Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 26, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
GST
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Academic institute faces GST hurdle on electricity charges to commercial occupants.
The ruling pertains to the applicability of GST on electricity charges recovered by IIT Roorkee from its commercial occupants. The key points are: IIT Roorkee sought an advance ruling on whether GST is applicable on the electricity charges it recovers from commercial occupants, representing only reimbursement of actual costs charged by the power corporation. The authority held that the issue raised is identical to the one already decided in the applicant's own case under audit proceedings. As per Section 98(2) of the CGST Act, the authority can reject an application if it concerns an issue already decided for the applicant. Since the applicant approached the authority again on an identical issue already decided, the application was rejected without examining the merits, as it is not maintainable u/s 98(2) of the CGST Act and UK GST Act.
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Unfair tax adjudication under UP GST Act - Petitioner's right to personal hearing denied. Court intervenes, directs fresh hearing.
Principles of natural justice violated in tax adjudication process under U.P. GST Act, 2017. No opportunity for personal hearing provided to petitioner despite request in reply to show cause notice. Writ petition allowed, impugned order dated 17.08.2022 set aside. Assessing Officer directed to fix date, time, and place for personal hearing within two weeks of receiving certified copy of order, as petitioner had already submitted reply to show cause notice.
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GST Notification Struck Down: Court Cites Lack of Council Recommendation, Parallel State Notification.
The High Court examined the validity of Notification No. 56/2023-CT dated 28.12.2023, which extended the time limit for passing orders u/s 73 of the Central Goods and Services Tax Act (CGST Act). The key issues were the absence of a recommendation from the GST Council and the absence of a corresponding state government notification parallel to the Central Government's notification. The Court held that exercising powers u/s 168A of the CGST Act to extend time limits requires a recommendation from the GST Council and the existence of force majeure circumstances, as defined in the Explanation to Section 168A. Citing the Supreme Court's judgment in V.M. Kurian Vs. State of Kerala, the Court emphasized that the word "recommendation" implies a statement expressing commendation, and its meaning must be understood in the context of the relevant provisions and objects. The Court observed that the CGST Act and State GST Acts do not define "recommendation" but noted the constitutional provisions promoting fiscal and cooperative federalism. Consequently, the Court ruled that the Notification No. 56/2023-CT is ultra vires the CGST Act and legally unsustainable, setting it aside. The Orders-in-Original passed u/s 73(9) of the CGST Act and State GST Act beyond the prescribed time limit u/s 73(10.
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Dissolution of partnership firm: Tax notice quashed, petitioner granted chance to prove tax payments.
The Court quashed the show cause notice (SCN) issued to the petitioner in a tax matter due to the dissolution of a partnership firm. The petitioner expressed willingness to participate in proceedings before the tax department and demonstrate tax payments made concerning the firm. The Court set aside the impugned order and notices, granting liberty to the respondent authorities to proceed against the petitioner and other legal heirs of the partner in accordance with law. The petition was disposed of.
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Quashed unlawful tax audit orders against firm under insolvency resolution.
The court quashed orders related to audit and intimation liability issued against the petitioner company u/s 65 of the CGST Act for financial years 2018-19 and 2019-20. The orders were found to be without jurisdiction or legal authority, as a resolution plan for the company had already been approved by the NCLT, rendering such proceedings impermissible under applicable legal precedents. Consequently, the petition challenging the impugned orders and proceedings was allowed by the High Court.
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Bank documents seizure challenged, court orders return for business operations. Attachment orders set aside pending liability determination.
Challenge to provisional attachment order concerning bank account - pre-show cause notice issued - court held documents seized should be returned as petitioner is in real estate business and requires documents for operations - order of seizure not interfered with but respondents directed to return seized documents - regarding provisional bank attachment orders, in light of petitioner's contention of partial discharge of liability and interim stay by court, attachment orders set aside with liberty to respondents to proceed further after decision on show cause notice - petition partly allowed.
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Acetylene gas supply not covered u/r 55, requires tax invoice - High Court directs authorities to revisit penalties.
The High Court held that Rule 55 of the CGST Rules, 2017 applies only to the four circumstances mentioned in Rule 55 (a) to (d), and the supply of Acetylene Gas is not covered by Rule 55 (a). Therefore, the goods should have been covered by a tax invoice. The competent authorities were directed to consider the case u/s 122 of the CGST/SGST Acts and impose appropriate penalties. Any amount recovered from the petitioner due to the previous order shall be refunded or adjusted against future tax liabilities by crediting the electronic cash register. The petition was disposed of accordingly.
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Firm's auditor wrongly served GST notice due to absent GST authorization; order passed denying personal hearing.
Petitioner failed to authorize representative for GST matters after registration under GST regime, resulting in show cause notice being served on auditor without petitioner's knowledge. Petitioner unable to respond or attend hearing due to lack of notice. Order passed without granting opportunity of personal hearing, violating natural justice principles. High Court set aside original order, remanded matter for fresh consideration by department, subject to petitioner paying 7.5% of disputed tax within four weeks. Petition allowed by way of remand due to department's fault in denying petitioner opportunity to respond.
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A government-owned company loses GST exemption on legal services due to insufficient equity stake.
The key points are: The applicant (THDCIL) does not qualify as a "Government Entity" under GST laws as it fails to meet the criteria of having 90% or more equity or control by the government. Although initially established with 100% government equity, currently the government's stake is only 25.504% due to equity dilution. Consequently, THDCIL cannot avail the GST exemption on legal services received under the reverse charge mechanism, which is available only to "Government Entities" as per the relevant GST notifications. The Advance Ruling Authority has ruled that THDCIL does not satisfy the definition of a "Government Entity" for GST purposes due to insufficient government equity participation.
Income Tax
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University's tax exemption denied for non-compliance: Unaudited accounts, lack of info/evidence on expenses & donations.
The assessee university's application for registration u/s 10(23C)(vi) was rejected due to non-submission of audited accounts and failure to provide necessary information or explanations regarding various queries raised by the Commissioner of Income Tax (Exemptions). The key points are: the assessee argued that audited accounts were not required for the first three years as per the applicable statute, but failed to substantiate this claim. The audit clause did not mention any exemption for the first three years. The assessee's contention regarding non-audit due to non-inclusion in the audit list was found untenable as accounts for the subsequent year were audited before the notification date. Regarding vehicle expenses, no plausible explanation or supporting evidence was provided. For examination expenses, the assessee claimed confidentiality but failed to provide relevant information or evidence. Donations received for honouring gold medalists lacked corroborative evidence. Following the Supreme Court's decision in New Noble Education Society, the Appellate Tribunal upheld the Commissioner's rejection order due to the assessee's failure to furnish necessary information and supporting documents.
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Firm denied tax deduction on compensation paid for properties it had no rights over.
The High Court held that the assessee firm was not entitled to claim deduction u/s 37(1) of the Income Tax Act for the compensation paid. The key points are: The properties involved in the agreement did not belong to the assessee firm during the relevant assessment year. The assessee did not have any right, title or interest in those properties. The assessee was not a party to the agreements related to those properties. The Tribunal's reasoning that the assessee had acquired interest or rights in the properties by virtue of registration or identification was erroneous. The assessee failed to substantiate that the liability for compensation was crystallized or provided for during the relevant year. The Tribunal erred in allowing the assessee's claim by setting aside the concurrent findings of the lower authorities.
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Deductions under 10B disallowed, Section 153C procedure non-compliance examined by High Court.
The High Court addressed two issues: disallowance of deduction u/s 10B and non-compliance with Section 153C procedure. Regarding Section 10B, the Court upheld the Tribunal's decision based on its previous judgment in Tata Elxsi Ltd. As for Section 153C, the Court reiterated that when search material is relied upon, the Assessing Officer must follow the procedure u/ss 153A, 153B, and 153C, and cannot continue with regular assessment. The Court relied on its decision in Dinakar Suvarna and ruled in favor of the assessee on both issues.
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CBDT must refund delayed tax amount with interest; IT portal glitches can't deny statutory benefits.
The High Court held that after the Income Tax Appellate Tribunal's order, the tax authorities are bound to refund the amount to the petitioner with interest, without requiring any formalities to be completed. The non-functionality of the TRACES Portal cannot be grounds for denying the statutory benefit under the Income Tax Act. Section 243 provides for payment of interest on delayed refunds, while Section 241A about withholding refunds is not applicable in this case. Section 245 allows setting off refunds against outstanding tax payable after giving written intimation. The TRACES Portal's limitations cannot override the assessee's rights under the Income Tax Act. The authorities must complete the refund exercise within 30 days.
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Income Tax assessment; unexplained receipts added to income u/s 69A; writ dismissed due to availability of statutory appeal remedy.
The High Court dismissed the writ petition filed against the order of assessment passed u/s 153A, making additions u/s 69A of the Income Tax Act. The Court held that the availability of an alternative statutory remedy of appeal u/s 246A is not a bar to exercise jurisdiction under Article 226 of the Constitution, subject to certain limitations. However, the petitioner failed to demonstrate any exceptional situation warranting interference under Article 226. The Court found that the Assessing Officer's action of bringing unexplained receipts to tax cannot be construed as without jurisdiction or violating principles of natural justice. The petitioner did not substantiate the claims of fraud by ex-employees and failed to provide information sought regarding unsecured hand loans. The Court granted liberty to the petitioner to approach the appellate authority u/s 246A.
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Unsecured loans verification inadequate, Addition partially upheld.
The Appellate Tribunal dismissed the assessee's appeal regarding the revision u/s 263 concerning unsecured loans received. The Principal Commissioner found that the Assessing Officer did not properly verify the unsecured loans, and the assessee failed to provide relevant documents for verification. The Tribunal held that the Assessing Officer's addition of 10% of the unsecured loan lacked basis and application of mind u/s 68. However, the revisional order pertained to the remaining unverified unsecured loan creditors, where the Assessing Officer erred by not conducting proper verification, prejudicing revenue interests. Mere document submission did not satisfy Section 263 requirements. The assessee's reliance on a distinguishable case was rejected, as the issue of verification remained unaddressed by the Assessing Officer in the impugned assessment.
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Income Tax - Limited Scrutiny Jurisdiction Exceeded, Unfair Addition of Capital Gains.
The case pertains to the scope of limited scrutiny by the assessing officer regarding computation of capital gains u/s 45 and providing exemption u/s 54B of the Income Tax Act. The key points are: The assessee's case was selected for limited scrutiny to verify the deduction claimed u/s 54B. However, the assessing officer exceeded jurisdiction by disallowing the fair market value claimed u/s 45 for computing capital gains, which was beyond the limited scrutiny scope. This violated CBDT instructions limiting the scrutiny scope. The assessment order u/s 143(3) became invalid as the officer traveled beyond the assigned jurisdiction of limited scrutiny. To examine aspects beyond limited scrutiny like cost of acquisition u/s 45, the assessing officer should have taken permission from higher authorities, which was not done. The limited scrutiny scope is narrow as per CBDT instructions, restricting inquiry to specified issues. Linking provisions of Section 54B with Section 48 for enhancing capital gains u/s 45 is impermissible without requisite permissions. Revenue authorities cannot travel beyond limited scrutiny issues without completing formalities for extending scrutiny scope. The assessing officer's addition on issues outside limited scrutiny reasons is invalid. The assessee's appeal is allowed as the officer exceeded jurisdiction.
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Milk agent escapes penalty for not auditing books due to small-scale operations.
Penalty proceedings u/s 271B for failure to get accounts audited. The assessee's main income was commission earned from sales of milk, acting as an agent for the mother dairy. The gross sales reported were not the actual sales but those of the mother dairy. As a small-time agent, the assessee purchased milk in bulk and sold it daily, remitting the amount to the mother dairy and retaining the commission income. The Assessing Officer observed that the assessee did not maintain books of account. Considering the nature of the assessee's activities, it was not possible to maintain books, and the requirement for audit depended on the gross commission income, not sales. Therefore, the Appellate Tribunal decided in favor of the assessee and held that there was no reason to levy penalty u/s 271B.
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Multiple officers assumed jurisdiction without valid transfer, leading to jurisdictional defect.
The jurisdictional Assessing Officer (AO) had suo moto transferred the assessment to Income Tax Officer (ITO), Ward 2(2) Noida. The appellant contended that the statutory notice u/s 143(2) was issued by ITO, Ward-40(1), Delhi and another such notice was issued by ITO, Ward-2(2), Noida despite the assessment proceedings for the relevant Assessment Year being pending with ITO, Ward-70(2), Delhi. The Tribunal held that even though the assessee had mentioned the Noida address in the Income Tax Return and requested the transfer to Delhi, the assessment is not vitiated. However, the Revenue failed to justify and establish the validity of issuance of the notice u/s 143(1) by ITO, Ward 40(1) on 20.09.2016. The Tribunal found no justification for how the Noida Office transferred the case to Ward 40(1), Delhi, which ultimately reached Ward 8(2), Delhi, from where the final assessment order was passed. The Tribunal held that it is not a case of concurrent jurisdiction, but rather a whimsical exercise of jurisdiction by the AOs in transferring the assessment. The assessee's objections to the assumption of jurisdiction were rightly raised and considered by the assessing officers. The Tribunal decided in favor of the assessee.
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Tribunal addressed comparability, interest on receivables, and loss set-off in transfer pricing case.
The Tribunal addressed various issues related to transfer pricing adjustments, including the selection of comparables, interest on trade receivables, and set-off of losses. Regarding comparables, the Tribunal upheld the inclusion of E-Infochips Bangalore Ltd. and Mindtree, rejecting the assessee's objections. However, it excluded Persistent Systems Ltd. due to the absence of inventory related to software products. Concerning interest on trade receivables, the Tribunal followed the DRP's decision to restrict interest to LIBOR plus 250 basis points, despite contrary Tribunal precedents, as the Revenue did not appeal the DRP's order. The Tribunal dismissed the assessee's ground regarding set-off of losses between units, citing the lack of objection before the DRP and the restriction u/s 92C(4) proviso. The order provides clarity on the Tribunal's approach to various transfer pricing issues.
Customs
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Lab chemicals up to 500g for own use under customs heading 9802, not for trading/resale.
Classification criteria for laboratory chemicals under customs heading 9802: Imported solely for own use, not trading or resale, in packings up to 500g/500ml, identifiable as laboratory chemicals by purity, markings or features. Chemicals exceeding 500g/500ml packings or imported for trading/resale classified under respective headings. Objective criteria established for consistent classification across customs formations.
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Customs broker's clearance without physical verification of exporters upheld.
The High Court dismissed the revenue's appeal against the Tribunal's order, upholding the Tribunal's view that the Customs Broker Licensing Regulations (CBLR) 2013 do not mandate physical verification of exporters, their premises, or antecedents. The allegation was that the respondent customs broker initiated clearance without meeting the exporter's authorized person and received work through intermediaries. However, the Tribunal found this permissible under the CBLR. The Court noted that the Department did not investigate how the seal was affixed or officials' involvement. Additionally, parallel proceedings against the respondent's partner concluded favorably, with no prosecution recommended and no adverse findings by the DRI. Consequently, the Court upheld the Tribunal's plausible interpretation of the regulations, dismissing the revenue's appeal.
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Carnet misuse through repair misdeclaration - duties paid, no concealment, notification benefit denied.
Carnet violation through non-filing of Bill of Entry - misdeclaration and misuse alleged. Notification 94/1996 applicable. Misdeclaration accepted for repair purpose, duty on repairs confirmed. No physical concealment, duties paid at import, denial of Notification benefit unjust. Redemption fine and Section 112(a) penalty set aside. Additional ground on duty determination raised for first time, being legal issue, remanded. Order modified to extent of allowing redemption fine and penalty, remanded for deciding additional ground on basic duty liability. Appeal disposed.
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Imported Polyester Bed Sheets Classified as 'Quilt Cover' - A CESTAT Ruling.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled on the classification of imported bed sheets declared as made of 100% polyester. The key points are: The goods were classified as 'Polyester Quilt Cover' by the Tribunal, considering the factual details, size, and common parlance usage. Based on the decided case laws and the nature of the goods, the Tribunal held that the bed sheets are classifiable under CTH 6304 (other furnishing articles) and not under CTH 5407 (woven fabrics of synthetic filament yarn). The order of the lower authority classifying the goods under CTH 6304 was upheld, and the appeal filed by the Revenue was dismissed.
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Customs rejects importer's declared value, enhances it based on email evidence & partner's higher negotiated price admission.
Customs authority rejected transaction value declared by importer and enhanced value based on email evidence and statement of partner admitting negotiated higher price. Email evidence deemed admissible despite lack of certificate u/s 138C of Customs Act. Tribunal upheld enhancement of value but reduced redemption fine and penalty imposed on importer for misdeclaration of value. Tribunal's order partially allowed importer's appeal by reducing financial liabilities while upholding substantive findings on undervaluation.
DGFT
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IT hardware import controls extended till 2024-end, new rules from 2025.
Import of certain IT hardware is restricted. Importers can apply for import authorizations valid until 31.12.2024. Existing authorizations issued until 30.09.2024 remain valid until 31.12.2024. Fresh authorizations required from 01.01.2025 onwards, subject to forthcoming guidance. Other provisions of Policy Circular No. 6/2023-24 dated 19.10.2023 remain applicable. Issued with competent authority's approval.
Corporate Law
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Producer Companies get 5-year transition to comply with securities allotment rules.
This notification amends the Companies (Prospectus and Allotment of Securities) Rules, 2014, by inserting a proviso in sub-rule (2) of rule 9B. The proviso states that a producer company covered under this sub-rule shall, within five years of the closure of such financial year, comply with the provision of this sub-rule. The amendment aims to provide a transitional period of five years for producer companies to comply with the requirements under sub-rule (2) of rule 9B.
IBC
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Bankrupt firm's rejected resolution plan not entertained, court directs NCLT intervention.
Writ petition under Article 226 of the Constitution seeking initiation of fresh voting on petitioner's Resolution Plan after considering principles of equality and fairness dismissed. Court held petitioner has efficacious remedy to assail CoC's action before NCLT as Adjudicating Authority has jurisdiction to regulate CoC's conduct, adjudicate upon resolution plan through judicial review, ensuring CoC functions per IBC. NCLT maintains supervisory role over CIRP proceedings u/s 60 of IBC. Court cannot usurp NCLT's powers to inquire into CoC's commercial wisdom rejecting petitioner's plan. Petitioner's offer to match successful bidder's offer cannot be entertained by Court. NCLT may allow open court bidding if deemed fit while considering CoC's decision. Petitioner granted liberty to approach NCLT to decide objections on merits per law.
PMLA
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Provisional attachment under PMLA upheld due to lack of evidence of legitimate income sources.
Appellants challenged the provisional attachment of their immovable and movable properties under the Prevention of Money Laundering Act (PMLA), alleging lack of evidence that the properties were acquired from proceeds of crime. The court held that the appellants failed to provide reliable proof of their claimed sources of income like agriculture, rent, and contracts to explain the actual purchase consideration. Income tax returns filed belatedly after investigations were insufficient. Under PMLA, the burden lies on the noticee to show the sources of income/assets. The presumptions u/ss 23 and 24 operate against the appellants. The court rejected the contention that the definition of "proceeds of crime" was not considered, as the pre-amendment definition covered any property derived directly/indirectly from criminal activity related to scheduled offences. The attached property's value was rightly determined as Rs. 60,00,000/-, not Rs. 4,37,500/-. Finding no reason to interfere, the Appellate Tribunal dismissed the appeal.
SEBI
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Investors apply for public debt issues up to Rs. 5L via UPI from Nov'24.
Individual investors applying through intermediaries for public issues of debt securities, non-convertible redeemable preference shares, municipal debt securities, and securitized debt instruments up to Rs. 5 lakh must use UPI for fund blocking and provide UPI ID in the application form. Other application modes like SCSBs and stock exchange platforms remain available. The circular is applicable to public issues opening on or after November 1, 2024, issued under relevant regulations to protect investors and regulate securities market.
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Objective Evaluation Criteria for Stock Exchanges & Market Infra Institutions.
This circular outlines the parameters and framework for independent external evaluation of performance of Market Infrastructure Institutions (MIIs) like stock exchanges, clearing corporations, and depositories. The key aspects are: minimum criteria with weightages for evaluation across areas like technology resilience, investor education, regulatory compliance, governance, and fair access; a rating framework for consistent assessment; principles for appointment of independent external agency; timelines requiring first evaluation for FY 2024-25 and subsequent three-yearly evaluations; and guidelines for performance evaluation of Managing Director and Key Management Personnel linking to regulatory and compliance outcomes. MIIs must implement necessary systems, amend bye-laws, and disseminate the circular. The measures aim to enhance MII performance, governance, and regulatory compliance for investor protection and market development.
VAT
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Tax appeal to be heard sans security deposit for poor litigants; Tribunal can't waive pre-deposit.
Constitutional validity of Section 33(5) of the Haryana Value Added Tax Act, 2003, regarding the waiver of the condition of pre-deposit of surety bond or bank guarantee, was examined. While the appellate authority lacks the power to waive the condition, the High Court, under Article 226 of the Constitution, can direct the appeal to be heard without insisting on the precondition. The requirement of an irrevocable bank guarantee or surety bond is an onerous condition. The petitioners would be unable to submit security in the form of a surety bond as they lack property worth the said amount. A person cannot be left remediless. The Joint Excise and Taxation Commissioner (Appeals), Faridabad, is directed to hear the appeals without insisting on the precondition u/s 33(5) and decide on merits. The appellate authority cannot waive the pre-deposit required u/s 33(5). The Haryana Tax Tribunal's order upholding the refusal to entertain the appeal without surety bonds or pre-deposit is not illegal.
Central Excise
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Cash seized - Can't be used for appeal deposits; Excess interest on seized cash FDs to be refunded.
Cash seized during investigation cannot be appropriated towards pre-deposits u/s 35FF of Central Excise Act or Section 129EE of Customs Act as a condition for filing appeals. Respondents erroneously granted interest at 6% per annum on refund of seized cash deposited in fixed deposits earning higher interest. Petitioner's claim for 18% interest rejected, but entitled to excess interest earned on fixed deposits over 6%. Respondents, as trustees, obligated to account for entire interest earned and cannot enrich themselves. Impugned order quashed, petitioner awarded excess interest of Rs. 90,07,829/- over 6% on fixed deposits from seized cash. Respondents to initiate inquiry, fix responsibility for negligence in non-renewal of fixed deposits.
Articles
Notifications
News
Case Laws:
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GST
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2024 (9) TMI 1402
Grant of leave - HELD THAT:- There is nothing placed on record by the respondents to show that the process in terms of order dated 8th April, 2024 passed by the Chief Judicial Magistratem Gautam Buddha Nagar, Uttar Pradesh was served upon the appellant. Apart from this, though on 29th April, 2024, interim relief was granted by this Court to the appellant on condition of cooperating for investigation, the counter affidavit and additional counter affidavit filed by the respondent-State show that even a notice was not issued during the last about four months calling upon the appellant to appear for investigation. The presence of the appellant was not required for about four months. The interim order passed by this Court on 29th April, 2024 is made absolute on the same terms and conditions - Appeal allowed.
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2024 (9) TMI 1401
Violation of principles of natural justice - tax adjudication process under U.P. GST Act, 2017 - HELD THAT:- It is found that no opportunity of personal hearing as was requested by the petitioner in his reply to the show cause notice was given to the petitioner before the impugned order has been passed. Therefore, the writ petition allowed. The impugned order dated 17.08.2022 is hereby set-aside. Since the petitioner has already given a reply to the show cause notice issued earlier, the Assessing Officer shall fix a date, time and place of hearing and give proper opportunity of personal hearing to the petitioner within a period of two weeks' from the date of certified copy of this order is produced before him.
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2024 (9) TMI 1400
Detention of the goods and vehicle of the petitioner - Section 129 of the Central Goods and Services Tax Act, 2017 read with Section 20 of Integrated Goods and Services Tax Act, 2017 - whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act read with IGST Act? - HELD THAT:- The present case is squarely covered by the judgment of this Court in H/S HALDER ENTERPRISES VERSUS STATE OF U.P. AND OTHERS [ 2023 (12) TMI 514 - ALLAHABAD HIGH COURT] where it was held that 'The order passed by the authorities dated October 19, 2023 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act within a period of three weeks from today'. On a bare perusal of the record and the judgment cited above, it is found that there are no reason why this Court should take a different view of the matter. Ergo, the goods would have to be released in terms of Section 129(1)(a) of the CGST Act read with IGST Act. The order passed by the authorities dated September 12, 2024 is quashed and set aside. The respondent authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act read with IGST Act within a period of three weeks from today - Petition allowed.
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2024 (9) TMI 1399
Dismissal of Appeal - appeal was considered to have been filed beyond 3 months from the date of communication of the order impugned in the said appeal - petitioner has not provided any acceptable evidence to prove that date of communication of order-in-original - HELD THAT:- The order-in-appeal dated 5th July 2024 is set aside - matter remanded for de novo consideration. Appellate Authority who will hear this appeal shall give personal hearing to Appellant, notice whereof shall be communicated at least 5 working days in advance. The order to be passed shall be a reasoned order dealing with all submissions of Appellant. If the Appellate Authority is going to rely on any order or judgment of any Court or Tribunal or any other forum, a list thereof shall be made available along with the notice for personal hearing. If the order or a judgment is unreported then a copy thereof shall also be made available along with the notice. This is to enable Appellant to deal with/distinguish the judgment or the order. The appeal shall be disposed by 30th November 2024.
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2024 (9) TMI 1398
Extension of time limit for passing and order u/s 73 - Absence of recommendation of GST Council - Absence of corresponding state government notification parallel to Central Govt. Notification - Non-fulfilment of condition precedent for issuance of the Notifications in exercise of powers under Section 168A of the Central Act - whether the Notification No.56/2023-CT dated 28.12.2023, is ultra vires the provisions of Section 168A of the Central Act? - HELD THAT:- It is apparent that for the Government to exercise the powers under Section 168A to extend the time limit specified or prescribed or notified, it can be made on the recommendation of the GST Council by way of a notification in respect to acts which could not be completed or complied with due to force majeure. The challenge to the Notification No.56/2023-CT is on account of absence of recommendation by the GST Council and existence of force majeure as defined in the Explanation to Section 168A of the Central Act. In the case of V.M. Kurian Vs. State of Kerala [ 2001 (3) TMI 1091 - SUPREME COURT ], the Supreme Court was dealing with Rule 5 of Kerala Building Rules and the question which arose was whether without the recommendation of Greater Cochin Development Authority and the Chief Town Planner, the State Government could have granted exemption from the operation of the Kerala Building Rules for construction of an eight storey building. The Supreme Court in the said judgment observed that the word recommendation is a statement expressing commendation or a message of this nature . However, taking into account that the word recommendation was not defined in the Kerala Building Rules, it was observed that the meaning of the word recommendation has to be understood in the context of the provisions of the Kerala Building Rules and the object behind the Rules. In the instant case, it would be seen that both the Central Act as well as the State Act do not define the term recommendation . Under such circumstances, it would be necessary to understand the impact of the word recommendation in the context of the provisions of the Constitution as well as the Central Act and State Act - It is also pertinent to take note of that the said power conferred on the Parliament and the State Legislature is not subject to Article 279A except to the extent that in respect to the Goods and Service Tax to be levied on petroleum, crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, the power can be exercised under Article 246A from the date recommended by the GST Council. It is apparent that the object behind the insertion of the Article 246A and Article 279A and overriding Article 254 is to promote fiscal federalism and cooperative federalism. Under such circumstances, the recommendations to be made by the GST Council if required as per the provisions of the Central Act or the State Act has to be construed to be a sine qua non for exercise of power by the Union or the State Government. In other words, wherever the provisions of the Central Act or the State Act stipulates that an act is required to be done on the recommendation of the GST Council, the act can be done only when there is a recommendation. This Court is of the opinion that the Notification No.56/20123-CT is ultra vires the Central Act and the same is not legally sustainable in law. Accordingly, the same is set aside and quashed - the impugned Orders-in-Original which have been passed under Section 73(9) both under the Central Act as well as State Act are beyond the time period prescribed under Section 73(10) of both the Central Act or the State Act for which the same are liable to be interfered with as being passed without jurisdiction. Petition allowed.
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2024 (9) TMI 1397
Rejection of appeal of the petitioner on the ground that the same is filed beyond the period of limitation - HELD THAT:- The impugned order dated 08.12.2023 passed by the appellate authority is set aside and the matter is remanded before the first appellate authority (respondent no.1) with a direction to consider and adjudicate upon the appeal filed by the petitioner on merits without raising any objection on the limitation, after notice and opportunity of hearing to all concerned. Petition disposed off.
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2024 (9) TMI 1396
Quashing of SCN issued to a petitioner in a tax matter due to the dissolution of a partnership firm - the petitioner submit that he is willing to participate in the proceedings before the department as tax payments with regard to the firm have been made and the petitioner is willing to show the same to the department. HELD THAT:- The impugned order dated April 28, 2024 issued by the respondent no.2 [Annexure No.9] as well notices dated December 16, 2023/December 19, 2023 and April 23, 2024 [Annexure Nos.5 6] are quashed and set aside with liberty granted to the respondent authorities to proceed against the petitioner and other legal heirs of the partner in accordance with law. Petition disposed off.
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2024 (9) TMI 1395
Detention of the goods and vehicle of the petitioner - Section 129 of the Central Goods and Services Tax Act, 2017 read with Section 20 of Integrated Goods and Services Tax Act, 2017 - whether the goods may be released by the authorities under Section 129(1)(a) or 129(1)(b) of the CGST Act read with IGST Act? - HELD THAT:- The present case is squarely covered by the judgment of this Court in H/S HALDER ENTERPRISES VERSUS STATE OF U.P. AND OTHERS [ 2023 (12) TMI 514 - ALLAHABAD HIGH COURT] where it was held that 'The order passed by the authorities dated October 19, 2023 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1)(a) of the CGST Act within a period of three weeks from today'. On a bare perusal of the record and the judgment cited above, it is found that the facts and issue in the present writ petition are quite similar to one in M/s Halder Enterprises. In light of the same, there are no reason why this Court should take a different view of the matter. Ergo, the goods would have to be released in terms of Section 129(1) (a) of the CGST Act read with IGST Act. The order passed by the authorities dated July 29, 2024 is quashed and set aside. The authorities are directed to carry out the exercise in terms of Section 129(1) (a) of the CGST Act read with IGST Act within a period of three weeks from today - Petition allowed.
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2024 (9) TMI 1394
Challenge to orders related to audit and intimation liability issued against the petitioner - Section 65 of the CGST Act, 2017 - HELD THAT:- In the instant case, it is a matter of record and an undisputed fact that the claim of the respondents are in relation to the petitioner-Company for the financial years 2018-19 and 2019-20 and the impugned order dated 29.04.2024 in relation to the financial year 2018-19 and the impugned proceedings in relation to financial year 2019-20 are clearly without jurisdiction or authority of law in the light of the undisputed fact that the Resolution Plan has already been approved by the NCLT and the judgments referred to supra. Under these circumstances, the impugned order and the proceedings deserve to be quashed. Petition allowed.
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2024 (9) TMI 1393
Challenge to Order of Seizure - challenge to provisional attachment of bank account - pre-show cause intimation and SCN - HELD THAT:- Upon issuance of the pre-show cause notice intimation and the show cause notice which was based upon the records, papers, documents etc., seized by the respondents, the same would not be required any longer and reliance placed on the said documents would not subsist any longer and the respondents are to be directed to return back the said documents, especially when the petitioner is into real estate business and the documents are required for the purpose of its business. Under these circumstances, though the order of seizure dated 09.01.2024 does not require to be interfered with in the light of the issuance of the pre-show cause notice intimation and the show cause notice issued by the respondents, suffice it to state that direction are to be issued to the respondents to return back all the documents seized by them vide Annexure-E dated 09.01.2024. Insofar as the impugned provisional bank attachment orders at Annexures-L1, L2 and L3 dated 28.05.2024 are concerned, in the light of the specific contention of the petitioner that out of the total alleged liability of Rs. 5,10,47,405/-, the petitioner has only discharged Rs. 3,60,00,000/- in the States of Karnataka and Telangana coupled with the interim order passed by this Court on 21.08.2024 staying the attachment of bank accounts, without prejudice to the rights of the respondents to proceed further after taking appropriate decision in pursuance of the show cause notice, it is deemed just and appropriate to set aside the provisional bank attachment order reserving liberty in favour of the respondents to proceed in this regard. The petition is hereby partly allowed.
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2024 (9) TMI 1392
Invocation of revisional jurisdiction conferred u/s 108 of KGST Act - HELD THAT:- Though several contentions have been urged by both sides in respect of their respective claims, having regard to the undisputed fact that the petitioner was not notified nor provided any opportunity by respondent No. 3 before passing the impugned order purporting to invoke Section 108 of KGST Act, it is deemed just and appropriate to set aside the impugned order reserving liberty in favour of the respondent to take appropriate steps in accordance with law after duly notifying the petitioner and hearing him in accordance with law. Impugned order at Annexure-A dated 21.05.2024 passed by respondent No. 3 is hereby quashed - petition allowed.
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2024 (9) TMI 1391
Initiation of proceedings u/s 129 of the CGST / SGST Acts - applicability of provisions of Rule 55 of the CGST Rules - HELD THAT:- It is not disputed that the goods were covered by Exts.P4, P5 and P6 delivery notes and Ext.P7 E-Way bill. Though, on the top of Ext.P7 E-Way bill only one delivery note is mentioned, the same is stated to be on account of difficulty in entering the details of 3 delivery notes on one E-Way bill. However, numbers of other two delivery notes are seen included in the column for 'transportation details' in the E-Way bill. That apart, a perusal of Exts.P4, P5, P6 and P7 will indicate that the value of the goods had been correctly mentioned and the entire amount of tax to be paid had also been mentioned. There is no finding in Ext.P17 that would indicate that there is any attempt to evade any tax. It is clear that Rule 55 of the CGST Rules, 2017 applies only to the four circumstances mentioned in Rule 55 (a) to (d) and supply of Acetylene Gas is not covered by Rule 55 (a). Therefore, the goods should have been covered by a tax invoice. The competent among the respondents are directed to consider the case as one covered by the provisions of Section 122 of the CGST /SGST Acts and impose appropriate penalty in terms of the provisions contained in that Section. Any amount recovered from the petitioner on account of ExtP17 order shall either be refunded or shall be adjusted against any future tax liability, by crediting the electronic cash register of the petitioner - petition disposed off.
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2024 (9) TMI 1390
Challenge to action on the part of the Central Board of Indirect Taxes and Customs in issuance of a notification bearing No. 56/2023 dated 28.12.2023 - validity of notification extending the time limit for passing orders under Section 73(9) of the CGST Act, 2017 - HELD THAT:- It prima facie appears that the notification bearing No. 56/2023 is not in consonance with the provisions of 168 (A) of the Central GST Act, 2017. If the said notification cannot stand the scrutiny of law, all consequential actions so taken on the basis of such notification would also fail. This Court duly takes note of the submission of Mr. S.C Keyal, the learned Standing counsel that the Petitioner would be entitled to the reliefs as proposed in the Financial Bill 2024. In addition to that, this Court also finds that an examination would be required as regards the applicability of the force majeure in respect to the notification bearing No. 56/2023 taking into account 7/7 the contents of the Minutes of the 49th Meeting of the GST Council. However for the purpose of deciding the same, this Court is of the opinion that an opportunity has to be granted to the Respondent Authorities to place on record their stand as well as bringing on record the materials on which they claim the applicability of the force majeure. This Court is of the opinion, that the Petitioner herein is entitled to an interim protection pending the notice. Till the next date, no coercive action shall be taken on the basis of impugned assessment order dated 30.04.2024 - The Respondents are directed to file their affidavits on or before 13.09.2024.
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2024 (9) TMI 1389
Challenge to bank attachment notice - impugned order passed without even granting an opportunity of personal hearing to the petitioner, nor calling for any reply from the petitioner - violation of principles of natural justice - HELD THAT:- Initially, petitioner herein was registered under the provisions of the Service Tax Act, during which period, the petitioner has appointed an Auditor as his Authorized representative in respect of Service matters; however, subsequent to the introduction of GST regime, though the petitioner got registered under the provisions of the GST Act and also shifted their place of business from AGT Business Park, Avinashi Road, Coimbatore to PMR Layout, Second Street, Poongothai Nagar, Civil Aerodrome post Citra, Coimbatore, the petitioner failed to give authorisation as regards GST matters, during which point of time, the show cause notice was served on the petitioner s Auditor and for the reasons best known to the Auditor, the same was failed to be brought to the notice of the petitioner. Therefore, the petitioner was not in a position either to give reply to the show cause notice nor appear before the first respondent for the personal hearing. It was only owing to the fault on the part respondent-Department, the petitioner became unaware of the entire proceedings and was not in a position to respond to such notices, this Court is of the view that the petitioner is entitled to the relief sought for in both the Writ Petitions. The Order-in-Original is set aside and the matter is remanded back to the first respondent for fresh consideration, however, the same is subject to the payment of 7.5% of the disputed tax by the petitioner within a period of four weeks from the date of receipt of a certified copy of this order - Petition allowed by way of remand.
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2024 (9) TMI 1388
Levy of Service Tax on royalty - challenge to SCN - HELD THAT:- The SCN has already been issued on 20.10.2021 and the petitioner was called upon for personal hearing in pursuance of the said show cause notice, the remedy lies on the petitioner to pursue his case before the authorities in the show cause notice issued on 20.10.2021 and to raise all his grievances there. In view of the judgment of Hon ble Supreme Court passed in Mineral Area Development Authority Case [ 2024 (7) TMI 1390 - SUPREME COURT (LB)] the present petition is disposed of, however, since the notice dated 23.02.2024 has already lost its efficacy as the date mentioned in the notice is already expired, therefore, it would be appropriate to direct the petitioner to appear before the authority concerned on 28/08/2024 and then the authority concerned after giving the proper opportunity of hearing to the petitioner, decide the case in accordance with law. Petition disposed off.
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2024 (9) TMI 1387
Applicant (THDCIL) is a Government Entity or not? - Legal Services provided by the advocates including Senior Advocate or firm of Advocate is exempt from GST for THDCIL - reverse charge mechanism - HELD THAT:- In order to qualify as a Government Entity , such ENTITY must be either set up by an Act of Parliament or State Legislature; or established by any Government, with 90per cent, or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority . The applicant is claiming to be a Government Entity , by interpreting the definition as Government Entity means an authority or a board or any other body including a society, trust, corporation, established by any Government, with 90 per cent, or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority - as on the date of filing of the application dated 01.05.2024 for the present proceedings, the Equity in the applicant company i.e. THDC India Limited is shared between NTPC Limited and Government of UP in a ratio of 74.496 % and 25.504 %, which is less than the stipulated 90% of equity and hence does not fulfill the condition of with 90 per cent, or more participation by way of equity or control, . There is no doubt that at the time of registering the Company, as a Public Limited Company, under the Companies Act, 1956, in July 1988, the Government had 100 % equity or control (Govt, of India and Govt, of Uttar Pradesh in the ratio of 75:25), but as admittedly accepted by the applicant in their application and during the course of personal hearing on 07.06.2024, the equity or control of the Government became less that 90 %, as Government of UP held only 25.504 % of the total equity i.e. paid up capital - the status of the applicant i.e. the Company with respect to equity or control of the Government did not remained same and got reduced to 25.504 %, which is less than the stipulated 90 % or more. At present the equity or control of the Government is less than the stipulated 90% and hence cannot be categorized and considered as Governmental Entity in terms of Notification No 11/2017-Central Tax (Rate), dated 28 June 2017, as amended by the Notification No. 31/2017-Central Tax (Rate), dated 13 October 2017. And hence the provisions of Entry No. 45 of the Notification No. 12/2017-Central Tax (Rate), dated 28 June 2017, shall not be applicable in the case of the applicant.
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Income Tax
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2024 (9) TMI 1386
Validity of appeal filed u/s 260A - Bogus LTCG - whether any substantial question of law has arisen for consideration? - reexamining appellant's additional documents obtained through the Right to Information Act - as argued Tribunal has failed to consider the report of the Securitisation and Exchange Board of India in its proper perspective - as decided by HC [ 2024 (6) TMI 1068 - CALCUTTA HIGH COURT] CIT(A) has examined the factual aspects with regard to the trading of shares in a company called, Sulabh Engineers Services Ltd. After examining the facts, the CIT(A) brought out the modus operandi and has recorded finding as to how the claim for long-term capital gain is a bogus claim. The conclusion arrived at by the Tribunal has also been supported by various decisions of the courts - no grounds to interfere with the order passed by the Tribunal HELD THAT:- The Special Leave Petition is dismissed.
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2024 (9) TMI 1385
Substantial question of law - retrospectivity of the amendment made to Section 23(b) of the Finance Act, 2017, the ground of deduction of overdue interest qua the ideal guidelines has not been considered by the Tribunal in its true perspective - As decided by HC [ 2023 (6) TMI 742 - MADHYA PRADESH HIGH COURT] retrospectivity was not of Section 43-D of the Finance Act, 2017, it seems from the record that the Tribunal has applied its mind to the ground raised by the appellants while the other ground of deduction of overdue interest qua RBI guidelines is also discussed. HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court which has only confirmed the order of remand passed by the Income Tax Appellate Tribunal (ITAT) [ 2022 (5) TMI 224 - ITAT JABALPUR ]. We are informed by respondent that the petitioner has availed Vivad se Vishwas - Settlement Scheme for the Assessment Year 2013-2014. If the petitioner seeks to avail the same remedy for the AY 2009-2010 and 2014-2015, we leave it open to the petitioner to make necessary applications. Upon such applications being filed, the procedure contemplated under the law shall be followed and applications be disposed of expeditiously. SLP disposed of.
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2024 (9) TMI 1384
Allowable business/revenue expenditure - admissibility of compensation paid as expenditure u/s 37 (1) - as submitted respondent has not incurred the said expenditure for the purpose of business - ITAT justification in allowing the claim of assessee u/s 37 (1) when the assessee has not acquired the said property as fixed asset nor it has started yielding revenue? - Revenue assailing the order of the Tribunal contends that the assessee is not the owner of any of the properties, which were the subject matter of the agreement with the purchaser and the agreement entered into with the purchaser was not entered into by the assessee. That the chronology indicates that the transaction is a sham transaction and damages cannot be claimed u/s 37 (1) HELD THAT:- The properties/rights which were the subject matter of the agreement dated 2.4.2002 did not belong to the firm during the said period i.e., AY 2005-06. Further, the assessee admittedly did not contract with MIPL to provide the built up area in the four properties mentioned in the agreement dated 2.4.2002 nor were any of the four properties mentioned in the said agreement belonged to the assessee nor that the assessee had any manner of right, title or interest in the said properties. The contention of the assessee that the properties belonged to the assessee by virtue of Section 14 of the Act of 1932 is ex facie untenable and liable to be rejected having regard to the fact that there is no material placed on record to demonstrate that the said properties were brought into or were part of the stock of the firm. Hence, the properties cannot by any stretch of imagination be held to be the properties of the assessee firm. The reasoning of the Tribunal that the advance of Rs. 22.00 crores having been shown in the books of accounts of the assessee and earlier transactions made by Sri Dayanand Pai having been shown as transactions made by the assessee, will also not aid the case of the assessee since the context of the said transaction has not been looked into. In view of the admitted position that the assessee was not the owner of the properties as also that the assessee did not have any manner of right, title or interest in the said properties, which were the subject matter of the agreements dated 2.4.2002 or 10.3.2004, the question of permitting the assessee to claim a deduction u/s 37 (1) does not arise. Reasoning of the Tribunal that the properties which were the subject matter of the agreement are identified and there was no doubt or ambiguity of the properties to be developed and identified by the assessee for development through other developers and that registration was not a prerequisite condition for acquiring interest, right or title in the constructed area of the properties being developed, is erroneous having regard to the admitted position that the assessee was not a signatory to the agreement dated 2.4.2002 or that the assessee had any manner of right, title or interest in the properties which were the subject matter of the said agreement. It is the vehement contention on behalf of the assessee that crystallization having been done and the liability having been provided for, the assessee was entitled to claim expenditure during AY 2005-06. The said contention is untenable and liable to be rejected since there is no factual basis for the same, inasmuch as there is no material placed before the authorities to indicate that the liability was crystallized or provided for during AY 2005-06. Tribunal erred in allowing the appeal of the assessee and setting aside the well considered, concurrent findings of fact recorded by the AO and the Commissioner. The reasoning adopted by the Tribunal is clearly erroneous and contrary to law as noticed above. Decided against assessee.
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2024 (9) TMI 1383
Assessment u/s 153C - disallowance of deduction claimed u/s 10B - HELD THAT:- It is forthcoming that the Tribunal while adjudicating regarding the disallowance of deduction claimed u/s 10B has noticed that the said aspect is covered by a coordinate Bench judgment of this Court in the case of Tata Elxsi Ltd. [ 2015 (10) TMI 634 - KARNATAKA HIGH COURT ] Having regard to the fact that the Tribunal has decided the matter in accordance with a judgment of this Court, the Revenue has not demonstrated as to how the same is erroneous. The substantial question of law No.1 is answered against the Revenue and in favour of the assessee. AO has not followed the procedure as envisaged u/s 153C - It is relevant to note that Chapter VI of the IT Act contemplates the procedure for assessment, wherein various stipulations are provided in terms of Sections 136 to 153 of the IT Act. Section 153A, 153B and 153C have been inserted by the Finance Act, 2003 w.e.f., 1.6.2003, which specifically contemplates assessments in cases of search or requisition. Section 153A of the IT Act contains various stipulations with regard to the person searched and Section 153C of the IT Act contains various stipulations with regard to such other person, other than the person searched. A coordinate Bench of this Court in the case of Dinakar Suvarna [ 2022 (7) TMI 800 - KARNATAKA HIGH COURT ] while considering an appeal of the assessee, in a fact situation wherein an assessment was re-opened u/s 147 of the IT Act based on a search conducted and the procedure u/s 153 of the IT Act was not followed was under consideration. In view of the settled position of law as noticed above, once material pursuant to a search is relied upon, the AO is required to follow the procedure as contemplated under Section 153A, 153B and 153C and it is impermissible for the AO to continue the regular assessment. Decided in favour of the assessee and against the Revenue.
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2024 (9) TMI 1382
Seeking quashment of the order and refund of tax - functionality of adjustment of refund against the outstanding (TAN/PAN) demand - Rejection of request for refund for the relevant assessment year can be raised, only if the assessee files its application on the TRACES Portal in the prescribed form i.e. Form 26B and secondly there is no provision available on the TRACES portal to adjust the outstanding demand of PAN or TAN against the pending refunds of the TAN and requested the petitioner to deposit the aforesaid demand HELD THAT:- Section 243 provides payment of interest on delayed refunds that shall start accruing after the expiry of the period of three months from the date of the order granting the refund. Section 241A has been inserted by Finance Act,2001 w.e.f.01.04.2017 about the withholding of refunds in certain cases but the same would not apply in this case because these assessments are in respect of years 2010-11 and 2011-12. Section 245 also provides a set off of refunds against tax remaining payable which says that where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeal), Commissioner (Appeals) or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may, in lieu of payment of refund, set off the amount to be refunded or any part of that amount, against the sum, after giving in an intimation in writing to such person of the action proposed to be taken under this section. Therefore, in view of the above, after the order passed by ITAT, the respondents are bound to refund the amount to the petitioner with interest without there being any formalities to be completed by the petitioner. The non-functionality of the TRACES Portal shall not be grounds for denying the benefit arising out of the statutory provision under the Income Tax Act. TRACES is nothing but a online Portal of the Income Tax Department to connect all the stockholders involved in the administration and implementation of TDS and TCS. The TDS is a Centralized Processing Cell created for TDS reconciliation analysis and correction enabling system which cannot run contrary to the provision of the Income Tax Act. The rights which have been given to the assessee under the Income Tax Act cannot be withheld due to the nonfunctionality of the TRACES.Let the entire exercise be completed within 30 days from the production of a certified copy of this order.
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2024 (9) TMI 1381
Revision u/s 263 - order of assessment passed under sec.153A - additions u/s 69A - Maintainability of the writ petition despite the availability of an alternative remedy of appeal under Section 246(A) - HELD THAT:- It is settled principle of law that the alternative remedy of appeal would not be a bar to exercise jurisdiction under Article 226 of the Constitution of India. However the same, as held by the apex court, is subject to certain limitations that warrants the exercise of jurisdiction, viz., where the order impugned is without jurisdiction, is in gross violation of principles of natural justice or is beyond the jurisdiction, or where the vires of the provisions of the Act are under challenge. I In the instant case, pursuant to the order of Revision passed by the CIT u/s.263 of the Act, the assessing officer has issued notices u/s 142 (1) calling for details of the un-secured hand loans and confirmations from the said creditors. The petitioner has failed to furnish relevant information asked for, except to state, that the material that was relied upon by the assessing officer to come to a conclusion that the petitioner had accepted unsecured loans, is bogus material and the same is resultant of the fraud played by his ex-employees. When the assessing officer had asked for the details, such as name, address and designation, of such of those employees who alleged to have played fraud on the petitioner and the details of the action taken against such employees, the petitioner did not respond to the same. Thus, the petitioner has failed to discharge the burden cast upon him. In the absence of any other material placed by the petitioner, the assessing officer proceeded with the assessment. The contention of the petitioner, that, the material that formed the basis for making the addition is Xerox copies of the promissory notes found at the premises of M/s.Raki Avenues Private Limited, which does not belong to him, and based on the said material the assessing officer could have made no addition, would involve a disputed questions of fact and the same would not be within the realm of this court under Art.226 of the constitution of India to be gone into. The act of the assessing officer bringing to tax a receipt of a sum, which the assessee has failed to explain, cannot be said to be without jurisdiction under the provisions of the Income-tax Act. It is for the assessee to establish before the assessing officer that the receipt is not his receipt or that the same is not taxable. Petitioner has not demonstrated any of the exceptional situations referred to above that would require this Court to interfere under Art.226 of the Constitution of India. Following the judicial dicta on the issue, without going into the issue of taxability of unexplained unsecured loans in the form of promissory notes, we are of the view that the order of the assessing officer cannot be construed as without jurisdiction or in violation of the principles of the natural justice. We hold that the petitioner has not made out any case justifying the bypass of statutory effective remedy of appeal and approaching this Court under Art 226 of the Constitution of India. The writ petition is, therefore, not entertainable. Writ Petition is accordingly dismissed. We however grant liberty to the petitioner to approach the appellate authority under Section 246A of the Income Tax Act.
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2024 (9) TMI 1380
Validity of the Section 234E - late fee imposed u/s 234E while processing the statement of TDS u/s 200A - HELD THAT:- In the present case, the respondent had imposed the late fee only u/s 234E of the Act for the assessment years 2012-2013, 2013-2014. However, Section 200A of the Act was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015 . Therefore, in the absence of any provisions u/s 200A of the Act, the respondents ought not to have imposed late fee under Section 234E while processing the applications for TDS under Section 200A. Hence, in such view of the matter, this Court is of the opinion that the impugned Demand Intimation Letters are liable to be set aside.
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2024 (9) TMI 1379
Penalty u/s 271B - failure to get accounts audited - Applicability of section 44AB to the assessee - as argued arrangement of the Mother Dairy with the Appellant as per terms conditions of the agreement, according to which the relationship between them is that of Principal Agent and, therefore, there is no requirement of tax audit - HELD THAT:- We are inclined to agree with the AR that the DGR has used word Commission which shows that the relationship between the Mother Dairy is that of Principal (Mother Dairy) to agent (Assessee). Even though the Mother Dairy has given nomenclature of Principal-to- Principal in its certificate, the nature of activity undertaken by the assessee shows the actual relationship between the Mother Dairy and assessee is that of Principal to Agent. We are of the opinion that the sales proceeds belonged to Mother Dairy and the assessee turnover was only commission from the sales of Dairy and milk products. The ld DR has not controverted the fact that in earlier years, no penalty was levied u/s 271B on this issue. As the value of gross commission received from the aforesaid business as turnover is much below than the prescribed limit of Rs. 1 Crore u/s 44AB of the Act, we hold that the provisions of section 44AB of the Act were not attracted in his case. The CBDT Circular No. 452 [F. No. 201/3/85-IT(A- II)], dated 17-3-1986 also supports our view which in cases of kachha arahati has advised that the turnover did not include sales effected on behalf of the principals and only gross commission has to be considered for the purpose of section 44AB. The remuneration of a kachha arahtia consists solely of commission and he is not interested in the profits and losses made by his constituent as is not the case with the pucca arahtia. In the instant case, we are of the opinion that the assessee is similarly placed to that of the kachha arahtia, who gets remuneration which consists solely of commission and he is neither interested into nor entitled to the profit and losses made by his principal (ie., Mother Dairy in given case). Thus penalty levied u/s 271B upheld by the ld. CIT(A) CIT/NFAC is quashed - Decided in favour of assessee.
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2024 (9) TMI 1378
Revision u/s 263 - unsecured loans received by the assessee was not duly verified by the Ld.AO - PCIT mentioned that assessee has not filed relevant documents in relation to the verification of unsecured loan - HELD THAT:- AO only added back 10% of the unsecured loan. The addition of @10% unsecured loan has no basis; even there is no application of mind for imposing Section 68 - assessee was unable to submit the documents which are convergent with the verification of unsecured loan creditors. AR respectfully relied on the order of Accumax Lab Devices Pvt Ltd. [ 2024 (7) TMI 494 - ITAT AHMEDABAD ] is distinguishable in fact. In impugned assessment there is no verification from the part of the ld. AO. AR took the plea that the issue is pending before the appellate authority. But the issue was challenged only the 10% of addition u/s 68 of the Act. The revisional order pertains to balance unsecure loan creditors - Here the AO was fully ignorant about the verification of unsecured loan creditors which caused the impugned assessment order as erroneous and prejudicial to the interest of the revenue. Mere submission of the documents will not serve the purpose of section 263. Assessee appeal dismissed.
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2024 (9) TMI 1377
Scope of Limited Scrutiny - computation of capital u/s 45 of the Act and providing exemption u/s 54B - provisions of section 54B linked with section 48 of the Act, for enhancement of Capital gain u/s 45 - during the course of hearing, the assessing officer had noticed the different fact, about Fair Market Value (FMV) claimed u/s 45 by the assessee, and observed that assessee has claimed fair market value, (FMV), under section 45 of the Income Tax Act, on higher side and therefore invoked provision of section 55A HELD THAT:- We find that case of the assessee, was selected for Limited Scrutiny, for verification of limited issue of deduction claimed u/s 54B of the Act, however, the assessing officer has exceeded his jurisdiction by disallowing the fair market (FMV), claimed u/s 45 of the Act, which is beyond the jurisdiction assigned to the assessing officer, under the limited scrutiny therefore, we find that assessing officer has violated the CBDT instruction No. 5/2016, dated 14.07.2016, read with instruction No. 20/2015, dated 29.12.2015. Thus, the assessment orders passed u/s 143(3) of the Act, dated 14.12.2016, become bad in law. The assessee`s case was selected for limited scrutiny to examine the provisions of section 54B of the Act and not for examination of provisions of section 45 of the Act, (determination of cost of acquisition) therefore, we find that assessing officer has exceeded his jurisdiction assigned to him. If the assessing officer wants to examine cost of acquisition, (which is not the subject matter of limited scrutiny) then in that circumstances, the assessing officer has to take permission from the higher authorities, which the assessing officer failed to do so. Assessee`s case was selected for limited scrutiny to examine two issues, viz: (i) Large Investment, and (ii) Deduction claimed u/s 54B of the Act, however, the assessing officer has not made addition on both the issues of Limited Scrutiny Notice. AO cannot travel beyond the issue raised under Limited Scrutiny , as stated in the two instructions of CBDT, which are binding to all the Assessing Officer, viz, (i)Instruction No. 20/2015, dated 29.12.2015 and (ii)Instruction no. 5/2016, dated 14.07.2016. The Limited Scrutiny has narrow scope of inquiry, as mentioned in Para 3 (d) of Instruction No. 20/2015 and Para No. 4 of Instruction No. 5/2016 of the CBDT. Thus, we find that the assessing officer has violated the Board Instructions and therefore the addition needs to be deleted. Thus, we find that provisions of section 54B of the Act, cannot be linked with section 48 of the Act, for enhancement of Capital gain u/s 45 of the Act. If the assessing officer wants to enhance the Capital Gain u/s 45 of the Act, the assessing officer must have to take prior permission of Pr. CIT, which he has failed to do so. It is settled law that the Revenue Authorities are not allowed to travel beyond the issues involved in limited scrutiny cases, except by completing the relevant formalities before proceeding to other issues, which in the instant case does not appears to have adhered to. That is, if a case is taken for limited scrutiny by the A.O., he cannot exceed the jurisdiction beyond the one which he has carved out himself in the notice issued for limited scrutiny. In the present case, the Ld. Assessing Officer has travelled beyond his jurisdiction and made addition on the issues which are not part of the reasons for limited scrutiny. Appeal of the assessee is allowed.
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2024 (9) TMI 1376
Addition made in proceedings u/s. 153C - whether any incriminating documents relating to assessee unearthed as a result of search, when the case was already concluded i.e., unabated - HELD THAT:- Five concerns have been named in the Satisfaction Note. It is not clear as to how the documents pertain to the assessee - The said documents are not incriminating as per the satisfaction note since nowhere the name of the assessee is there. If that be so, how addition can be perpetrated against such documents. It is surprising to note that no addition has been made against the documents marked as incriminating Annexure B 2(23). The document dated 28/04/2017, is only an estimate of profit provided the price is quoted within the certain range. Nowhere it has been brought on record that actual price charged for resin capsules was within the same price range. Similar orders were passed verbatim for the other entities namely Techno Precision Engineers Ltd. and Support Technologies Ltd. The same document is pertaining to multiple entities as per the Assessing Officer who is same for all the assessees. We ask a question to ourselves as to whether it is at all possible? Abject non application of mind and brazen untenable stand of the Assessing Officer is displayed.An estimated profitability statement is held to be constant for seven years ignoring inflation. Then why for purpose of computing long term capital gain cost inflation index changes every year as enshrined in section 48 of the Act. The Satisfaction Note drawn on a combined basis without any specific reference to any year is baseless and unsustainable and defies common logic. The bedrock of usurpation of jurisdiction under section 153C of the Act is missing palpably in the instant case since these documents are not conclusively established to pertain with the assessee nor do the same have a bearing on the determination of total income for the respective years. The year could then be subjected to action under section 154C of the Act only when the assessment is likely to be influenced or impacted by the material discovered. Section 153C of the Act neither mandates nor emerges a mechanical or an en blank exercise of power. Hence, the assessment order is unsustainable on legal grounds. Decided in favour of assessee.
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2024 (9) TMI 1375
Unexplained deposit made in bank accounts during demonetization period - Receipt from the sale of agricultural produce - HELD THAT:- The receipt shown as source from agriculture for making deposit during demonetization period was also a part of total agricultural receipts shown by assessee for the financial year 2016-17. Since the AO has accepted net agricultural income generated by assessee from gross receipts, the receipt of Rs. 6,00,000/- forming part of overall receipts of Rs. 9,19,400/- is also accepted by assessee. Therefore also, the AO is not justified in adopting a contradictory stand of rejecting the receipt while assessing the very same receipts as part of gross-receipts and for that matter net agricultural income of Rs. 2,29,100/- for the whole year. Receipt from the recovery of loans given to friends/relatives - The assessee has filed supporting evidences of all loan given and recovered which are A/c Confirmations, Notarised Affidavits of parties and Aadhar Cards of parties as ID proofs (death certificate in case of one deceased), copies of these documents were also filed to CIT(A). On examination, we find that the parties have given their A/c Confirmations in which details of loans taken from assessee and repayments made to assessee with dates are mentioned which tally with the details submitted by assessee to AO. The same details are also testified by respective parties by way of notarized affidavits (except one person which had already deceased). The id proof of parties in the shape of aadhar cards are also available. The evidences filed by assessee prove the transactions claimed by assessee. In that view of matter, the addition made by AO is found not sustainable. Assessee appeal allowed.
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2024 (9) TMI 1374
Penalty proceedings u/s 271B - failure to get accounts audited or initiated - HELD THAT:- Levy of penalty is discretion on the part of the AO in the current case, it is fact on record that the main income of the assessee is only earning of commission out of sales of milk, therefore, the assessee is getting only agency commission from the mother dairy and the gross sales reported by the assessee are not the actual sales of the assessee and it is the sales of mother dairy. Since, the assessee is a small time agent working for the mother dairy, he purchases milk pockets in bulk and sells the same on daily basis. His real income is only percentage of commission received from mother dairy, therefore, as per assessee is concern, the gross income is only the commission income. As per the facts on record even the Assessing Officer observed that the assessee has not maintained any books of account and he merely purchases milk on daily basis and sell the same on daily basis remitting the amount collected to the mother dairy and retains the commission income with him. Therefore, as per the facts on record it is not possible on the part of the assessee to maintain any books based on the nature of activities carried on by the assessee. In order to maintain the books and requirement to get his book audited depends upon the gross income, in this case, it is only the gross commission not the sales, therefore, we do not see any reason to levy the penalty u/s 271B - Decided in favour of assessee.
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2024 (9) TMI 1373
Rejecting the registration of the assessee trust u/s.12AB and recognition u/s 80G - HELD THAT:- Application of the assessee for registration u/s. 12AB was rejected on the objection of fact that the assessee is not registered under the Rajasthan Public Trust Act, 1959, for the assessee has made an application for registration and as regards the genuineness of activities the observation made by ld. CIT(E) is curable in nature and therefore, considering the arguments of the parties we are of the considered view that so far the issue of registration u/s. 12AB of the Act the assessee require one more opportunity to represent the correct fact and produce the registration certificate under RPT Act. Thus, looking to the interest of justice and considering the prayer of assessee submitted that the assessee be given a chance to defend the issues on its merit before the ld. CIT(E)and the observation made are curable in nature we considered the prayer of the assessee to remind the case to the file of CIT(E) for making a decision a fresh and thus we set aside the order dated 22.03.2024 passed for rejecting the registration of the trust u/s. 12AB with a direction to the assessee to produce all the related to the issue. Appeal of the assessee allowed for statistical purpose.
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2024 (9) TMI 1372
TP Adjustment - comparable selection - claim raised before ITAT for the first time - HELD THAT:- Infosys BPO Limited, Eclerx Services Limited, Crossdomain Solutions Pvt. Ltd. excluded on the grounds of functional dissimilarity as in assessee s own case in earlier assessment years. Exclude MPS Limited from the list of comparable - There is no dispute about the facts that no objection was raised by the assessee before the revenue authorities regarding the exclusion of MPS Limited from the list of comparable. The claim has been raised before us for the first time. Respectfully relying on the decision of Quark Systems (P) Ltd. [ 2009 (10) TMI 591 - ITAT, CHANDIGARH ] we hold that taxpayer is not estopped from pointing out that MPS Limited had wrongly been taken as comparable. While admitting the fresh claim of the assessee to include MPS Limited included in the comparable, we make no comments on merit except observing that assessee from record has shown its prima facie case. Further the claim may be examined by the Ld. AO. Therefore, we deem it fit and proper to remit the matter to the file of the Ld. AO for consideration ACE BPO Services Private Limited rejected by the revenue authority due the reason that, sufficient financial information to verify related party transaction( RPT ) were not available - AR submitted that, the annual report of ACE BPO Services Limited is now available on the public domain and contended that ACE BPO Services Limited should be considered as the comparable company as it is engaged in ITeS and passes all the filter applied by the Ld. TPO - Thus if the comparable is functionally same as that of tested party then same cannot be rejected. Hence we direct the Ld. AO to verify the RPT from the available data and to permit the assessee to demonstrate the RPT from the available data and consider the same as a good comparable. Inclusion of Informed Technologies Limited as rejected by the revenue authority as functionally different and had high non current investment - As relying on Infor (India) Pvt. Ltd. [ 2019 (9) TMI 973 - ITAT HYDERABAD ] we direct the Ld. AO to verify afresh and consider Informed Technologies Limited as a good comparable after providing an opportunity of being heard to the assessee. Interest on outstanding receivables - In the case of PCIT vs. Tecnimont (P.) Ltd. [ 2018 (7) TMI 490 - BOMBAY HIGH COURT ] held that interest chargeable on delayed recovery of export receivables from AEs should be taken at LIBOR rates for determining ALP of notional interest on delayed recovery. Respectfully following the same, we are of the considered opinion that the ends of justice would be met by accepting the interest rate at LIBOR+200 points. We direct the Ld. AO to adopt the same. Therefore this ground of the assessee is allowed in part.
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2024 (9) TMI 1371
Validity of Reopening of Assessment U/Sec 147 - Assessment on the basis of information received from the Investigation department of the Income Tax based on the Statement recorded of accommodation entry provider - main contention of the assessee is that the second reopening was done merely based on the information received for DDIT(Inv) and that the AO has not done any independent enquiry more so when the assessment is reopened beyond four years. HELD THAT:- From the perusal of the assessment order we notice that the AO has acknowledged the fact that the assessee has submitted the bills, delivery challan, stock register etc., pertaining to the alleged bogus transaction - AO also acknowledges the fact that the assessee has submitted the ledger copy of M/s. Giriraj Enterprises, Bank statements, party confirmation etc. - We also notice that the AO is not disputing the fact that the goods bought through alleged bogus transactions have been sold as reflected in audited financial statements. We further notice that the AO has not recorded any adverse findings with regard to the documents submitted by the assessee with regard to the alleged bogus transactions. We further notice that the AO has recorded in the assessment order that the input credit on the alleged bogus purchases has not been denied and that the supplier has not been named as the hawala party. AO is making the addition for the reason that the party has admitted having entered into bogus transaction and that the assessee has not produced the parties. During the course of hearing the ld AR drew our attention to the statement of oath recorded from Mr. Harish Chandak, to submit that he has not mentioned having entered into any bogus transactions with the assessee - We notice that during cross examination by the assessee's partne has categorically denied having given hawala bills to the assessee . From the perusal of the entire facts in assessee's case as explained herein above, it is clear that the AO has completed the reassessment without proper appreciation of the facts and evidences submitted by the assessee in support of the alleged bogus purchases and merely based on the information from DDIT(Inv). Therefore in our considered view the entire reopening is carried out only on the basis of report of investigation wing without any independent enquiry and without any tangible material in the hands of the AO to show that the assessee was involved in taking accommodation entry towards bogus purchases. Accordingly the addition made by the AO is not sustainable and liable to be deleted. Decided in favour of assessee.
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2024 (9) TMI 1370
Non-issuance of notice u/s 143(2) by Jurisdictional AO - AO had suo moto transferred the assessment to ITO, Ward 2(2) Noida - appellant has contended that the statutory notice u/s 143(2) was issued by ITO, Ward-40(1), Delhi and another such notice was issued by ITO, Ward-2(2), Noida despite the fact that the assessment proceedings for AY 2014-15 were pending with ITO, Ward-70(2), Delhi at that time - HELD THAT:- As in the present case, as assessee had himself mentioned the Noida address in the ITR and on his request only the case was transferred to Delhi, so assessment is not vitiated. The question actually to be examined was if jurisdictional AO had issued notice u/s 143(2) with in time which Revenue has failed to justify and establish the validity of issuance of the notice u/s 143(1) by ITO, Ward 40(1) on 20.09.2016. We find no justification as to how the tax authorities of Noida Office, when transferred the case of the assessee to Ward 40(1), Delhi, even to say on request of assessee, the same ultimately, reached Ward 8(2), Delhi, from where the final assessment order was passed. We are of the considered view that even if it is assumed that in accordance with the order dated 15.11.2014 u/s 120 of the Act, the jurisdiction vested with Ward 8(2), Delhi, then, why the assessment for the previous year AY 2014-15 stood transferred from the ITO, Ward 40(1) to ITO 70(2) from where the assessment order was passed on 31.01.2017. We are of the considered view that it is not a case where the notice was issued and assessment completed by invoking provisions of concurrent jurisdictions, rather, it appears that in whimsical manner the AOs had exercised jurisdiction under the Act and transferred the assessment. There is no substance in the contention that due to sections 292BB or sub-section (3)(a) of section 124 of the Act, the assessee is barred to raise the ground objecting to the assumption of jurisdiction. More particularly when objections were raised at earliest and even considered by assessing officers. Decided in favour of assessee.
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2024 (9) TMI 1369
TP Adjustment - comparable selection - HELD THAT:- E-Infochips Bangalore Ltd. - No reason to exclude this company as a comparable. We may point out that merely because this company has earned some extra ordinary profit is no reason to exclude this company as long as this company continues to be comparable with that of the assessee on FAR analysis. In view of the above, we do not find any reason to exclude this company and accordingly, the ground raised by the assessee is dismissed. Persistent Systems Ltd. - If we look into schedule 11 where bifurcation of sales and software services and products are mentioned, then we find that this company does not have any inventories showing software products and though this company has classified as sales of software products. In view of the above, it is difficult to accept the contention of the assessee that this company is into product development. Further, if we look at the revenue recognition, then only we find that the Revenue the assessee is recognizing the income from software services only and there is no reference of making development of any products. We do not agree with the contention of the assessee and accordingly, this ground is also dismissed. Mindtree - Assessee has not objected to the inclusion of this company in the list of comparable selected by the TPO while filing objection in response to the show cause notice before the TPO. Before the learned TPO, the assessee has only raised objection with respect to E-Infochips Bangalore Ltd, Infosys Technologies Ltd, Kal Infosystems Ltd, L T Infotech Ltd. No objection has been filed by the assessee with respect to any other comparables. In our view, once the assessee has forgone his right to raise objection before the TPO, it is not permissible in law to raise the objection before the Tribunal at this stage. Further, we are of the opinion that merely because the company is owning intangible and earned reasonable margin cannot be a ground to exclude this company if on FAR analysis, it is found to be otherwise comparable with that of the assessee. In view of the above, we do not find any reason to exclude this company. Accordingly, this ground is also dismissed. Interest on Trade Receivables - Admittedly, this Tribunal in the case of Satyam Ventures Engineering Services [ 2024 (6) TMI 147 - ITAT HYDERABAD] , Zeta Interactive Systems India Private Limited [ 2022 (6) TMI 1383 - ITAT HYDERABAD] , M/s. Apache Footware India Private Limited etc. [ 2023 (4) TMI 521 - ITAT HYDERABAD] has decided the issue in favour of the Revenue by holding that the SBI bank rate of 6% with a credit period of 60 days is to be applied for determining the interest on delayed trade receivables. However, in the present case, the Revenue is not in appeal against the finding given by the DRP and the assessee cannot be worsened off in the appeal filed by the assessee. If we look into the order passed by the DRP where the DRP has decided the issue in favour of the assessee by restricting the interest to be paid at LIBOR Plus 250-point basis, though the said decision of the DRP is contrary to the decision of the Tribunal. However, since the Revenue is not in appeal against the decision of the DRP, therefore, we deem it proper to dismiss the ground raised by the assessee and sustain the order passed by the DRP by reiterating that the delay on trade receivable will be restricted to LIBOR Plus 250 point basis, as there is no appeal of the Revenue and the assessee cannot be worsened off in its appeal by following the decision in the case of Satyam Ventures [ 2024 (6) TMI 147 - ITAT HYDERABAD] . Thus, this ground of appeal is dismissed. Set off of losses of the Hyderabad Unit against the profit of the Pune Unit - Since in the present case, the assessee has not raised ground before the learned DRP and therefore, the grievance of the assessee is not emanating from the final assessment order or from the direction of the DRP. Therefore, the assessee is not entitled to raise this ground before the Tribunal now. We may also point out that no deduction u/s 10A or 10B or under Chapter VI A is allowable in respect of income by which the total income of the assessee is enhanced after computation of income under sub section 92C, in view of 1st proviso to Section 92C(4) of the Act. Appeal raised by the assessee is dismissed.
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Customs
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2024 (9) TMI 1368
Seeking grant of bail - offence committed under Sections 135(1)(a) and 135(1)(b), and punishable under Section 135(1)(i)(A) of the Customs Act - HELD THAT:- Having regard to the fact that the appellants have already undergone sixteen months of incarceration (as on date), and that the charge-sheet has been filed as back as in August, 2023 and since then, even the charge has not been framed by the Trial Court, without going into the merits of the cases, the present appeals accepted. In that view of the matters, the appellants namely, Premal Ketan Radia and Anil Paswan @ Anil Saroj, are directed to be released on bail in connection with the Criminal Complaint Case No. 67(O) 2023 arising out of the D.R.I. Regional Unit Patna, Unit Case No. 5/2023-24 dated 09.06.2023, lodged before the Court of Presiding Officer(Special), Economic Offences, Civil Court, Patna for the offence committed under Sections 135(1)(a) and 135(1)(b), and punishable under Section 135(1)(i)(A) of the Customs Act, if they are not required in any other case, on such terms and conditions that may be imposed or deem fit by the Trial Court, including the condition that the appellants shall deposit their passport with the Trial Court and give their correct addresses and contact numbers on affidavit. They shall also co-operate with the Trial Court in concluding the trial expeditiously. Appeal allowed.
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2024 (9) TMI 1367
Revocation of Customs Broker License - forfeiture of security deposit - Failure to follow any of the condition mentioned under Regulation 11(a), 11(d), (k) and 11(n) of the CBLR 2013 - respondent has not obtained any job clearance from the exporter and the authorization has been obtained through intermediaries after filing of the shipping bill. The only allegation in the show cause notice issued by the Directorate of Revenue Intelligence (DRI) is that the respondent on receipt of the KYC documents, authorization letter IEC of M/s. Panel Pin Manufacturing Company Pvt. Ltd. had initiated the clearance work without meeting authorized person of the exporter and work was received through many people in between acting as middlemen. HELD THAT:- Reading the order of adjudication does not show as to whether the Department/DRA investigated as to how seal came to be fixed by the authorities and whether there was any involvement of the officials in the said process. Be that as it may, the learned Tribunal has considered the facts of the case and has arrived at the finding that the relevant provisions of the CBLR does not envisage physical verification of the exporters and antecedents nor verification of the factory premises of the exporter concerned. One other aspect which needs to be also taken note of is that the proceedings initiated under the provisions of the Customs Act culminated in an order passed by the Commissioner of Customs (Port), Kolkata dated 14th February, 2019 imposing a penalty of Rs.10 Lacs on the partner of the respondent Surendra Nath Mallick. One more aspect which has been brought to notice by the learned counsel for the respondent is that the DRI initiated criminal proceedings against the partner of the respondent and based on a petition filed by DRI before the Chief Metropolitan Magistrate, Kolkata. An order was passed on 8th August, 2023 stating that the adjudicating authority did not recommend prosecution against the partner of the respondent who was arrayed as accused no.1. There is also a communication sent by the Senior Intelligence Officer (Group III), Kolkata Zonal Unit, DRI stating that necessary verification has been done regarding the Customs Broker namely, Surendra Nath Mallick and nothing adverse was noted against the firm or the respective person. Thus, the other collateral proceedings have also ended in favour of the partner of the respondent. The view taken by the learned Tribunal is one of the plausible views and the same cannot be faulted - the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
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2024 (9) TMI 1366
Levy of duty and penalty - challenge to order dated 23.01.2015 by Director General of Health Services under Customs Act - HELD THAT:- As per the memo, the proceedings are pending regarding default and violation of terms and conditions of Notification No.64/1988, the possibility of the Tribunal hearing all the matters involving violation of terms and conditions of Notification No. 64/1988 cannot be ruled out. Even if the Tribunal for its convenience hears the matter by clubbing the similar appeals, it is expected that the Tribunal shall apply and examine each appeal on its facts. Though the apprehension expressed in the memo is not justifiable, however, considering the nature of dispute and requirement of examination of facts of each case on its own, the apprehension cannot be brushed aside. Further if the Tribunal is directed to consider the appeal of the petitioner independently, by extending due opportunity of hearing, no prejudice would be caused to the revenue. The Customs, Excise and Service Tax Appellate Tribunal shall dispose of the appeal i.e., Appeal No. 20295/2020 against the petitioner herein, independently on its own merits - Petition disposed off.
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2024 (9) TMI 1365
Violation of conditions of Carnet by not filing normal Bill of Entry for clearance of the same - alleged misdeclaration and misuse of carnet documents - Applicability of N/N.94/1996 dated 16.12.1996 - HELD THAT:- There is a misdeclaration on the part of the appellant to the effect that the car was exported only for the purpose of repair and reimported thereafter. Since the appellant has accepted his liability on the value of his repairs, the demand of duty on repairs is confirmed. The Commissioner observing that no case of physical concealment within the car having been brough out, the car being available for examination by Customs and duties of Customs having already been paid on the car at the point of first import, denial of benefit of said Notification No.94/1996-Cus. dated 16.12.1996 would be travesty of justice . Having extended the benefit of the Notification No.94/1996 dated 16.12.1996 which is eligible for goods being exported for repairs, we do not find any reason for confiscating the vehicle nor imposition of penalty under Section 112(a) of the Customs Act 1962. Hence redemption fine and penalty is set aside. The Revenue challenging the additional grounds filed by the appellant for the first time regarding determination of duty submitted that the appellant had paid the entire amount of duty and thus, now cannot challenge the same having not taken up this issue before the adjudicating authorities. With regard to determination of duty since the issue has been raised for the first time and being a pure question of law. The impugned order is modified to the extent of allowing the redemption fine and penalty and appeal is remanded to the Commissioner to decide only on the additional ground raised before this Tribunal with regard to their liability to pay only basic customs duty - Appeal disposed off.
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2024 (9) TMI 1364
Classification of imported one consignment of Bed sheet, declared as made of 100% Polyester - classifiable under CTH 5407 or under CTH 6304? - HELD THAT:- The Tribunal in the case of M/S. C.F. INC., A UNIT OF SURINDER KUMAR SONS (HUF) VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA [ 2024 (4) TMI 1178 - CESTAT KOLKATA] has held that ' the goods imported by the appellants are only Polyster Quilt Cover . Going by the factual details, particularly keeping in view the common parlance usage of the material as bed sheets which can be deduced from their size and the decided case laws, the goods are classifiable under CTA 6304 as contended by the appellant and not under CTA 54.07 as has been held by the Revenue. The order of the lower authority is upheld and the appeal filed by the Revenue dismissed.
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2024 (9) TMI 1363
Levy of redemption fine and penalty - valuation of imported goods - rejection of transaction value and enhancement of value - Admissibility of e-mail evidence - non-compliance with Section 138C of the Customs Act, 1962 - HELD THAT:- Actually, there is no whisper replying to the allegation in the SCN that the appellant had opened his e-mail ID and downloaded 13 documents including the e-mail. This being so, the appellant had handed over the e-mail to the Department as part of the investigation. If there was any grievance for the appellant, he ought to have sent a letter or objection to the department stating that the email was downloaded on threat or duress. No such letter has been sent to the department. No such averment has been made in the reply to the SCN. Chapter XIII (Sections 100 to 110A of Customs Act, 1962) deals with the powers of officers for search, seizure and arrest. Section 110A provides power to inspect and Section 107 provides power to examine persons. For these reasons, the email is admissible evidence. The other evidence relied is the statement of Shri Sheetal K. Jain (appellant active partner) recorded by Department. In his statement, it is clearly deposed by him that after negotiations, they had agreed to supply Ginger Beer @ 4.55 GBP per case. It is also stated that the appellant had made part payment and the balance amount of 99.61 is still to be paid. This clearly shows that the declared value is incorrect - It is incumbent upon the appellant to come forward with an explanation in the reply as to why they have paid an amount over and above than that has been mentioned in the invoice. The appellant has not been able to put forward any explanation in regard to higher amount paid by them. The strong inference that can be drawn from the facts is that the value declared in the Bill of Entry is not correct transaction value. The department has therefore correctly rejected the transaction value and enhanced the value on the basis of e-mail - the order of enhancement of value and the confirmation of differential duty is upheld. The rejection of declared value and enhancement of value is upheld - The redemption fine is reduced to Rs. 1,00,000/- - The penalty imposed under Section 114A of Customs Act, 1962 is reduced to Rs. 1,00,000/- - appeal allowed in part.
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Insolvency & Bankruptcy
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2024 (9) TMI 1362
Invocation of writ jurisdiction of this Court under Article 226 of the Constitution of India, 1950 - initiation of process of fresh voting on the Resolution Plan of the Petitioner after taking into consideration - principle of equality and fairness - HELD THAT:- This Court is not inclined to issue notice for the elementary reason that the petitioner has an alternative and efficacious remedy to assail the impugned action or inaction on the part of the CoC, if any, before the NCLT. It is well ordained in law that the Adjudicating Authority alone has the jurisdiction to regulate the conduct of the CoC and finally adjudicate upon the resolution plan through the powers of judicial review and thereby ensure that the CoC functions as per the role and responsibilities delineated under the IBC. In other words, the Adjudicating Authority maintains a supervisory role over the entire CIRP proceedings and is empowered under Section 60 of the IBC to take action on any issue relating to the insolvency proceedings. Thus, the resolution plan decided by the CoC shall be put up for consideration before the Adjudicating Authority, which forum alone shall finally decide whether the CoC has performed its fiduciary duty as per the legislative mandate of the IBC. This Court is not enjoined upon to exercise its power of judicial review and thereby usurp upon the powers of the NCLT to inquire into the commercial wisdom of the CoC whereby the Resolution Plan of the petitioner was rejected vide impugned letter dated 18.09.2024. In the end, a last desperate attempt is made by the petitioner that it is willing to renew its offer and match the offer given by the SRA in every aspect, but the same cannot be entertained by this Court. Although there is no gainsaying that in matters of public funds auction the best methodology for discovering fair value and the principle criteria is to ensure maximizing the recovery, the bottom line is that the decision of the CoC shall definitely be considered by the NCLT in a just and expedient manner, and if it deems fit it, may even allow Open Court Bidding in accordance with law - the present writ petition is dismissed with liberty to the petitioner to take appropriate recourse before the NCLT, which forum alone shall decide the objections of the petitioner, if any preferred, on its own merits in accordance with law. Petition dismissed.
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PMLA
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2024 (9) TMI 1361
Provisional attachment of certain immovable and movable properties of the appellants herein - money laundering - proceeds of crime - burden to prove - offences punishable under section 409,420,423,424,465 120B of IPC,1860 and Section 7,10,11 and 13 of Prevention of Corruption Act, 1988 - disproportionate assets - HELD THAT:- There are no cogent evidence that the property was acquired out of known sources of income. The appellant has claimed various sources of income, including substantial agricultural income, rental income, contract work etc., but no reliable proof has been adduced in respect of any of these. ITRs have been filed belatedly, after investigations began and even considering the best case scenario of the returns being accepted at face value, the same are not sufficient to explain the actual purchase consideration for the subject land. The legal position is undisputed that once a notice under Section 8(1) of PMLA, 2002 is issued, it is for the noticee to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under Section 5(1), the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money laundering and confiscated by the Central Government. Further, the presumption in inter-connected transactions under Section 23 as also the presumption under Section 24 is against the appellant. There are no merit in the contention that the Ld. AA has not considered the definition of proceeds of crime under PMLA, 2002. Even at the relevant time (prior to the amendments of 2015 and 2019), the definition of proceeds of crime took within its sweep any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence and even the value of any such property . The term property was also very widely defined to mean property of every kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible. It also includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located. Having perused the contents of the order carefully and the evidence of the written agreement on nonjudicial Stamp Paper, the value of the attached property should rightly be reflected as Rs. 60,00,000/- and not Rs. 4,37,500/- - there are no reason to interfere with the order of the Ld. Adjudicating Authority - appeal dismissed.
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Service Tax
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2024 (9) TMI 1360
Short payment of service tax - courier agency services - difference in income reflected in ST-3 returns and profit and loss account, due to the exempted services provided - period 2006-07 to 2010-11 - HELD THAT:- In the case of GIHED documents, the appellant has billed the multiple exhibitors of GIHED in their individual names C/o GIHED Stall No., Penta Freight Pvt. Limited has billed in the name of appellants while issuing Housed Airway Bill in the name of GIHED, Ahmedabad with destination at GIHED, World Gujarati Conference, USA and airlines Jet Airways/Continental Airlines has issued Air-Way Bill to Penta Freight Pvt Limited. Whereas the bills issued by the appellants to individual exhibitors ranges approx. from 250 Kgs to 1000 kg. per consignment, Housed Airway Bill/ Airway Bill issued by Peta prefight Pvt Limited/ Airlines are 5000 Kg. plus thus aggregating multiple consignments of the exhibitors. The description as per Airway Bill reads as Exhibition cargo as for display purposes only . It would be pertinent to mention that the time sensitive documents, goods or articles would be such volume/ weight that an individual could handle the same and deliver it personally. The expression utilizing the services of a person to our view mean that the person here means an individual and not a juristic person. As is a trade practice and as suggested by the above definition, small goods or articles capable of being handled and delivered by an individual would be covered under the definition of courier service - Larger consignments howsoever may be time sensitive or the requirement for door-to-door delivery, would not be classified as courier services but as cargo. Another factor which is crucial to examine is that normally a courier agency aggregates small consignments of documents, goods or articles and there are different senders and the place of destination for door-to door delivery - when a courier agency service is provided for door-to-door delivery, all the transporters taking responsibility to deliver the consignment from the booking stage to the final door delivery would fall under the courier agency service and the cascading effect of taxation can be avoided by input credit claim. It is now well established that a sub-contractor is obliged to discharge tax independent of the main contractor. There are no record/ data to examine other than the above two specific consignments, we are constrained to remand back the case to the original authority to examine the documents of the appellants afresh in the light of above observations - appeal allowed.
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2024 (9) TMI 1359
Failure to pay service tax - Non-Utilization (NU) Penalty - Water Supply Charges - Miscellaneous Receipts - Transfer Charges - Infrastructure Up gradation fund - HELD THAT:- It has been accepted in the impugned order that the Infrastructural up-gradation fund and transfer fees were covered under article 243W which is a statutory function of the state government covered under the expressions Regulation of land use and construction of buildings,' 'Roads and bridges,' and 'Planning for economic and social development and GIDC is a state undertaking which is performing these functions in the state for development of industry in the state. Once it is accepted that these are the statutory functions of the state, the same cannot be exigible to tax under the period prior to 01.07.2012 also. Further misc. receipts which are stated to be in respect of as sub- letting fees, subdivision charges, amalgamation fees, collateral fees are nothing but necessary for orderly regulation of industrial estate and are for of the infrastructural development activity only. It is an avowed statutory duty of the state to develop industry in the state and any charges collected for such making such development cannot be subjected to tax. The infrastructure up-gradation fund , transfer fees and other misc. charges in respect of in respect of as sub-letting fees, subdivision charges, amalgamation fees, collateral fees are necessary for maintenance, management and repairs of the industrial estate under Gujarat Industrial Development Corporation (GIDC), established under the Gujarat Industrial Development Act, 1962 and are not subject to service tax during the impugned period of either before or after 01.07.2012 - no service tax could be charged on the share of IUF which was collected from the leaseholders on behalf of the Industrial Associations and reimbursed to them as those does not qualify as consideration for any service provided by GIDC. The impugned order is set aside - appeal allowed.
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2024 (9) TMI 1358
Taxability of Works Contract Services provided by the appellant - Whether the benefit of entry 12 A (a) of notification 25/2012 was available only for such contracts as were executed before 01.03.2015? - extended period of limitation. HELD THAT:- Sr. No. 12 of Mega Exemption N/N. 25/2012-ST dated 20.06.2012 as amended vide N/N. 6/2015 dated 01.03.2015 is reported below vide which the entry at serial no. (c) above, was omitted vide N/N. 6/2015-ST dated 01.03.2015 with effect from 01.04.2015. This Perusal is sufficient to hold that for the period in dispute, the condition that contracts for rendering construction/WCS services to be executed prior to 01.03.2015 was no more in existence as it was omitted with effect from 1.04.2015. Resultantly the services as that of construction provided to Government/ local authority/Governmental authority remain exempted from entire service tax liability irrespective the date of contract for the purpose is post 01.03.2015. In the present case the contract is 19.08.2015 i.e. post-1.04.2015 hence, the condition of contract to be executed prior 1.03.2015 is held to have wrongly being relied upon/invoked by the adjudicating authority below while confirming the demand of Rs.9,56,210. Admittedly the Service in question has been rendered to government/ local authority (PWD) In light of the above the discussion the said demand is held liable to be set aside. Extended period of limitation - HELD THAT:- It is observed that the non-filing of ST-3 returns is alleged as the act of suppression. However, it has been observed that even in reply to the show cause notice, the appellant had explained that exemption being arising from notification 25/2012 has been the reason to not to file the returns. The said contention of appellant has been accepted, there is no act of suppression being committed by the appellant. Present is not the case of evasion of service tax. Hence, it is held that extended period has wrongly been invoked. The show cause notice itself therefore gets barred by time. The order under challenge, upholding the invocation of extended period is therefore held liable to be set aside. The order under challenge/ O-I-A is hereby set aside - Appeal allowed.
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Central Excise
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2024 (9) TMI 1357
Valuation - related person - inter-connected undertakings - seller and alleged buyers of the goods are related persons in terms of Section 4(3)(b) of the Central Excise Act or not - mutuality of interest - it was held by CESTAT that 'The transaction value of the goods between respondent and the so-called interconnected undertaking is correct valuation and the same cannot be disturbed, therefore, there are no merits in the appeal of revenue.' HELD THAT:- No case is made out to interfere with the impugned judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad. The Civil Appeal is accordingly dismissed.
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2024 (9) TMI 1356
Cash seizure - sale proceeds of clandestinely removed goods - pre-deposits made under section 35FF of the Central Excise Act - whether Respondents are justified in granting interest @6% per annum on the refund of cash seized although the said cash seized was deposited in fixed deposit and earned interest at more than 6% per annum? - HELD THAT:- On a reading of Circular 984 of 2014, the contention raised by Respondents to justify interest @6% per annum is erroneous. The said Circular was issued in the light of amendments made to section 35F of the Central Excise Act and 129E of the Customs Act whereby these sections were substituted by section 35FF and section 129EE, respectively, providing for certain percentage of the demand to be paid as a condition precedent for entertaining the appeal. It is also important to note that in the present case cash was seized on 29th August 2011 and therefore appropriation of cash seized during investigation towards any pre-deposit as a condition for filing an appeal also cannot arise. Therefore, the contention raised by Respondents to justify the impugned O-I-O on this count is to be rejected. The Petitioner has not brought to our notice any provision to justify claim of interest @18% per annum and therefore such a claim cannot be granted to Petitioner. However, Petitioner s alternative submission on grant of interest at the actual rate which the fixed deposit has earned is certainly required to be considered. In the present case it is undisputed that at no point of time the cash seized was appropriated towards final tax dues and rightly so because the order discharging Petitioner of tax dues had attained finality. It is settled position that a trustee cannot enrich himself on behalf of the person for whom the money is held in trust. A trustee is supposed to account for each and every sum of money which is held in trust on behalf of the beneficiary. In the instant case, therefore, action of Respondents in granting interest @6% per annum when the fixed deposits arising out of cash seized from Petitioner have earned more than 6% per annum cannot be justified and Respondents are duty bound to handover the entire amount of interest which they have earned - Admittedly Petitioner cannot be faulted on account of this and Respondents have while granting interest, has granted interest for the period post the expiry of 10 years and Petitioner in his calculation has also reduced the same for arriving at the final claim. An inquiry should be initiated by Respondents to ascertain the accountability on this aspect and fix the responsibility by taking appropriate action against the persons found negligent for non-renewal of the fixed deposits. The impugned O-I-O dated 5th July 2024, Exhibit A to the petition is quashed and set aside - petitioner is not entitled to interest @18% per annum. However, is entitled to sum of Rs. 90,07,829/- being the interest in excess of 6% earned on fixed deposits arising out of cash seized from Petitioner - petition disposed off.
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2024 (9) TMI 1355
Valuation of the goods cleared by the appellant under section 4 of the Act read with Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - follow up demand for an earlier order passed for the period October 2010 to July, 2015 - Extended period of limitation - HELD THAT:- This bench had, by final order No. 51135 of 2022 dated 02.12.2022 [ 2022 (12) TMI 450 - CESTAT NEW DELHI ] held that 'Evidence in the case is insufficient to hold that the appellant and its buyers Vandana and Shivali are interconnected undertakings and there is no allegation or evidence that they are related in any other manner. Even if they are inter-connected undertakings but are not related in any other manner, valuation has to be done as per Valuation Rule 10(b) as if they are not related persons and the demand would not sustain.' - This order was passed setting side the order-in-appeal dated 15.02.2018 passed by the Commissioner (Appeals) for the relevant period. In the present appeal, the Assistant Commissioner and the Commissioner (Appeals) followed the previous order of the Commissioner (Appeals) dated 15.02.2018. Since the order dated 15.02.2018 is set aside, this appeal also needs to be allowed and the demand needs to be set aside. The impugned order is set aside - appeal allowed.
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2024 (9) TMI 1354
100% Export Oriented Unit (EOU) - Utilization of cenvat credit for payment of duty on goods cleared to domestic tariff area (DTA) by an Export Oriented Unit (EOU) - appellant discharged the said duty liability as per Notification 52/2003 but by utilizing the cenvat credit - HELD THAT:- From the facts of the case, it is obvious that the amount to be paid at the time of clearance of imported goods to DTA in these circumstances is custom duty and therefore, any demand of duty in respect of such goods can only be customs duty. Customs duty cannot be discharged by utilizing cenvat credit as the cenvat credit rules do not prescribe such utilization. However in the instant case, no demand of custom duty has been made but demand of Central Excise duty has been made. From the decision in MATRIX LABORATORIES LTD AND MYLAN LABORATORIES LTD VERSUS COMMISSIONER OF CENTRAL TAX MEDCHAL - GST (VICE-VERSA) [ 2023 (6) TMI 458 - CESTAT HYDERABAD] also it becomes clear that in respect of imported inputs cleared by EOU only demand of custom duty can be made under Section 28 of the Customs Act, 1962 in respect of inputs obtained duty free cleared to DTA by EOU, the same can be cleared on payment of Central Excise duty and in such cases, notice under Section 11A of the Central Excise Act, 1944 can be raised - In the instant case, the notice has been issued invoking Section 11A(5) of the Central Excise Act and same is not proper provision for demanding the Custom duty. In the instant case, no violation of provision of Notification 52/2003 has been cited for demanding the said duty. The provisions of Section 28 of the Customs Act have also not been invoked and consequently, the show cause notice issued under Section 11A(5) of the Central Excise Act, 1944 for recovery of custom duty is void ab initio. The proceedings initiated by said show cause notice cannot, therefore be sustained - The impugned order is set aside and appeal is allowed.
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CST, VAT & Sales Tax
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2024 (9) TMI 1353
Constitutional validity of Section 33 (5) of the Haryana Value Added Tax Act, 2003 - waiver of condition of pre-deposit of surety bond or bank guarantee - inability to furnish security in the form of surety bond or bank guarantee - HELD THAT:- While power does not lie with the appellate authority to waive the condition of pre-deposit of surety bond or bank guarantee in terms of Section 33 (5) of the HVAT Act, however, this Court is not precluded under Article 226 of the Constitution of India to direct the appeal to be heard without insisting upon the precondition. It is true that the Supreme Court in M/s Tecnimont Private Limited [ 2019 (9) TMI 788 - SUPREME COURT] considered a separate set of provisions, however, we do not agree with the learned State counsel that merely because under Section 33 (5) of the HVAT Act the requirement is not of actual deposit but submitting a bank guarantee or adequate security to the satisfaction of the assessing officer. The provision has to be read differently. While such a provision may exist on the statute, the circular issued asking for irrevocable bank guarantee or security in the form of surety bond is too onerous a condition. This Court is satisfied that the petitioners before us would not be in a position to submit security in the nature of surety bond as in all the cases the company or the concerned Directors would be required to have property worth the said amount which they do not possess. A person cannot be left remediless, and in view thereto, as opined in M/s Tecnimont Private Limited and Smt. P. Laxmi Devi [ 2019 (9) TMI 788 - SUPREME COURT] the Joint Excise and Taxation Commissioner (Appeals), Faridabad, is directed to hear the appeals without insisting upon the pre-condition required under Section 33 (5) of the HVAT Act and decide the appeals on merits. Since the concerned appellate authority would not have the power to waive off the pre-deposit as required under Section 33 (5) of the HVAT Act, the order passed by the Haryana Tax Tribunal, Chandigarh, upholding the order of the Joint Excise and Taxation Commissioner (Appeals), Faridabad, in refusing to entertain the appeal without submitting surety bonds or pre-deposit cannot be said to be illegal - appeal disposed off.
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Indian Laws
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2024 (9) TMI 1352
Seeking laying down appropriate guidelines to be followed by all including the police officials and Judicial Magistrate to desist from initiating or directing initiation of criminal proceedings - HELD THAT:- In the case on hand, the Enforcement Directorate, New Delhi, was impleaded as a party respondent in the writ petition on 04.07.2023, by way of the final order disposing of the case. The final order was passed without putting it on notice and affording it an opportunity of hearing. Therefore, the directions of this Court in the said order in relation to ECIR No. ECIR/HIU-1/06/2023 cannot be sustained. More so, as the final order only records that the interlocutory applications for impleadment and to bring on record additional facts were allowed and no more. Further, though this Court relegated the writ petitioners to the jurisdictional High Courts for challenging the FIRs registered against them, certain errors crept in by oversight while doing so. As regards FIR No. 197 of 2023, this Court directed that no coercive steps should be taken in relation thereto against the petitioner financial institution and its people till final disposal of such a petition by the High Court. Having said that, this Court went on to observe that it would be open to the writ petitioners to seek stay of proceedings in relation thereto, which was to be considered by the High Court on merits. When a party is relegated to the High Court to pursue its remedies, it would not be proper, in the normal course, to bind the said High Court with directions in relation to the proceedings to be impugned before such Court. Ordinarily, this Court would leave all issues open for the party so relegated to raise and pursue before the High Court. The miscellaneous applications and the interlocutory applications are disposed of accordingly.
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