TMI Tax Updates - e-Newsletter
June 26, 2020

Case Laws in this Newsletter:

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

Articles

1. Eligibility of ITC on Medical Insurance

   By: Shivashish Karnani

2. COVID19- IMPROVE HABITS TO FIGHT AGAINST VIRUSES AND DIESES

   By: DEVKUMAR KOTHARI

3. LIABILITY OF THE LAST OWNER

   By: DR.MARIAPPAN GOVINDARAJAN

4. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

5. Ignorance of Law is no excuse

   By: AMITKUMAR GUPTA

News

1. Finance Commission holds meeting with The Ministry of Panchayati Raj

2. CCI approves acquisition of 9.99% stake in Jio Platforms by Jaadhu Holdings LLC

3. Extension of various time limits under Direct Tax & Benami laws

Notifications

Companies Law

1. G.S.R. 399(E) - dated 23-6-2020 - Co. Law

Amendment in Schedule VII in Companies Act, 2013

Customs

2. 24/2020-Customs (N.T./CAA/DRI) - dated 21-5-2020 - Cus (NT)

Amendment in Notification No. 19/2020-Customs (N.T./CAA/DRI) dated 03.03.2020

GST

3. 54/2020 - dated 24-6-2020 - CGST

Seeks to extend due date for furnishing FORM GSTR-3B for supply made in the month of August, 2020 for taxpayers with annual turnover up to ₹ 5 crore.

4. 53/2020 - dated 24-6-2020 - CGST

Seeks to provide relief by waiver of late fee for delay in furnishing outward statement in FORM GSTR-1 for tax periods for months from March, 2020 to June, 2020 for monthly filers and for quarters from January, 2020 to June, 2020 for quarterly filers

5. 52/2020 - dated 24-6-2020 - CGST

Seeks to provide one time amnesty by lowering/waiving of late fees for non furnishing of FORM GSTR-3B from July, 2017 to January, 2020 and also seeks to provide relief by conditional waiver of late fee for delay in furnishing returns in FORM GSTR-3B for tax periods of February, 2020 to July, 2020.

6. 51/2020 - dated 24-6-2020 - CGST

Seeks to provide relief by lowering of interest rate for a prescribed time for tax periods from February, 2020 to July, 2020.

7. 50/2020 - dated 24-6-2020 - CGST

Central Goods and Services Tax (Seventh Amendment) Rules, 2020

8. 49/2020 - dated 24-6-2020 - CGST

Seeks to bring into force Sections 118, 125, 129 & 130 of Finance Act, 2020 in order to bring amendment to Sections 2, 109, 168 & 172 of CGST Act w.e.f. 30.06.2017.

9. 05/2020 - dated 24-6-2020 - IGST

Seeks to provide relief by lowering of interest rate for a prescribed time for tax periods from February, 2020 to July, 2020.

10. 04/2020 - dated 24-6-2020 - IGST

Seeks to bring into force Section 134 of Finance Act, 2020 in order to bring amendment to Section 25 of IGST Act w.e.f. 30.06.2020.

11. 02/2020 - dated 24-6-2020 - UTGST

Seeks to provide relief by lowering of interest rate for a prescribed time for tax periods from February, 2020 to July, 2020.

GST - States

12. 38/1/2017-Fin(R&C)(150) - dated 19-6-2020 - Goa SGST

Amendment in Notification No. 38/1/2017-Fin(R&C)(148), dated 5th June, 2020

13. 38/1/2017-Fin(R&C)(149) - dated 19-6-2020 - Goa SGST

Appoints the 8th day of June, 2020, as the date from which the provisions of the Goa Goods and Services Tax (Fifth Amendment) Rules, 2020 , shall come into force.

14. 8/8/2020-LA-104 - dated 16-6-2020 - Goa SGST

Goa Goods and Services Tax (Amendment) Ordinance, 2020.

15. 47/2020-State Tax - dated 22-6-2020 - Maharashtra SGST

Seeks to amend Notification No. 40/2020 – State Tax dated 18.05.2020 in respect of extension of validity of e-way bill generated on or before 24.03.2020 (whose validity has expired on or after 20th day of March 2020) till the 30th day of June.

16. 46/2020-State Tax - dated 22-6-2020 - Maharashtra SGST

Seeks to give effect to the provisions of Rule 67A for furnishing a nil return in FORM GSTR-3B by SMS

17. 44/2020-State Tax - dated 22-6-2020 - Maharashtra SGST

Seeks to give effect to the provisions of Rule 67A for furnishing a nil return in FORM GSTR-3B by SMS

18. 04/2020 - dated 20-6-2020 - Telangana SGST

Seeks to prescribe return in FORM GSTR-3B of Telangana Goods and Services Tax Rules, 2017 alongwith due dates of furnishing the said form for April, 2020 to September, 2020.

19. 03/2020 - dated 20-6-2020 - Telangana SGST

Seeks to amend Notification No. 25/2019 – State Tax, dt. 30-10-2019.

20. 02/2020 - dated 18-6-2020 - Telangana SGST

Extending the time limit for furnishing the details of outward supplies in FORM GSTR-1

21. 543-F.T. - dated 18-6-2020 - West Bengal SGST

Seeks to give effect to the provisions of Rule 67A for furnishing a nil return in Form-GSTR-3B by SMS.

Income Tax

22. 35/2020 - dated 24-6-2020 - IT

Extension of time limits under the Income-tax Act, 1961 and related Acts

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/CFD/CMD1/CIR/P/2020/109 - dated 25-6-2020

Further extension of time for submission of Annual Secretarial Compliance Report by listed entities due to the continuing impact of the CoVID-19 pandemic

GST

2. Instruction No. 3/2/2020 - dated 24-6-2020

Payment of GST by real estate promoter/developer supplying construction of residential apartment etc, on the shortfall value of inward supplies from registered supplier at the end of the financial year

3. 141/11/2020 - dated 24-6-2020

Clarification in respect of various measures announced by the Government for providing relief to the taxpayers in view of spread of Novel Corona Virus (COVID-19)

Highlights / Catch Notes

GST

• Land Development Deemed Works Contract, Not Immovable Property Transfer; 18% GST Applies Per Section 2(119) GST Act.

  Case-Laws - AAAR : Nature of supply / transaction - Development of land - Lease of property or supply of works contract for construction of flat - The appellant pleaded that the activity would amount to transfer of immovable property and hence not liable to GST levy at all. - Decision of AAR upheld wherein it was held that, the activity would be in the nature of “works contract” as defined under Section 2 (119) of the Act and fall under SAC 9954 and attract GST @ 18%.
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Income Tax

• Prepayment surplus of deferred sales tax loan is a capital receipt, not a trading liability u/s 41(1).

  Case-Laws - HC : Surplus arising on prepayment of deferred sales tax loan at net present value (NPV) - Whether a capital receipt which cannot be termed as remission on cessation of a trading liability under section 41(1)? - Held Yes
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• Reassessment u/s 147 Invalidated Due to Mismatched Reasons; Notice u/s 148 Quashed.

  Case-Laws - AT : Reopening of assessment u/s 147 - Reasons which were supplied to the petitioner were not the actual reasons and the objections which were taken by the petitioner were not to the actual reasons - The entire process would be a sham and would amount to making a mockery of the law. Therefore, for this reason also, the notice under section 148 as well as all proceedings subsequent thereto as also the order are liable to be quashed.
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• Reopening of assessment invalid due to jurisdictional error; initial notice issued by non-jurisdictional officer u/s 147.

  Case-Laws - AT : Reopening of assessment u/s 147 - Jurisdiction - objections were raised by the assessee u/s 124(3) of the Act, within one month of receipt of notice u/s 148 of the Act and the Assessing Officer who issued notice u/s 148 of the Act, accepted that he had no jurisdiction on this case and thus transferred the case to the ITO, Ward-4(3), who had jurisdiction. A notice issued by non-jurisdictional Assessing Officer is illegal.
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• Assets Received Free: Taxed u/s 28(iv), Not Section 69; Eligible for Deduction u/s 10A.

  Case-Laws - AT : Unexplained investment - Tax value of certain assets received by it free of cost under Section 28(iv) - Therefore, the addition u/s. 69 of the Act cannot be sustained. - The entire value of assets has to be regarded as an addition made u/s. 28(1)(iv) of the Act, as was done by the AO - However the same would be eligible for deduction u/s 10A
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• Taxpayer's Evidence Sufficient u/s 68; Unexplained Cash Credit Addition Unjustified Without Officer's Proof.

  Case-Laws - AT : Unexplained loan creditors u/s 68 - If the assessee filed ample evidences to discharge the burden carted upon him and the assessing officer fails to bring any material on record to show that explanation filed by the assessee are unsatisfactory, then addition u/s 68 of the Act for unexplained cash creditors is not justified.
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• Investment Allowance Dispute: AO Misapplies Section 72A; Appellant Rightly Claims u/s 32A(6) of Income Tax Act.

  Case-Laws - AT : Unabsorbed investment allowance - allowance u/s 32A (6) - AO had to see whether the assessee had fulfilled the conditions of section 32A(6) but he laid emphasis on the provisions of section 72A of the Act, which is misplaced. - The appellant has elaborately shown that the conditions specified in section 32A(6) of the Act are fulfilled by it. Therefore, the claim of the appellant is fully justified.
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Indian Laws

• Petitioner cannot be prosecuted u/s 138 of the Negotiable Instruments Act without company as co-accused.

  Case-Laws - HC : Dishonor of Cheque - Framing of Charges - Vicarious Liability against the company or not - A demand notice was served only on the petitioner/accused, there was no demand notice against company, therefore, without arraying the company as an accused in complaint case, the petitioner can not be prosecuted for the offence of Section 138 N.I. Act.
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Central Excise

• Court Rules Confiscated Goods Redemption Order Unsustainable; Hologram Affixing on CFLs Not Manufacturing.

  Case-Laws - AT : Redemption of confiscated goods - Process amounting to manufacture or not - activity of affixing holograms on the CFLs (revalidation process) carried out by the appellant in its warehouse - Since the demand itself has been dropped, the order ordering confiscation of the goods with an option to redeem the same, is not sustainable in law
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Case Laws:

• GST

• 2020 (6) TMI 602
  Nature of supply / transaction - Development of land - Lease of property or supply of works contract for construction of flat - Appellant pleaded that the activity would amount to transfer of immovable property and hence not liable to GST levy at all - Held that:- Though the appellant in the draft agreement has projected the said transaction as a lease transaction of residential unit in an apartment/building and has also drafted agreement in such a way to project it as a lease transaction, the said transaction cannot be a lease transaction but it is an agreement for construction of residential flats. We say so because the clauses in the agreement though purported to be a lease agreement as clauses which are in complete disharmony with a normal lease transaction. When a flat/apartment is given on lease it is always a complete unit which is immediately handed over to the Lessee for use. The appellant has argued that the transaction purported to be undertaken by him will come within the purview of renting of residential dwelling for used as residence. However, in the present case, the agreement has taken place during the construction of the project and the lease payments are made slab wise before the completion of the project. This almost never happens in the lease of a flat or a unit. It is seen that almost 95% of the amount comprising the lease consideration is paid before the possession of the apartment. It is difficult to believe that a Lessee will commit such amount before moving or enjoying the flat. All these leads us to believe that this is nothing but a sale transaction projected as a lease transaction. Though the object of the RERA Act is to regulate the sale of building, apartment or building, this project is RERA registered. This fact and the interpretation by the Bombay High Court in the case of Lavasa also shows that the said transaction is not a lease. Decision of AAR upheld wherein it was held that, the activity would be in the nature of works contract as defined under Section 2(119) of the Act and fall under SAC 9954 and attract GST @ 18%.

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• 2020 (6) TMI 601
  Transitional Credit - Period of limitation - Held that:- the judgment of this Court in Brand Equity Treaties Ltd. Ors. (supra) has been stayed by the Supre me Court in [ 2020 (6) TMI 517 - SC ORDER .] - Application for early hearing dismissed.

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• 2020 (6) TMI 600
  Transitional credit - Ultra vires provisions - Rules 117 and 120A of CGST Rules - petitioner states that the petitioner could not carry forward this credit for reasons beyond its control due to glitches in the system of the respondents - Held that:- Notices issued - To wait for the decision of Apex court in [ 2020 (6) TMI 517 - SC ORDER. ]

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• 2020 (6) TMI 599
  Anti-profiteering proceedings - seeking a direction to prohibit the respondents form taking any action u/s 171 of CGST Act - Transfer of petition from Bombay High Court to Delhi High Court - Held that:- the Supreme Court has granted liberty to the petitioners to apply for interim relief - As informed, now this petition has been transferred to this court - Supreme Court has neither directed this Court nor given it liberty to entertain any fresh writ petition filed by the petitioner. Consequently, this Court is of the view that it cannot entertain a fresh writ petition pending transit of W.P. No. 3536/2019 to this Court, especially when the Supreme Court did not pass any interim order.

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• Income Tax

• 2020 (6) TMI 587
  Surplus arising on prepayment of deferred sales tax loan at net present value (NPV) - Whether a capital receipt which cannot be termed as remission on cessation of a trading liability under section 41(1)? - Tribunal held that decision of the Bombay High Court in Sulzer India Limited [ 2014 (12) TMI 267 - BOMBAY HIGH COURT] squarely covered the issue and that the first appellate authority made no mistake in holding that the surplus arising on prepayment of deferred sales tax loan at NPV was a capital receipt which could not be termed as remission or cessation of a trading liability so as to invite section 41(1) - HELD THAT:- Value (NPV) should be treated as a capital or a revenue/trading receipt and applicability of section 41(1) of the Act thereto came up for consideration before the Supreme Court in Balkrishna Industries Limited [ 2017 (11) TMI 1626 - SUPREME COURT] in which the decision of this Court in Sulzer India Limited [ 2014 (12) TMI 267 - BOMBAY HIGH COURT] was also considered. Supreme Court noted that the main judgment out of which the appeals arose and were considered in the said case was rendered in Sulzer India Limited (supra). Supreme Court referred to the decision of this Court in Sulzer India Limited (supra), more particularly to paragraph 40 thereof which has been extracted above, and held that the aforesaid approach of the High Court was without any blemish. Accordingly, the appeals were dismissed. No error or infirmity in the view taken by the Tribunal. This issue is squarely covered by the decisions in Sulzer India Limited (supra) and Balkrishna Industries Ltd. (supra) and Tribunal rightly followed the same. Consequently, we see no reason to interfere with the same. Question No.1 so framed is accordingly answered against the Revenue and in favour of the assessee. Interest under section 234B and section 234C - Whether interest not chargeable with respect to tax liability determined under minimum alternate tax (MAT)? - HELD THAT:- Though in Rolta India Limited [ 2011 (1) TMI 5 - SUPREME COURT] Supreme Court held that interest under sections 234B and 234C is payable on failure to pay advance tax in respect of tax liability under section 115JB of the Act, the fact remains that at the time of payment of advance tax by the assessee the decision of the Karnataka High Court in Kwality Biscuits Limited [ 2006 (4) TMI 121 - SC ORDER] was holding the field as per which assessee was not required to pay advance tax since the entire exercise of computing book profit could only be made at the end of the financial year and therefore, following the law applicable at that point of time, assessee did not pay the advance tax on the book profit which was subsequently computed. Therefore, there was no deliberate or intentional failure to pay advance tax on the book profit by the assessee. In the circumstances, Tribunal was justified in affirming the view taken by the first appellate authority that the charge of interest under sections 234B and 234C on the book profit was not justified. - Decided against revenue.

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• 2020 (6) TMI 586
  Reopening of assessment u/s 147 - Validity of reasons to believe - HELD THAT:- On perusal of above two statements (one) the reasons supplied it to the assessee and (two) the reasons some before the High Court, it is apparent that both are altogether different. It is not denied that in context and in substance they are same but there should be same ad verbatim. It cannot be the case of the revenue that it gives few extracts of the reasons to the assessee to defend it against the reopening of the assessment and when cornered before the higher authorities, the revenue comes out with the detailed reasons recorded by the assessing officer. In fact in all circumstances the assessing officer is supposed to provide the complete reasons recorded for reopening of the assessment to facilitate the assessee to defend itself against the reopening of the assessment. To keep few arrows in its quiver and only disclosing few arrows out of that is not expected from a revenue officer. It also against the fair play rule of reassessment proceedings. In Haryana Acrylic Manufacturing Co V Commissioner of Income tax [ 2008 (11) TMI 2 - DELHI HIGH COURT] the identical issue arose. Reasons which were supplied to the petitioner were not the actual reasons and the objections which were taken by the petitioner were not to the actual reasons and the speaking order dated March 2, 2005, which was passed was also neither on the basis of the actual reasons nor the objections to the actual reasons. The entire process would be a sham and would amount to making a mockery of the law. Therefore, for this reason also, the notice under section 148 as well as all proceedings subsequent thereto as also the order are liable to be quashed. We are not inclined to uphold the reopening of the assessment and hence they are quashed. The orders of the learned Commissioner of income tax upholding of the reopening of the assessment are reversed. - Decided in favour of assessee.

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• 2020 (6) TMI 585
  Reopening of assessment u/s 147 - as contended by the assessee that the ITO Ward-2(2), Kolkata, had no jurisdiction over the case of the assessee, in view of the transfer of jurisdiction on the basis on Pin code - HELD THAT:- In the case on hand, the admitted fact is that the Assessing Officer who issued notice u/s 148 of the Act, had no jurisdiction over the assessee. Thus, case-law relied upon by the ld. D/R, are not applicable to the facts of this case. In the case on hand, objections were raised by the assessee u/s 124(3) of the Act, within one month of receipt of notice u/s 148 of the Act and the Assessing Officer who issued notice u/s 148 of the Act, accepted that he had no jurisdiction on this case and thus transferred the case to the ITO, Ward-4(3), who had jurisdiction. A notice issued by non-jurisdictional Assessing Officer is illegal.- Decided in favour of assessee.

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• 2020 (6) TMI 584
  TP Adjustment - international transaction of provision of software development services [SWD services] to the assessee s Associated Enterprises [AE] - Comparable selection - HELD THAT:- Assessee provided software research development services and marketing technical support services to its AEs, thus companies functionally dissimilar with that of assessee need to be deselected, thus companies functional dissimilar with that of assessee need to be deselected from final list. Non-grant of working capital adjustment (WCA) and risk adjustment - HELD THAT:- It is now a settled proposition of law that necessary adjustments are to be made to the margins of comparables to give effect to the differences in the working capital positions of the tested party and of the comparables. The TPO ought to have given the assessee the benefit of the same. We hold and direct the TPO to allow working capital adjustment after verification of the assessee s computation and after affording opportunity of being heard to the assessee. Risk adjustment - HELD THAT:- Reliance in this regard was placed on the decision of the Hon ble Delhi Bench of the Tribunal in the case of Honeywell Turbo Technologies (India) (P.) Ltd. v. DCIT [ 2017 (3) TMI 1533 - ITAT PUNE] wherein the Tribunal granted an adjustment to be granted for differences in risk assumed by the tested party and the comparable entities. We are of the view that the question of allowing risk adjustment should be considered by the TPO afresh in the light of the submissions and after examining the computation of risk adjustment and affording opportunity of being heard to the assessee. Mistakes in computation of PLI - HELD THAT:- We are of the view that in the light of the decision of the Tribunal in the case of Rolls- Royce India (P.) Ltd. [ 2015 (12) TMI 516 - ITAT DELHI] the PLI should directed to be reworked by considering the provision for doubtful debts as operating expenditure. We hold and direct accordingly. Unexplained investment - Tax value of certain assets received by it free of cost from its AEs - Additions u/s 28(iv) - HELD THAT:- The provisions of section 69 are not attracted because there is nothing brought on record to show that the assessee was the owner of these assets. From the fact that invoices were in the name of assessee, it cannot be said that assessee was the owner of the assets, especially in the light of the affirmation by Brocade Communication LLC that they are given all the assets free of cost to the assessee. Therefore, the addition u/s. 69 of the Act cannot be sustained. The entire value of assets has to be regarded as an addition made u/s. 28(1)(iv) of the Act, as was done by the AO in the order of assessment.. Deduction u/s. 10A - Addition made u/s. 28(1)(iv) will go to enhance its profits and that profit is eligible for claim of deduction u/s. 10A and therefore, the addition, even if sustained, will not have any impact on the tax liability - The plea of the assessee in this regard is supported by the decision of the Hon ble High Court of Karnataka in the case of Mpact Technology Services Pvt. Ltd. [ 2018 (8) TMI 202 - KARNATAKA HIGH COURT] . The CBDT in Circular No.37/2016 dated 02.11.2016 has also taken the view that any disallowance of expenses which go to enhance the profits of eligible business, would be eligible for deduction on enhanced profits. In view of the above, we direct the AO to allow deduction u/s. 10A of the Act on the enhanced profits.

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• 2020 (6) TMI 583
  Unexplained expenditure in the purchase of gold bullion u/s 69C - HELD THAT:- AO grossly erred in making addition for unexplained expenditure u/s 69C based on incorrect item movement analysis sheet which at the later stage during the remand proceedings were correctly filed by the assessee and duly accepted by the assessing officer. we find no infirmity in the finding of Ld. CIT(A) deleting the addition made by the Ld. AO u/s 69C of the Act on account of unexplained expenditure. Thus, ground No.1 of the revenue s appeal stands dismissed. Unexplained loan creditors u/s 68 - HELD THAT:- Assessee to the best of his ability has furnished requisite documentary evidences to prove identity, genuineness and creditworthiness of the 13 cash creditors from whom loan stood taken at the close of the year. It is also noteworthy that out of 13 cash creditors 10 have appeared before the AO and explained the transactions and for the remaining three cash creditors even though necessary details were filed but they could not appear but the facts remains that transactions were carried out through banking channel confirmation account with PAN and address were filed and the loans have been repaid in subsequent year/years - AO has not carried out any further investigation nor pointed out any instance from the bank statement or other documents of these 3 cash creditors to raise suspicion about the genuineness of the loan transactions. If the assessee filed ample evidences to discharge the burden carted upon him and the assessing officer fails to bring any material on record to show that explanation filed by the assessee are unsatisfactory, then addition u/s 68 of the Act for unexplained cash creditors is not justified. Personal appearance of 10 cash creditors out of 13 cash creditors and in the remaining 3 cases also the loan taken has been repaid in subsequent years and all the necessary documentary evidences stands filed, we, are of the considered view that the CIT(A) has rightly deleted the addition for unexplained cash credit u/s 68 - Decided against revenue.

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• 2020 (6) TMI 582
  Unabsorbed investment allowance - allowance u/s 32A (6) - HELD THAT:- In view of the provisions of section 32A(6) of the Act, the matter travelled back to the AO as per the directions of the Tribunal. The AO had to see whether the assessee had fulfilled the conditions of section 32A(6) but he laid emphasis on the provisions of section 72A of the Act, which is misplaced. AO (the incumbent who has submitted the remand-report) completely went beyond the directions of Hon ble ITAT and repeated the provisions of section 72A of the Act which the AO had relied upon in the original assessment order and which were adjudicated upon by the Hon ble ITAT. The specific issue which remained to be decided was whether various conditions as specified in section 32A(6) and the section 32A(4), 32A(3) as referred in section 32A(6) of the Act are fulfilled in the appellant s case. The appellant has elaborately shown that the conditions specified in section 32A(6) of the Act are fulfilled by it. Therefore, the claim of the appellant is fully justified. Revenue has failed to controvert the findings of the CIT(A). Once the assessee has fulfilled the conditions of section 32A(6) of the Act, the claim merits to be allowed in the hands of the assessee. Accordingly, we find no merit in the present appeal filed by the Revenue.

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• Benami Property

• 2020 (6) TMI 588
  Benami transaction - sale deeds standing in the name of deceased - consistent case of the defendants is that Lakhiya Devi purchased the said property from her Stridhan ornaments, gifts and valuable assistance from her two sons and married daughters and also by selling vegetables in the market and the entire lands were purchased by her from her personal income - HELD THAT:- The issue akin to this Court has already been decided by the Apex Court in the case of Nand Kishore Mehra [ 1995 (7) TMI 64 - SUPREME COURT] . It has been held in the said case that Sub-Section 2 of Section 3 permits a person to enter into benami transaction of purchase of property in the name of his wife or unmarried daughter by declaring that the prohibiton contained against a person in entering into a benami transaction in sub-section (1) of Section 3, does not apply to him. The question of punishing the person concerned in the transaction under sub-section (3) thereof or the question of acquiring the property concerned in the transaction under Section 5, can never arise. Otherwise the exemption granted under Section 3 (2) would become redundant . The suit has been rightly dismissed by both the courts below as the plaintiff has not impleaded his other sons or daughters as party in the suit, as their interest also involved in the suit as they have also inherited the property of her mother Lakhiya Devi. They have not been impleaded party by the plaintiff even after objection raised by defendants in their written statement. Thus, both the courts below have rightly held that suit is barred under the provisions of Benami Transaction (Prohibition) Act, 1988 as well as the suit is also barred for non-joinder of necessary parties. The sale deeds standing in the name of Lakhiya Devi (deceased), wife of plaintiff are not self-acquired property of the plaintiff and the defendant no. 1 Kamla Kuer has valid right to execute power of Attorney with regard to land of her mother Lakhiya Devi to the extent of her share.

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• Customs

• 2020 (6) TMI 598
  Habeas Corpus Petition - Validity of Detention Order - Smuggling - Gold - It is the contention of the respondents that earlier, the petitioner was arrested for having smuggled 1200 grams of gold - HELD THAT:- The orders of remand passed against the petitioner were not furnished to her depriving her fundamental right to submit an effective representation to the detaining authority for revocation of the detention order. Therefore, the petitioner is entitled to succeed on this ground and consequently, the impugned order of detention is liable to be quashed. The Habeas Corpus Petition is allowed.

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• Insolvency & Bankruptcy

• 2020 (6) TMI 597
  Maintainability of application - by an order dated September 4, 2019 the petition of the appellant was rejected by the National Company Law Tribunal on the ground of admission of the petition of Dalmia Group Holdings on August 8, 2019 - HELD THAT:- Since the disputes between respondent No. 1 and Dalmia Group Holdings has been settled and the order dated September 19, 2019 has been set aside, it will be open to the appellant to proceed against respondent No. 1 before the National Company Law Tribunal by seeking recall of the order dated September 4, 2018 and revival of its application C. P. (I. B.) No. 4000/ MP/2018. Appeal disposed off.

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• 2020 (6) TMI 596
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- In pursuant to the corporate debtor after the receipt of the demand notice is required to raise the dispute within ten days from the receipt of demand notice either the existence of dispute or show the documents that the payment of the unpaid operational debt has already been made. And if the corporate- debtor fails to raise the existence of disputes and documents showing the payment has not been paid operational debt then the operational-creditor has right to file an application under section 9 of the Insolvency and Bankruptcy, Code, 2016. The corporate debtor has failed to raise any existence of disputes and show that the operational debt raised by the operational-creditor has been paid. So under such circumstances there is no option, but to pass the order under section 9(5)(i) if the application is complete and from the perusal of the application we find that the application is complete and there is no payment of unpaid operational debt and no notice of dispute has been raised by the operational creditor or there is no record of dispute in the information utility. On fulfilment of requirements of section 9(5)(i)(a) to (d) of the Code, the present application is admitted - Application admitted - moratorium declared.

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• 2020 (6) TMI 595
  Maintainability of application - pre-admission stage - HELD THAT:- Though the statutory prescribed period of 14 days for passing of an order by Adjudicating Authority with regard to admission or otherwise of an application under section 7 of the Code has not been held to be mandatory but having regard to the timelines prescribed by I B Code, there can be no dispute with the proposition that such order is required to be passed with utmost expedition. The appeal is disposed off with direction that the learned Adjudicating Authority shall accord priority to this matter and make all endeavours to pass the order at the admission stage within 15 days.

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• 2020 (6) TMI 594
  Maintainability of application - appellant director/ shareholder submits that before constitution of committee of creditors , the parties had reached a terms of settlement on October 10, 2019 - HELD THAT:- In view of the fact that the appellant has admitted to the pay the resolution cost and fee of the interim resolution professional, no reply affidavit required to be filed by the interim resolution professional. In view of various developments and as terms of settlement has been reached between the appellant and the financial creditor prior to the constitution of committee of creditors , this Appellate Tribunal in exercise of power conferred by rule 11 of the National Company Law Appellate Tribunal Rules, 2016, set aside the impugned order dated September 19, 2019 - appeal allowed.

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• Central Excise

• 2020 (6) TMI 593
  Redemption of confiscated goods - Process amounting to manufacture or not - activity of affixing holograms on the CFLs (revalidation process) carried out by the appellant in its warehouse - Section 2(f)(iii) of the Central Excise Act, 1944 - HELD THAT:- All the proceedings initiated against the appellant pertaining to all the warehouses including Kolkata warehouse, have been dropped on merits. All the proceedings against the appellants have been dropped by the Commissioner by passing a common order holding that the said activity cannot be constituted as amounting to manufacture in terms of Section 2 (f)(iii) of the Central Excise Act, 1944. Since the main appeal has been allowed on merits in favour of the appellant, the present proceedings are only in respect of confiscation of the goods valued at Rs. 87,17,157/- with an option to redeem the same on payment of fine of Rs. 81,17,157/-. The impugned order ordering confiscation of the goods with an option to redeem the same, is not sustainable in law - Appeal allowed - decided in favor of appellant.

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• 2020 (6) TMI 592
  Time Limitation - removal of capital goods during the period September 2011 in contravention of Notification no. 22/2003- CE dated 31.03.2003, as amended, read with para 6.13(c) of the FTP 2009-14 and Para 25 of the Customs Law Manual, 2013 - HELD THAT:- The impugned order cannot sustain on limitation in as much as the Show Cause Notice was issued in September 2016 for the period in dispute of September 2011. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2020 (6) TMI 591
  Levy of VAT - Inter-state Branch Transfer - petitioner contends that there is no element of sale involved in this transaction and the petitioner was not liable to pay any tax on it and did not report it in its CST-VI returns - HELD THAT:- The petitioner had raised substantial contentions both on law and on facts and the 1st respondent ought to have provided a personal hearing after the COVID-19 pandemic situation resolves to enable the petitioner to submit the documentary evidence regarding its defence that the turnover of Rs. 40,68,01,526/- relates to inter-State purchase of goods under inter-State branch transfer and there is no element of sale involved in it - there has been denial of opportunity to the petitioner by the 1st respondent in view of the COVID-19 pandemic and the consequent lockdown and therefore, the impugned order of Assessment dt.31.03.2020 is vitiated. The matter is remitted back to the 1st respondent to determine afresh after affording hearing to the petitioner within two (2) months - Petition allowed by way of remand.

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• 2020 (6) TMI 590
  Violation of Principles of Natural Justice - petitioner was denied a fair opportunity of being heard even on merits - baseless presumption that petitioner had effected sale of its assets to MHPL at Book Value and that there is no sale as a going concern - HELD THAT:- It is not in dispute that the 1st respondent issued show-cause notice dt.12.02.2020 proposing to levy additional VAT of Rs. 82,04,233/- for the periods 2014-15 to 2017-18 (up to June, 2017) and gave a mere seven (07) days time to the petitioner to file a reply - In such a short time, it is not possible for the petitioner to file all the documentary evidence and also file a detailed reply covering a period of more than five (05) years. It is not in dispute that petitioner filed a letter dt.20.02.2020 seeking additional time of two (02) months to file objections to gather the various tax invoices from 2014-15 and also to seek legal advice in the matter. There is no material filed by the respondents to show that the endorsement allegedly made on 28.02.2020 by him (which is referred to in the impugned order) was, in fact, served on the petitioner at all - the time granted to the petitioner was too short and there has been a clear violation of principles of natural justice and denial of fair opportunity to the petitioner of being heard. The matter is remitted to the 1st respondent to pass a fresh order in accordance with law within three (03) months - Petition allowed by way of remand.

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• Indian Laws

• 2020 (6) TMI 589
  Dishonor of Cheque - Framing of Charges - Vicarious Liability against the company or not - HELD THAT:- Section 141 of N.I. Act deals with the offences committed by the companies and say that if an offence is committed by a company under Section 138 of the Act, every person, at the time, the offence was committed, was in-charge and responsible to the company in the conduct of the business of the company, is liable along with the company to be proceeded against and punished accordingly. Further, it is provided that no person shall liable to be punished if he proved that an offence was not committed under his knowledge or he has exercised all due diligence to prevent the commission of such offence. In the case of ANEETA HADA VERSUS GODFATHER TRAVELS TOURS (P.) LTD. [ 2012 (5) TMI 83 - SUPREME COURT] it has been held that when the company would be prosecuted then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments made in the complaint. To summarize, there cannot be any vicarious liability unless there is prosecution against the company. In the present case, although, the respondent stated that the petitioner borrowed money from him on account of personal need of his business but looking to the fact that the respondent has accepted his business relation with the petitioner and the disputed cheque was given by the petitioner on behalf of the Company. A demand notice was served only on the petitioner/accused, there was no demand notice against company, therefore, without arraying the company as an accused in complaint case, the petitioner can not be prosecuted for the offence of Section 138 N.I. Act. Petition allowed.

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