TMI Tax Updates - e-Newsletter
June 1, 2019

Case Laws in this Newsletter:

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

Articles

• Calculation procedure of ITC reversal u/s 17(2) of CGST Act,2017
• RECENT ADVANCE RULINGS IN GST (PART-16)

News

• CBIT & Customs Notification No.39/2019

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• Monthly Review of Union Government of India for the month of April 2019 for the Financial Year 2019-20

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• Accounts of the Union Government of India (Provisional/Unaudited) for the Financial Year 2018-19

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• Smt. Nirmala Sitharaman takes charge as the Union Minister of Finance & Corporate Affairs

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• Piyush Goyal takes charge as Commerce & Industry Minister

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• Finance Commission to visit Meghalaya

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• PRESS COMMUNIQUE - The President of India, as advised by the Prime Minister, has directed the allocation of portfolios among the members of the Union Council of Ministers

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• Sovereign Gold Bond Scheme 2019-20

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• Restructuring of Ministry of Statistics & Programme Implementation (MoSPI)

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• The President of India has appointed Shri Narendra Damodardas Modi to be the Prime Minister of India.

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Notifications

Companies Law

• F. No. 05/01/2019-CSR - G.S.R. 390 (E) - dated 30-5-2019 - Co. Law
  Seeks to amend Schedule VII in the Companies Act, 2013

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Customs

• 39/2019 - dated 31-5-2019 - Cus (NT)
  Amendment in Notification No. Notification No.37/2019-CUSTOMS (N.T.), dated 16th May, 2019 with effect from 1st June, 2019.

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GST - States

• G.O. (P) No. 81/2019/TAXES - dated 31-5-2019 - Kerala SGST
  Amendment to the Notification issued under G.O. (P) No. 79/2019/ TAXES. dated 25th May, 2019 and published as S.R.O. No. 358/2019.

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• 10/2019-State Tax (Rate) - dated 10-5-2019 - Maharashtra SGST
  Amendment to Notification No. 11-2017- State Tax (Rate) so as to extend the last date for exercising the option by promoters to pay tax at the old rates of 12% / 8% with ITC.

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• FIN/REV-3/GST/1/08(Pt-1)(Vol.1)/140 - dated 27-5-2019 - Nagaland SGST
  Corrigendum to F.NO.FIN/REV-3/GST/I/08 (Pt-I) (Vol 1) /05 , dated 31st Dec. 2018.

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• FIN/REV-3/GST/1/08(Pt-1)(Vol.1)/131 - dated 10-5-2019 - Nagaland SGST
  Aamendment in the Notification No F.NO.FIN/REV-3/GST/I/08 (Pt-I) "N" dated 30th June,2017.

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• FIN/REV-3/GST/1/08(Pt-1)(Vol.1)/126 - dated 25-4-2019 - Nagaland SGST
  Corrigendum to F.NO.FIN/REV-3/GST/I/08 (Pt-I) (Vol 1)/111, dated 29th March, 2019.

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• FIN/REV-3/GST/1/08 (Pt-1) (Vol.1)/124 - dated 23-4-2019 - Nagaland SGST
  Seeks to notify the provisions of rule 138E of the CGST Rules w.e.f 21st June, 2019.

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• FIN/REV-3/GST/1/08 (Pt-1) (Vol.1)/123 - dated 23-4-2019 - Nagaland SGST
  Seeks to notify procedure for quarterly tax payment and annual_filing

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• 16936 – FIN-CT1-TAX-0043/2017/FIN - S.R.O. No. 163/2019 - dated 29-4-2019 - Orissa SGST
  CORRIGENDUM - Government of Odisha, in the Finance Department No. 11266-FIN-CT1-TAX-0043-2017/FIN., dated the 30th March, 2019, S.R.O. No. 127/2019.

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• G.S.R.22/P.A.5/2017/S.164/Amd.(28)/2019 - dated 30-4-2019 - Punjab SGST
  The Punjab Goods and Services Tax (Third Amendment) Rules, 2019.

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• KA.NI-2-770/XI-9(47)/17 - dated 20-5-2019 - Uttar Pradesh SGST
  Amendment in the Notification No. KA.NI.-2-842/XI-9(47)/17-U.P. Act-1-2017-Order-(09)-2017 dated 30th June, 2017.

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• KA.NI-2-590/XI-9(47)/17 - dated 16-5-2019 - Uttar Pradesh SGST
  Amendments in the Notification No. KA.NI.-2-842/XI-9(47)/17-U.P. Act-1-2017-Order-(09)-2017 dated 30th June, 2017

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Indian Laws

• RBI/2018-19/193 - IDMD.CDD.No.3391/14.04.050/2018-19 - dated 30-5-2019 - Indian Law
  Sovereign Gold Bond Scheme 2019-20 - Series I/II/III/IV - Operational Guidelines

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• RBI/2018-19/192 - IDMD.CDD.No.3392/14.04.050/2018-19 - dated 30-5-2019 - Indian Law
  Sovereign Gold Bond Scheme (SGB) 2019-20- Series I/II/III/IV

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Circulars / Instructions / Orders

GST - States

• 28T of 2019 - dated 17-5-2019
  Nature of Supply of Priority Sector Lending Certificates (PSLC).
• 27T of 2019 - dated 17-5-2019
  Clarification on various doubts related to treatment of sales promotion schemes under GST.
• 26T of 2019 - dated 17-5-2019
  Clarification regarding tax payment made for supply of warehoused goods while being deposited in a customs bonded warehouse for the period July, 2017 to March, 2018.
• 25T of 2019 - dated 17-5-2019
  Compliance of rule 46(n) of the MGST Rules, 2017 while issuing invoices in case of inter- State supply.
• 24T of 2019 - dated 17-5-2019
  Mentioning details of inter-State supplies made to unregistered persons in Table 3.2 of FORM GSTR-3B and Table 7B of FORM GSTR-1.
• 23T of 2019 - dated 17-5-2019
  Changes in Circulars issued earlier under the MGST Act, 2017.
• 22T of 2019 - dated 17-5-2019
  Levy of GST on Priority Sector Lending Certificates (PSLC).
• 21T of 2019 - dated 15-5-2019
  Extension of due date for submission of Form for One time option to pay tax in respect of ongoing projects from 10th May 2019 to 20th May 2019.
• 19T of 2019 - dated 8-5-2019
  Submission of Form for one time option to pay tax on construction of apartments in a project by the promoters at the rate as specified for item (ie) or (if), against serial number 3 in the Table in this notification, as the case may be, by the 10th of May, 2019.
• 18T of 2019 - dated 7-5-2019
  Providing Information regarding Casual Taxable person {CTP} and Non-Resident Taxable Person {NRTP}.
• Order No. 05/2019-State Tax - FIN/REV-3/GST/1/08 (Pt-1)(Vol.1) - dated 23-4-2019
  The Nagaland Goods and Services Tax (Fifth Removal of Difficulties) Order, 2019.-
• Order No. 04/2019-State Tax - FIN/REV-3/GST/1/08 (Pt-1)(Vol.1)/119 - dated 29-3-2019
  THE NAGALAND GOODS AND SERVICES TAX (REMOVAL OF DIFFICULTIES) ORDER, 2019

Highlights / Catch Notes

Income Tax

• Prosecution u/s 276B r.w.s 278B - petitioners have deducted TDS but failed to credit the same to the account of the Central Government within the prescribed time - even without determining the penalty, the respondent was entitled to resort to criminal prosecution for the reason that the petitioners/accused have not disputed their tax liability - prosecution continue before trial Court
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• Computation of capital gain - evidence of cost of improvement - claim of the assessee was rightly rejected by authority below in the absence of the bills of material and labour or any proof of having incurred renovation expenditure - quotation was not an evidence of actual expenditure - no substantial question of law arise
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• Taxability of property held in stock in trade - it is now abundantly clear from Sec. 23(5) that until the completion certificate is not issued by the competent authority and two years thereafter; annual value of the unsold units shall be NIL - since certificate only issued on 01.07.2015, the property in question for the both the assessment years 2011-12 and 2012-13 are not taxable
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• Exemption u/s 54EC - can investments spread over two financial years - The provision as contained in section 54EC r/w its proviso would make it clear that the cap is with regard to the amount to be invested in a particular financial year and it does not restrict the claim deduction even if the investments are made in excess of ₹ 50 lakh spread over two financial years
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• Exemption u/s 54EC - REC Bonds - investment within six months from the date of transfer of the capital asset - assessee has demonstrated that non–investment in REC Bonds within the stipulated period was due to non–availability of bonds in the market - the delay in investment has to be condoned as the assessee cannot be expected to do or perform an impossible act - exemption allowed
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• Exemption u/s 11 - Proviso of section 2(15) - assessee is receiving fees/ subscription as per norms of Gov. of India, profit motive is not visible - activities are centered around disciplining, promoting, improving and contributing to similar academic environment and quality of teaching and to enhance the knowledge and discipline of the educational institutions which are incidental to the education and cannot be kept under the objects of general public utility - proviso not applicable
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Customs

• Extension of export obligation period - It is also well settled that the relaxation of the policy is not a matter of right - Sufficient discretion is granted to the PRC/DGFT to relax any provision of the policy or procedure as it deems fit - applicant must establish that his cause of hardship is on account of circumstances, which could not be reasonably anticipated by a person engaged in the trade
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Corporate Law

• Activities that may be included in the Corporate Social Responsibility (CSR) policy. - Schedule VII in the Companies Act, 2013 amended
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• Oppression and mismanagement - Directors were under a responsibility to disclose to all the shareholders that further shares are to be issued and such of them as were interested, may apply for further shares in proportion to their shareholding - taking a defence that on earlier occasions, the original Petitioners did not invest much and thus, they were not interested and so it was not necessary to offer shares to them is wrong - allotment canceled
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• Oppression and Mismanagement - POA in favour of the Bank to sell, transfer, assign, handover possession etc. to the property but Bank was unable to locate a best buyer - then Board Resolution was passed that if the guarantor repays the loan amount, the property and legal rights of company should be transferred to the guarantor - No offer was made by the appellant for purchase of property, earlier and subsequent offer would be of no use.
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Indian Laws

• Deposit 25% of fine/compensation - section 148 of NI Act - irrespective of the provisions of Section 357(2) of the Cr.P.C., challenging the order of conviction and sentence u/s 138 of the N.I. Act, the appellate court is conferred with the power to direct the appellant to deposit such sum pending appeal which shall be a minimum of 20% of the fine or compensation awarded by the trial Court
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IBC

• Validity of Resolution Plan - upfront payment suggested by the ‘Resolution Applicant’ being less than average of the liquidation value to the ‘Financial/Operational Creditors’ - It is open to the ‘COC’ to negotiate and ask the ‘Resolution Applicant’ to revise its plan, if it does not confront with the ‘I&B Code’ - directed to match liquidation value or ‘Resolution Plan’ will be treated to be set aside
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Service Tax

• Refund of service tax - unjust enrichment - duty paid under protest - the amount being claimed as refund is reflected in the balance sheet under the head “current assets loan and advances” and the said amount has been shown as “advance recoverable” as per the disclosure requirement of the Companies Act. - Refund allowed.
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• CENVAT Credit - services tax paid on electricity charges under on renting of immovable property - Since the department had not raised any objection on the service provider and accepted such tax as the appropriate tax due, the issue of levy of service tax on service cannot be questioned at the recipient’s end inasmuch as the recipient of service is permitted to avail Cenvat credit - refund allowable
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Central Excise

• Cenvat credit on the input services have been used in or in relation to setting up of the plant, which is covered under the main clause of definition of input service.
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• CENVAT Credit - alleged fake documents - there is no evidence brought forth by the Department that there was no delivery of goods or that the invoices were bogus, except that statement of Shri Amit Gupta and transporters, but no cross examination of the witnesses was provided - Once it is demonstrated that reasonable steps had been taken as per Rules 9(3), to cast an impossible or impractical burden on the assessee is not permissible
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• Pre-show cause notice - petitioner seek a reasonable time - thereafter on the very same day, the impugned show cause notice has been issued, which is not in the spirit of the circular dated 10.3.2017 - SCN stayed
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VAT

• Recovery of excess tax paid which was not liable to be paid - tax payable on 'capital goods' 5% OR 14.5% - cheques issued under coercion - presumption that the petitioner has admitted his liability whereas as seen from the available records except for the issuance of cheques, there is no conclusive evidence to prove that the petitioner had admitted his liability - impugned notice quashed and the matter is remanded
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Case Laws:

• GST

• 2019 (5) TMI 1651
  Consideration of petition - HELD THAT:- If there has already been a pre-consultation with the Petitioner then the petition be placed before the GST Council on the same date when it is considering the case of the Solar Power Developers Association. If not, then preparatory to the above step the Petitioners will be called before the Central Board of Indirect Taxes Customs through their authorized representatives for a consultative meeting within the next four weeks. If necessary, the concerned Ministry which is Ministry of Renewable Energy, Government of India will also be invited to such consultative meeting and the deliberations of that meeting also be placed before the GST Council for its consideration. The Petitioner be informed of the date, time and venue of the meeting at least one week in advance. List the petitions before the Registrar on 10th July 2019 for completion of pleadings.

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• 2019 (5) TMI 1650
  Refund claim - Delhi GST Act - HELD THAT:- The learned CGSC of UOI also assures the Court that wherever an order has been passed for refund of the Central component of the tax, the refund amount will stand credited to each of the concerned Petitioners, positively before the next date - Learned counsel for the Petitioners are permitted to file affidavits before the next date explaining their claims for interest in terms of the DGST/CGST Act and in the facts and circumstances of these cases. List on 8th July, 2019.

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• 2019 (5) TMI 1649
  Jurisdiction - power of the U.P. State Officers/Authorities under the GST regime in seizing the consignment of goods which were going from Kanpur (Uttar Pradesh) to Bihar - validity of Detention Order and Penalty notice - HELD THAT:- The petitioner has challenged the penalty order against which he has an efficacious remedy under Section 107 of the Act of filing an appeal. The petitioner can raise all the plea as has been pleaded before us in the present writ petition before the competent authority in appeal, who shall consider the same and pass reasoned and speaking order in accordance to law after providing proper opportunity of hearing to the petitioner. Learned Counsel for the petitioner, at this stage, submits that the petitioner will file an appeal within period of one week from today - In case the petitioner files an appeal within a period of one week, the authority concerned shall decide the appeal within a period of three weeks thereafter. Seizure of the goods/vehicle of the petitioner - HELD THAT:- The petitioner is directed to move appropriate application before the competent authority for release of goods/vehicle. If such an application is moved by the petitioner, we hope and trust that the competent authority shall release the goods/vehicle on furnishing the bank guarantee to the satisfaction of the authority concerned. The said exercise shall be completed within a period of one week from the date of moving the application by the petitioner for release of goods/vehicle. Petition disposed off.

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• 2019 (5) TMI 1648
  Imposition of penalty u/s 67 of Kerala VAT Act - time limit stipulated under Section 67 of the KVAT Act - constitutional validity of Section 174 of the KSGST Act - HELD THAT:- A re-consideration of the writ petition on the ground raised as mentioned above will be appropriate to achieve the ends of justice. Hence we are inclined to remit the matter to the Single Judge for reconsideration. The Registry shall post the writ petition before the learned Single Judge dealing with the subject matter, as per the roster, for consideration of the grounds raised in the writ petition, other than the issue relating to the validity of Section 174 of the KSGST Act.

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• 2019 (5) TMI 1611
  Issuance of necessary directions for clubbing the FIRs filed by some of the respondents together with the FIR - treatment of all FIR as single FIR - HELD THAT:- Liberty to approach the trial court for interim bail is granted.

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• 2019 (5) TMI 1610
  Notice issued to respondent Nos.1 and 2. Notice is made returnable on 18.04.2019. The petitioner is at liberty to serve respondent Nos.1 and 2 by private service.

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• Income Tax

• 2019 (5) TMI 1647
  Prosecution u/s 276B read with Section 278B - survey u/s 133A - admitting default and sought time to remit the admitted TDS liability - HELD THAT:- Provision makes it clear that in order to get over the penal consequences that follow on account of non-payment of tax deducted at source, it is open for the accused persons to come clean of the said charge by showing reasonable cause for failure to deposit the said amount. In the light of this provision, contentions urged by the learned counsel for the petitioners cannot be accepted. Since the material placed on record prima facie discloses that the petitioners have deducted tax at source but failed to credit the same to the account of the Central Government within the prescribed time, the petitioners cannot escape from the rigour of Section 276B. The alternative argument canvassed by the learned counsel for the petitioners that without determining the penalty, the respondent was not entitled to resort to criminal prosecution of the petitioners u/s 276B, also cannot be accepted for the reason that the petitioners/accused have not disputed their liability. The question of determining the liability and consequent imposition of penalty would arise only in case of dispute with regard to the liability to remit the deducted tax. In the instant case, the facts alleged in the complaint clearly indicate that the amount was credited subsequent to the survey. As a result, even this defence is not available to the petitioners. - petition is dismissed

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• 2019 (5) TMI 1646
  Benefit of deduction u/s 80IA to sub-contractor or transferee or assignee - Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. - Assessing Authority denied the said benefit was that the Assessee himself did not enter into any such contract with the Railways or with the Central Government - Tribunal allowed claim - HELD THAT:- Present Appeals is covered by the Judgment of this court in the case of the same Assessee in [ 2019 (4) TMI 683 - MADRAS HIGH COURT] wherein this court has has held that Tribunal, however, in our opinion, rightly applied the Proviso to Section 80IA(4) and held that since the Assessee was recognised as contractor for these railway sidings, which undoubtedly fell under the definition of infrastructure facility , it was entitled to the said benefit u/s 80IA. The grounds on which the Assessing Authority denied the said benefit to the Assessee ignoring the effect of Provisos to Section 80IA(4), therefore, could not be sustained - Decided in favour of the Assessee and against the Revenue.

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• 2019 (5) TMI 1645
  Penalty u/s 271(1)(c) - quantum additions have been deleted - HELD THAT:- Once the quantum additions have been deleted by the Tribunal and the same having been upheld by this Court no case for penalty is made out. No illegality or perversity could be pointed out by the learned counsel for the revenue in the findings recorded by the CIT(A) and affirmed by the Tribunal which may warrant interference by this Court. No question of law arises in this appeal.

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• 2019 (5) TMI 1644
  Computation of capital gain - evidence of cost of improvement - contractor in his statement recorded u/s 131 had stated that very petty renovation was made - no substantive or corroborative material was produced by the assessee with regard to the renovation works done - HELD THAT:- The Tribunal upheld the addition of ₹ 10,31,906/- made on account of repair and renovation of the property by concluding that from the documents available on record, nowhere it was specified by the assessee as to when the renovation of hotel and from whom the same was done. The assessee had only relied upon quotation dated 26.6.1999 which was rejected by the Assessing Officer and the CIT(A) that the said quotation was not an evidence of actual expenditure incurred on renovation works in the hotel. In the absence of the bills of material and labour or any proof of having incurred renovation expenditure on the hotel building, the claim of the assessee was rightly rejected by the CIT(A). The Tribunal had further observed that the assessee got various opportunities to substantiate his claim, but he failed to establish his case. No illegality or perversity could be pointed out by learned counsel for the assessee in the findings recorded by the CIT(A) and affirmed by the Tribunal which may warrant interference by this Court - appeal is dismissed.

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• 2019 (5) TMI 1643
  Advertising , Marketing and Promotion (AMP) Expenses - Bright Line Method - HELD THAT:- The agreements entered in to by the AEs with the assessee, that in the agreements there is no condition about sharing of AMP, that the agreements talks of using best efforts to market and distribute the product or promote the products in a commercially reasonable manner. In our opinion, these terms do not give any indication that the AE and the assessee had to share AMP expenses. Secondly, if the AE was benefitted indirectly by the AMP expenditure incurred by the assessee, it cannot be held that it had entered into agreement for sharing AMP expenses. We are also of the opinion that Bright Line Method should not have been applied by the TPO. Grounds is fully covered by the decision of Co-ordinate Bench in assessee s own case in [ 2018 (5) TMI 507 - ITAT MUMBAI] holding that and therefore the same the said issue should be decided following the order of the coordinate bench. Disallowance of depreciation on building - HELD THAT:- Once the concept of block of assets was brought into effect from AY 1989- 90 onwards, then depreciation is allowable on the aggregate of WDV of all the assets in the block at beginning of the Financial year alongwith the additions made to the assets in the subject AY. The individual asset losses its identity for depreciation. Respectfully following the order of the Co-ordinate Bench of the Tribunal in assessee s own case in [ 2018 (5) TMI 507 - ITAT MUMBAI] , we decide the issue in favour of the assessee Disallowance in respect of payment made to Doctors - free samples - MCI guidelines - HELD THAT:- We are of the opinion that the MCI guidelines are applicable to the professionals i.e. Doctors only. They do not and cannot govern the other tax entities like Drug manufacturing or drug distributing Companies or individuals other than the doctors, or HUF,s., or Firms etc. MCI, as a body can formulate policy for the Doctors. The assessee is not a practicing professional. So, any guidelines issued by it cannot decide the allowability or otherwise of an expenditure under the Act. Income tax Act is a code in itself and business income an assessee has to be assessed and taxed as envisaged by the provisions of the Act. The issue at hand being similar to one as decided by the coordinate bench in assessee own case[ 2018 (5) TMI 507 - ITAT MUMBAI] and also squarely covered by ratio laid down by the Hon ble Delhi in MAX HOSPITAL, PITAMPURA VERSUS MCI [ 2014 (1) TMI 1829 - DELHI HIGH COURT] and Rajasthan High Courts in DR. ANIL GUPTA VERSUS ACIT [ 2017 (12) TMI 931 - RAJASTHAN HIGH COURT] respectively , we are therefore inclined to uphold the order of CIT(A). Depreciation on non-compete fee - held to be capital in nature in A.Y. 2002-03 - HELD THAT:- It was argued that while deciding the appeal for the AY. 2002-03, the Tribunal had directed the AO to allow depreciation on payment made for non compete fee treating the same as capital expenditure. Following the above order of the Tribunal, we allow the additional ground raised by the assessee.

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• 2019 (5) TMI 1642
  Exemption u/s 11 - charitable activity or not? - activities of the assessee is to facilitate accreditation and continuing supervision through inspection and charging inspection and accreditation fees from various organizations - why its receipt from fees subscription should not be hit by Proviso of section 2(15) ? - HELD THAT:- The main objectives of assessee society for assessment and accreditation carried out by the assessee society, the same are to assess and grade colleges and/or institutions of technical and professional education, the courses and programs offered by them, their various units, faculty, department etc.; to stimulate the academic environment and quality of teaching and research in the institutions; to make contribution to the sphere of knowledge in its discipline; to motivate colleges and/or institutions of technical and professional education for research, and adopt teaching practices that groom their students for the innovation and development of leadership qualities; to encourage innovations, self evaluation and accountability in higher education; to promote necessary changes, innovations and reforms all aspects of the working of the colleges/ institutions of technical and professional education for the above purpose; and to help institutions realize their academic objectives; it leads to the conclusion that the assessee society is into charitable activities, the objectives being incidental to the education. Whether receipts of the assessee from fees/ subscription are hit by Proviso to section 2(15)? - HELD THAT:- When the assessee society is receiving receipt of fees/ subscription as per norms laid down by Government of India, profit motive is not visible rather all the activities are centered around disciplining, promoting, improving and contributing to similar academic environment and quality of teaching and to enhance the knowledge and discipline of the educational institutions which are incidental to the education and cannot be kept under the objects of general public utility. Further examine the activities being carried out by the assessee society in the light of the fact that in the immediately preceding year i.e. AY 2012-13, assessee has been duly granted exemption u/s 11 by framing assessment u/s 143(3). Undisputedly, there is no change in the aims and objectives of the assessee society which are being carried out in accordance with the Memorandum of Association and Certificate of Registration under Societies Registration Act dated 07.01.2010. There is not an iota of material brought on record by AO if the facts of the year under assessment are distinguishable from AY 2012-13. In these circumstances, rule of consistency as laid down in Radhasoami Satsang vs. CIT [ 1991 (11) TMI 2 - SUPREME COURT] is applicable in this case. AO without proving on record that the activities of the assessee society are in the nature of trade, commerce or business proceeded to deny the benefit of section 11 which is not sustainable in the eyes of law. Rather assessee is carrying out its activities of accreditation as per All India Council for Technical Education (AICTE) Act, 1987 and there is no element of profit and as such First Proviso to section 2(15) is not applicable. We are of the considered view that CIT (A) has rightly allowed the exemption u/s 11 to the assessee by allowing the appeal. - Decided against revenue.

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• 2019 (5) TMI 1641
  Exemption u/s 54EC - REC Bonds - investment within six months from the date of transfer of the capital asset - investment made in REC Bonds was made in two tranches i.e., ₹ 50 lakh on 31st March 2007 and further ₹ 50 lakh on 1st August 2007 - HELD THAT:- As per the condition of section 54EC Series VIA Bonds, the maximum amount one can invest is ₹ 50 lakh. Therefore, the assessee could not have invested more than ₹ 50 lakh in the said Bonds on 31st march 2007. This restriction was also as per the conditions imposed by the CBDT in its notification issued on 29th June 2006. Undisputedly, after 31st March 2007, REC Bonds were not available in the market and REC Bonds Series VII was again available from 2nd July 2007 to 31st March 2008. It is a fact that the assessee had invested further amount of ₹ 50 lakh on 01.08.2007 after REC Bond Series VII became available. In the meanwhile, the six month period from the date of transfer of the capital asset expired on 18th June 2007. The assessee could not have invested in the REC Bonds within the stipulated period of six months as provided u/s 54EC as it was not possible on the part of the assessee to do so due to non availability of the bonds. That being the case, the claim of deduction in respect of balance amount of ₹ 50 lakh cannot be disallowed since the assessee has demonstrated that non investment in REC Bonds within the stipulated period was due to non availability of bonds in the market. This view of ours is supported by the decision of the Hon'ble Jurisdictional High Court in case of CIT Vs. Celloplast [ 2012 (8) TMI 527 - BOMBAY HIGH COURT] Therefore, the delay in investment has to be condoned as the assessee cannot be expected to do or perform an impossible act. Whether the claim of deduction u/s 54EC is available if the investments are spread over two financial years ? - HELD THAT:- We are of the considered opinion that there was no bar in section 54EC for allowing deduction in respect of investment made in two financial years. The provision as contained in section 54EC r/w its proviso would make it clear that the cap is with regard to the amount to be invested in a particular financial year and it does not restrict the claim deduction even if the investments are made in excess of ₹ 50 lakh spread over two financial years. The decisions cited by the learned Authorised Representative clearly support this view. Therefore, on over all consideration of facts and material on record, we are of the view that the claim of deduction u/s 54EC in respect of the amount of ₹ 1 crore is allowable. Accordingly, we direct the Assessing Officer to allow assessee s claim of deduction in respect of the balance amount of ₹ 50 lakh also. Grounds raised are allowed. Disallowance of claim of TDS - additional ground - HELD THAT:- It is seen from the record, while deciding the appeal arising out of original assessment order, CIT(A) had directed the Assessing Officer to give credit for TDS as per law. Therefore, the issue raised in the additional ground can be decided on the basis of facts and material available on record. That being the case, though, we admit the additional ground, however, we restore the issue to the Assessing Officer for verifying assessee s claim vis a vis the facts and material on record including the TDS certificate furnished by the assessee and allow credit for TDS as per law. The additional grounds are allowed for statistical purposes.

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• 2019 (5) TMI 1640
  Taxability of property held in stock in trade - owner of the house property u/s 22 - deemed annual letting value - finished apartments - absence of occupancy / completion certificate - assessee submitted that it was not the owner of the said premises as they had already been allotted to various allottees - HELD THAT:- Once the appellant had executed requisite documentation evidencing the allotment of specific units / apartments in favour of intending purchasers and thereafter received consideration amounts in accordance with the terms of allotment, then the rights of specific performance as well as right to obtain conveyance in respect of the specified apartment had accrued in favour of the respective purchaser. In the circumstances even though the husk of a title, if any, vested in the Owner, in law such person could not be considered to be the owner of the house property for the purposes of Section 22. Annual value of the property is to be determined as per the actual rent received or receivable by the owner of the property which is capable of being let legally. The legislative intention that the property which is legally habitable but it is not occupied by the owner then the annual value of such lettable property shall be deemed as income under the head House Property . Hon ble Bombay High Court in the case of Shree Nirmal Commercial Ltd Vs CIT [ 1991 (4) TMI 91 - BOMBAY HIGH COURT] wherein it was held that if the property is of such nature that it is inherently incapable of being let out and the assessee owner thereof, then the charge u/s 22 cannot arise. In present case the property in question was granted the occupancy / completion certificate only on 01.07.2015, so the property in question for the both the assessment years 2011-12 and 2012-13 could not have construed to be properties capable of being legally let so as attract the rigors of Section 23(1)(c). We note that the view entertained by us now finds legislative support in sub-section (5) of Sec. 23, wherein the Legislature has provided where a builder holds flats as its stock in trade then the annual value of such property shall be taken as NIL for a period of two years from the end of the financial year in which the certificate of completion of construction of the properties obtained from the competent authority is obtained. In view of the latter enactment it is now abundantly clear that until the completion certificate is not issued by the competent authority and two years thereafter; annual value of the unsold units shall be NIL. For the reasons set out in the foregoing and the fact that the completion certificate was issued only on 01.07.2015, we delete the addition being the deemed notional annual value of the apartments included in the Inventory as on 31.03.2011. - appeals of assessee are allowed

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• 2019 (5) TMI 1639
  Penalty u/s 271(1)(c) - addition deleted in quantum appeal of the assessee - HELD THAT:- On a perusal of the impugned order of the learned Commissioner (Appeals), we find that in course of hearing of appeal, the decision of the Tribunal in quantum appeal was filed. On going through the order of the Tribunal, Commissioner (Appeals) having found that the additions on the basis of which penalty u/s 271(1)(c) was imposed have been deleted by the Tribunal, held that the penalty order passed under section 271(1)(c) of the Act would not survive. The aforesaid factual position remains uncontroverted. In fact, in ground no.1 of the present appeal, the Revenue has accepted the fact that the additions on the basis of which penalty under section 271(1)(c) of the Act was imposed have been deleted by the Tribunal. No infirmity in the order of the learned Commissioner (Appeals) in deleting the penalty imposed.

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• 2019 (5) TMI 1638
  Levy of penalty u/s 271(1)(c) - reopening of assessment u/s 148 - dismissal of appeal for non-prosecution - HELD THAT:- It is an admitted fact that due to non-appearance, the CIT(A), relying on the decision of the Tribunal in the case of CIT vs. Multiplan India Ltd. [ 1991 (5) TMI 120 - ITAT DELHI-D] , the decision of CIT vs. B.N. Bhattacharya [ 1979 (5) TMI 4 - SUPREME COURT] and various other decisions, dismissed the appeal for non-prosecution. However, she has not decided the appeal on merit. Considering the totality of the facts of the case and in the interest of justice we restore the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the CIT(A) and explain its case failing which the CIT(A) is at liberty to pass appropriate order as per law. Thus hold and direct accordingly. The grounds raised by the assessee are allowed for statistical purposes.

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• 2019 (5) TMI 1637
  Addition u/s.40(a)(ia) - non deduction of TDS for interest paid to the Co-operative credit societies - Scope of amendment - whether the second proviso to section 40(a)(ia) is retrospective in nature - HELD THAT:- Hon'ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd [ 2015 (9) TMI 79 - DELHI HIGH COURT] as well as Pr. CIT-5 Vs. Perfect Circle India Pvt. Ltd. [ 2019 (1) TMI 1532 - BOMBAY HIGH COURT] have taken a view that the second proviso to section 40(a)(ia) of the Act has retrospective effect from 01.04.2005 being the date from which sub-clause (ia) of section 40(a) was inserted by the Finance ( No.2) Act, 2004. Hon'ble Supreme Court has held in the Hindustan Coca Cola Beverages P Ltd. Vs. CIT [ 2007 (8) TMI 12 - SUPREME COURT] that even in absence of second proviso to section 40(a)(ia) if it is noticed that the payee had already paid the tax, on the amount received under such circumstances, the Court held that the payer/deductor can at best be asked to pay the interest on delay in depositing tax and no further liability is warranted in the hands of the payer/deductor. AR has placed before us the additional evidences and necessary certificates from C.A. demonstrating that the taxes have been paid by the payee on the amount received as interest from assessee. These facts needs to be verified and established therefore, we set aside the order of the Ld. CIT(Appeals) and restore the matter back to the file of the Assessing Officer to verify the payments of taxes made by the payee and adjudicate the issue after providing reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.

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• 2019 (5) TMI 1609
  Levy of penalty u/s 271(1) (c) - non-recording of proper satisfaction by AO for initiating the penalty proceedings - no proper service of notice - HELD THAT:- The facts involved in this matter are very similar to the facts involved in the case of CIT vs Virgo Marketing (P) Ltd. [ 2008 (1) TMI 15 - HIGH COURT, DELHI] wherein while assessing the income of the assessee, at the end of the order, AO observed Penalty proceedings u/s. 271(1)(c) have been initiated separately. There was no proper satisfaction recorded by the learned Assessing Officer while concluding the assessment, and while respectfully following this decision of the Hon ble jurisdictional High Court in this case, we conclude that there is no proper recording of satisfaction by the Ld. AO while initiating the penalty proceedings. AO to assume jurisdiction u/s 271(1)(c) of the Act, proper notice is necessary and because of the defect in notice u/s 274 of the Act and on the facts of this case, it is difficult to hold that the learned AO rightly assumed jurisdiction to pass the order levying the penalty. Because of non-recording of proper satisfaction for initiating the penalty proceedings, the penalty cannot be sustained. We accordingly quash the penalty proceedings. - Decided in favour of assessee

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• Customs

• 2019 (5) TMI 1636
  Advance Authorization Scheme - extension of export obligation period - import of bulk drugs for the purposes of supplying the same to the Russian Company after repackaging the drug in question for retail trade and exporting the same to the Russian Company - HELD THAT:- The contention that the petitioner had imported the drug in question from a registered source and, therefore, the export obligation period was thirty six months and not twelve months, cannot be accepted. First of all, no such contention has been canvassed before the Licensing Authority or before the PRC and no such contention has been raised by the petitioner in the writ petition as well. This Court is, thus, of the view that this contention is an afterthought and must be rejected outrightly - Secondly, even if it is accepted that the petitioner had imported the products from a registered source (which, in this case, it had not), it cannot be accepted that the export obligation period was 36 months and not twelve months. In terms of policy circular no.12 dated 27.06.2005, it was clarified that if the imports are from registered sources, conditions governing normal advance licences are applicable. In these cases, it included validity period and normal export obligation period. The petitioner is correct that in the event, it is accepted that if the products are exported from a registered source, normal provisions with regard to the export obligation period would apply. However, the contention that the said period is thirty six months is incorrect. In terms of paragraph 4.22 of the Handbook of Procedures for the year 2009-2010 (Volume-I), the export obligation period for advance authorization issued with inputs as mentioned in Appendix 30A would be for the period as stipulated against each entry, therein - Appendix-30A of the said Handbook clearly specifies that the export obligation period for drugs (with specific export order and pre import condition) would be twelve months from the date of clearance of each import consignment by the Customs Authorities. In view of the above, even if it is accepted the petitioner had imported the drug in question from a registered source, the export obligation period applicable would be twelve months from the date of the consignments imported by the petitioner. In the present case, the import against the advance authorization was made against two Bills of Entry dated 13.06.2012 and 20.06.2012. Thus, the export obligation period expired on 12.06.2013 and 19.06.2013 respectively. During this period, the petitioner had exported five consignments, last of which was exported on 15.02.2013. The PRC had acceded to the petitioner s request and had extended the export obligation period by further six months, which expired on 12.12.2013/19.12.2013 - During the said extended period, the petitioner had exported another consignment which was done on 29.08.2013. However, the remaining three consignments were exported after a significant delay; first two consignments were exported on 17.10.2014 and the last consignment was exported on 02.06.2015. In terms of paragraph 2.5 of the FTP, DGFT is empowered to grant relaxation as he deems fit and proper on the ground of genuine hardship and adverse impact on trade in genuine if the extension, as sought for by the petitioner, is not granted - Although, the petitioner contends that its case is one of the genuine hardships, there is no material on record which could persuade the PRC to consider that the extension of export obligation period to such an extent is warranted. The petitioner was fully aware while accepting the advance authorization and importing the products that it would require to perform the export obligation within a period of twelve months. It is possible that the petitioner has faced commercial difficulties, however, that would not be a ground to extend the export obligation period from twelve months to three years (thirty six months). It is also well settled that the relaxation of the policy is not a matter of right. Sufficient discretion is granted to the DGFT to relax any provision of the policy or procedure as it deems fit - In the present case, this Court is unable to accept that the decision of the PRC to deny extension of export obligation period is perverse, arbitrary or falls foul of the guidelines as indicated in paragraph 2.5 of the FTP. Petition dismissed.

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• 2019 (5) TMI 1625
  Benefit of reduced mandatory pre-deposit of Penalty amount - HELD THAT:- The conduct of the appellant in not depositing the amount, and approaching the court, deserves to be frowned upon; at the same time, this court notices that according to the averments, the appellant was facing severe financial constrains as it has been subjected to some search and seizure process and its assets were also attached. It is stated, however, that the appellant is willing to deposit the entire mandatory amount (20% of the penalty) - Given the fact that, its appeal has not been adjudicated on merits but dismissed on the ground of failure to comply with the statutory requirement of mandatorily pre-depositing the amount, this court is of the opinion that the interest of justice requires that the request of the appellant be granted. The appeal would stand restored - application disposed off.

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• 2019 (5) TMI 1624
  Refund claim - Benefit of Concessional rate of CVD - Sl. No 263A of Notification no. 12/2012-CE dated 17.03.2012 as amended by N/N. 04/2014-CE dated 17.02.2014 - import of mobile phone parts, components and accessories - whether re-assessed bills of entry are required in respect of the refund claim filed under Section 27 of the Customs Act, 1962? HELD THAT:- The requirement to furnish re-assessed bills of entry existed in the erstwhile Section 27 as it existed prior to 08.04.2011 before the introduction of self assessment - A perusal of the erstwhile Section 27 of the Customs Act would provide that refund was admissible in respect of duty which was paid in pursuance of the order of assessment. Thus, if there was an order of assessment by an officer, the same was subject to challenge by way of an appeal subsequent to which refund would accrue to an assessee in light of a favourable appellate order. As per the existing provisions of Section 27 of the Customs Act, it is not mandatory that a claim for refund of duty be made only against an order of assessment. This is because where there is self assessment, the question of any assessment order does not arise. So long as the assessee is able to show that the duty is paid by him or borne by him, he is entitled to file a claim for refund. Thus, if duty has been paid under self assessment basis, a claim for refund can be made without filing any appeal against the bill of entry. The Hon ble Delhi High Court in the case of AMAN MEDICAL PRODUCTS LTD. VERSUS COMMISSIONER OF CUSTOMS, DELHI [ 2009 (9) TMI 41 - DELHI HIGH COURT] held that a claim for refund would be maintainable in absence of an Appeal against bills of entry where the duty was paid inadvertently. The Apex Court in the case of M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI [ 2015 (4) TMI 561 - SUPREME COURT] has held that the exemption from payment of CVD shall be available even in respect of imported goods for the reason that no question of availing cenvat credit under the Cenvat Credit Rules, 2002 arises where inputs are produced in a country other than India. Thus, the condition must be considered to be fulfilled. Appeal dismissed - decided against Revenue.

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• Corporate Laws

• 2019 (5) TMI 1635
  Oppression and Mismanagement - Validity of Board Resolution dated 12.8.2010 and Authority letter dated 15.2.2013 - case of appellant is that the resolution is forged and illegal and it is signed by Resigned Directors - Appellant further argued that the Resolution dated 12.8.2010 is not there in the compliance certified issued by Practicing Company Secretary for FY 2011 - HELD THAT:- As 6th to 8th respondent had resigned on 15.1.2011, therefore, the authority letter was got signed from them in terms of the MOU dated 16.11.2010. Further 1st appellant became director of 1st respondent on 16.9.2010, therefore, he cannot state that the Board Resolution dated 12.8.2010 is a forged and illegal document. Therefore, the Deed of conveyance dated 4.3.2013 in favour of 3rd respondent was signed by Mr. Jai Bhagwan Gupta on the basis of Resolution dated 12.8.2010 as he was authorised by 5th to 8th Respondent, as in the books of GIDC the names of the erstwhile directors were on record and only they could sign the conveyance deed. It is to be noted that Board of Directors take a decision through Resolutions and the decisions could be taken by the Board of Directors to authorise any body not necessarily the Member of the Board of Directors so that follow up action on the Board Resolution can be taken to logical conclusion. Once decision to dispose off the property has been taken by the Board and in terms of MOU ex-Directors has already agreed to cooperate in the matter for transfer of property. In the light of the decision taken by Board, that the application signed by the ex-Directors can not be termed as illegal. We have perused the Board Resolution dated 1.8.2012 and the letter dated 15.2.2013 and we find no illegality in this. It is not disputed that the Power of Attorney was given in favour of the Bank by 1st appellant and 2nd respondent with the power to sell, transfer, assign, handover possession and to create interest right etc. As the Bank was unable to locate a best buyer then Board Resolution dated 15.10.2012 was passed and then it was also made clear to the bank that the loan is not being repaid and in such case if the guarantor repays the loan amount then the property and legal rights of company should be transferred in favour of the guarantor. Guarantor, 3rd respondent cleared the loan and property was transferred in his favour. However, if the appellant was interested to take the property then he should have repaid the outstanding loan. No such offer was made by the appellant, earlier and subsequent offer would be of no use. Appeal dismissed.

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• 2019 (5) TMI 1634
  Oppression and mismanagement - Allotment/transfer of shares - HELD THAT:- The original Petitioners claimed that the offer made by Respondents would not put an end to series of acts of oppression and mismanagement and they expressly denied the same. They reiterated that the allotment of shares was without following due procedure and was liable to be struck down. The sub-paragraph also made a conditional statement. The Impugned Order does not show that at the time of final arguments, the original Petitioners agreed to such offer. Para 159 of the Impugned Order shows the Respondents reiterating their offer. It does not show that the Petitioners accepted the same. NCLT picked up the offer made by the Respondents and ignoring what the Petitioners stated, proceeded to pass the final Orders as if the issue relating to first and second allotments required no consideration due to mutual agreement of the parties and gave what only Respondents wanted to give. When disputes had been raised and argued the same were required to be decided and no shortcut could be adopted without both sides categorically agreeing. NCLT could not have abrogated its responsibility to decide the legality or otherwise of first and second allotment. We are thus not in agreement with NCLT with the manner in which it dealt with the first and second allotment. There was no comparison in what was filed with ROC as true copy of Resolution and what surfaced during the litigation. It is being argued by the Appellants/Original Petitioners that these documents were prepared later to justify the allotments which had already been made. We find substance in the submission that the Directors of OR1 were under a responsibility to disclose to all the shareholders that further shares are to be issued and such of them as were interested, may apply for further shares in proportion to their shareholding. In the present matter, the Respondents are rather taking a defence that on earlier occasions, the original Petitioners did not invest much and thus, they were not interested and so it was not necessary to offer shares to them. Reliance is placed on some letter of authorization for arbitration said to have been signed by original Petitioners 2 to 5 on 03.08.2010. There is nothing that such letter led to any follow up or resolution. Picking up such letter and then saying that all the original Petitioners 1 to 9 would not have interest and so need not be offered shares, cannot be upheld. If money of Home Land City Project Ltd. was being returned, the Directors of OR1 had responsibility to offer shares to all shareholders in the Company and cannot pick up R7 to say that he offered the money and so we took it. Similarly, in the second allotment also, the allotments were made to select Respondents which the original Petitioners claim were part of the group of original Respondent promoters. The original Respondents cannot be allowed to tide over the illegality by claiming to offer to select original Petitioners 2 to 9 from, what was issued under these allotments to select Respondents. We set aside rest of the operative Order as recorded in para 161 of the Impugned Order and reasons recorded by NCLT in support of the same. Any steps taken by the parties pursuant to such directions recoded in para ii to vi, pending Appeals shall stand set aside - we set aside the second transfer dated 24.05.2010 recorded in the register of members in the record of OR1 transferring the shares of OP1 in favour of OR2. The Respondents will rectify the register of members so as to reflect 14,96,000 shares standing in the name of OP1 Aar Kay Chemicals Pvt. Ltd. with effect from 19.05.2010, and the second transfer dated 24.05.2010 done shall stand ignored. The first allotment made on 29.06.2011 as well as the second allotment made on 10th October, 2012 were both illegal and are hereby struck down. Petition disposed off.

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• Insolvency & Bankruptcy

• 2019 (5) TMI 1633
  Validity of Resolution Plan - grievance of the Appellant- Indian Bank is that the claim of the Bank has not been properly decided and the Resolution Plan did not take care of the report of the valuers - contravention of the provisions of Section 30(2) of the I B Code - HELD THAT:- We find that Mr. K. Vijay Bhaskar Reddy and Mr. P. Madhu, who were appointed as the valuers to determine the value of the Corporate Debtor , valued it as ₹ 681 Crores and ₹ 513 Crores, respectively. However, Mr. K. Vijay Bhaskar Reddy admitted that he had prepared the valuation Report at the behest of Indian Bank . A third Valuer, Duff and Phelps who valued the Corporate Debtor at ₹ 352 Crores, therefore, the definite conclusion about the liquidation value of the Corporate Debtor cannot be derived except by taking average of the three valuation. The Committee of Creditors has also accepted the average of the liquidation value which comes to ₹ 597.54 Crores and on the basis of which the Resolution Plan was considered. If the Resolution Plan is considered, then it will be evident that 25% of the admitted dues of the Financial Creditors have been allowed in the Resolution Plan . On the other hand, the Operational Creditors have been discriminated. The liquidation value being ₹ 597.54 Crores, the upfront payment suggested by the Resolution Applicant being less i.e., ₹ 477 Crores, the payment to the Operational Creditors is lower than the proportionate liquidation value, therefore, the Resolution Plan , as approved by the Adjudicating Authority is against Section 30(2) (b) of the I B Code . In Binani Industries Limited vs. Bank of Baroda Anr. [2018 (3) TMI 1604 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] this Appellate Tribunal taking into consideration the viability and feasibility of the Resolution Plan , held that there cannot be any discrimination amongst the same set of group such as Financial Creditors or Operational Creditors and the Operational Creditors must get roughly the same treatment as Financial Creditors , and if they are not, such plans are to be rejected or modified so that the Operational Creditor s rights are safeguarded - In the present case, as we find that the Operational Creditors have been discriminated and not given the same treatment as Financial Creditors , the impugned order approving the Resolution Plan cannot be upheld. Whether the order approving the Resolution Plan should be set aside or the said plan should be substituted with certain modification to ensure successful Resolution? - HELD THAT:- It is open to the Committee of Creditors to negotiate and ask the Resolution Applicant to revise its plan, if it does not confront with the I B Code . Such power being vested with the Committee of Creditors , it is also open to the Adjudicating Authority and this Appellant Tribunal to ask the Resolution Applicant to appropriate modification in the plan to make it in consonance with the provisions of the I B Code and thereby to substitute the plan with modification - In the present case, as we noticed that the upfront amount of ₹ 477 Crores is much less than the average liquidation value of ₹ 597.54 Crores, we find that the Resolution Applicant wants to take the assets of the Corporate Debtor at a lessor value than the value which may be received on liquidation. M/s. Maharashtra Seamless Ltd. should increase upfront payment of ₹ 477 Crores as proposed to the Financial Creditors , Operational Creditors and other Creditors to ₹ 597.54 Crores by paying additional ₹ 120.54 Crores approximately to make it at par with the average liquidation value of ₹ 597.54 Crores. If the upfront amount is increased to ₹ 597.54 Crores, the total amount should be distributed amongst the Financial Creditors and the Operational Creditors at same ratio as suggested. As per suggestion of the Resolution Applicant , the Operational Creditors can be given same percentage of amount as allocated to the Financial Creditors - If the Resolution Applicant fails to undertake the payment of additional amount of ₹ 120.54 Crores in addition to ₹ 477 Crores thereby raising it to ₹ 597.54 Crores (total) and deposit the amount in the Escrow Account within 30 days in such case, the impugned order of approval of the Resolution Plan be treated to be set aside. Thereafter, the Adjudicating Authority will pass appropriate order in accordance with law. Appeal disposed off.

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• Service Tax

• 2019 (5) TMI 1632
  Refund of service tax - duty paid under protest - refund rejected on the ground of time bar and unjust enrichment - HELD THAT:- Revenue have not placed any ground to the effect that the Commissioner (Appeals) have erred in appreciation of the financial accounts or the balance sheet of the appellant. The Commissioner (Appeals) have given categorical finding that the amount being claimed as refund is reflected in the balance sheet under the head current assets loan and advances and the said amount has been shown as advance recoverable as per the disclosure requirement of the Companies Act. Further, in the account, ₹ 8,40,643/- have been shown as duty payment on account of galleries under protest. The Commissioner (Appeals) have correctly determined the issue that the clause of unjust enrichment is not attracted in view of the facts and circumstances - there is no merit in the ground by Revenue and same do not have any merit. Refund allowed - appeal dismissed - decided against Revenue.

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• 2019 (5) TMI 1631
  CENVAT Credit - input services - air travel agent service - membership of club association service - rent-a-cab service - HELD THAT:- The definition of input service takes within its scope and ambit those services for consideration as input service. Thus, under the CENVAT provisions, the appellant should be entitled for benefit of refund of service tax paid on such input services - Credit allowed. CENVAT credit - input services - renting of immovable property service - denial on the ground that the services availed by the appellant are related to the electricity charges incurred on the rented premises - HELD THAT:- Service provider providing the services to the appellant is registered with the Service Tax Department and paid the tax on such electricity charges under the taxable entry of renting of immovable property service. Since the department had not raised any objection on the service provider and accepted such tax as the appropriate tax due, the issue of levy of service tax on service cannot be questioned at the recipient s end inasmuch as the recipient of service is permitted to avail Cenvat credit of service tax paid on the taxable service by the service provider. Thus, denial of refund benefit on renting of immovable property service will not stand for judicial scrutiny. CENVAT Credit - duty paying documents - the debit notes issued by the service provider to the appellant - HELD THAT:- The said note had contained the requisite particulars provided in Rule 4 (A) of Rules. Since payment of service tax by the service provider and receipt of services by the appellant for providing the output service have not been specifically alleged by the Department, the denial of refund benefit cannot be sustained on the ground that debit note is not a prescribed document for availment of CENVAT Credit. Appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1623
  Recovery of Service tax alongwith interest and the penalties - suppression of taxable value - evasion of service tax - service of order - Law of Limitation - HELD THAT:- There is no dispute about fact that the SCN was received by the appellant and he also received the notices to join the investigation. Though it is the case of the appellant that the SCN and the subsequent letters were served on the correct address of the appellant i.e. 28/10 Talawali Chanda, Dewas Naka, Indore (M.P.), once the SCN which triggered the adjudication and the Order-in-Original was the outcome for the same, it was incumbent duty of the appellant to follow the outcome of the said SCN. There is no apparent effort on the part of the appellant. Service of Order - defect in the address - HELD THAT:- The present is not the case of the wrong address. It is merely a typographical error that too of merely one slash being substituted by numeral one. Rest of the address apparently and admittedly is same. It cannot be presumed from any stretch of imagination that the postal services of the particular area will not be in a position to make out the said error. Letter of the appellant vide which they requested for the Order-in-Original - HELD THAT:- It is observed that no such reason of wrong address is mentioned in the said letter. Rather the letter is specifically mentioning the details of the Order-in-Original. There is nothing on record as to when and how the appellant acquired those details which again is sufficient to hold that the Order-in-Original was very much in the knowledge and notice of the appellant. It is due to the earlier noticed dilatory tactics and the negligent attitude of the appellant that the same was not pursued in time. Law of Limitation - HELD THAT:- Law of limitation intends to fix a time limit to a lis which has to be mandatorily followed. Though there has been a catena of judgments that the merits of the case have always to be preferred instead of dismissing the lis merely on technical grounds but those decisions are ample clear to hold that whenever there is an apparent malafide/negligence on the part of the appellant that the mandate of the procedural law of limitation must be given the full effect. Appeal dismissed - decided against appellant.

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• 2019 (5) TMI 1622
  Classification of services - Site Formation and Clearance, Excavation Earth Moving and Demolition or not? - agreement for providing work of de-silting of iron ore slimes including loading and transportation of the same at Kadampal Tailing Dam to the fine ore dump at M.V. Siding, Kirandul of Bailadila Iron Ore Project - HELD THAT:- A perusal of the agreement indicates that the work that has to be performed by the appellant is de-silting of slimes at Kadampal Tailing Dam and transportation of the slimes to fine ore dump at M.V. Siding, Kirandul . It is, therefore, apparent that the Dam is in existence and only the work of de-silting of slimes has to be carried out by the appellant. Thus, any activity prior to the construction of Dam, would fall under the category of Site Formation , as has been clarified in the Budget Letter dated 27 July, 2005. Any activity of de-silting of slimes after the construction of the Dam would, therefore, not fall in the category of Site Formation . The Commissioner (Appeals) failed to appreciate this aspect of the matter and committed an error in holding that the activity carried out by the appellant would fall under the category of Site Formation . Appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1621
  Construction of Commercial Complex - construction of driveway for the petrol pump, for which admittedly separate contract was issued - taxability - HELD THAT:- The said issue is settled in favour of the appellant- assessee by the coordinate Bench of this Tribunal in SHILPA CONSTRUCTIONS PVT. LTD. VERSUS COMMR. OF SERVICE TAX, AHMEDABAD [ 2010 (6) TMI 175 - CESTAT, AHMEDABAD] where it was held that the construction of road does not require payment of service tax - demand set aside. Valuation - Construction of Commercial Complex - material supplied by principle to contract, free of charge, which was admittedly not adjusted in the bill of the appellant contractor - HELD THAT:- This issue is also settled in favour of the appellant-assessee by ruling of Hon ble Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [ 2018 (2) TMI 1325 - SUPREME COURT] where it was held that The value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005 - demand set aside. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (5) TMI 1630
  Consultation with noticee before issue of show cause notice - Circular No.1053/2/2017-CX dated 10.3.2017 of CBEC - It was pointed out that the petitioner immediately replied to the said pre-show cause notice asking for a reasonable time as the person who was aware of the entire facts was not reachable. It was pointed out that thereafter on the very same day, that is, on 12.4.2019 the impugned show cause notice has been issued, which is not in the spirit of the circular dated 10.3.2017. HELD THAT:- Issue Notice returnable on 27th June, 2019. By way of ad-interim relief, further proceedings pursuant to the impugned show cause notice dated 12.4.2019 are hereby stayed.

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• 2019 (5) TMI 1629
  Refund of Education Cess as well as Secondary Higher Education Cess collected from the petitioner on the basis of the excise duty - N/N. 20/2007 dated 25.04.2007 - HELD THAT:- Hon ble Apex Court in M/s SRD Nutrients Private Limited v. Commissioner of Central Excise Guwahati [2017 (11) TMI 655 - SUPREME COURT] , the appeals have been allowed and the petitioner therein have been held entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty on the ground that the excise duty itself was exempted from levy. This petition is also disposed of with a direction to the respondents to refund the Education Cess as well as Secondary Higher Education Cess, which was collected from the petitioner along with excise duty, within a period of three months from today.

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• 2019 (5) TMI 1628
  CENVAT Credit - fake documents - credit availed without accompanied goods - Rule 4(1) of Cenvat Credit Rules, 2004 - cross-examination of witnesses denied - HELD THAT:- Department has made out a case of irregular availment of cenvat credit mainly based on the statement of Shri Amit Gupta and transporters, but no cross examination of the witnesses was provided to the appellants. One of the witnesses has retracted his earlier statement. Surprisingly, in the instant case, no inquiry was made from the customers of the appellant company. All the transactions related to inputs purchased was duly recorded in the book of accounts and inventory records. The appellant have purchased the goods from the registered dealer. When it is so, then it is expected by the department to make a inquiry about the genuineness of the supplier. Ultimately, the issue in each case is whether, within the meaning of Rule 9 (3) of the Rules of 2004, the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken CENVAT credit were goods on which appropriate duty of excise was paid. Once it is demonstrated that reasonable steps had been taken, which is a question of fact in each case, it would be contrary to the Rules to cast an impossible or impractical burden on the assessee. Appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1620
  CENVAT Credit - input services - services used for setting up of the factory or the business premises - Appellant has acquired the land and paid compensation and also constructed rehabilitation and resettlement colony for displaced person - Time Limitation - period involved is April, 2012 to March, 2016 - SCN issued on 12.4.2017 - HELD THAT:- The input services is required for setting up of the Aluminium Smelter plant by the Appellant in the process the Appellant has acquired the land and paid compensation and also constructed rehabilitation and resettlement colony for displaced person. This was required for setting up of the plant which would be required for manufacturing of the final products by the Appellant in their manufacturing plant. Accordingly, the Cenvat credit on the input services have been used in or in relation to setting up of the plant, which is covered under the main clause of definition of input service. Invocation of extended period of limitation - suppression of facts or not - HELD THAT:- The issue has been detected by the audit conducted in the Appellant s factory by the Department. It is admitted fact that the Appellant has taken Central Excise registration in the year 2009 and also started filing ER-1 returns with the Department. In such a circumstances, the extended period for raising demand is not available to the Appellant. The similar issue has been decided by this Tribunal in their own case HINDALCO INDUSTRIES LTD VERSUS C.C.E ST, JABALPUR [2018 (10) TMI 392 - CESTAT NEW DELHI] where it was held that There is no allegation of fraud, suppression, or falsification of records. The issue is simply of interpretation. The invocation of the extended period of limitation is bad and the Show Cause Notice is not maintainable on this ground. The demand is barred by limitation, without going into the merits of the case - appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1619
  Requirement with the pre-deposit - Section 35 F (i) of the Central Excise Act, 1944 - pre-condition of payment of mandatory pre-deposit under Section 35 F (i) of the Central Excise Act, 1944 not fulfilled - HELD THAT:- The amount which need to be deposited as per the requirement of Section 35 F (i) comes to ₹ 19,569/- which admittedly have already been deposited by the appellant - A proper compliance of Section 35 F (i) regarding pre-deposit have already been complied with by the appellant. Matter remanded back to the Commissioner (Appeals) to consider the appeal on merits in this case - appeal allowed by way of remand.

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• 2019 (5) TMI 1618
  CENVAT Credit - input services - outward freight incurred on finished goods dispatched by them to their buyers / consignment agents on FOR basis - Place of removal - Rule 2(l)(ii) of Cenvat Credit Rules, 2004 - HELD THAT:- It is admitted fact that the appellant has sold the goods on FOR basis and such price includes the cost of freight upto the customers premises. Further, in the facts and circumstances, till the time the customer has accepted the goods at his doorstep, the appellant was liable for risk in transit - the place of removal was the doorstep of the customer and accordingly as provided in Rule 2(l) of the Cenvat Credit Rules, 2004, the appellant is entitled to cenvat credit on outward freight, till the place of removal. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1617
  Valuation - remission in the nature of subsidy - additional consideration or not? - inclusion of 75% VAT refunded by the State Government to the noticee under the Madhya Pradesh Industrial Investment Promotion Assistance Scheme, 2004/2010 in the assessable value - HELD THAT:- The transaction value includes all the payments made by the buyer to the assessee. However, in the instant case, the subsidy has been underpaid to assessee by the State Government as a financial assistance Industrial Promotion Scheme of MP State Government. Only the mode of payment is by way of crediting the sales tax head under VAT challan in favour of the appellant. Thus, it could not be said that the amount is in the nature of additional consideration. In the present case, the remission is in the nature of subsidy which the appellant was receiving from the State Government in the form of VAT 37B Challans and not from the buyers of the appellant. The said remission was not only as good as cash but can also not be considered as an additional consideration. Reliance placed in the case of SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR [ 2018 (1) TMI 915 - CESTAT NEW DELHI] wherein it was held that where assesses are required to remit the VAT recovered by them at the time of sale of goods manufactured and a part of such VAT is given back to them in the form of subsidy in VAT 37b Challans, such Challans are as good as cash but for the limited purpose of being used for the payment of VAT in the subsequent period. The Tribunal has clarified that in terms of the scheme of Government of Rajasthan, payment of VAT using such Challans are the legal payments of tax. Appeal dismissed - decided against Revenue.

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• 2019 (5) TMI 1616
  CENVAT Credit - input service - cost of transportation, for clearance of their goods from the factory to the premises of their buyer - place of removal - period in question May/June 2010 to December, 2012 - Extended period of limitation - penalty - HELD THAT:- The appellant is entitled to Cenvat Credit - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. [2018 (2) TMI 117 - SUPREME COURT] . Extended period of Limitation - HELD THAT:- The present matter arising from the subsequent show cause notice on the same issue, the extended period of limitation is not available to Revenue, as there is no case of suppression etc made out - Admittedly show cause notice states that same arises pursuant to audit. We find that similar show cause notice was issued previously also. CENVAT Credit - HELD THAT:-The appellant is liable to reverse cenvat credit only for the normal period of limitation which is July, 2012 to December, 2012 as the show cause notice is served on 18 July, 2013, and the appellant has filed return for the month of June 2012 on 9th July, 2012 - penalty imposed is also set aside. The appellant is directed to file a calculation of the amount they are required to reverse by way of Cenvat Credit before the Original Adjudicating Authority and Commissioner shall verify the same and if any discrepancy is pointed out, and the appellant shall accordingly act - appeal allowed by way of remand.

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• 2019 (5) TMI 1615
  Valuation - inclusion of VAT subsidy amounts received by the appellants from Rajasthan Government in assessable value - HELD THAT:- The appellant was availing the benefit of Rajasthan Investment Promotion Scheme, 2010 (RIPS) notified by State Government of Rajasthan with a view to promote investments thereby entitling the appellant to a subsidy up to certain percentage of the VAT paid by the appellant - It is an admitted fact that the said subsidy is credited to the sales tax account of the appellant which he receives by way of VAT 37B Challans. It is also an apparently admitted fact that the appellant was paying total VAT charged at applicable rates on sale of goods to the State Exchequer and was filing the VAT returns. The VAT 37B Challans, the appellant was utilising to discharge the output VAT liability for the subsequent period. Department has given much emphasis upon COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II VERSUS M/S. SUPER SYNOTEX (INDIA) LTD. AND OTHERS [ 2014 (3) TMI 42 - SUPREME COURT] but we are of the opinion that the facts of present case are absolutely different from the said case in the terms that the Hon ble Apex Court in the said case was dealing with sales tax incentive scheme. But in the present case, the issue is with respect to the grant of sales tax subsidy. In Super Synotex case, the assessee was retaining 75% of the sales tax collected from the customers whereas in the present case, the appellant had paid the entire amount of sales tax collected from the customers, with the Sales Tax Department without retaining even a meagre portion thereof. Hence, the benefit granted by RIPS to the appellant herein is not in the nature of exemption or incentive from payment of sales tax but is a remission where nothing was initially retained by the appellant. Thus, the facts of present case are absolutely different from the case decided by the Hon ble Apex Court. The discharge of liability by way of VAT 37B challans is a legally sustainable method of discharging tax liability of subsequent period - no question of intent to evade tax at all arises once it stands so discharged - the order confirming demand and imposing penalty is apparently erroneous. Appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1614
  CENVAT Credit - duty paying documents - supplementary invoices raised against the original invoices issued by the subsidiary companies of Coal India Ltd. i.e. M/s. South Eastern Coal Limited - suppression of facts - HELD THAT:- Tribunal in connected matter of ULTRA TECH CEMENT LTD UNIT ADITYA CEMENT WORKS VERSUS CE ST-UDAIPUR [ 2018 (8) TMI 952 - CESTAT NEW DELHI] wherein the pendency of similar matter before the Hon ble Supreme court in the case of South Eastern Coal Fields Ltd. and ors. and also of other cases, referred to in the above case, has been considered and it is held that it is an admitted position that demand raised by the department against M/s. SECL is under challenge before the Hon ble Supreme Court and therefore the cenvat credit can be availed by the manufacturer on the strength of supplementary invoice as such amount of duty cannot be said to be paid on account of any non levy or short levy by reason of fraud, collusion or any wilful mis- statement or suppression of facts or contravention of any provision of the Central Excise Act/ Rules with intent to evade payment of duty. The appellant is entitled to take CENVAT credit on the supplementary invoices in question - Appeal allowed - decided in favor of appellant.

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• 2019 (5) TMI 1613
  CENVAT Credit - input services - excavation services by the respondent in respect of tailing dam constructed by the respondent and used for disposal of industrial waste and polluted water in compliance with the Environment Laws - demand from Feb. 2012 to March, 2015 - HELD THAT:- This issue is decided in their own case of CCE, UDAIPUR VERSUS M/S HINDUSTAN ZINC LIMITED [ 2018 (7) TMI 682 - CESTAT NEW DELHI] , wherein, such credit has been held to be admissible. Credit allowed - Appeal dismissed - decided against Revenue.

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• CST, VAT & Sales Tax

• 2019 (5) TMI 1627
  Recovery of excess tax paid which was not liable to be paid - cheques issued under coercion - higher rate of tax demanded on capital goods - Vertical Band saw machines, Horizontal Sawing (Trolly) Machines, Log Saw Mill and all kinds of wood working Machines - HELD THAT:- Even though, the petitioner has issued four cheques valued at ₹ 9,28,317/- to the Enforcement Wing Officers towards alleged tax amount payable by the petitioner, the said tax according the petitioner is not payable by them. According to the petitioner, the aforesaid four cheques were obtained by the Enforcement Wing Officers from the petitioner, only under the threat of coercion and undue influence. After issuing the cheques, the petitioner has also issued stop payment instructions to their Bankers for the cheques handed over to the Enforcement Wing Officers. In the instant case, even without affording an opportunity to the petitioner, the respondent has issued the impugned notice under Section 45 of the Tamil Nadu Value Added Tax Act 2006 on the presumption that the petitioner has admitted his liability whereas as seen from the available records excepting for the issuance of cheques, there is no conclusive evidence to prove that the petitioner had admitted his liability. The impugned notice dated 27.01.2016 is hereby quashed and the matter is remanded back to the respondent for fresh consideration and the respondent is granted liberty to initiate fresh legal action after affording sufficient opportunity to the petitioner to raise all objections available to them under law - petition allowed by way of remand.

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• Indian Laws

• 2019 (5) TMI 1626
  Requirement to deposit 25% of the amount of compensation - section 148 of Negotiable Instruments Act - Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act - whether the first appellate court is justified in directing the appellants original accused who have been convicted for the offence under Section 138 of the N.I. Act to deposit 25% of the amount of compensation/fine imposed by the learned trial Court, pending appeals challenging the order of conviction and sentence and while suspending the sentence under Section 389 of the Cr.P.C., considering Section 148 of the N.I. Act as amended? HELD THAT:- Having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction under Section 138 of the N.I. Act, is conferred with the power to direct the convicted accused appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. By the amendment in Section 148 of the N.I. Act, it cannot be said that any vested right of appeal of the accused appellant has been taken away and/or affected. Therefore, submission on behalf of the appellants that amendment in Section 148 of the N.I. Act shall not be made applicable retrospectively and more particularly with respect to cases/complaints filed prior to 1.9.2018 shall not be applicable has no substance and cannot be accepted, as by amendment in Section 148 of the N.I. Act, no substantive right of appeal has been taken away and/or affected. Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the N.I. Act would be frustrated. Therefore, as such, no error has been committed by the learned first appellate court directing the appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court considering Section 148 of the N.I. Act, as amended. Interpretation of statute - the language used in Section 148 of the N.I. Act as amended - case of appellant is that the appellate Court may order the appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court and the word used is not shall and therefore the discretion is vested with the first appellate court to direct the appellant accused to deposit such sum and the appellate court has construed it as mandatory - HELD THAT:- Amended Section 148 of the N.I. Act confers power upon the Appellate Court to pass an order pending appeal to direct the Appellant Accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the AppellantAccused under Section 389 of the Cr.P.C. to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 of the N.I. Act, a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the appellate court for sufficient cause shown by the appellant. Therefore, if amended Section 148 of the N.I. Act is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 of the N.I. Act, but also Section 138 of the N.I. Act. Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of the dishonoured of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonoured cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque who has to spend considerable time and resources in the court proceedings to realise the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions, the Parliament has thought it fit to amend Section 148 of the N.I. Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Sec 138 of the N.I. Act. Section 357(2) of the Cr.P.C. - case of appellant is that once the appeal against the order of conviction is preferred, fine is not recoverable pending appeal and therefore such an order of deposit of 25% of the fine ought not to have been passed - HELD THAT:- The opening word of amended Section 148 of the N.I. Act is that notwithstanding anything contained in the Code of Criminal Procedure.. - Therefore irrespective of the provisions of Section 357(2) of the Cr.P.C., pending appeal before the first appellate court, challenging the order of conviction and sentence under Section 138 of the N.I. Act, the appellate court is conferred with the power to direct the appellant to deposit such sum pending appeal which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. There are no reason to interfere with the impugned common judgment and order passed by the High Court dismissing the revision application/s, confirming the order passed by the first appellate court directing the appellants to deposit 25% of the amount of fine/compensation pending appeals - appeal dismissed.

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• 2019 (5) TMI 1612
  Dishonor of Cheque - insufficiency of funds - section 138 of NI Act - whether the defence raised by the appellant is bonafide and probable; has the appellant been able to raise a triable issue or whether the defence of the appellant is moonshine, sham, bogus and malafide? HELD THAT:- A reading of the leave to defend application, more particularly, paragraph 6, which has been extracted by the learned Single Judge in detail, would show that the appellant had consistently taken a stand that he would be taking action against the respondent for the illegal acts committed but no such action has been initiated. The signatures on the agreement are not disputed. Handing over of cheques and part payments made during this period are clearly indicative of the acknowledgement of debt and liability by the appellant. Another factor which cannot be ignored is that to clear the debt, the appellant had also sought permission of the respondent to involve overseas investors, which was obviously an act by the appellant to clear his debt. In response to the stand taken by the respondent that no criminal complaint had been filed, counsel for the appellant submits that he had filed a petition under Section 482 Cr.P.C. for quashing of the proceedings under Section 138 of the Negotiable Instruments Act. He submits that he had agitated this question before the learned Single Judge of this Court and the Court granted liberty to raise the grounds before the concerned court. The learned Single Judge has rightly dismissed the application of the appellant seeking leave to defend - appeal dismissed.

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