stand satisfied, subject to removal by the any deficiencies in the Deregistration Application by Petitioners/Lessors, the deregistration of the 54 Aircraft is to be proceed with by the Respondent/DGCA. Possession of Aircraft with Respondent/Go Air cannot be disturbed - HELD THAT:- Placing reliance on the judgement of the Supreme Court in the TATA Consultancy case, this Court had already ruled that Section 60(5) of the IBC is not applicable in the circumstances of the present case as the termination does not arise solely on account of the insolvency. In addition, the Respondent/RP of Go Air s claim for possession or occupation of the Aircraft under Section 14(1)(d) of the IBC has been exercised after the Lease Agreements of the Aircraft had been terminated. The Insolvency Commencement Order was passed after the Lease Agreements were terminated. The termination has remained unchallenged by the Respondent/RP of Go Air. Thus, Respondent/Go Air acting through the Respondent/RP of Go Air, cannot be permitted to retain possession of the Aircraft. Dura lex sed lex - the law must be upheld - HELD THAT:- No doubt, the return of the Aircraft would cause hardship to the corporate debtor, i.e. Respondent/Go Air. This, however, cannot be used as a defense to not deregister the Aircraft(s). The Supreme Court in Popat Bahiru case [ 2013 (8) TMI 930 - SUPREME COURT] has held that although a statutory provision may impose hardship or inconvenience on a specific party, the Court is obligated to uphold and enforce the law without exception. The principle of dura lex sed lex applies here, emphasising that the law, no matter how harsh, must be upheld. The Courts have consistently maintained that inconvenience of a party alone cannot outweigh the legal obligation to interpret and apply statutes faithfully, even if it leads to perceived hardship . The impugned rejection letters / communications dated 11.05.2023, 12.05.2023 and 19.05.2023 issued by the Respondent/DGCA declining to process the Deregistration Applications of the Petitioners/Lessors are set aside - The Respondent/DGCA shall forthwith and no later than the next five working days process the Deregistration Applications as filed for the following Aircraft in terms of Rule 30(7) of the Aircraft Rules. Petition disposed off.

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• 2024 (5) TMI 205
  Reconsideration of Resolution plan - It is submitted that in order to ensure that no serious prejudice , is caused to the Petitioners / Appellants rights , and the same are not rendered Fait Accompli , it is just and necessary to secure the differential amount and deposit the same in an Escrow Account . - HELD THAT:- On a careful consideration of the respective contentions, advanced on either side, this Tribunal , keeping in mind the Orders , passed by this Tribunal to the effect that in the meanwhile, any Order passed by the Tribunal , at Hyderabad, shall be subject to the final outcome of this Appeal , in the meantime, the Plan Approval Proceedings , to be undertaken by the Tribunal , shall be subject to the final outcome of the present appeal , and apart from the same, to safeguard the interests of the Petitioners / Appellants , pending final decision of the main Comp. App, quite in the fitness of things, simpliciter, on the basis of Fair Play , Good Conscience , to avoid any further complications / wider implications / ramifications and to prevent an Aberration of Justice , in the subject matter in issue, passes an Order , in directing the Respondents , to place an amount of Rs.543.28 Crores , being the amount equivalent to the difference between Entitlement of the Petitioners / Appellants , in an Escrow Account , till the final determination of the main Comp. Appeal. Appeal disposed off.

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• 2024 (5) TMI 204
  Maintainability of application u/s 7 - time limitation - Financial debt or not - whether the Respondent / Financial Creditor cannot assume the character of Financial Creditor under Insolvency and Bankruptcy Code, (IBC) 2016 merely on basis of an Assignment Agreement and a Recovery Certificate issued by Debt Recovery Tribunal, Hyderabad? - loan classified as NPA. Whether the NCLT has erred in holding that the liability arising out of the decree obtained in DRT-I, Hyderabad on 19.02.2019 and the consequent Recovery Certificate issued on 09.07.2019 is a financial debt within the meaning of section 5(8) of IBC, 2016? - Whether the FC / Respondent being the holder of such a decree and such Recovery Certificate, is entitled to initiate CIRP under section 7 of IBC, 2016 as on 24.10.2021 the date on which he filed the Application under section 7 of IBC, 2016 before NCLT, Hyderabad? - HELD THAT:- The appellant has cited 3 Judgments of NCLAT, namely Ashok Agarwal Vs Amitex Polymers [ 2021 (2) TMI 823 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI ], Ishrat Ali Vs Cosmos Cooperative Bank Ltd. [ 2020 (3) TMI 1238 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ] and Sushil Ansal Vs Ashok Tripathy Ors. [ 2020 (8) TMI 396 - NATIONAL COMPANY LAW APPEALLATE TRIBUNAL, NEW DELHI ]. In all these Judgments, NCLAT has taken the view that a Financial Creditor does not include the Decree holder within the definition of section 5(7) of IBC, 2016 and that the claimed amount is an adjudicated amount under a decree and not against a debt disbursed. The Respondent has countered the same by stating that matter has reached a finality with the decision of the 3-Judge bench the Hon ble Supreme Court in the case of Kotak Mahindra Bank Limited Vs A. Balakrishnan [ 2022 (6) TMI 13 - SUPREME COURT ] - With this ruling it is crystal clear that a liability in respect of a claim arising out of a Recovery Certificate would be a financial debt within the meaning of section 5(8) of IBC and that the holder of such Recovery Certificate would be a financial creditor as per section 5(7) of IBC and would be entitled to initiate CIRP. Whether such Application is barred by limitation as laid down under section 238 of IBC r/w Article 137 of Limitation Act, 1963? - HELD THAT:- The section 7 application of FC / Respondent is clearly not barred by limitation as date of filing is 24.10.2021 which is within the 3 years of the date of decree (19.02.2019) and of date of issue of Recovery Certificate (19.07.2019). Whether pendency of an appeal to the decree render the decree and the consequent Recovery Certificate devoid of merits? - Whether the AA / NCLT failed to see that the FC / decree holder abused the provisions of IBC for recovery of its dues and not for resolution of insolvency which is the objective of the code? - HELD THAT:- The fact that a decree holder, has moved an application under section 7 of IBC will not lead to a conclusion that the CIRP, if ordered, will only result in recovery of the FC s dues at the cost of CD. IBC prescribes an elaborate procedure for Resolution of Insolvency , including revival of CD, if possible, with the help of Resolution Professionals . Seen this way, it will not be correct to say that AA / NCLT failed to see that the FC / Respondent abused the provisions of IBC , for recovery of its dues , at the cost of the avowed objective of the Insolvency Bankruptcy Code, 2016. Thus, the Adjudicating Authority / NCLT has been correct in allowing the application filed by the FC / Respondent under section 7 of Insolvency Bankruptcy Code, 2016 - appeal dismissed.

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• PMLA

• 2024 (5) TMI 203
  Money Laundering - scheduled offences - predicate offence - respondent nos. 1 and 2 in the scheduled offence acquitted - continuation of proceedings under the PMLA - release of properties attached by the petitioner/ED on the premise that the same are proceeds of crime - pendency of appeal preferred against the order of acquittal in the scheduled offence - HELD THAT:- The controversy articulated in the above noted two questions is no more res integra. The Hon ble Supreme Court with reference to the relevant provisions of PMLA in Vijay Madanlal Choudhry [ 2022 (7) TMI 1316 - SUPREME COURT ] has observed The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. In Parvathi Kollur [ 2022 (8) TMI 1256 - SC ORDER ], the appellants therein were acquitted from the predicate / scheduled offence under the Prevention of Corruption Act, 1988 and premised on the said acquittal, the appellants were discharged from the offence under the PMLA by the Special Court observing that the occurrence of a scheduled offence was the basic condition for giving rise to proceeds of crime and that commission of scheduled offence was a pre-condition for proceeding under the PMLA. However, the said order of discharge was set aside by the High Court on a revision filed by the Directorate of Enforcement. In Prakash Industries Ltd. v. Directorate of Enforcement, [ 2022 (7) TMI 877 - DELHI HIGH COURT ], a Coordinate bench of this Court dealing with an identical question held that charge of money laundering will not survive after the charges in respect of the predicate offence are quashed or the accused is discharged. It was further observed that when it has been found that the accused had not indulged in any criminal activity, the property cannot be treated as proceeds of crime. Once a person is discharged or acquitted from the scheduled offence, the very foundation gets knocked out and the charge of Money Laundering will not survive as there will be no proceeds of crime. Concomitantly, the properties attached under the PMLA cannot legally be treated as proceeds of crime or be viewed as property derived or obtained from criminal activity - till the judgment of acquittal predicate offence is reversed in an appeal, all the effects of acquittal will continue to operate and mere filing of an appeal against acquittal in a predicate offence would not mean that the respondents will continue to suffer the rigors of criminal proceedings or attachment under the PMLA. The upshot of above discussion is that no proceedings under the PMLA could be sustained after the acquittal of the respondent nos. 1 and 2 in the predicate offence. Accordingly, the learned Special Judge vide order dated 09.10.2023 has rightly discharged the respondents herein from the offences under the PMLA. Likewise, there is no infirmity in the order dated 07.11.2023 whereby the attached movable and immovable properties were directed to be released by the learned Special Judge. The petition is dismissed.

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• Service Tax

• 2024 (5) TMI 202
  Exemption from service tax - agreement with DTDC for transportation and hiring buses - exemption claimed as per the amended list of categories of transport goods vehicles - HELD THAT:- It is not in dispute that the show-cause notice is issued on the basis of the information obtained from the Income Tax Department with regard to returns filed by the petitioner as well as Form No. 26AS (TDS), which reflects the amount of TDS deducted by the recipient for commission under Section 194 of the Income Tax Act, 1961. On perusal of the facts and the documentary evidence placed on record, it is apparent that the notice issued by the respondent authority was not received by the petitioner and therefore, the petitioner could not file reply. It is clear that the show-cause notice issued by the respondent is contrary to the provisions of the Finance Act, 1994 without disclosing the facts as to what type of services is rendered by the petitioner for which the service tax was leviable. As it appears from the facts of the case, the petitioner was rendering GTA services, for which the petitioner was not liable to pay the service tax on the basis of reverse charge mechanism. The entire basis of the show-cause notice is frustrated. The respondent authority assumed the jurisdiction without there being any basis for issuing the show-cause notice as the show-cause notice could not have been issued only on the basis of the information retrieved from the Income Tax Department in Form 26AS (TDS). The SCN is liable to be quashed and set aside - Petition allowed.

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• 2024 (5) TMI 201
  Non-payment of service tax - aviation services - failure to provide unit wise and year wise information in respect of amount received as aviation income by the appellant or by its other unit at Delhi and the service tax, if any, paid - territorial jurisdiction - time limitation - HELD THAT:- The documents on record establish that the income shown in the returns as well as balance sheet is one amount under the head of aviation income but the activities performed are two separate activities. One is Supply of Tangible Goods by chartering the aircraft and another is dry leasing the aircrafts along with all its control and possession. The said activity of leasing out the aircraft with all rights of use therein to the lessee, to our understanding is a deemed sale under Article 366 (29A) of the Constitution and thus is excluded from the charge of service tax under Section 65(105)(zzzzj) and Section 66B of the Act. Thus, it becomes clear that the income earned by M/s. JSPL, Delhi from dry leasing arrangements is not chargeable to service tax during the relevant period but value for this activity is included in the impugned amount. It was mandatory for the department as well as the adjudicating authority to take note of the bifurcation which was provided by the appellant at very initial stage of filing reply to the show cause notice and also the C.A. Certificate dated 10.03.2016 filed subsequently. Territorial Jurisdiction - HELD THAT:- The commissionerate, Raipur had no jurisdiction to issue the show cause notice demanding the tax for such service which was provided by the appellant s unit in Delhi. Time Limitation - Suppression of facts or not - HELD THAT:- The tax on the amount receipts stands already discharged by M/s. JSPL Delhi. Thus, it becomes crystal clear that the present is not at all a case of tax evasion. Appellant was regularly filing the returns, is found to have maintained the proper documents. Question of alleged suppression does not at all arise. The extended period has wrongly been invoked. The entire period of demand gets hit by the bar of limitation. The order under challenge is hereby set aside. Appeal stands allowed.

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• 2024 (5) TMI 200
  Refund of of Service Tax paid under club or association services - doctrine of mutuality applicable - incidence of duty passed on not - hit by mischief of unjust enrichment as provided under Section 11B of Central Excise Act, 1944 or not - HELD THAT:- It is found that even the aspects of taxability decided by the Hon ble Supreme Court in STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. [ 2019 (10) TMI 160 - SUPREME COURT] is on the principle that due to doctrine of mutuality no service exists between the club or association and its members. When the Hon ble Supreme Court held that the club or association and its members are not two distinct identity and there is a mutuality of interest between both of them on that basis only it was held that since no service provider or service recipient exists service tax is not payable. On the same principle, if any service tax is paid, it has gone from one hand to other within the same entity it cannot be said that the incidence of the service tax has been passed on. It can be seen that the Learned Commissioner (Appeals) held that unjust enrichment is not applicable due to principle of mutuality, it is completely agreed with the finding of the commissioner (Appeals) in the present case. The impugned orders are legal and correct which do not require any interference - the impugned order is upheld - Revenue s appeal is dismissed.

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• 2024 (5) TMI 199
  Levy of service tax - Construction of Residential Complex Services - construction of residential complex for Army personnel - Ministry of Finance letter F. No. 137/26/2006-CX.4 dated 05.07.2006 - period 16.06.2005 to 31.05.2007 - HELD THAT:- It is found that from period prior to 01.06.2007 service tax is not leviable and in view of the judgment of the Hon ble Supreme Court in the matter of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] , and in the case of Total Environment Building Systems Pvt., Ltd., [ 2022 (8) TMI 168 - SUPREME COURT] , wherein it is held that Works contract were not chargeable to service tax prior to 1.6.2007 . As regards the period from 01.06.2007 to 31.05.2010, it is covered by the decisions of Tribunal in the case of M/S. SUGANDHA CONSTRUCTION PVT. LTD. VERSUS CCE, BHOPAL [ 2017 (12) TMI 446 - CESTAT NEW DELHI] where it was held that Having found that the Service Tax was not at all leviable on service element of a works contract, Parliament felt the need for the amendment and was so incorporated by the Finance Act, 2007. . The impugned order is set aside - appeal allowed.

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• 2024 (5) TMI 198
  Classification of services - cargo handing service or business auxiliary service - extended period of limitation - suppression of facts or not - HELD THAT:- It is found that initially, a SCN was issued to the appellant for the very same activity, to re-classify their service under the category of cargo handling service , which was dropped by the Hon ble High Court. Later on, the Revenue sought to classify the said activity under the category of business auxiliary service by way of the impugned Show Cause Notice by invoking the extended period of limitation. Since the Revenue itself is in confusion as to whether the activity undertaken by the appellant falls under cargo handling service or business auxiliary service, in these circumstances, the extended period of limitation is not invokable and the charge of suppression cannot be alleged against the appellant. The whole of the demand against the appellant is barred by limitation. Accordingly, the impugned proceedings are set aside - appeal allowed.

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• 2024 (5) TMI 197
  Exemption from Service Tax - providing gravel topping and laying laterite along the build road Biennial Maintenance of roads inside mines - benefit of N/N. 24/2009 dated 27.07.2009 - HELD THAT:- It is an undisputed fact that the appellant had rendered inter alia the services of road construction in private commercial premises of Neyveli Lignite Corporation, and thus claimed the benefit of Notification No.24 ibid. The Notification No.24/2009-ST dated 27.7.2009 provides for exemption of service tax on management, maintenance or repair of roads and the new Section 97 introduced vide Finance Act, 2012 gave retrospective amendment to this notification w.e.f/ 16.6.2005. The above said Notification No.24/2009-ST or amendment Notification No.54/2010-ST dated 21.12.2010 and new Section 97 of Finance Act, 2012 does not stated in any place that the exemption from payment of service tax is only with respect of public utility roads . The orders relied upon in the case of RAJENDRA SINGH BHAMBOO. VERSUS C.E. AND S.T. JAIPUR-I [ 2018 (4) TMI 772 - CESTAT NEW DELHI ] and NMC INDUSTRIES PVT LTD VERSUS COMMISSIONER OF SERVICE TAX II [ 2020 (3) TMI 319 - CESTAT MUMBAI ] are apt where it was held that Since there is no ambiguity in plain reading of the definition and in view of the admitted fact that the appellant had constructed roads for different commercial entities/organization, the benefit of the exclusion provided in the definition clause should be available to it. The demand raised and confirmed against the taxpayer in the case on hand cannot sustain - the impugned order is set aside - appeal allowed.

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• 2024 (5) TMI 196
  Invocation of extended period of limitation - activities of the appellant have been entered in their books of accounts and they have been filing their ST-3 returns regularly - Failure to discharge the service tax liability correctly - income earned for the services such as customer fee income, share application fee income, share application fee income for society, tender form fee income, transfer fee income, visit fee income etc. HELD THAT:- It can be seen that the provisions of section 73(1) provides that if the service tax has not been levied or paid or has been short paid or short levied for the reason of fraud, collusion or willful mis-statement or suppression of facts or contravention of any of the provision of this chapter or the rules with an intend to evade payment of service tax the show cause can be issued within a period of five years - Since, the allegations of fraud, collusion or willful mis-statement or suppression etc. has not been proved by the department. It is found that invoking the extended time proviso under section 73(1) of the Finance Act, 1994 is legally not sustainable. The demand of service tax has been made from April 2007 to March 2012, while the show cause notice has been issued on 1st December, 2015 and therefore it is clear that entire period of the demand is barred by period of limitation and period from April 2007 to January 2010 is even beyond the intended time limit of five years. At the same time the department has not been able to adduce any evidence which can support the extended time proviso for demanding service tax. This Tribunal in case of INTERCONTINENTAL POLYMER PVT LTD VERSUS C.C.E. S.T. -DAMAN [ 2023 (6) TMI 453 - CESTAT AHMEDABAD] held that in the peculiar facts as noted above there is no suppression of fact or mala-fide intention on part of the appellant, therefore, the invocation of extended period is illegal and incorrect. . The demand for the period April 2007 to March 2012 raised by the show cause notice dated December 1, 2015 is clearly barred by period of limitation and therefore without going into merit of the matter, it is held that the impugned show cause notice is barred by period of limitation - the impugned order is set aside - appeal allowed.

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• Central Excise

• 2024 (5) TMI 206
  Territorial jurisdiction to Grant Refund - Authorities at Noida or the Assistant Commissioner, Ghaziabad, had the jurisdiction to grant refund of the duty paid - Refund of excess duty in cash - price variation clause - HELD THAT:- The present litigation attained finality with the order of this Tribunal being Final Order No.A/70802/2016-EX[DB] dated 10.06.2016 [ 2016 (11) TMI 1203 - CESTAT ALLAHABAD ]. Subsequently, an appeal was filed by the Commissioner, GST Noida before this Tribunal against the Order-In-Original No.R-373/D-III/GZB/2016-17 dated 19.01.2017 and the same was dismissed by the Tribunal in COMMR., CENTRAL TAX (CENTRAL GOODS SERVICE TAX) , NOIDA VERSUS M/S. TTL LTD. [ 2019 (7) TMI 2018 - CESTAT ALLAHABAD] . Thus, cash refund of the entire amount already paid to the Appellant has attained finality as no further appeal before any of the superior courts has been filed by the Revenue. The factory of M/s TTI Ltd. was located in Ghaziabad. Hence the territorial jurisdiction over the factory was of the Assistant Commissioner, Ghaziabad Division and not the Assistant Commissioner, Noida. Clearances of electric meters took place in Ghaziabad Division and the Central Excise duty was also paid in that Division. Hence, refund of the excess duty paid in Ghaziabad Division was to be sanctioned by the jurisdictional Assistant Commissioner, Ghaziabad. Initially refund claims were rejected by the Assistant Commissioner, Ghaziabad - While jurisdiction of the Commissioners is specified by the Government / Board by issue of a notification., no such notification is issued in case of the Assistant Commissioners of the Division, whose jurisdiction is determined with respect to the location of the factory. M/s TTL Ltd., Ghaziabad surrendered their Registration Certificate to the Assistant Commissioner, Ghaziabad on 09.03.2009 on merger with M/s QRG Enterprises Ltd. Order-in-Original dated 19.01.2017 was passed by the Assistant Commissioner, Ghaziabad after surrender of the certificate. The refund was rightly sanctioned by the Jurisdictional Commissioner, Ghaziabad who was having jurisdiction over the factory premises located in Ghaziabad at the appropriate time in which disputed duty was paid which was to be refunded. The impugned order cannot be sustained and the same is set aside - Appeal allowed.

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• 2024 (5) TMI 195
  CENVAT Credit - services utilized for setting up plant for manufacturing of finished products which started with effect from September 2015 - amendment in Rule 2 (l) of CCR, 2004 with effect from 01/04/2011 and the word setting up was removed because of which Cenvat Credit cannot be taken for the services used towards setting up of the factories - suppression of facts or not - extended period of limitation - HELD THAT:- There is no dispute that the Appellant is manufacturing goods which were exigible to Excise Duty payment when they are cleared from their factory. They have taken the Cenvat Credit on various input services which have been used before they commenced the manufacturing activities. The issue is no more res-integra. This Bench in the case of Texmaco UGL Rail (P) Ltd, [ 2019 (7) TMI 1651 - CESTAT KOLKATA ] has held the amendments have been made in the definition of input services effective from 1 stApril, 2011 to specifically exclude input services in forms of works contract or construction services used in relation to building or civil structure or part thereof. It also excludes similar services used for laying of foundation or making of structure for support of capital goods. Thus, the intention of legislature was to restrict input tax credits on above services, which are used during factory set up and hence the term setting up was removed from the earlier definition having specific exclusion clause in the new definition. There are substantial force in the Appellant s submission that when they were taking the Cenvat Credit and reflecting the same in the ER-1 Returns during the period 2012 to 2015, the Department was very much aware that they were taking the Cenvat Credit for various input services. The Department was aware that till September 2015, they were not manufacturing the goods, nor clearing the same. Therefore, the Appellant cannot be fastened with the liability of suppression. The confirmed demand for the extended period is also hit by time bar. Therefore, the Appeal stands allowed even on account of limitation.

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• 2024 (5) TMI 194
  Valuation - inclusion of freight and/or insurance charges is includable in the assessable value of excisable goods - sale of goods is on ex-factory basis - HELD THAT:- It is observed from the sale invoices of the appellant that the sale is ex-factory as clearly mentioned in the invoice and freight and /or insurance were charged separately. In this fact the freight and /or insurance is not includable in the assessable value as held by this Tribunal in the case of Gujarat Fluorochemicals Ltd [ 2024 (1) TMI 883 - CESTAT AHMEDABAD] wherein this Tribunal has held that freight charges are not to be included in the assessable value. From the above decision of this Tribunal, it can be seen that the facts in the present case and the case referred above is identical. Accordingly, the ratio of the above judgment is directly applicable in the present case. Hence, issue is no longer res-Integra. Thus, freight and/or insurance is not includable in the assessable value. Consequently, demand of duty on this count is not sustainable - the impugned order is set aside - appeal allowed.

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• 2024 (5) TMI 193
  Excisability of waste product - Requirement to pay the duty at the prescribed rates on the value of exempted goods namely Bagasse and Press Mud - HELD THAT:- The issue has already been decided by us in the case of M/S. PONNI SUGARS ERODE LTD. VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, SALEM [ 2024 (5) TMI 3 - CESTAT CHENNAI] where it was held that impugned demand cannot sustain since Press mud is no different from Bagasse, which is also a waste product, which is also a result of the manufacturing process of a different product and, consequently, the impugned demand cannot sustain. Thus, the present demand against the appellant cannot sustain - the impugned order set aside - appeal allowed.

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• 2024 (5) TMI 192
  Refund of Cenvat credit availed on Education Cess and Higher Secondary Education Cess carried forward as on the appointed day i.e. 30.06.2017 in terms of Section 142(3) of the CGST Act 2017 - Section 11B of Central Excise Act, 1944 read with 142(3) of the Central GST Act 2017 - violation of principles of natural justice - time limitation - HELD THAT:- Cess is commonly employed to connote a tax with a purpose or a tax allocated to a particular thing suggested by the name of the cess. In the present case, it is related to education. Cess is generally for such levy which is for some special administrative expense as shall be suggested by the name of the cess. Education cess was levied by virtue of Finance Act No. 2 of 2004 in Section 92 to 94 thereof to be charged as a duty of excise with an objective to fulfill commitment of the government to provide a finance universalized quality basic education. No doubt the Cess are the part of the excise duty - the levy of EC and SHEC was however dropped and deleted by the Finance Act, 2015. Whether the cess are cenvitable? - HELD THAT:- The definition of eligible duties and taxes as per the explanation 3 under Section 140 of the CGST Act, 2017 was amended with retrospective effect from 01.07.2017 whereby it is specified that cesses are excluded from the definition of eligible duties and taxes , Thus, the credit is ab initio not available for utilization for GST. In view of the above, cesses are not be transitioned through TRAN-1, as per the transitional provisions specified under CGST Act, the credit balances not transitioned to GST regime shall lapse, and, as such, the argument of the appellant the impugned credits never lapse, as there is no provision retaining the same is not sustainable. The appellant cannot circumvent the said legal provision through the route of 142 (3) of the CGST Act. As the amount of Cenvat credit balance of E. Cess SHE Cess of Rs.7,97,27,333/- (of which refund had been filed by the appellant) was included in the carried forward amount by the appellant as on the appointed day i.e. 01.07.2017, in terms of Section 142(3) of the CGST Act 2017, refund of the same is not admissible to the appellant. Thus, it is clear that taking of the input credit in respect of Education Cess and Secondary and Higher Educatiion Cess in the Electronic Ledger after 2015, after the levy of Cess itself ceased and stopped, does not even permit it to be called an input Cenvat credit and therefore, mere such accounting entry will not give any vested right to the Assessee to claim refund of the said amount - there is no error when Commissioner (Appeals) has held that there is no provision in the Cenvat Credit Rules, 2004 or in Central Excise Act, 1944 to allow cash refund of cesses lying in he balance in Cenvat credit. Once it is not allowable, question to refund the same does not arises mere transitioning it to TRAN-1 shall not create any light to what was not allowable. Violation of principles of natural justice - HELD THAT:- The appellant had filed the written submissions dated 02.01.2020 before original adjudicating authority. Personal hearing was also attended. There is no denial that notices of hearing were issued by Commissioner (Appeals) as well. Though appellant could not appear before him, without going into the plea by receipt of those notices, it is observed that Commissioner (Appeals) has duly considered the appellant s reply dated 03.12.2017 and all the grounds of appeal taken by appellant. Hence it is not agreed that principles of natural justice have been violated. Time limitation - HELD THAT:- There are no reason to differ from the findings arrived at in the impugned order. Appeal dismissed.

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• 2024 (5) TMI 191
  Refund claim - Can refund be claimed without opting of provisional assessment? - Reduction in price subsequently resulting in payment of duty in excess - time limitation - Section 11B of the CEA, 1944 - HELD THAT:- The word may is used interchangeably with shall and does not necessarily mean that the word may used cannot be read as shall . If the Learned Advocate s contention is taken as correct, that would mean that the refund claim can be made even after many years since no specific mention has been made that the refund claim should be made within one year. This would make the time specified under Section 11B (1) otiose. On going through the orders of the lower authorities, it is found that they have passed a detailed and considered Order wherein they have rejected the refund claim solely on the ground of time bar. There are no reason to interfere with the same. Accordingly, the present Appeal is dismissed.

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• 2024 (5) TMI 190
  Refund of CVD/SAD paid - unable to avail and utilize the credit of CVD/SAD paid by them as payment was made on 30.09.2020 when no provision exist in GST regime to avail such credit - rejection of refund on the ground that at the time of payment of CVD and SAD, Cenvat Credit Rules were not exist, therefore neither the appellant can take the Cenvat credit nor the same is eligible for the refund - Section 11B of the Central Excise Act, 1944 - HELD THAT:- In the present case, the refund was made under the existing law i.e. section 11B of Central Excise Act, 1944 accordingly, the refund of SAD/CVD paid by the appellant which was cenvatable at the time when the said duty was payable, It is clearly eligible for refund under Section 11B read with Section 142(3) of CGST Act, 2017. Therefore, the appellant are legally entitled for the refund of CVD/ SAD. The Revenue has filed the appeal on the sole ground that the adjudicating authority has rejected the claim relying on the Single Member Bench decision in the case of this Tribunal decision in the case of Sarvo Packaging Ltd. There are number of judgments by this Tribunal itself which are contrary to the decision of M/S. SERVO PACKAGING LIMITED VERSUS COMMISSIONER OF G.S.T. AND CENTRAL EXCISE, PUDUCHERRY [ 2020 (2) TMI 353 - CESTAT CHENNAI ]. Moreover, even after considering the Sarvo Packaging Limited decision, the Tribunal s Single Member Bench in the case of SRI CHAKRA POLY PLAST INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX MEDCHAL GST [ 2024 (1) TMI 927 - CESTAT HYDERABAD] after relying upon many other decision came to the conclusion that the appellant are entitled for the refund under Section 142(3) of CGST Act, therefore, the decision of Sarvo Packaging Limited stand departed. The impugned order is upheld. Revenue s appeal is dismissed.

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• 2024 (5) TMI 189
  CENVAT Credit - requirement to pay 10% of the value of the excisable goods cleared to a SEZ developer in terms of Rule 6(3)(i) of CENVAT Credit Rules, 2004 - non-maintenance of separate records - HELD THAT:- There is no dispute about the fact that during the disputed period, the appellant had cleared furnitures against ARE-1 and raised proper invoices to SEZ developers without payment of duty. It is found that applicability of Rule 6(2) of the CENVAT Credit Rules, 2004 for clearances to SEZ developers is no more res integra being covered by the judgment of the Hon ble Karnataka High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX AND THE COMMISSIONER OF CENTRAL EXCISE VERSUS M/S FOSROC CHEMICALS (INDIA) PVT LTD AND OTHERS [ 2014 (9) TMI 633 - KARNATAKA HIGH COURT ]. Interpreting Rule 6 of the CENVAT Credit Rules, 2004 in the context of Notification No.50/2008-CE(NT) dt. 31.12.2008 whereby the earlier Rule 6(6)(i) has been amended as cleared to a unit in a special economic zone or to a developer of a special economic zone for their authorised operations w.e.f. 31.12.2008 held that the same is retrospective operation. The said judgment has been followed by the jurisdictional High Court in subsequent judgments COMMISSIONER OF C. EX., BANGALORE-III VERSUS ELINS SWITCH BOARDS PVT. LTD. [ 2014 (10) TMI 1066 - KARNATAKA HIGH COURT ] and COMMISSIONER OF CENTRAL EXCISE BANGALORE-III, VERSUS M/S. LOTUS POWER GEARS (P) LTD. [ 2016 (6) TMI 998 - KARNATAKA HIGH COURT ]. In Lotus Power Gears s case, the Hon ble High Court further observed that the judgment of the jurisdictional High Court is to be followed even a SLP has been filed before the Hon ble Supreme Court against the earlier judgment as there is no stay granted by the Hon ble Supreme Court. The impugned order is set aside - Appeal allowed.

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• CST, VAT & Sales Tax

• 2024 (5) TMI 188
  Attachment by the sales tax authorities over an apartment in Mumbai - priority of charges - whether as a matter of law, the Petitioner, the auction purchaser of the Walkeshwar Flat under the SARFAESI Act, is a valid recipient of free and marketable title to it? - HELD THAT:- The Lender Bank had first priority in enforcement against the Walkeshwar Flat with effect from 24th January, 2020, having been the first to register with CERSAI, which was done on 2nd January, 2020 - Encore ARC, which conducted the auction on 28th February, 2023, acquired the entitlement to priority from the Lender Bank along with the assignment of the loans to the borrowers with attendant security interests on 21st March, 2020 - Although the DCST has repeatedly issued orders of restraint, there is no evidence of registration with CERSAI. The DCST has fairly stated on oath in an additional affidavit filed pursuant to directions by this Court, that no proclamation of sale has been issued. Therefore, in view of the law laid down in Jalgaon Janta, it cannot be said that there is a competing charge in favour of the DCST over the Walkeshwar Flat. The attachment orders issued prior to 24th January, 2020 are of no assistance in giving priority to the DCST in claims over the Walkeshwar Flat. With no registration with CERSAI having been made by the DCST, and no proclamation of sale having been issued, the Lender Bank s entitlement to priority has not been undermined. That entitlement flowed to Encore ARC. The consequences of such priority has led to the Petitioner having a free and marketable title free of the encumbrance claimed by the DCST. Any attachment sought to have been issued in respect of value added tax and central sales tax dues owed by SMI, insofar as it relates to the Walkeshwar Flat, is hereby quashed and set aside. The Petitioner is entitled to have the Walkeshwar Flat registered in his name and the DCST can have no objection to such registration. Petition allowed.

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• Indian Laws

• 2024 (5) TMI 187
  Dishonour of Cheque - insufficient funds - discharge of legal liability - rebuttable presumption - conviction of accused u/s 138 of the N. I. Act - suspicious transaction - HELD THAT:- It has been held by the Hon ble Supreme Court and the Jharkhand High Court on various occasions that payment of friendly loan without giving any specific date or dates to the accused petitioner in absence of any witness led to suspicious transaction. It has been held by Hon ble the Supreme Court in the case of Rajaram Through L.Rs. Versus Maruthachalam [ 2023 (1) TMI 794 - SUPREME COURT ] that the standard of proof for rebutting the presumption is that of preponderance of probabilities. Applying this principle, the learned Trial Court had found that the accused had rebutted the presumption on the basis of the evidence of the defence witnesses and attending circumstances. The Supreme Court has also held that the issuance of blank cheque with signature only by the accused may not go in favour of the holder of the cheque, i.e. the complainant. Thus, it is evident that opposite party no. 2 had rebutted the presumption in light of the Section 139 of the N. I. Act. Therefore, this Court finds that no illegality has been committed by the learned Appellate Court below while coming to the conclusion that the petitioner had no financial capacity to pay loan amount to the opposite party no. 2 and thus, this Criminal Revision is devoid of merit - the criminal revision is dismissed.

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