Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 17, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
GST
-
Retrospective amendment allows IGST refund for exporters who paid tax on imported inputs.
-
Decoding data hosting services for overseas cloud providers - a clarification.
-
Demo vehicles: ITC eligibility for dealers to promote sales.
-
Advertising services to foreign clients: Export benefits eligibility clarified.
-
Bank account unlocked due to lack of fresh grounds for attachment by tax department.
-
Tax authorities advised voluntary payments without legal basis, quashed by court.
-
Authorities can't prosecute GST offenses under IPC, bypassing GST Act's penal provisions sans sanction.
-
Denial of personal hearing before issuing adverse order on excess ITC claim & GST short payment violates natural justice.
-
Tax dispute over invalid Input Tax Credit claim on motor cars.
-
Delayed GST appeal allowed after precedent; GSTR non-filing condoned on conditions.
-
Real estate firm's GST claim rejected, Court orders reconsideration on rising material costs.
-
Tax demand discrepancies led to unlawful property attachment despite pre-deposit made, prompting court relief.
Income Tax
-
Tax dispute awaits identical case verdict before initiating proceedings against assessee.
-
Petitioner to provide materials for CGDS account closure, authorities to decide in 4 weeks & intimate proceedings in 3 weeks.
-
Tax evasion charge quashed for non-payment of admitted tax later deposited with interest.
-
New Banks and section 115JB: Nationalized banks exempted from Minimum Alternate Tax (MAT) due to legal technicality.
-
Overseas contracts escape India's tax net, receipts excluded from business income calculation.
-
Penalty upheld for delayed tax audit report filing despite assessee's claim of books destroyed by termites.
-
Income Tax penalties: upheld for non-maintenance of books, (1)(c) quashed due to improper notice.
-
Family business' share valuation method upheld, faulty tax assessment set aside.
-
Deemed dividend taxable in hands of individual shareholder, not loan-receiving entity; notional interest saving on interest-free loan not taxable.
-
AO's reassessment order upheld; CIT can't reexamine same material u/s 263.
Customs
-
Govt extends export benefits to courier shipments; ease of customs clearance through ICEGATE.
-
Exemption for Yellow Peas extended, 20% duty on Onion exports, rates revised for edible oils. Changes effective 14.09.2024.
-
Customs revises import tariff values for edible oils, metal scrap, areca nuts, precious metals from Sep 14.
-
Customs broker not liable for client's incorrect IEC/GSTIN as authority verification is enough.
DGFT
-
Govt extends relaxation on wastage limits & input-output norms for precious metal exports till Oct 31.
-
Govt extends import policy relaxation for yellow peas till end of 2024.
-
India removes minimum export price for onions, boosting global trade.
PMLA
-
Alleged irregularities in Delhi's excise policy: Arrest legal, bail granted.
-
Confidential data breach by bank exposes money laundering; criminal proceedings initiated.
SEBI
-
Enhanced Disaster Recovery Guidelines for Stock Exchanges and Market Institutions.
-
New SEBI norm allows using client's cash collateral-backed stocks as maintenance margin for brokers' Margin Trading Facility.
-
SEBI renews Metropolitan Stock Exchange's recognition for 1 year from Sept 16, 2024 to Sept 15, 2025.
VAT
-
Tractor trailers sans motor exempt from entry tax as not "motor vehicle" under state law.
-
Transporter's tax liability under old provisions questioned when goods moved by rail without checking.
-
Trader penalized for invalid import form; produced valid form later. High Court set aside penalty after considering new documents.
Service Tax
-
SEZ unit wins refund of wrongly paid tax; CESTAT rejects Revenue's 'unjust enrichment' plea.
-
Tolerating the act: Forest land usage approval not a "declared service"; NPV payment to CAMPA Fund not taxable.
-
Full CENVAT credit allowed despite discounts or retention, overturns adjudicating authority's 10% denial.
-
Service tax refund on input services for exports rejected for exceeding one-year limitation.
Central Excise
-
Cosmetics manufacturer wins refund battle over differential duty payment.
Articles
Notifications
GST - States-
05/2020-State Tax - dated
12-9-2024
-
Delhi SGST
Seeks to appoint Revisional Authority under DGST Act, 2017
SEZ-
S.O. 3919(E). - dated
12-9-2024
-
SEZ
Central Government rescinds the Notification No. S.O. 1324 (E) dated 31.03.2016 - De-notification of area - SEZ for Bio-technology sector at Genome Valley, Village Lalgdai Malakped, Mandal Shameerpet, District Ranga Reddy, in the State of Telangana
-
S.O. 3907(E) - dated
12-9-2024
-
SEZ
Central Government de-notifies an area of 44.7305 hectares, thereby making resultant area as 77.2095 hectares at Seekinankuppam, (Paramankeni and Vellur Villages), Cheyyur Taluk, Kancheepuram District in the State of Tamil Nadu
-
S.O. 3904(E) - dated
12-9-2024
-
SEZ
Central Government de-notifies an area of 368.80 hectares, thereby making resultant area as 66.06 hectares at Raviryala Village, Maheswaram Mandal, Ranga Reddy District in the State of Telangana
Circulars / Instructions / Orders
News
Case Laws:
-
GST
-
2024 (9) TMI 830
Challenge to provisional attachment order - expiry of the period of one year - requirement of fresh reasons for a second provisional attachment of a bank account - HELD THAT:- In M/S RADHA KRISHAN INDUSTRIES VERSUS STATE OF HIMACHAL PRADESH ORS. [ 2021 (4) TMI 837 - SUPREME COURT] the Supreme Court has held in relation to Section 83 of the Act that a second attachment of the bank account may be made under Section 83 of the Act, but the Department has to provide fresh reasons for the same. Upon perusal of Sub-section 2 of Section 83 of the Act, it appears that such provisional attachment shall cease to have effect after the expiry of a period of one year. The department cannot be allowed simpliciter to issue a second notice, and thereafter, third and fourth and continue with the provisional attachment for four to five years without giving any fresh reason for the said provisional attachment. If the same was allowed, Sub-section 2 of Section 83 of the Act would become otiose and have no relevance whatsoever. The legislature never intended this provision to be read in a casual manner, as the provision for provisional attachment is a drastic measure that the Department takes even before assessing the liability of the petitioner. This provision is in the nature of preventive detention in criminal cases where one detains a person without any offence having been committed - it becomes extremely necessary for the Department to justify the reasons for such a provisional attachment and without such justification being provided by the Department, by way of specific reasons, such provisional attachment would be illegal, arbitrary and non est in law. The provisional attachment order dated May 16, 2024 is quashed and set aside. The bank concerned is directed to remove the attachment and immediately allow the petitioner to have access to the said bank account - Petition allowed.
-
2024 (9) TMI 829
Chellenge to letter dated March 13, 2024 issued by the Superintendent (A.E.) Central Goods and Service Tax, Gautam Budh Nagar, advising voluntary tax payments without proper legal basis - HELD THAT:- From the letter, it appears that the Department is advising the petitioner to make voluntary payments without issuing any show cause notice/demand notice/recovery notice against the petitioner. The entire procedure is unknown in law. The respondents has not been able to indicate any provision under which such a letter could be issued by the authorities. The impugned letter dated March 13, 2024 is quashed and set-aside with a direction upon the authorities to be cautious in future and not issue such letters that tantamount to pressure tactics by the Department - Petiton allowed.
-
2024 (9) TMI 828
Jurisdiction of GST Authorities - Whether the GST Authorities can launch prosecution invoking penal provisions under Indian Penal Code, without invoking the penal provisions of GST Act, when the alleged offences are covered under the provisions of GST Act and that too without obtaining Sanction under Section 132(6) of GST Act? - If not, then whether the prosecution so launched is hit by legal bar against the institution or continuance of the proceedings so as to warrant quashment? HELD THAT:- Upon perusal of record, it is apparent that the petitioner herein had been summoned under Section 70 of GST Act vide Summon dated 11.08.2021 and he had given his statement with GST Authorities and thereafter no action under GST Act was taken against the petitioner by GST Authorities. GST authorities conducted search and seizure operations while exercising powers under Section 67(2) of GST Act, on the premises of M/s. Shreenath Soya Exim Corporate and prepared inspection report dated 04.07.2022, in which it has been alleged that Shri Vaibhav Laxmi Industries was bogus firm and has been fraudulently registered, which issued invoice/bill without supply of goods/services leading to wrongful availment or utilisation of input tax credit/refund of tax. Upon perusal of inspection report dated 04.07.2022 along with FIR, it becomes quite apparent that there is no allegation against the petitioner of forming the bogus firm and even if the allegations therein are taken at their face value, the same constitutes offence which are squarely covered by the penal provision of Section 132 of GST Act, 2017. The GST Act, 2017 is a special legislation which holistically deals with procedure, penalties and offences relating GST and at the cost of repetition this court cannot emphasise more that the GST Authorities cannot be permitted to bypass procedure for launching prosecution under GST Act, 2017 and invoke provisions of Indian Penal Code only without pressing into service penal provisions from GST Act and that too without obtaining sanction from commissioner under Section 132(6) of GST Act especially when the alleged actions squarely fall within the precincts of offence as enumerated under GST Act, 2017. This court has no hesitation in holding that GST Authorities cannot bypass procedure prescribed under GST Act for launching prosecution by simply invoking penal provisions under IPC without invoking penal provisions under GST Act especially when the allegations so revealed as a result of search and seizure conducted by GST Authorities constituted offence covered under the penal provisions of GST Act as that would amount to bypassing procedural safeguards as provided under Section 132(6) of GST Act which requires sanction of the commissioner prior to initiation of prosecution, which is to the prejudice of the petitioner herein. Letting GST Authorities to adopt such course of action would amount to abuse of process of law which cannot be permitted by this court. This petition deserves to be allowed and is hereby allowed.
-
2024 (9) TMI 827
Recovery of inadmissible input tax credit with interest and penalty - Respondent No. 3 has relied upon some Verification Report which was not referred to in the show cause notice and which was not even furnished to petitioner - violation of principles of natural justice - HELD THAT:- Once it is admitted that the Verification Report formed the basis of passing the impugned order, the petitioner ought to have been given an opportunity to respond and controvert the same. The failure on the part of Respondent No. 3 in sharing such vital document tantamounts to gross violation of principles of natural justice. In fact, if only the Verification Report was made available to petitioner, perhaps petitioner would have been able to correlate invoice to invoice or make further submissions by providing further documents and explanation. The Verification Reports which were available before the show cause notice was issued ought to have been released alongwith the show cause notice so that petitioner would have been able to effectively deal with the allegations in the show cause notice and if the report has been prepared after issuance of the show cause notice, then certainly before passing the impugned order Respondent No. 3 was duty bound to make available the same alongwith either supplementary show cause notice or a query memo. Respondent having failed to do so, in our view, the impugned order dated 30th April 2024 cannot be sustained. The same is hereby quashed and set aside. Petition disposed off.
-
2024 (9) TMI 826
Utilization of Input Tax Credit - discrepancy in the GSTR-9 filing arose solely due to an inadvertent clerical error - HELD THAT:- The petitioner was unaware of the notices issued by the respondent, as they were only uploaded on the GST common portal and were not physically served, thereby depriving the petitioner of an effective opportunity to respond to the show cause notice or to correct the clerical mistake in the GSTR-9 filing. Considering these circumstances, this Court is of the view that allowing the impugned order to remain in force without providing the petitioner an opportunity to rectify the error and present their case would not be fair. It is therefore necessary, in the interest of justice, to set aside the impugned order and the summary order, subject to verification of the petitioner s full payment of tax already made by the petitioner. The setting aside of the orders will take effect upon such verification. The petitioner is directed to submit their reply/objections, along with supporting documents, within two weeks from the date of receipt of a copy of this order. The writ petition is disposed of.
-
2024 (9) TMI 825
Challenge to adjudication order in form GST DRC-07 - demand for excess availment Input Tax Credit - short payment of output GST - petitioners had not provided documents in support of its submissions - violation of principles of natural justice - HELD THAT:- A plain reading of sub-section 4 of Section 75 of the Act makes it crystal clear that opportunity of hearing must be granted in two situations viz (a) where a request in specific is received in writing from the person chargeable; (b) where any adverse decision is contemplated against such person - This is trite that when language of statute is plain and unambiguous, it should be given effect to irrespective of its consequences. In the instant case whether or not the petitioners have specifically asked for personal hearing, fact remains that the adverse decision was contemplated against the petitioners. In that event, it was obligatory and mandatory on the part of respondents to provide the petitioners opportunity of personal hearing. Admittedly, no opportunity of personal hearing has been provided in both the matters. Resultantly, the decision making process adopted by the respondents is vitiated and runs contrary to the principles of natural justice and statutory requirement of sub-section 4 of Section 75 of GST Act. The impugned proceedings after the stage of reply of show cause notices, in the present case is set-aside.
-
2024 (9) TMI 824
Challenge to assesment order along with the summary of the order in Form DRC-07 - wrongful claiming of Input Tax Credit (ITC) on the purchase of four motor cars from M/s Ramani Cars Private Limited, which was ineligible under Section 17(5) of the CGST/TNGST Act, 2017 - petitioner was unaware of these notices due to the introduction of a new View Additional Notices and Orders feature on the GST portal, which was not adequately communicated - violation of principles of natural justice - HELD THAT:- The facts remain that the petitioner had purchased four motor cars for the usage of passenger service. In the course of filing their returns, they mistakenly claimed Input Tax Credit (ITC) on these purchases, which was not permissible under the relevant provision of law, as the vehicles were intended for personal use rather than for business purposes. On realising the same, they voluntarily reversed the wrongly availed ITC in their March 2023 return, before the closing of the financial year. However, the first respondent passed the assessment order, after issuing pre-show cause notice and show cause notice. According to the petitioner, they did not aware of the said notices served through view additional notices and orders portal and hence, they were unable to file their reply to the same and hence, an opportunity be provided to them to substantiate their claim. Considering the facts and circumstances of the case, this court in order to provide an opportunity to the petitioner, is inclined to set aside the order passed by the first respondent. Accordingly, the order dated 20.02.2024 is set aside and the matter is remanded to the first respondent for fresh consideration - Petition disposed off by way of remand.
-
2024 (9) TMI 823
Condonation of delay in filing appeal - appeal filed by the petitioner is beyond the condonation period prescribed under Section 107 (4) of the GST Act - cancellation of GST registration - petitioner has not filed GSTR returns for the period of more than six months - HELD THAT:- Under identical circumstances in a batch of matters in TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [ 2022 (2) TMI 933 - MADRAS HIGH COURT] allowed the said Writ Petitions, subject to fulfilment of conditions imposed. Recording the same, this Court is inclined to allow this Writ Petition on the conditions, which was agreed to by the learned counsel for the petitioner and the same was not objected by the learned Senior Standing Counsel for the respondents - petition allowed.
-
2024 (9) TMI 822
Challenge to assessment order - petitioner failed to file a reply or avail of the opportunity to be heard - HELD THAT:- Considering the conduct of the petitioner in depositing a part of amount in pursuance of the inspection, to balance the interest of the petitioner and the Revenue Department, the impugned order is quashed and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law, within a period of 3 months from today. The impugned order which stands quashed in this order shall be treated as addendum to the Notice in Form GST DRC-01 dated 23.09.2023. The petitioner shall file a consolidated reply within a period of 30 days from today. The petitioner is also directed to deposit 10% of the balance amount within a period of 30 days from today. Petition dismissed.
-
2024 (9) TMI 821
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - liability of GST - reverse charge mechanism - mismatch between the petitioner's GSTR 1 and GSTR 3B - HELD THAT:- On perusal of the impugned order, it is evident that the tax liability pertains to the mismatch between the petitioner's GSTR 1 and GSTR 3B. The petitioner contended that such mismatch occurred because the petitioner committed an inadvertent error while filling up the GSTR 1 statement by not indicating the amount in the appropriate row and column pertaining to supplies on reverse charge basis. Since such order was issued on the ground that the tax payer did not reply to the show cause notice, the interest of justice warrants that an opportunity be provided to the petitioner by putting the petitioner on terms. The impugned order dated 20.11.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Within the said period the petitioner is also permitted to submit a reply to the show cause notice - petition disposed off.
-
2024 (9) TMI 820
Challenge to assessment order - SCN issued in breach of sub-section (2) of Section 73 of the applicable GST enactments - both SCN and the impugned order were issued on the same date - reasonable opportunity of haearing was not provided - violation of principles of natural justice - HELD THAT:- On examining the documents placed on record, the contention of learned counsel for the petitioner that a reasonable opportunity was not provided is liable to be accepted. Since both the show cause notice and impugned order were issued on the same date, the impugned order is unsustainable. The impugned order dated 31.12.2023 is set aside by leaving it open to the respondent to initiate proceedings in accordance with law. Petition disposed off.
-
2024 (9) TMI 819
Principles of natural justice - order challenged on the ground of denial of reasonable opportunity to the petitioner - petitioner was unaware of proceedings culminating in the impugned order because GST compliances were entrusted to an accountant and such accountant failed to verify the view additional notices and orders tab of the GST portal - alleged failure of the petitioner to reverse Input Tax Credit - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal pertained to the alleged failure of the petitioner to reverse Input Tax Credit to the extent of credit notes issued by suppliers. Learned counsel for the petitioner contended that Input Tax Credit was availed of net of the value of such credit notes. In these circumstances, it is just and necessary that the petitioner be provided an opportunity, albeit by putting the petitioner on terms. The impugned order dated 31.07.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is also permitted to submit a reply to the show cause notice. Petition disposed off.
-
2024 (9) TMI 818
Challenge to assessment order - cancellation of GST registration - no-service of SCN/ order - principles of natural justice - HELD THAT:- The petitioner has stated categorically in the affidavit that the GST registration was cancelled on 25.09.2019. In those circumstances, it is reasonable that the petitioner would not monitor the GST portal continually. Nonetheless, in view of the submission of learned Government Advocate that the notice and order were also communicated by e-mail, it is just and appropriate that the petitioner be provided an opportunity by putting the petitioner on terms. The impugned order dated 23.08.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a maximum period of two weeks from the date of receipt of a copy of this order - petition disposed off.
-
2024 (9) TMI 817
Application seeking cancellation of the GST registration dismissed - dismissal on the ground that some discrepancies were found in the returns and the reply submitted by the petitioner was not found satisfactory - petitioner did not receive any notice for a personal hearing - principles of natural justice - HELD THAT:- The notice issued to the petitioner on 14.02.2024 requiring the petitioner to furnish additional information/clarification does not mention that petitioner had to appear for personal hearing. The notice also does not indicate the name or designation of the officer where petitioner had to appear. Thus, no opportunity of personal hearing was given to the petitioner. This is also not disputed on behalf of the Respondents. Thus, the impugned order dated 15.03.2024, rejecting the application for cancellation of registration holding that petitioner did not appear for personal hearing is not sustainable and is accordingly set aside. The application of the Petitioner seeking cancellation of GST registration is restored on the file of the Proper Officer. Petition disposed off.
-
2024 (9) TMI 816
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - communications were only uploaded on the 'View Additional Notices and Order' tab of the GST portal and not communicated to the petitioner through any other mode - tax proposal pertains to discrepancy between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal pertains to a discrepancy between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. It is also clear that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. In the affidavit in support of the writ petition, it is asserted that the petitioner has obtained the requisite certificates to fulfil obligations under Circular No.183. In these circumstances, albeit by putting the petitioner on terms, it is just and appropriate that an opportunity be provided to the petitioner to contest the tax demand on merits. The impugned order dated 13.09.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is also permitted to submit a reply to the show cause notice - Petition disposed off.
-
2024 (9) TMI 815
Seeking to set aside order of cancellation of registration on the ground that the order contains only one line reason - violation of principles of natural justice - HELD THAT:- The petitioner does not press this petition with a liberty to file appropriate reply to the notice which is proposed to be issued by the respondent authority, raising all the contentions which are raised in this petition. The present petition is disposed of as not pressed, at this stage.
-
2024 (9) TMI 814
Breach of principles of natural justice - non-service of order/SCN - petitioner was unaware of proceedings culminating in the impugned order until the petitioner was informed that his bank account was frozen - tax proposea owing to reversal of Input Tax Credit on account of belated filing of returns - HELD THAT:- On perusal of the impugned order, it is evident that such order confirmed the tax proposal only on the ground that the petitioner filed the returns belatedly. Such finding was recorded because the petitioner did not reply to the show cause notice or attend the personal hearing. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide the petitioner with an opportunity to contest the disputed tax demand on merits. The impugned order dated 10.10.2023 is set aside and the matter is remanded to the respondent concerned for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
2024 (9) TMI 813
Wrongful availment of Input Tax Credit - Seeking for de-freezing of bank accounts of the petitioner - HELD THAT:- Having regard to the statement made in Para-4 that a letter for de-freezing of bank account of the petitioner has been issued on 24th April 2024, the present contempt case is closed. However, keeping in mind the interest of the revenue it is left open to the opposite parties to take action in accordance with law including freezing of the tentative amount of tax liability (but not the bank account) of the petitioner.
-
2024 (9) TMI 812
Challenge to assessment order on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits - order was uploaded on the View Additional Notices and Orders tab on the GST portal and not communicated to the petitioner through any other mode - discrepancy between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A returns - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not file objections or participate in the personal hearing. The petitioner has asserted that he would be in a position to explain the discrepancy between the GSTR 3B and 2A returns if provided an opportunity. In these circumstances, it is just and appropriate that an opportunity be provided to the petitioner by putting the petitioner on terms. The order impugned herein is set aside and the matter is remanded to the first respondent for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a period of fifteen days from the date of receipt of a copy of this order - Petition disposed off.
-
2024 (9) TMI 811
Breach of principles of natural justice - Petitioner was unaware of proceedings until recently since the notices and order were uploaded in the GST portal - notices and orders not communicated to the petitioner through any other mode - not communicated to the petitioner through any other mode - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal pertaining to a mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A. It is also clear that the tax liability was confirmed because the petitioner failed to reply to the show cause notice. The petitioner asserts that there is no discrepancy and that the IGST component was not taken into consideration. In these circumstances, albeit by putting the petitioner on terms, the matter requires reconsideration. The impugned order dated 01.03.2024 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. With in the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice - Petition disposed off.
-
2024 (9) TMI 810
Violation of principles of natural justice - denial of reasonable opportunity - non application of mind - tax demand owing to difference between Input Tax Credit (ITC) available as per the GSTR 2A and the ITC availed of under the petitioner's GSTR 3B returns - HELD THAT:- On perusal of the impugned order, it appears that the ITC available in the auto-populated GSTR 2A exceeded the ITC availed of in the petitioner's GSTR 3B returns. Prima facie, in those circumstances, GST liability would arise only if there was sales suppression. Since the petitioner did not respond to the show cause notice, it appears that tax liability was imposed. As a registered person, the petitioner cannot be absolved of responsibility in this regard. On balance, albeit by putting the petitioner on terms, the impugned order calls for reconsideration. The impugned order dated 01.12.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a period of two weeks from the date of receipt of a copy of this order - Petition disposed off.
-
2024 (9) TMI 809
Violation of rpinciples of natural justice - order challenged on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits - petitioner asserts that he was unaware of these proceedings - iscrepancy between the petitioner's GSTR 3B returns and the auto populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it is clear that the tax proposal pertains to a difference between the petitioner's GSTR 3B returns and the auto populated GSTR 2A. The tax proposal was confirmed because the petitioner did not reply to the show cause notice. The petitioner asserts that all necessary documents are available to establish that the availment of Input Tax Credit was in order. In these circumstances, it is just and appropriate that the petitioner be provided an opportunity after putting the petitioner on terms. The impugned order dated 17.10.2023 is set aside subject to the petitioner remitting 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order - petition disposed off.
-
2024 (9) TMI 808
Condonation of delay in filing the revocation application - compliance with the requirements of paying the taxes, interest, late fee, penalty etc. due, the 3B Return Form - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. Petition disposed off.
-
2024 (9) TMI 807
Rejection of petitioner's appeal on the ground of delay - HELD THAT:- On examining the impugned order, it is clear that the only reason for rejecting the appeal at the threshold was that such appeal was presented 12 days beyond the specified period. In the affidavit in support of the writ petition it is stated that the staff concerned had left the services of the petitioner during the relevant period and that this caused delay in presentation of the appeal. On taking into account this reason and the fact that the period of delay is only 12 days, it is just and necessary that the petitioner be permitted to prosecute the appeal. The impugned order dated 01.04.2024 is set aside and the petitioner is permitted to file a statutory appeal within 15 days from the date of receipt of a copy of this order - Petition disposed off.
-
2024 (9) TMI 806
Challenge to assessment order - denial of reasonable opportunity to the petitioner - reply to SCN of petitioner disregarded - petitioner, engaged in construction material business, purchased a commercial vehicle - HELD THAT:- From the copy of the reply on record, it appears that no documents were uploaded while filing such reply. Therefore, the petitioner undoubtedly failed to substantiate the contention that the purchase was in furtherance of business and outside the scope of sub-section (5) of Section 17 of applicable GST enactments. Nonetheless, the relevant invoice has been placed on record now and the petitioner has asserted that the purchase was in furtherance of business because the petitioner is a dealer in construction material. The interest of justice warrants the provision of an opportunity to the petitioner in these facts and circumstances. The impugned order dated 04.08.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit any additional documents with in the aforesaid period - Petition disposed off.
-
2024 (9) TMI 805
Denial of GST Claim amount (differential tax liability) - increased prices of material/wages - Respondents-BUIDCo. has stated that he has no objection if the matter is remanded back to the authority concerned for passing orders afresh in accordance with law - HELD THAT:- The impugned order dated 16.11.2019 is set aside and the matter is remanded back to the Chief General Manager, BUIDCo. i.e. Respondent No. 3 for considering the representation dated 27.06.2019 (Annexure P5) and pass necessary orders strictly in accordance with law. Petition disposed off by way of remand.
-
2024 (9) TMI 804
Seeking a direction for the release of attachment of the immovable properties - discrepancy between the petitioner's GSTR 3B returns and the auto populated GSTR 2A - HELD THAT:- The petitioner has placed on record the order in original dated 30.05.2023. Proof of filing of the appeal has also been placed on record. From the document at pages 16 to 18 of the typed set of papers, it is evident that the petitioner has made the requisite pre deposit of 10% of the disputed tax demand by remitting a sum of Rs.4,94,956/-. Once such pre deposit is made, under sub-section (7) of Section 107, recovery proceedings in respect of the balance amount shall be deemed to be stayed. In this case, without waiting for the statutory period of three months, an attachment was effected of the petitioner's immovable property. Such attachment is contrary to the statutory prescription and cannot be sustained. Petition allowed by directing the first respondent to release the attachment over the immovable property bearing Survey Nos.1305/4, 1305/4B, 1306/1B and 1306/2A2 and situated in Kamandoddi Village of Shoolagiri Taluk.
-
2024 (9) TMI 803
Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it is evident that the tax liability pertains to the mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A. It is also evident that the tax demand was confirmed because the petitioner failed to reply or appear for the personal hearing. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide an opportunity to the petitioner to contest the tax demand on merits. The impugned order dated 10.07.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Petition disposed off by way of remand.
-
2024 (9) TMI 802
Grant of refund with interest for the delayed refund - period August 2020 to January 2021 - HELD THAT:- Since the application seeking refund is still pending, the petition is disposed of, directing the proper Officer to consider the application in accordance with law and dispose of the same within a period of four weeks from today. In case the refund is found admissible and payable, the same be also disbursed to the Petitioner. In case the same is not found to be payable, a speaking order shall be passed and communicated to the Petitioner within a period of four weeks from today. The proper Officer shall also pass an appropriate order in terms of Section 56 of the Central Goods Service Tax Act, 2017 with regard to payment of interest on the delayed refund, if any. In case interest is payable, the same shall also be disbursed to the Petitioner along with the refund. Petition disposed off.
-
2024 (9) TMI 801
Breach of principles of natural justice - SCN and impugned order were uploaded on the View Additional Notices and Orders tab on the GST portal - wrongful availment of Input Tax Credit (ITC) - HELD THAT:- On perusal of the impugned order, it is evident that the said order pertains to alleged wrongful availment of Input Tax Credit (ITC). The documents on record include the show cause notice dated 22.06.2023. From the impugned order, it appears that a personal hearing notice was issued on 17.07.2023. The impugned order further discloses that the tax demand was confirmed because the petitioner failed to respond to the show cause notice or participate in the personal hearing. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide the petitioner with an opportunity to contest the tax demand on merits. The impugned order dated 16.08.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
2024 (9) TMI 800
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - petitioner unaware of proceedings as order was not communicated through any mode other than uploading on the GST portal - difference between the petitioner's GSTR 3B returns and the GSTR 1 statement - HELD THAT:- On perusal of the impugned order, as contended by learned counsel for the petitioner, such order pertains to the difference between the petitioner's GSTR 3B returns and the GSTR 1 statement. It is also evident that the tax proposal was confirmed in view of the petitioner's failure to reply to the show cause notice. The show cause notice discloses that a personal hearing was offered to the petitioner on 25.08.2023. Therefore, the petitioner cannot be absolved of responsibility for non participation. At the same time, it should be recognized that the tax proposal was confirmed only because the petitioner failed to reply. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide the petitioner an opportunity to contest the tax demand on merits. The impugned order dated 13.11.2023 is set aside, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to with in a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period. Petition disposed off.
-
2024 (9) TMI 799
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - cancellation of GST registration with retrospective effect - HELD THAT:- On perusal of show cause notice dated 30.09.2023, it is evident personal hearing was offered to the petitioner on 07.10.2023. The of cancellation of the petitioner's GST registration is on record. Such order is dated 31.05.2021. In those circumstances, the explanation of the petitioner that he was not monitoring the GST portal on an ongoing basis cannot be completely disregarded. In the overall facts and circumstances, albeit by putting the petitioner on terms, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits. The impugned order dated 31.10.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of three weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
-
2024 (9) TMI 798
Challenge to separate orders dated 10.11.2023 pertaining to three different assessment periods - transport agency services - reverse charge mechanism - notices and the impugned order were uploaded on the GST portal, but not communicated through any other mode - violation of principles of natural justice - HELD THAT:- On perusal of the petitioner's annual return, it appears prima facie that the petitioner has provided services on reverse charge basis. It is unclear as to whether other services were provided on forward charge basis. All these aspects would have to be examined by the jurisdictional officer. However, the facts and circumstances justify providing another opportunity to the petitioner by putting the petitioner on terms. The orders impugned herein are set aside and these matters are remanded for reconsideration, subject to the condition that the petitioner remits 10% of the disputed tax demand in respect of each assessment period as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order - petition disposed off.
-
2024 (9) TMI 797
Challenge to order in original - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN and impugned order were uploaded on the GST portal, but not communicated to the petitioner through any other mode - violation of principles of natural justice - mismatch between the petitioner's GSTR 3B returns and the auto populated GSTR 2A - HELD THAT:- Such order was issued without hearing the petitioner and the tax proposal was confirmed because the petitioner did not respond to the show cause notice. While the petitioner cannot be absolved of responsibility in such regard, it is just and necessary that the petitioner be provided an opportunity after putting the petitioner on terms. The impugned order dated 28.04.2023 is set aside, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period - petition disposed off.
-
2024 (9) TMI 796
Grant of refund besides interest for the delayed refund - period June 2020 to November 2021 - HELD THAT:- Since the application seeking refund is still pending, the petition is disposed of, directing the proper Officer to consider the application in accordance with law and dispose of the same within a period of four weeks from today. In case the refund is found admissible and payable, the same be also disbursed to the Petitioner. In case the same is not found to be payable, a speaking order shall be passed and communicated to the Petitioner within a period of four weeks from today. The proper Officer shall also pass an appropriate order in terms of Section 56 of the Central Goods Service Tax Act, 2017 with regard to payment of interest on the delayed refund, if any. In case interest is payable, the same shall also be disbursed to the Petitioner along with the refund. Petition disposed off.
-
Income Tax
-
2024 (9) TMI 795
Validity of reassessment proceedings commenced without the approval of the specified authority - As decided by HC [ 2023 (10) TMI 1201 - DELHI HIGH COURT] sense we get is that the second condition requiring AO to obtain prior approval of the specified authority was not fulfilled, as otherwise, there was no good reason not to furnish the same to the petitioner along with the document which contained the AO s reasons for holding the belief that income otherwise chargeable to tax had escaped assessment. HELD THAT:- In view of the categorical finding recorded in paragraph 13 of the impugned judgment and in the facts of the case, no case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.
-
2024 (9) TMI 794
Application filed by the revenue u/s 158A(b) - Procedure where an identical question of law is pending before High Courts or the Supreme Court - HELD THAT:-The provision stipulates a procedure under which, inter alia, on a consent being granted by the assessee as provided for under sub-section (3) of Section 158AB any legal proceedings are kept in abeyance and depending on the outcome of the pending proceedings, a decision appropriate to a case is permitted to be taken to initiate proceeding against the assessee as contemplated under subsection (4) (5). As stated that the respondent / assessee had issued a letter of acceptance to the Applicant / Revenue that the question of law in the other case is identical to that arising in the present case. Having perused the provisions of Section 158AB as also Rule 16 of the Income Tax Rules, 1962, as also the record which annexes Form 8A which sets out all the necessary details qua the proceedings as noted hereinabove, in our opinion, the application needs to be accepted as consented by the respondent / assessee.
-
2024 (9) TMI 793
Transferring the petitioner s income tax jurisdiction from Shillong to Kolkata and had also further prayed for closure of her CGDS account - HELD THAT:-Having heard learned counsel for the parties and as it appears from the submission of Mr. N. Dasgupta, the petitioner that transfer of jurisdiction is no longer resisted, the only issue that remains is with regard to the approval for closure of the CGDS account. Accordingly, it is directed that on production by the petitioner before the respondent authorities of all materials necessary to be taken into consideration on the application for closure of CGDS account, the respondents, shall thereafter within a period of four weeks thereof, decide on the matter and pass final orders. The commencement of the said proceedings however will be intimated to the petitioner by the concerned respondent within a period of three weeks from today.
-
2024 (9) TMI 792
Offence u/s 276(C) (2) and 277 - Allegation of willful tax evasion and non-payment of admitted tax - compounding application - HELD THAT:- The court has gone through the materials available on record and finds that admittedly the petitioner has submitted the income tax return pointing out the liability for the year 2011-12, however along with the return the tax liability was not deposited, which was deposited later on. Thus, it is crystal clear that the tax amount has already been deposited, however, after certain delay and that was deposited with interest in light of Section 240(A) of the Income Tax Act. Admittedly, there is no proceeding pending with regard to recovery of tax or penalty against the petitioner. The willful demand of payment of tax was the subject matter in the case of Gopal Ji Shaw [ 1988 (3) TMI 41 - CALCUTTA HIGH COURT ] which was considered by this court in para-7 of the judgment relied by the learned counsel appearing for the petitioner and the same was also considered which is already quoted hereinabove and other judgments are also considered in the said judgment and thereafter the proceeding was quashed. Admittedly, in the case in hand, there was no penalty provision against the petitioner and in view of that it will be presumed that there is no concealment and quashing of prosecution u/s 276(C) (1) is automatic. As such, the petitioner cannot be allowed to suffer and to face criminal trial and the same cannot sustain in the eyes of law. There is no doubt that penalty proceeding and prosecution can go simultaneously in the facts and circumstances of the cases, however, in the case in hand, the penalty proceeding is not there and in view of the above judgments in the case of Pralay Pal [ 2023 (9) TMI 115 - JHARKHAND HIGH COURT ] the case of the petitioner is fit to be allowed under Article 226 of the Constitution of India. Accordingly, the entire criminal proceeding including the cognizance order dated 02.11.2017, by which, cognizance has been taken for the offence u/s 276(C) (2) and 277 against the petitioner, in connection with Complaint Case pending in the court of learned Special Judge, Economic Offences, Jamshedpur, are hereby, quashed.
-
2024 (9) TMI 791
Assessment passed u/s 148 and Penalty u/s 271(1)(c) - no assessment order was served on the assessee by the ITO, no notice un/s 143(2) and 143(1) was served on the assessee and no notice u/s 271 (1)(c) was served - HELD THAT:- PAN jurisdiction over the assessee was transferred to ITO, Ward 5(2), Kolkata from ITO Ward 46(1), Kolkata vide order dated 21st January, 2014. There after, the ITO, Ward No.5(2), Kolkata merged with the ITO, Ward 5(1), Kolkata. In the order u/s 127 department admits that the address of the appellant/assessee is mentioned as 22, BRB Basu Road, Canning Street, 1st Floor, Room NO.14, Kolkata 700001. Thereafter, the affidavit proceeds to state the further steps taken and in sub- paragraph (e) it is stated that notice u/s 148 was issued by ITO, Ward 5(2), Kolkata on 31st March, 2016 and the service of the said notice was made by affixation by departmental inspector on 31st March, 2016 at the address 37, Abani Dutt Road, 1st Floor, Howrah 711106. As evident that despite the department being aware of the change of address, the notice u/s 148 has been served by affixing in the old address. This is sufficient to hold that the proceeding, which was taken ex parte is not sustainable in law. For the above reasons, the appeal and the connected application are allowed. Consequently, the writ petition is allowed, the order passed u/s 148 and the consequential proceedings are set aside and the mater is restored to the file of the assessing officer.
-
2024 (9) TMI 790
Validity of Assessment proceedings u/s 153C - petitioner approached this Court that despite the application having been made by the petitioner, the relevant documents were not supplied to him and in absence of the documents, the petitioner was unable to give proper reply to the notices issued to him - HELD THAT:- The grievance/issue which is raised in the present writ petition was very much available to the petitioner. Petitioner did not make any prayer in the earlier writ petition in respect of the grievance/issue raised here, if any, as he stated in the present writ petition. A litigant cannot be allowed to come and file separate proceedings for each and every grievance/issue as and when he feels that same issue is there which was not raised in the earlier concluded proceedings between the same parties. This writ petition is barred by the principle of res-judicata/constructive res-judicata. The sum and substance of the writ petition is the proceedings in pursuance to the search and seizure operation conducted on the business and residential premises of the petitioner and the very same issue was before this Court in earlier writ petition. Considering the aforesaid facts, find this writ petition is nothing but a gross abuse of process of the court. The petitioner is adopting every trick to stall the early completion of the assessment proceedings. This Court cannot be a party to such a trick of a litigant. Writ petition dismissed.
-
2024 (9) TMI 789
MAT Application u/s 115JB to banks constituted as 'corresponding new banks' under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 - Whether clause (b) to sub section (2) of section 115JB of the Income-tax Act inserted by Finance Act, 2012 w.e.f. 1-4-2013 will bring the assessee-banks constituted as 'corresponding new bank' in terms of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 within the scope of section 115JB from assessment year 2013-14 onwards? - main crux of the department is that since assessee bank has come into existence by the Acquisition Act‟ and Section 11 thereof states that for the purpose of Income Tax Act, every corresponding new bank shall be deemed to be an Indian company‟ and the company in which the public are substantially interested' HELD THAT:- Section 11 of the Acquisition Act states that For the purposes of Income-tax Act, 1961 (43 of 1961), every corresponding new bank shall be deemed to be an Indian company and a company in which the public are substantially interested . Therefore, the said deeming fiction is created only for the purposes of the Income-tax Act. Further, for the purposes of the said Act, it treats every corresponding new bank to be an Indian company and also a company in which the public are substantially interested. First of all, deeming an entity to be an Indian Company or a company in which public are substantially interested for the purposes of the Income-tax Act would not ipso facto make such entity as a 'company' for the purposes of the Companies Act, 2013, unless the conditions specified in Section 3 thereof are fulfilled. There is no provision to deem a nationalised bank to be a company for the purposes of Section 3 of the Companies Act, 1956. As explained in the foregoing paragraphs, Section 2(17) of the income Tax Act r.w.s. 2(26) which defines company‟ to mean a company formed and registered under the Companies Act, 1956, does not meet the requirement of being a company in the case of assessee bank, because the Indian company has to be formed and registered under the Companies Act. Notwithstanding that Section 11 of the Acquisition Act deems assessee bank to be a company for the purpose of Income Tax Act, but that does not lead to an inference that merely regarded as a company for the purpose of the Income Tax Act it is also Company registered under the Companies Act. The fiction created by Section 11 of the Acquisition Act, does not imply that the assessee bank would also become a company for the purpose of the Companies Act for which Clause (b) of Sub-Section 2 of Section 115JB is applicable. In the earlier part of the order, we have already noted that by the Acquisition Act, the banking business of the existing bank was transferred from Union Bank of India Ltd to The Union Bank of India. The earlier entity, i.e., Union Bank of India Ltd. was a company under the earlier Companies Act, however, that company as a whole was not taken over or acquired but only banking business was acquired by the Acquisition Act. That is the reason why Union Bank of India Ltd. still existed at the point of acquisition and continues till now and the shareholders of Union Bank of India Ltd. were paid compensation as a consideration for acquiring the banking business. It was by the Acquisition Act that these banks were nationalized and the banking business was acquired from the erstwhile banking companies. These new acquiring banks including Union Bank of India is neither registered under the Companies Act, 2013 nor under any other previous company law. Already the Hon ble Supreme Court in the case of Rustom Cavasjee Cooper v. Union of India [ 1970 (2) TMI 130 - SUPREME COURT ] had held that only undertaking was acquired for the banking companies acquisition and transfer of invoking ordinance which was promulgated on 19/06/1969, which culminated into the Act of Banking Companies (Acquisition and Transfer of Undertaking) Act,1970. Thus, assessee cannot be treated as a company under the Companies Act, because it was never registered under the Companies Act. Ergo, the deeming fiction by way of Section 11 of the Acquisition Act has to be read purely in the context for the purpose of Income Tax Act where the corresponding new bank have been deemed to be an Indian Company and a company in which public are substantially interested. This deeming section cannot be extended to a company registered under the Companies Act to which alone Section 115JB is applicable. Thus, we hold that Section 11 of the Acquisition Act which deals a corresponding new bank treated as Indian company for the purpose of Income Tax, however, Clause (b) in Sub-Section 2 to Section 115JB does not permit treatment of such bank as a company for the purpose of the said clause, because it should be company to which second proviso to sub-section (1) to Section 129 of the Companies Act is applicable. The said proviso has no application to the corresponding new bank as it is not a banking company for the purpose of the said provision. The expression company used in section 115JB(2)(b) is to be inferred to be company under the Companies Act and not to an entity which is deemed by a fiction to be a company for the purpose of the Income Tax Act. Thus referring to Notification No. S. O. 710, dated February 16, 1970 read with provision of Section 194A(3), makes it clear that even Government of India considers the above entities separate and distinct from banking companies. Once under the Income Tax Act, Legislature itself has made a distinction for the aforesaid banks including the assessee are not covered as banking company, then, this further buttresses the point that these banks are separate and distinct from other banking companies. Accordingly, the question referred to Special Bench is decided in favour of the assessee banks that clause (b) to sub section (2) of section 115JB of the Income-tax Act inserted by Finance Act, 2012 w.e.f. 1-4-2013, that is, from assessment year 2013-14 onwards, are not applicable to the banks constituted as 'corresponding new bank' in terms of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and therefore, the provision of Section 115JB cannot be applied and consequently, the tax on book profits (MAT) are not applicable to such banks.
-
2024 (9) TMI 788
Addition of income from Offshore Supply Contracts u/s 44BBB - scope of special provision computing profit and gains of foreign companies engaged in the business of civil construction, etc. in certain turnkey power projects - HELD THAT:- On the above factual matrix on the case, it is evident that this issue has been consistently arising in the previous years since A.Y. 2007-08 and has been decided by the co-ordinate bench in favour of the assessee for this year and for the subsequent years. It is also observed that there has been no change neither in the terms of the agreements nor in the nature of work carried out as per the said contract. As decided in earlier years after analyzing the various case laws, statutory provisfonc, DTA/ provisions and contractual terms and respectfully following judgment of Ishikawajima- Harirna Heavy Industries Limited [ 2007 (1) TMI 91 - SUPREME COURT ] we are inclined to hold that Offshore Supply contracts were 'carried and concluded- outside India and hence no income therefrom deemed to accrue or arise in India as per section 9(1) and DTAA provisions and accordingly, not chargeable to tax. The receipts thereof do not form part of receipts for the purpose of computational provisions of section 44BBB. Explanation-4 could not overcome the limitation imposed by Explanation-l(a) to section 9(i)(i) and hence,the impugned income do not form part of business receipts for computation of income u/s 44BBB of the Act - Appeal filed by the assessee is allowed.
-
2024 (9) TMI 787
Penalty levied u/s 271B - delay in filing the audit report u/s 44AB within time - HELD THAT:- Admittedly assessee has not completed the audit of the books of accounts u/s 44AB of the Act for the impugned assessment year. Submission of the assessee is that the invoices and other records are destroyed by the white ants forcing the assessee to reconstruct the books of accounts for submitting to the Chartered Accountant for getting the books of account audited under section 44AB of the Act, hence there is delay in filing the audit report under section 44AB. In the instant case, assessee has stated that books of accounts are destroyed by white ants and the audit report of the books of accounts was commenced after 26.11.2018 only. Section 273B provides that no penalty thereby imposable on the assessee, if the assessee proves that there is a reasonable cause for the said failure. However, assessee was not able to submit any evidences to show that assessee is having a reasonable cause showing that the books of accounts have been destroyed by the white ants. The cause adduced by the assessee could not be considered as reasonable cause. In the absence of assessee not being able to demonstrate reasonable cause the non-filing of audit report attracts provisions of section 271B in our considered opinion - no hesitation to confirm the penalty levied u/s 271B AO and we do not find any infirmity in the order of the CIT(A) on this issue. The grounds raised by the assessee is dismissed.
-
2024 (9) TMI 786
Penalty u/s 271(1) (c) - income determined in the OGE [order giving effect] - as argued AO has miscalculated the additions in the OGE and that the specific charge was not mentioned as to whether assessee had concealed its income or had furnished inaccurate particulars thereof - HELD THAT:- It is seen that section 271(1)(c) of the Act clearly empowers an assessing officer to initiate penalty proceedings if in the course of any proceedings under this Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars thereof. The law therefore mandates that there should be existence of any proceedings under the Act so as to give the AO the authority to initiate any penalty proceedings. With this understanding of the law, the Ld. AO was required to have issued penalty notice u/s 271(1) (c) of the Act on 13.12.2019 only. His issuance of notice u/s 271(1) (c) on 19.12.2019 therefore makes the penalty order dated 01.02.2022 invalid as it is not based upon any lawfully issued notice. Pertinently no proceedings were pending against the assessee on 19.12.2019 when the notice u/s 271(1)(c) was issued. We hold that the penalty order u/s 271(1)(c) is invalid and bad in law. The same is therefore quashed and set aside. Penalty u/s 271A - assessee failed to produce evidences that it had maintained its records etc as mandated in Rule-6F of IT rules - HELD THAT:- Assessment order clearly stipulates that the AO had asked the assessee to submit evidences in respect of evidences maintained under Rule-6F and the same were not produced. During the course of hearing in this, assessee was asked as to whether the assessee has maintained books of accounts within the meanings of Rule-6F of IT rules r.w.s 44AA of the Act or not. The counsel confirmed that no books of accounts were maintained per Rule-6F of IT rules r.w.s 44AA - Section 271A of the Act clearly provides that penalty under the section shall be levied upon an assessee who fails to maintain its books of account and other documents as required u/s 44A r.w. Rule-6A of income tax rules. It further mandates that a penalty of Rs. 25000/- shall be levied for the impugned failure. The failure of the assessee in this case is amply demonstrated from the material on records. In view of the same we are of the view that penalty u/s 271A has been rightly imposed by AO in this case. Accordingly, the grounds of appeal raised by the assessee are dismissed.
-
2024 (9) TMI 785
Revision u/s 263 - CIT directed AO to compute the income of the assessee by adding difference valuation of shares u/s 56(2)(viib) - CIT held that valuation report submitted by the assessee was not found in assessment folders - AR contended that the valuation report produced by the Assessee must have been misplaced by the Department, for which the assessee cannot be put to hardship for the same. HELD THAT:- The valuation has been done on the basis of balance sheet as on 30/06/2013 i.e. book value as on 30/06/2013 which is not on the other method i.e. discounted free cash flow method. AO had got himself satisfied with the premium of Rs. 310 per share charged by the Assessee on allotment of shares to family members and the entire amount was received by the Assessee in the month of October, 2013 and also allotment was done thereafter. Therefore, there was no reason for the AO to doubt the quantum of premium charge at Rs. 310 per share on allotment of share to family members. Assessee has also produced the Valuation Report before the Ld. PCIT. PCIT neither verified the said Valuation Report produced by the Assessee nor found any fault in the method/manner adopted in the Valuation Report and without giving any reasoning set aside the assessment order. When the Ld. PCIT makes allegation that the Assessee has not produced the Valuation Report before the AO, which has been disputed by the Assessee, nothing prohibited the PCIT from looking into the Valuation Report produced by the Assessee before him and give finding thereupon. Without even examining the Valuation Report and without even finding fault in the method of valuation adopted by the Assessee the PCIT erroneously invoked provision of Section 263 - Appeal filed by the Assessee is allowed.
-
2024 (9) TMI 784
Best judgement Assessment u/s 144 - applying the net profit rate at 8% on gross turnover - Counsel submits that the assessee has shown average GP at 5.03% and average net profit at 0.08% for the assessment years 2014-15 to 2016-17 and, therefore, there is no justification in estimating the profit at 8% applying section 44AD - HELD THAT:- Best judgment assessment was made under 144 of the Act as assessee could not file the requisite details. The assessee contends that the action of the AO for estimating the income at 8% of turnover as per provisions of section 44AD since the provisions of section 44AD are not applicable on the assessee having turnover more than 1 crore. It is also the contention of the assessee that non maintenance of stock register cannot be the only basis for rejecting the books and estimating the profits at 8%. The turnover shown by the assessee for the assessment year under consideration is Rs. 2,14,36,475/- and, therefore, the AO could not have applied provisions for 44AD and estimated profit at 8%. It is also the finding of the AO that since the books and vouchers were not produced before him the income was estimated especially as stated by the auditor in column no.5 in 3CB report that maintenance of stock register is not plausible. Therefore, AO is directed to estimate the income at 5% of gross turnover as against 8% and re-compute the income accordingly. Appeal of the assessee is partly allowed.
-
2024 (9) TMI 783
Deemed dividend u/s 2(22)(e) - accumulated profits in the companies at the time of advancement of loans to the assessee company - HELD THAT:- In a recent decision, in the case of Mahimananda Mishra [ 2023 (1) TMI 780 - ORISSA HIGH COURT] held that the deemed dividend paid by a company is chargeable to tax in the hands of individual who held the shares in the said company and not in the hands of loan recipient in which the said shareholder was a partner. Further, the ITAT in the case of Rainbow Promoters (P) Ltd. [ 2022 (2) TMI 939 - ITAT DELHI] has held that the deemed dividend shall be taxed in the hands of share holder not in the hands of loan receiving entity which is not a share holder. In the instant case, it is observed that the assessee company is not a share holder in the companies which have extended loan to it. Shri Udai Karan Singh Dalai is the common share holder having substantial interest in the assessee company as well as in the loan giving companies. Thus, we find that the deemed dividend is not taxable in the hands of the assessee and hence decline to interfere with the reasoned order of the ld. CIT(A) on this issue. Deemed Interest Income u/s 56(1) - notional saving of interest on the borrowed funds - interest free loan given to the assessee company which was sourced from the interest bearing loans taken from different entities - assessee submitted that during the assessment proceedings, AO has duly verified the source of loan taken from the promoter and the sister concerns and the loan given by these entities to the assessee company are not interest bearing - HELD THAT:-CIT(A) held that it is not in dispute that the entities mentioned above have given loan to the assessee company without any interest. There is no provision to tax the saving of interest on notional basis in the hands of borrower in case loan taken by it is without interest or below the market rate. It is a case where sister concerns have taken interest bearing loan in its books and have given loan to the assessee company without interest for acquisition of property. In such case the claim of interest expenditure by the sister entities if any, against their income may be disallowable in terms of Section 37. CIT(A) rightly held that the saving of interest on borrowed funds cannot be taxed as deemed income in the hands of the assessee company. Accordingly, the addition made by the Assessing Officer on account of deemed interest income is deleted. We find that the order of the ld. CIT(A) is reasonable and in accordance with the statute and hence, decline to interfere with the order of the ld. CIT(A). Appeal of revenue dismissed.
-
2024 (9) TMI 782
Revision u/s 263 - as per CIT AO had not examined/made inadequate inquiries with respect to provision for subcontracting expenses during the assessment proceedings and AO had not examined the refund claim of the Appellant along with interest - AR contended that in reassessment proceeding, the assessee pursuant to notice u/s.133 (6) has filed reply and explained the queries raised by the ld. AO - HELD THAT:- CIT took into consideration the same set of material which was duly addressed by the AO in reassessment proceedings. CIT cannot sit in appeal on the reassessment order 23.03.2023 reversing findings of the AO and impose his own view of decision making process on same material. There is legal presumption as per Section 114(f) of the Evidence Act that AO passed the reassessment order properly to the best of his ability. Section 114(f) of the evidence Act says: The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case . The issue of sub-contract expenses admittedly was duly deliberated upon by the AO in Section 147 proceedings after the questionnaire dated 18.03.2023 - CIT wrong in saying that AO has not done proper enquiry. As discussed it is clearly discernible that AO has done properly each and every inquiry pertaining to sub-contract etc. The issue of refund was consequential to reassessment order dated 23.03.2023 and there is no specific order by the AO, hence, CIT cannot invoke jurisdiction u/s. 263 of the Act; Hence, we hold that the order passed by AO u/s. 147 dated 23.03.2023 is not erroneous in so far as it is prejudicial to the interest of the revenue. Since assessee has not challenged order u/s. 154 of the Act dated 8th August, 2023, hence not entitled to agitate in this proceedings. Tribunal order in the cases of Trinity Charitable Trust [ 2014 (9) TMI 924 - ITAT COCHIN ] and Cargo Service Centre India (P) Ltd. [ 2021 (12) TMI 398 - ITAT MUMBAI ] are dehors the facts of the present case hence not applicable. Case law cited by the ld. CIT-DR in the case of DCIT vs. Vasco Sales and Marketing Corporation [ 2015 (10) TMI 1088 - KERALA HIGH COURT ] is on different footing than present case, hence ratio of the said decision is not applicable. In the light of entire conspectus of matter, we are inclined to interfere in the impugned order of CIT. Hence, we accordingly set aside the impugned order. Appeal of the assessee stands allowed.
-
Customs
-
2024 (9) TMI 781
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - violation of Regulation 10(n) of CBLR - DGFT had issued benami IECs - onus to prove - HELD THAT:- The IEC is issued by the Director General of Foreign Trade and the GSTIN is issued by the GST officers under the Central Board of Indirect Taxes and Customs of the Government of India or under the Governments of State or Union territory. The question which arises is has the Customs Broker to satisfy himself that these documents or their copies given by the client were indeed issued by the concerned government officers or does it mean that the Customs Broker has to ensure that the officers had correctly issued these documents. Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of actions by the Government officers. Such an interpretation would amount to saying that the Regulations under the Customs Act prevail over the actions under the Foreign Trade (Development and Regulation) Act, 1992 under which the IEC is issued by DGFT and the Central Goods and Services Tax Act (or state GST Act) under which the GSTIN is issued by the GST officers. Therefore, the verification of certificates part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers had correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. The Customs Broker did not fail in discharging its responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the appellant had violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers. The impugned order is set aside - Appeal allowed.
-
PMLA
-
2024 (9) TMI 780
Illegal arrest - application for the grant of regular bail rejected - declination to exercise its concurrent jurisdiction under Section 439 of the Code of Criminal Procedure, 1973 - FIR stated irregularities, falsification, undue advantage, and a conspiracy among the persons holding positions of responsibility within the GNCTD, in framing and implementing the Excise Policy for the year 2021-2022 - Appellant s name did not figure in the FIR. Whether the procedure undertaken in arresting the Appellant was illegal? - HELD THAT:- In the present case, following the interrogation, the CBI moved another application to the Trial Court on 25.06.2024, seeking permission to arrest the Appellant. The CBI justified the arrest on the grounds that the Appellant had allegedly given evasive responses during questioning and that custodial interrogation was necessary to confront him with evidence and uncover a purported larger conspiracy involving the accused persons in the implementation of the excise policy. The Trial Court, after considering these reasons, allowed the CBI's application for the Appellant's arrest and issued production warrants on the same day. Whether Section 41A(3) was violated, thereby rendering the arrest per se illegal? - HELD THAT:- First, it is trite law that there is no insurmountable hurdle in the conversion of judicial custody into police custody by an order of a Magistrate. Thus, there is no impediment in terms of arresting a person already in custody for the purposes of investigation, whether for the same offence or for an altogether different offence - Second, Section 41A(3) allows for arrest, provided the reasons are recorded, justifying the necessity of such a step, and the police officer is satisfied that the individual should be arrested. In this context, we have already noted that the CBI, in their application dated 25.06.2024, clearly recorded the reasons as to why they deemed the Appellant's arrest necessary. These reasons were also summarized in the arrest memo dated 26.06.2024. It is important to clarify that our current analysis is limited to verifying whether the CBI followed the correct procedure, including the recording of sufficient reasons - Third, Section 41A(1), when read with Section 41A(3) CrPC, does not impose an absolute prohibition on the arrest of an individual against whom there exists reasonable suspicion of having committed a cognizable offence punishable with imprisonment up to seven years. This is evident from the language of the provision itself. Section 41A(3) explicitly states that an arrest is permissible if the police officer believes it to be necessary and duly records the reasons for such arrest - There are no merit in the Appellant's contention that the CBI failed to comply with Section 41A CrPC, in its true letter and spirit. Whether Section 41(1)(b)(ii) of the CrPC is applicable? - HELD THAT:- Section 41(1)(b)(ii) of the CrPC clearly stipulates that an arrest under this provision can be made based on a complaint or credible information that an individual has committed a cognizable offence punishable with imprisonment up to seven years, with or without a fine. However, such an arrest must be conducted subject to the satisfaction of specific conditions outlined in subsections (a) to (e) - Having considered the CBI's compliance with Section 41A of the CrPC and the inapplicability of Section 41(1)(b)(ii) of the CrPC, the Appellant s arrest does not suffer with any procedural infirmity. Consequently, the plea regarding non-compliance of these provisions, merits rejection. Whether the Appellant is entitled to the relief of regular bail? - HELD THAT:- Although the procedure for the Appellant s arrest meets the requisite criteria for legality and compliance, continued incarceration for an extended period pending trial would infringe upon established legal principles and the Appellant s right to liberty, traceable to Article 21 of our Constitution. The Appellant has been granted interim bail by this Court in the ED matter on 10.05.2024 and 12.07.2024, arising from the same set of facts. Additionally, several co-accused in both the CBI and ED matters have also been granted bail by the Trial Court, the High Court, and this Court in separate proceeding - given the Appellant s position and his roots in the society, there seems to be no valid reason to entertain the apprehension of his fleeing the country. In any case, in order to assuage the apprehensions of the CBI, we may impose stricter bail conditions. As regard to Appellant indulging in influencing witnesses, it needs no emphasis that in the event of any such instance, it will amount to misuse of the concession of bail and necessary consequences will follow - the Appellant satisfies the requisite triple conditions for the grant of bail. Whether the filing of a chargesheet is a change in circumstances warranting relegation to the trial court for grant of regular bail? - HELD THAT:- An undertrial should, ordinarily, first approach the Trial Court for bail, as this process not only provides the accused an opportunity for initial relief but also allows the High Court to serve as a secondary avenue if the Trial Court denies bail for inadequate reasons. This approach is beneficial for both the accused and the prosecution; if bail is granted without proper consideration, the prosecution too can seek corrective measures from the High Court. Since notice was issued and the parties were apparently heard on merits by the High Court, it is not deemed necessary at this stage to relegate the Appellant to the Trial Court even though filing of a chargesheet is a change in the circumstances. The Criminal Appeal challenging the legality of arrest (arising out of SLP (Crl.) No. 10991/2024) is, hereby, dismissed. In view of the separate order passed by Hon ble Mr.Justice Ujjal Bhuyan, however, there being a concurrent opinion that the appellant is entitled to be released on bail, subject to the terms and conditions imposed, authored by Hon ble Mr.Justice Surya Kant, the Criminal Appeal challenging the legality of arrest is dismissed - Appellant is directed to be released on bail subject to fulfilment of conditions imposed.
-
2024 (9) TMI 779
Money Laundering - breach of bank secrecy - collection of financial information of accounts, which were used for money laundering in benefit of a transnational criminal organization - proceedings under PMLA - Contracting state under PMLA - Effects of corruption in the economy of a country. Proceedings under PMLA - HELD THAT:- An appeal against an Order U/s. 8(1) of the PMLA lies to the Appellate Tribunal, PMLA U/s. 26 of the PMLA and the same is to be filed within a period of 45 days from the date of receipt of the order. The Petitioner has also filed an appeal U/s. 26 of the PMLA in PMLA/FPA-PMLA No. 5322 of 2022 challenging the Order dated 21.10.2022 and that the same is pending before the Appellate Tribunal, PMLA. Contracting state under PMLA - HELD THAT:- Chapter IX of the PMLA, titled 'Reciprocal Arrangements for Assistance in Certain Matters and Procedure of Attachment and Confiscation of property' deals with reciprocal arrangement with a contracting state. Effects of corruption in the economy of a country - HELD THAT:- Businessmen often view corruption as a form of illegal tax due to the secrecy involved and the unpredictability of whether the bribe-taker will honour their part of the deal. This perception reduces their motivation to invest. This results in a significant reduction in investment and affects the economic growth of the nation in a serious way - Corruption results in the diversion of benevolent funds that are spent for the purpose of economic and social upliftment of the country and thus slows down the socio-economic growth of the country - When corruption takes the form of tax evasion or claiming improper tax exemptions, corruption brings about loss of tax revenue which further affects the economic growth of the country. All the three grounds raised by the petitioner fail and thus, there are no reason to interfere with the impugned order - petition dismissed.
-
Service Tax
-
2024 (9) TMI 778
Refund along with interest on delayed payment of refund under Section 11BB of Central Excise Act, 1944 - principles of unjust enrichment - Section 11B(1) of the Central Excise Act, 1944 - HELD THAT:- The Ld. Commissioner (Appeals) after analyzing Rules 6(3) of the CCR Rules and Rule 6(6A) has held that Rule 6(3) does not refer to the duty of excise or service tax. The word used is 'amount' and not 'duty' or tax and further the amount so payable is not available as input tax credit to the recipient and therefore, the amount payable under Rule 6(3) CCR Rules is not Service tax payable under Section 66 of the Finance Act and further the Ld. Commissioner has held that the doctrine of unjust enrichment is not applicable in availing the Cenvat Credit or in case of refund of Cenvat credit as mandated under Section 11B(2)(c) of CE Act. The denial of refund claim of the amount wrongly paid is in violation of Article 265 of Indian Constitution. As regards the claim of unjust enrichment, the respondent has proved that no tax has been charged from SEZ unit. The invoices issued to SEZ units along with sample copies of tax invoice shows that no service tax was charged from SEZ unit. The respondent has proved that the amount of refund claim has actually been borne by them and sanctioning of the refund would not amount to unjust enrichment. The erroneous payment of the duty/tax under mistake of law would not attract provisions of unjust enrichment as provided in Section 11B of Central Excise Act. There are no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue - appeal dismissed.
-
2024 (9) TMI 777
Non-payment of service tax - sales commission under the category of business auxiliary service - Demand of Service Tax in respect of sales promotion expenditure - Demand under the head of other charges under reverse charge mechanism - period from 01.10.2007 to 31.03.2012 - suppression of facts or not - time limitation. Demand of Service Tax under the head of sales commission under the category of business auxiliary service - Suppression of facts or not - time limitation - HELD THAT:- It is observed that this demand has been raised for the period from 2007-08 to 2010-11 and the show cause notice was issued only on 18.04.2013 beyond the normal period of limitation; the appellant has been filing returns regularly and declaring about the expenditure incurred towards foreign currency in their Annual Financial Statements - the issue is revenue neutral as the service tax paid under reverse charge would be available to the appellant as credit to them. When the issue is revenue neutral, extended period of limitation cannot be invoked to demand Service Tax from the assessee - the demand of Service Tax confirmed by invoking the extended period of limitation is not sustainable. Demand of Service Tax in respect of sales promotion expenditure - time limitation - HELD THAT:- Most of the expenses are in the form of discounts / bonuses offered on account of sale and related purchase of goods. There is no evidence brought on record by the Revenue to show that these expenses were incurred by the appellant towards receipt of any service , for demanding Service Tax from the appellant under reverse charge mechanism - Further, the fact is noted that all these details have been declared by the appellant in their financial statements. Hence, the extended period of limitation cannot be invoked to demand Service Tax under this head - the demand of Service Tax confirmed under the head of sales promotion expenses' is not sustainable, on merits as well as on limitation. Demand under the head of other charges under reverse charge mechanism - HELD THAT:- The appellant has disclosed the expenses in foreign currency under this head in their financial statements. The impugned order has not demanded service tax on this amount under any particular category of service. It is also observed that the Department has failed to bring any evidence on record to show that these have been incurred towards the receipt of any service, to demand Service Tax under reverse charge mechanism from the appellant. Accordingly, the demand of Service Tax under this head is not sustainable. The demands of Service Tax confirmed in the impugned order are not sustainable and accordingly, the same are set aside - Appeal allowed.
-
2024 (9) TMI 776
Time limitation - Failure to discharge Service Tax liability on Transportation of Goods by Road (GTA) Services on reverse charge mechanism basis - N/N. 04/2010-S.T. dated 27.02.2010 - HELD THAT:- Admittedly, the appellant is a corporation incorporated by the Government of Bihar. They have been carrying on the activity of receiving and storing food grains. This issue had come up before the Hon ble Gujarat High Court in the case of GUJARAT PULSES MANUFACTURING ASSOCIATION AN ASSOCIATION OF PULSE MILLS VERSUS UNION OF INDIA [ 2018 (5) TMI 1424 - GUJARAT HIGH COURT] wherein the Hon ble High Court held ' across the country, the trade did not pay service tax on transportation of Tur Dal till 2010 nor did the department raise any demand disputing the interpretation of the trade that the product Tur Dal was already included in the exemption notification. That being the position, nowhere the non-payment of tax can be co-related to fraud, collusion, wilful misstatement, suppression of facts or contravention of the statutory provisions by the petitioner with the intent to evade payment of duty. The show cause notices thus which seek to levy such duty for the period beyond the normal period of eighteen months of limitation therefore, cannot survive.' The appeal is allowed on the ground of limitation itself, without going into the merits of the case - appeal disposed off.
-
2024 (9) TMI 775
Declaration/application filed by the appellant under VCES - entitlement to immunity from penalty, interest or any other proceedings under the Chapter in terms of Section 108(1) of the 2013 Act - HELD THAT:- Support found from the decision of the Allahabad Bench of this Tribunal in the case of M/S GOENKA MOTORS (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, ALLAHABAD [ 2017 (11) TMI 883 - CESTAT ALLAHABAD] , wherein in similar circumstances, the tax dues were paid by the assessee under Section 107, it was concluded that neither the demand under Section 111 of the Finance Act, 2013 nor the demand under Section 73 of the Finance Act, 1994 was maintainable in view of the immunity granted to the appellant by the provisions of sub-section (1) of Section 108 of the Finance Act, 2013 and accordingly, the order-in-original impugned therein was set aside and the appeal was allowed. Since the controversy in the present case is squarely covered by the aforesaid decision of the Allahabad Bench, the declaration filed by the appellant under VCES stands allowed. The impugned order is set aside - The appeal is, allowed.
-
2024 (9) TMI 774
Taxability - Tolerating the act - Net Present Value (NPV) paid by the appellant in the Compensatory Afforestation Fund (CAMPA Fund) - Change for usage of the forest land falling under the said project for non-forest purposes - Declared Service under Section 66E(e) of the Finance Act, 1944 - time limitation - suppression of facts or not. Taxability - HELD THAT:- The appellant has made payments of NPV to the CAMPA Fund, as a result of the constitutional mandate enshrined in Article 48 of the Constitution of India. It is also observed that the charges are collected in pursuance of the decision of the Hon ble Supreme Court. From the impugned order, it is observed that the adjudicating authority has considered the payment of NPV as a consideration for the 'Declared Service' as defined under Section 66E(e) of the Finance Act, 1944. The observation that the Government is tolerating the act of the appellant against a consideration is legally not sustainable inasmuch as one cannot envisage the situation as apprehended by the Department that by collecting NPV, the Government is tolerating the act of the appellant. The issue regarding taxability of the payment of NPV in the CAMPA Fund stands decided by this Tribunal in the case of M/S MAHANADI COALFIELDS LIMITED (ORIENT AREA) VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, ROURKELA. [ 2023 (7) TMI 1336 - CESTAT KOLKATA] , wherein this Tribunal held that ' Equally unthinkable is to say that the Government employee has tolerated the non-sanction of leave during his service as per an agreement and in consideration, received the leave encashment at the time of retirement and to charge service tax on the amount received as leave encashment. These, cannot be called taxable services of tolerating a situation by any stretch of imagination. No service tax can be levied on the amounts received by the appellant as compensation.' Thus, the clearance granted by Ministry of Environment, Forest and Climate Change for usage of the forest land falling under the said project for non-forest purposes, cannot be considered as a 'Declared Service' as defined under Section 66E(e) of the Finance Act, 1944 and the charges of NPV paid by the appellant cannot be considered as a 'consideration' for the said service. Accordingly, the demand of service tax along with interest, in the impugned order is not sustainable. Time limitation - suppression of facts or not - HELD THAT:- It is also observed that the appellant has not suppressed any information from the Department. In fact, the entire payment of NPV into the CAMPA Fund is as per the law. Hence, extended period cannot be invoked to demand Service tax in this case - As there is no suppression of facts with intention to evade the tax has been established in this case, penalty under Section 78 of the Finance Act, 1994 is not imposable on the appellant. The impugned order is set aside - appeal allowed.
-
2024 (9) TMI 773
Re-quantification undertaken by the ld. adjudicating authority - requirement of dropping a huge portion of the demand on this count alone - The Revenue took the view that since they were not paying to the extent of 10% of the invoice value, the assessee-appellant is not eligible to avail CENVAT Credit, to that extent - HELD THAT:- The issue is no more res integra. The Delhi Bench of the Tribunal in the case of M/S HINDUSTAN ZINC LIMITED VERSUS CCE, JAIPUR-II [ 2017 (4) TMI 1323 - CESTAT NEW DELHI] has held 'identical issue decided in the case of M/s. Hindustan Zinc Ltd. Versus C.C.E. Jaipur-II [2017 (1) TMI 373 - CESTAT NEW DELHI], where it was held that in case of any amount retained or discounted after the invoices were issued, the credit need not be changed and full credit of service tax paid to the service provider will be eligible for credit'. The ratio laid down under these Tribunal decisions are squarely applicable to the facts of the present case. Accordingly, the impugned order is set aside and the appeal filed by the assessee-appellant is allowed. Appeal disposed off.
-
2024 (9) TMI 772
Time limitation for filing refund claim - refund claims have been filed beyond the stipulated time limit of one year - whether service tax paid on input services used for export of medicines for the period April, 2013 to January, 2014, is refundable in terms of N/N. 41/2002-S.T. dated 29.06.2012 or not? - HELD THAT:- The original authority had scrutinized the refund claim filed by the appellants and after recording his findings that the appellants have not filed refund applications within one time had rejected the refunds. It is found that in order to claim the refund of service tax paid on the input services on export of goods as per the N/N.41/2012-S.T. dated 29.06.2012, the requirements are that in respect of various extent/conditions prescribed therein, have to be fulfilled by the claimant/ exporter and the refund shall be granted in the manner specified therein. Further, in terms of Section 11 B of the Central Excise Act, 1944 as made applicable to matters relating to service tax under Section 83 of the Finance Act, 1994, any application for refund of duty/tax shall be filed before the expiry of one year from the relevant date prescribed therein. On the above basis and as per the condition 3(g) of the aforesaid Notification, the refund claim shall be filed within one year from the date of export of the goods for which such input services were used. The case in hand does not relate to the first category of unconstitutional levy or the third category of refund on the basis of the judgement delivered by the Hon ble Supreme Court. It squarely falls under the second category of duty/tax paid by the claimant which could at the most be treated as illegal levy. However, even in such cases, the legal provisions of Section 11B of the Central Excise Act, 1944 as made applicable to service tax, would apply for refund of service tax. With respect to the time limit for filing of a refund claim in such case, it is mandated under said Section 11B of the Act of 1944 that such refund claim is required to be filed within one year from the relevant date. It is a fact on record that the Notification No.41/2002-S.T. dated 29.06.2012 under which the refund has been filed in this case, had prescribed that the refund claim shall be filed within one year from the date of export. As regards the disputed part of the refund claim relating to Freight, Banking and other Financial services for which the appellants have filed this appeal, it is found that the respective refund claims have been filed beyond the prescribed time limit of one year from the relevant date, and therefore these are clearly barred by limitation of time as mandated under Section 11B of the Central Excise Act, 1944, as made applicable to service tax under Section 83 of the Finance Act, 1994 and as per condition 3(g) of the Notification No. 41/2012-S.T. dated 29.06.2012. There are no grounds for interfering with the impugned order passed by the learned Commissioner (Appeals). Therefore, the appeal preferred by the appellants is liable to be dismissed on the grounds of time bar. The appeal filed by the appellants is dismissed.
-
Central Excise
-
2024 (9) TMI 771
Request for grant of interest on delayed refunds - rejection with an advise that petitioner may file an appeal against the order in original - Respondent submitted that if only petitioner had made this submissions to the officer before the impugned order dated 15th December 2020 was passed, he might have consider and allowed interest - HELD THAT:- The respondents are not agreed upon, in as much as the officer should be aware of what the law is and the law was as confirmed by the circular issued by the Board that Section 11BB of the Act is attracted automatically for any refund sanctioned beyond a period of three months. In view of the provisions of law, instead of quashing and setting aside the order dated 15th December 2020 and adding to the burden of the officers, the Respondent No. 3 or 4 or the appropriate officer are directed to work out the interest payable at the notified rate and that would mean the rate notified on 15th December 2020 as provided under Section 11BB of the Act and pay the amount within four weeks from the date this order is uploaded. Petition disposed off.
-
2024 (9) TMI 770
Condonation of delay in filing the application for restoration - HELD THAT:- Though the reasons given are not very satisfactory yet since the appeal had been filed under Section 35G of the Central Excise Act, 1944, way back in the year 2020 and the appeal was pending, and we are required to consider as to whether any substantial question of law arose for consideration the discretion is exercised and the delay in filing the application is condoned for restoration. Whether the findings of the adjudicating authority that after removal of goods inter mixing of SKO with MS/HSD amounts to manufacture? - HELD THAT:- The reasoning given by the learned Tribunal to be perfectly valid and justified, as the Board cannot issue a Circular contrary to the statutory provision nor the adjudicating authority can travel beyond the allegations in the show-cause notice - there are no grounds to interfere with the order passed by the learned Tribunal. The appeal fails and dismissed and the substantial questions or law are answered against the revenue.
-
2024 (9) TMI 769
Condonation of delay in filing appeal - time limitation - appeal filed beyond the period permitted in section 35 of Central Excise Act, 1944 - HELD THAT:- Taking note of the decision in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] , it was held in M/S TNET MESSAGING SERVICES P LTD. VERSUS COMMISSIONER OF CUSTOMS CGST CX, MUMBAI EAST [ 2023 (3) TMI 891 - CESTAT MUMBAI] that 'it is well settled that once the period of limitation expired as prescribed u/s. 85(3) ibid neither the Tribunal nor the first appellate authority has power to condone the delay in filing the appeal beyond the statutory period.' Thus, it is not open to the Tribunal to condone such delay as could not be condoned by the first appellate authority. There is no merit in the appeal which is dismissed.
-
2024 (9) TMI 768
Rejection with respect to the self-credit taken by the appellant - manufacture of cosmetics and Vaseline classifiable under Chapter 33 and 27 respectively of first schedule to the CETA - benefit of N/N. 20/2007-CE dated 25.04.2007 - HELD THAT:- Both the lower authorities have not disputed the fact that differential duty of Rs. 18,89,626/- has been paid by the appellant along with duty payable for the month of January 2012, on 02.02.2012. It is also observed that the appellant has fulfilled all the conditions of N/N. 20/2007-CE, as amended by N/N. 20/2008-CE. Thus, there is no dispute regarding the eligibility of the credit to the appellant. The impugned order has not allowed the refund of self-credit claimed by the appellant to the extent of 56% of the said differential duty paid, amounting to Rs. 10,27,377/-, based on the observation that the appellant have not complied with Paragraph 2A of the said Notification - In the present case, as directed by the Department, the appellant paid the duty for the months of August 2011 to December 2011 in the month of January 2012. Thus, there is no infirmity in taking self-credit of all the duties paid in the month of January, including the duty paid for the earlier months. Accordingly, the appellant is eligible for the refund of self-credit of Rs.10,27,377/-.Thus, that portion of the impugned order rejecting the refund of self-credit to the extent of Rs.10,27,377/- is liable to be set aside. The portion of the impugned order rejecting the refund of self-credit to the extent of Rs.10,27,377/- set aside - appeal allowed.
-
2024 (9) TMI 767
CENVAT Credit - advertising service - failure to comply with requirement in rule 6 of CENVAT Credit Rules, 2004 of maintaining separate records of consumption of advertisement services - rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- It is settled law that advertising services is an input service for goods manufactured as long as it relates to goods being sold. That the procurement of such service for HIT has been undertaken by the appellant-assessee is not in dispute by either side. That such credit could have been distributed to contract manufacturers is in the realm of the hypothetical as that is not a fact in the present dispute. The distribution of the eligible credit to the one unit of the appellant-assessee manufacturing the product is also not disputed by the appellant-Commissioner. It is only required to determine credit eligible to be utilised by the sole manufacturing facility in proportion to the contribution to the total turnover of the advertised product. The impugned order has not erred in computing the proportion and, indeed, there is no dispute on that score. It is only the remedy that is under dispute. The adjudicating authority has adopted the harshest of the methods without allowing the assessee to seek the most facilitative option. The impugned order is set aside to the extent of recovery determined therein - matter remanded back to the original authority to re-adjudicate the matter after taking into consideration the correctness of the reversal adopted by the appellant-assessee - appeal allowed by way of remand.
-
CST, VAT & Sales Tax
-
2024 (9) TMI 766
Levy of Entry tax - product being a tractor trailer - Interpretation of the definitions of motor vehicle and vehicle under the Motor Vehicles Act, 1988 and the Orissa Entry Tax Act, 1999 - HELD THAT:- The definition given of motor vehicle and vehicle in section 2 (28) (Act of 1988). Section 2(h) in the Entry Tax Act defines only motor vehicle to mean the same as defined in clause (28) of section 2 (Act of 1988) excluding, inter alia, tractor. There is no dispute that product manufactured by petitioner does not have a motor. As such, it can only find meaning as given for vehicle , by section 2 (28) in Motor Vehicles Act. 1988. Section 2(h) in Entry Tax Act, 1999 defines motor vehicle . There is no definition of vehicle in that Act. The question is answered in the negative and in favour of petitioner - Petition allowed.
-
2024 (9) TMI 765
Validity of the proceedings under Section 17-A of the Andhra Pradesh General Sales Tax Act, 1957 - Time limitation of the order declaring the sale void after seven years - HELD THAT:- The provisions of Section 17-A, provide the commercial tax department with a provision to safeguard recovery of revenue by permitting an authority under the Act to declare any transaction which takes away an asset out of the reach of the department. Needless to say, this provision would be available only where it is shown that such property had been alienated for adequate consideration and the purchaser was unaware of the liability of the vendor in alienating such property. This provision came to be considered by a Division Bench of the erstwhile High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in the case of DAMERA RAMAKRISHNA AND OTHERS VERSUS COMMERCIAL TAX OFFICER (FAC), VIJAYAWADA AND OTHERS [ 2004 (10) TMI 556 - ANDHRA PRADESH HIGH COURT] . In this case, a Private Limited Company had fallen in sales tax arrears to the tune of Rs. 35,98,030/-. The said assessee, while steps were being taken to recover the tax dues, had sold away immovable property belonging it and orders under Section 17-A were passed - In the present case, the facts are different. The petitioner is no other than the son-in-law of the 5th respondent and the assertion of the petitioner that he was unaware of the tax dues of the 6th respondent, which was essentially a family concern of the 5th respondent, cannot be taken on face value. In the present case, though the company is admitted to be in liquidation, no steps have been taken against the 5th respondent by issuance of a notice calling upon him to pay the tax dues of the 6th respondent Private Limited Company nor was the 5th respondent given an opportunity of hearing to demonstrate that there was no liability to pay such taxes. In the absence of such an opportunity being given to the 5th respondent, tax liability cannot be fastened upon the 5th respondent. This Court is of the view that the proceedings of the 1st respondent dated 14.09.2007 would have to be set aside, subject to the condition that such proceedings can again be issued, provided steps are taken to fix liability of payment of tax dues of the 6th respondent on the 5th respondent and thereafter steps are taken for recovery of such tax dues. This Writ Petition is allowed by setting aside the order passed by the 1st respondent in RcB2 191/2007, dated 14.09.2007 under Section 17-A of APGST Act, 1957. However, it shall be open to the 1st respondent or any other competent authority under the APGST Act or the successor Acts, provided such authority is vested in any authority, under the Successor Act, to take steps to ascertain whether the 5th respondent would be liable to clear the dues of the 6th respondent and whether such tax dues can be recovered from the 5th respondent, if it is found that he would be liable to pay the tax dues of the 6th respondent. Petition allowed.
-
2024 (9) TMI 764
Cancellation of assessment order - whether the Notification dated 13.09.2012 can be made applicable in the case of the present revisionist, whose goods were seized way back in the year 2008-2009? - HELD THAT:- As per the Notification dated 13.09.2012, the transporter during movement has to carry with him duly signed two copies of Lorry Challan/E-generated Lorry Challan , document of title to goods/GR/bilty, invoice/challan etc. The present revisionist has been registered with the Ministry of Railways, and as per the letter dated 25.05.2006, he is bound to keep the complete address of the consignors as well as the consignee. When he was issued a show-cause notice before the assessment order dated 01.09.2009, and on that date, the Notification dated 13.09.2012, was not existing. Hence, the case of the revisionist has to be examined in view of the provisions of the Act applicable on the date when the assessment order was passed on 01.09.2009. In the present case, the provisions of section 49 (3) were done away by deleting the same by Notifications dated 13.09.2012 and 17.12.2012 with effect from 01.03.2012. The law which was applicable with respect to the definition of the word dealer and whether the non production of the documents relating to the title of the goods i.e. duly signed two copies of Lorry Challan/E-generated Lorry Challan , document of title to goods/GR/bilty, invoice/challan etc., could be made basis to assess tax liability has already been considered by the Hon ble Supreme Court in various judgments. In the present case, after the Notification of 13.09.2012, and 17.12.2012, the State of Uttarakhand had established check-posts at Kashipur, Rudrapur, Haldwani, Dehradun, Haridwar and Rishikesh, and if they are non functional, then mobile squad has also been deployed. In the case of the revisionist when the goods were transported, there was no checking done on the way as the goods were being transported on the railways coach, and hence, there was no checking done during the transportation of these goods, and hence, when there no checking was done during the transportation of the goods, the revisionist being a transporter of the goods cannot be liable to pay tax, if he has not produced the evidence of the name of the consignors and consignees. The order dated 02.04.2014, passed by the Commissioner Tax Tribunal, Dehradun Bench, Dehradun is set aside, and the order passed by the JCA dated 19.06.2012, is being upheld - the present revision is being allowed.
-
2024 (9) TMI 763
Levy of penalty on the revisionist - ex parte penalty order was passed against the assessee - existence of mens rea or not - HELD THAT:- Before imposing penalty under Section 48 (8) of the Act, the Tax Assessment Officer has to be satisfied that the goods were imported in contravention of Section 48, is an attempt to evade assessment or payment of tax due or likely to be due under the Act. In this backdrop, the Tribunal, thereafter, proceeded to examine the alleged Declaration Form (Form DVI) of the import to the officer of the Trade Tax Department. The Import Declaration Form (Form XVI) was not in force, and its legal position will be like a waste paper, and in this backdrop, the Tribunal held that the trader had made the open contravention of the provisions of Section 48 (2). The Tribunal held that under Section 48A, the Import Declaration Form has to be given by the importer duly filled in and signed before the import of goods to the consignor. There is no provision in the Uttarakhand Value Added Tax Act, 2005 to produce new prevailing import declaration form before the Inquiry Officer, and hence, subsequent new declaration form produced by the assessee, along with his reply to the show-cause notice, cannot be a ground not to impose penalty on the assessee. After perusing the order of the Tribunal, it is worth highlighting that imposition of penalty is on the ground that the trader was importing the goods with an import declaration form, which was invalid Form-XVI, and trip-sheet under Section 48A had not been prepared. The very fact that when the goods are seized as per the provisions of Section 43 of the VAT Act, the provisions of Section 48 would require to be examined, which deals with the power to seize goods. Even in Section 43 (5), where an order of penalty has to be passed, an opportunity of hearing has to be given, and the officer has to be satisfied that there was an attempt to willfully not show the goods in accounts, register and other documents, and only then the penalty has to be imposed not exceeding 40% of the value of goods. After seizure of the goods under Section 43 (4), the Assessing Authority has to give a show-cause notice as to why show-cause notice should not be imposed, and after giving notice, an opportunity of hearing as per Section 43 (5) has to be given, and after examining the evidence, a finding has to be given whether there was willful attempt to evade tax. On issuance of show-cause notice, the trader had produced the valid declaration form (Form XVI). It is the case of the trader that he had sent the material to Mysore for job work. The job work was not done and the material was being brought back to the Uttarakhand without the job work. Hence, there was no payment made for the job work, and it was not the case of import of goods to the State of Uttarakhand. The goods, which were sent from Uttarakhand, were being brought back to Uttarakhand without job work. Hence, the nature of goods had not been changed, and it was the case of invalid declaration form, which was made basis to impose penalty. Castrol India Ltd. another vs. Commissioner, Commercial Tax [ 2012 (4) TMI 585 - ALLAHABAD HIGH COURT ], was a case where under the U.P. VAT Act, 2008, the goods had been seized on the sole ground that the goods were not being accompanied by the Import Declaration Form (Form 38) under Section 50 of the Act. However, the original form was enclosed with the reply, and the Allahabad High Court held that the object of issuance of show-cause notice under Section 50(4) of the Act was to give to the party concern not only an opportunity to submit an explanation as to why the security may not be demanded, but also to explain why the goods may not be seized, and if in response to such a show-cause notice, the party produces necessary documents so as to remove the discrepancy, if any, found at the time of checking, the authorities are legally bound to consider the same before ordering for the seizure of the goods. The ratio of the above judgment is applied to the facts of the present case that at the time of seizure, an invalid declaration form (Form XVI) was produced. However, subsequently, pursuant to the show-cause notice, the valid import declaration form (Form XVI) was produced, and it was not the case of the Assessing Officer that the valid import declaration form was fake, or there was discrepancy in the documents. In the present case, keeping in view the above judgment referred to by learned counsel for the revisionist, the revision(s) is being allowed, and the order of the Tribunal is being set-aside.
-
2024 (9) TMI 762
Legality of demanding security when all the relevant information relating to the said goods was already uploaded on the website of the department and the department had duly acknowledged the receipt of the uploaded information - whether Tribunal without deciding the fact relating to the intention of the dealer was legally justified to upload the demanded security when the said goods were being imported as raw material for the manufacture of Aata, Maida and Suji which are exempted under the VAT Act? HELD THAT:- A perusal of the order nowhere shows that with respect to the goods in transit, there is any intension of evasion of tax, and the Assessing Officer has accepted the invoice and weighment slip and has finalized the assessment order. Since the Assessing Officer has accepted all the documents presented before him by the revisionist, the impugned order demanding security of Rs. 2,26,725/- (40% of the value of goods) is liable to be set-aside. The present revision is being allowed, and the order dated 31.05.2014 and the order dated 11.06.2014 are being set-aside. Application disposed off.
-
Indian Laws
-
2024 (9) TMI 761
Accused in a complaint under Section 138 of Negotiable Instruments Act, pending trial seeking for production of Income Tax particulars and GST particulars of the complainant - HELD THAT:- The trial Court after considering the prayer to putforth probable defence to rebut statutory presumption, production of Income Tax returns for the financial year 1920 is necessary and hence allowed the petition partly. In so far as GST Statement, the trial Court has observed that the complainant's firm is not a registered firm under GST Act as per the statement of the complainant and therefore there is no necessity to direct the complainant to produce documents. This Court confirm the order of the trial court. Further hold that transaction between the complainant and the accused is not in connection with any business dealing. Therefore, there is no necessity for production of GST Accounts to the accused person. Hence, this Criminal Original Petition is dismissed.
-
2024 (9) TMI 760
Release of a seized vehicle on Superdari - concealent of illicit liquor of a large quantity in the vehicle - HELD THAT:- The petitioner is facing the prosecution under Section 52(2) of Delhi Excise Act, 2009. The issue before this Court is not to determine the merits of that prosecution but only to consider whether the vehicle in question can be released on Superdari to the petitioner, and if so, on what conditions, and whether the conditions which have been imposed by the Financial Commissioner by the Impugned Order, deserve any modification. The purpose of seeking surety while releasing the same on Superdari is only to ensure that the vehicle is produced before the learned Trial Court as and when directed. In SUNDERBHAI AMBALAL DESAI VERSUS STATE OF GUJARAT [ 2002 (10) TMI 773 - SUPREME COURT ], the Supreme Court directed that where a vehicle is seized, it is for the Magistrate to pass appropriate orders immediately by taking appropriate bond and guarantee as well as security for return of the said vehicles, if required at any point of time. It held that it is of no use to keep such vehicles seized at the police stations for a long period. In the facts of the present case, there is no opposition to the release of the vehicle in question on Superdari to the petitioner. The only issue is of the reasonable conditions that should be imposed on the petitioner for the same. In my opinion, the object of releasing the vehicle on Superdari can be achieved by directing the petitioner to give a surety of Rs.1 lac. As far as the undertaking that the bus shall not be used for similar offence for a period of one year, in my opinion, there is no warrant in law for the said condition to be imposed. The impugned order records that in case the vehicle is not found to be involved in any other case of a similar nature for one year from its release, the surety shall stand discharged. The said condition shall continue to operate. Petition dispsoed off.
|
9911796707
