TMI Tax Updates - e-Newsletter dated: September 30, 2016 - with Direct Tax, Indirect Tax and GST Updates and Updates on FTP, FEMA, IBC & Corporate Laws etc. published on TMI with Latest Case Laws

Pricing Login

Tax Management India. Com
Law and Practice : Digital eBook
Research is most exciting & rewarding

For Sales / Support:
WhatsApp

9911796707

Case Laws Acts Notifications Circulars Classification Forms Manuals Articles News D. Forum Highlights Notes

TMI - e-Newsletter TaxTMI Excess Input Tax Credit penalty appeal dismissed... TaxTMI Income Tax Assessment Notice Issued by... TaxTMI Excessive delay in issuing show cause notice &... TaxTMI Rectification: Show Cause Notice quashed for period... TaxTMI Investor locked into long-term capital gains bonds;... TaxTMI Funds received by assessee overlooked during... TaxTMI Cash deposits explained through VAT returns, cash... TaxTMI Customs duty dispute: Imported goods classified as... TaxTMI Appointment of adjudicator for corporate penalties... TaxTMI Undisclosed investments, agricultural land... TaxTMI Taxpayer's victory: AO's order upheld, PCIT's... TaxTMI Non-resident Singapore firm's software licensing... TaxTMI Excessive transport expenses deduction and TDS... TaxTMI Importer imports "Ground Colemanite (B2O3 40%)... TaxTMI Bank penalized for delayed reporting of high-value... TaxTMI Latest Case-Laws TaxTMI Latest Notifications + Circulars TaxTMI GST Council Decisions TaxTMI

Follow us:


Tax Updates - TMI e-Newsletters

Home e-Newsletters Index Year 2016 September Day 30 - Friday ← Older Newer →
TMI e-Newsletters FAQ
You need to Subscribe a package.
Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter September 30, 2016 Case Laws in this Newsletter: Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles How to determine cost of improvement in case of sale of old or inherited land / building in the absence of any material i.e. evidence or documents Interest liability in case of Confirmed Demand - relevant date for calculation of interest News Monetary Policy Committee constitution under the Reserve Bank of India Act, 1934 notified 3rd India and Canada Annual Ministerial Dialogue Auction for Sale (Re-issue) of Government Stocks RBI Reference Rate for US $ CBDT extends Working Hours till 8.00 pm on 28th& 29th September, 2016 for IDS Declarations; On 30th September, such declarations can be filed till midnight India climbs steadily in the Global Competitiveness Index; Improves its ranking by 16 places for the second year in a row;. Now placed 39th among 138 countries, ahead of BRICS countries other than China Notifications Central Excise 47/2016 - dated 28-9-2016 - CE (NT) Seeks to amend Notification No. 30/2014-CE (NT) dated 14th October, 2014 Income Tax 85/2016 - dated 28-9-2016 - IT U/s 32(1) and 32AD(1) of Income Tax Act 1961 - Central Government notifies the districts of the State of Andhra Pradesh as backward areas Service Tax 44/2016 - dated 28-9-2016 - ST Seeks to amend Notification No. 20/2005-Service Tax dated 10th August, 2005 Circulars / Instructions / Orders Income Tax 10/2016 - dated 28-9-2016 The Income Declaration Scheme, 2016 – reg. FEMA 3 - dated 29-9-2016 Exim Bank's GoI supported Line of Credit of USD 87.00 million to the Government of the Republic of Zimbabwe DGFT 35/2015-2020 - dated 28-9-2016 Amendments in Public Notice No. 29/2015-2020 dated 08.09.2016 and in Public Notice No 27 dated 31.08.2016. 36/(2015-2020) - dated 28-9-2016 Inclusion of new Regional Office of DGFT at Belagavi, Karnataka in Appendix — 1 A of Foreign Trade Policy, 2015-20. Customs F.No.605/30/2015-DBK - dated 28-9-2016 Discontinuation of practice of making manual debits on physical copy of Advance Authorizations registered at EDI Customs port Central Excise 1049/37/2016-CX - dated 29-9-2016 Revised Monetary Limits for adjudication of Show Cause Notice in Central Excise and Service Tax-reg Highlights / Catch Notes Income Tax Allow-ability of expenditure - scholarship to the children of members, payment to legal heirs of members and gifts to members - even though there is no legal obligation to incur these expenditure but the assessee had incurred it for preserving business connection and goodwill of the business - claim of expenditure allowed - AT Visit to Get Source The presumption shall arise that loan is on capital field until the same is rebutted by the assessee company and hence the said notional loss arising on restatement/revaluation of foreign currency loans due to adverse foreign exchange fluctuations cannot be allowed as deduction u/s 37(1) - AT Visit to Get Source Transfer of building - provisions of section 50 are not applicable as the same being a special provision for computation of capital gains in the case of depreciable assets - AT Visit to Get Source As the amount of interest on which tax has been withheld is not chargeable to tax in the instant year, the assessee cannot equally be allowed credit for TDS on such interest income against other income - AT Visit to Get Source Entitlement for interest u/s 244A - even if, where the delay in filing of return is condoned, still when it is attributable to the assessee, there is justification on the part of the CIT to deny interest u/s 244A(2) - HC Visit to Get Source When the entire block of purchases made by the assessee is disallowed, the same would have automatic and direct impact on bringing up the Gross Profit ratio of the assessee during such year - HC Visit to Get Source Income from house property - if the maintenance charges etc. are stipulated to be payable by the licencee or the lessor it must form a part of the rent for the purpose of computing the annual value of the property - HC Visit to Get Source Amortization of expenditure u/s 35D - under the very same provisions benefit is allowed for the first two Assessment Years and, therefore, it could not have been denied in the subsequent block period - SC Visit to Get Source Payment of bonus to employees - There is no dispute that this amount was paid by the assessee to its employees within the stipulated time. Embargo specified under Section 43B or 40A(9) of the Act does not come in the way of the assessee. - SC Visit to Get Source The expenditure incurred by the assessee on conversion of convertible debentures into equity shares would have to be treated as capital expenditure - HC Visit to Get Source Customs Discontinuation of practice of making manual debits on physical copy of Advance Authorizations registered at EDI Customs port - Order-Instruction Visit to Get Source Mis-declaration of goods in the shipping bills - the appellant himself has informed the customs authorities about the mistake even before the consignment was taken up for examination. - there is absolutely no malafide - confiscation and penalty set aside - AT Visit to Get Source Enhancement of Anti Dumping Duty - rubber chemicals known as PX13 (6 PPD) - The injury to the domestic industry is likely to recur in case the present AD duties are not modified. The definitive AD duty has been revised based on such recommendation by the DA - the imposition of AD duty per-se cannot be challenged. - AT Visit to Get Source The request for provisional release of seized betel nuts rejected by the Adjudicating authority was improper and legally not correct. It is ordered that seized betel nuts should be provisionally released to the Appellant after executing a bond for the full value of the goods with one solvent surety equal to 25% of the value of the seized goods - AT Visit to Get Source 100% EOU - DTA sale of prawn seed - The allegations in the show cause show cause notice and the conclusions in the impugned order are without solid foundation, without evidence and premised on presumptions and assumptions - demand set aside - AT Visit to Get Source Central Excise Revised Monetary Limits for adjudication of Show Cause Notice in Central Excise and Service Tax-reg - Circular Visit to Get Source Demand of interest - Once in terms of the order passed by the adjudicating authority after remand by the Tribunal, there is no delay in deposit of duty by the respondent in view of Section 11AA of the Act, the demand of interest is not justifiable - HC Visit to Get Source Clandestine removal of goods - Whether appellant was manufacturing Zinc Ingots for the entire period from 1996-1997 to 2000-2001 or started such Zinc Ingot manufacturing few days before the search - It is a well accepted legal proposition now that a statement has to be accepted as a whole and Revenue cannot pick and choose the portions of a statement favourable to them. - AT Visit to Get Source Whether stock-taking of goods manufactured by the Appellant has been correctly done by the officers of DGCEI and the Income Tax authorities to determine shortages and clandestine removal of goods - Held No - AT Visit to Get Source Valuation - captive consumption - Frequency or periodicity of costing in terms of CAS-4 - the CAS-4 cost price arrived at on annual basis by the Revenue is correct procedure - AT Visit to Get Source Valuation - includability - freight incurred in transportation of goods manufactured - transfer of ownership takes place at the factory gate when the goods are delivered - demand set aside - AT Visit to Get Source Export of goods procured against CT-1 certificate after processing and not in the same condition - benefit of Notification No. 42/2001 CE(NT) dated 26.06.2001 allowed - AT Visit to Get Source Deemed Manufacture - emergence of clean oil through the processes, such as, Dehydration, Distillation, Clay Polishing and Filtration from waste and used oil - there was not a single invoice raised to a consumer, establishing that the goods were marketable to consumer - demand set aside - AT Visit to Get Source Reversal of Cenvat credit under Rule 6(3) passed on to the buyers - The show cause notice is issued for recovery of amount under Rule 6(3)(b) ibid, & the amount to be recovered under Rule 6(3)(b) ibid, is possible only when the Cenvat Credit is admissible. - AT Visit to Get Source VAT Levy of tax on discount received from the suppliers - KVAT - The question whether the discount has to be added to the turn over was not a matter which ought to have been taken up afresh especially when no appeal had been filed by the revenue authorities - HC Visit to Get Source Proportionate dis-allowance of Input Tax Credit - Explanation to Section 14 of the M.P. VAT Act, as introduced by Amendment Act of 2014 and amended in 2015, would apply prospectively. However, the legislature has power to validate the judicial invalid levy retrospectively by bringing Validation Act. - HC Visit to Get Source Demand of input tax rebate - cancellation of refund of input tax credit - The notice must mention the grounds on which the action is proposed to be taken and if the notice mentions one ground but the action has been taken on some other ground, the same would amount to violation of principle of natural justice. - HC Visit to Get Source Case Laws: Income Tax 2016 (9) TMI 1199 Amortization of expenditure under Section 35D - Whether expenditure incurred on issue of shares is eligible to be amortized? - Held that:- AO was satisfied that there was expansion of the facilities to the industrial undertaking of the assesseee. It is on this satisfaction that for the Assessment Year 1996-97 also the expenses were allowed. Once, this position is accepted and the clock had started running in favour of the assessee, it had to complete the entire period of 10 years and benefit granted in first two years could not have been denied in the subsequent years as the block period was 10 years starting from the Assessment Year 1995-96 to Assessment Year 2004-05. The High Court, however, disallowed the same following the judgment of this Court in the case of Brook Bond India Ltd (1997 (2) TMI 11 - SUPREME Court). In the said case it was held that the expenditure incurred on public issue for the purpose of expansion of the company is a capital expenditure. However, in spite of the argument raised to the effect that the aforesaid judgment was rendered when Section 35D was not on the statute book and this provision had altered the legal position, the High Court still chose to follow the said judgment. It is here where the High Court went wrong as the instant case is to be decided keeping in view the provisions of Section 35D of the Act. In any case, it warrants repetition that in the instant case under the very same provisions benefit is allowed for the first two Assessment Years and, therefore, it could not have been denied in the subsequent block period. We, thus, answer question No. 1 in favour of the assessee holding that the assessee was entitled to the benefit of Section 35D for the Assessments Years in question. Deduction for payment of bonus by the assessee to its employees - Whether deduction on account of payment of bonus to the employees of the assessee is not eligible under Section 36 of the Act, as it is hit by Section 40A(9) of the Act? - Held that:- The amount paid by way of bonus is one such expenditure which is allowable under clause (ii) of sub-section (1) of Section 36. There is no dispute that this amount was paid by the assessee to its employees within the stipulated time. Embargo specified under Section 43B or 40A(9) of the Act does not come in the way of the assessee. Therefore, the High Court was wrong in disallowing this expenditure as deduction while computing the business income of the assessee and the decision of the ITAT was correct. 2016 (9) TMI 1198 Income from house property - annual value of the property computation - inclusion of maintenance charges as part of the rent - Held that:- The actual rent received would be much higher where the facilities are better. Section 23 provides that the annual value of the property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year or where the property is let, the actual rent received or receivable by the owner whichever is higher. In either case the rent that is received in respect of the premises in a building where the common amenities are better is bound to be higher than the rent that is expected to be received or is received in a building where the amenities are not as good. Where the agreement provides that the owner shall pay the amounts for the common facilities, maintenance charges, outgoings etc. it is obvious and reasonable to presume that the same is factored into the rent, fee or compensation payable by the lessee or the licencee. In that event the same cannot be added to the rent agreed to be paid. However, if the maintenance charges etc. are stipulated to be payable by the licencee or the lessor it must form a part of the rent for the purpose of computing the annual value of the property. A view to the contrary would enable a party to undervalue the annual value of the property for the purpose of section 23 by the simple expedient of providing for the payment of the maintenance charges etc. and the rent separately. The maintenance charges must be included as part of the rent for the purpose of computing the annual value of the property. The assessee is not prejudiced thereby in any event. We are informed that the amounts received under the sub-sub-licencee had been brought under the head “Income from house property”. Section 24 provides that the income chargeable under the head “Income from house property” shall be computed after making the deductions specified therein. Under clause (a) of Section 24, a sum equal to thirty percent of the annual value is liable to be deducted. The assessee has, therefore, the benefit of deductions under section 24 as well as under the proviso to section 23 of the Act. - Decided against the assessee. 2016 (9) TMI 1197 Revision u/s 263 - Gross Profit ratio - disallowance of expenditure - additions on account of bogus purchases - Held that:- Assessing Officer disallowed the entire expenditure and added back the full sum of ₹ 62.75 lacs shown to have been expended by the assessee for purchases from F.H. Rizvi concerns. There was no further material with the Assessing Officer or even possible avenue for inquiring whether remaining purchases of assessee were genuine or not. There was thereafter, no further scope of making addition in the guise of adjusting the Gross Profit ratio. The disallowance itself would automatically reflect in increasing the Gross Profit from one claimed by the assessee in the original return. Only on this ground, the order of assessment can be stated to be neither erroneous nor prejudicial to the Revenue. If the Commissioner had an angle of further inquiry to be made with respect to purchases from party unconnected to F.H. Rizvi, such angle has not come on record. The notice issued by the Commissioner does not suggest that since it was found that all purchases from F.H. Rizvi by the petitioner were bogus, the Assessing Officer could have inquired into the genuineness of the remaining purchases also. All that the Commissioner conveyed by way of reasons in the impugned notice was that the Assessing Officer did not bear in mind the Gross Profit ratio element. It is true that increasing the Gross Profit is one of the modes adopted by the assessing authority while adjusting the claim by the assessee. This can be so on the basis of materials on record suggesting that the current rate of Gross Profit does not reflect the true financial picture. Nevertheless, the same methodology cannot be applied arbitrarily without atleast some materials suggesting that the Gross Profit presented by an assessee was inaccurate. When the entire block of purchases made by the assessee is disallowed, the same would have automatic and direct impact on bringing up the Gross Profit ratio of the assessee during such year. Without there being any further material suggesting that other purchases were also not genuine, further increase of the Gross Profit ratio, was an option simply not available with the Assessing Officer. 2016 (9) TMI 1196 Entitlement for interest under Section 244A - delay in refund - belated return filing - whether once the delay in filing the return has been condoned, it becomes a valid return and therefore grant of interest is consequential? - Held that:- The liability to pay interest on refund arises from the date when claim for refund is made with all necessary particulars. As already indicated, Section 244A(2) imposes a restriction on payment of interest when the procedure for refund is on account of the delay attributed to the assessee. In the case on hand, what is to be looked into is whether the delay in refund was due to a cause attributable to the assessee. The facts involved in the case would disclose that the return of income for the assessment year 1997-98 was filed only on 01/02/2000 on account of delay in auditing. Return was filed belatedly and thereby it was rejected. Thereafter an application was filed under Section 119(2)(b), seeking for condoning the delay in filing the return, was rejected and ultimately the matter reached this Court wherein this Court had directed the delay to be condoned. There cannot be two ways to look at it. Admittedly, there had been delay on the part of the assessee which had given rise to a situation to condone the same. Delay has been condoned only for the purpose of accepting the return. But it cannot be stated that the delay was not attributable to the assessee. Even if such instances where the delay is condoned, still when it is attributable to the assessee, there is justification on the part of the Commissioner to deny interest under Section 244A(2). Therefore, no error in the impugned orders passed by which the claim for interest has been rejected. 2016 (9) TMI 1195 Reopening of assessment - exemption from the payment of capital gain - agricultural land - nature of land - Held that:- There is serious doubt about genuineness of the certificate dated 16.1.2013 of the Executive Engineer certifying that the land in question was situated beyond 8 kms from the outer limit of Vadodara Municipal Corporation, upon which the petitioner heavily relied. Shri K.D. Patel who is supposed to be the author of the certificate has since retired from Government service but has filed an affidavit stating that he has never issued the said certificate and the document does not carry his signature. The Road and Building division contends that a copy of said certificate is not found in their official records. A strong case is built up against the petitioner of having produced a document which was not genuine. For the purpose of this petition, atleast, we must proceed on the basis of declaration of official of Road and Building division that no copy of such document is found on the record and Shri K.D. Patel, retired Executive Engineer, who has gone on oath stating that he had never issued said certificate. If that be so, the very foundation of the petitioner's case of the land being at a distance of more than 8 kms from the outer limit of Vadodara Municipal Corporation fails. This would also match with the present information which Revenue collected after the assessment was over in form of statement of Shri Sohan M. Patel and certificate issued by the Deputy Collector of Vadodara Municipal Corporation, both indicating that the distance between the two limits is much shorter. In fact, the Executive Engineer of Road and Building division also in the latest affidavit has confirmed this aspect. In view of such facts, we are not inclined to quash the notice for reopening. However we clarify that the assessment may be carried out on the basis of evidence that may be brought on record including by the petitioner, unmindful of the observations made hereinabove. 2016 (9) TMI 1194 Application to stay the recovery of the demand - Held that:- In the present case by the impugned order dated 14.06.2016 the petitioner was required to deposit 15% of the outstanding demand, namely, ₹ 41.64 crores. This figure attained finality. At the cost of repetition, the Assessing Officer did not refer the matter to the Administrative Pr.CIT for an amount higher than 15% of the amount to be deposited as a condition for stay. This infact indicates that the last sentence in paragraph 5 of the order dated 14.06.2016 granted the Assessing Officer the right to adjust any refund which may arise in favour of the assessee in respect and to the extent of the said 15% of the demand only. In any event, even if it entitles the Assessing Officer to adjust any refund against the entire tax demand, it would be contrary to the instructions of the CBDT contained in the Office Memorandum dated 29.02.2016. Lastly, Mr. Putney submitted that the Assessing Officer has unbridled powers under section 220(6) of the Act. However, in view of the circular dated 02.02.1993 as clarified by the circular dated 21.03.1996 and modified by the Office Memorandum dated 29.02.2016 the Assessing Officer’s powers have been circumscribed to the extent provided therein. We quite see the force in Mr. Putney’s contention that the department must safeguard its interest and that its interest may be jeoparadized if the petitioner is entitled to avail of the refund and at the same time enjoy the benefit of the stay. However, the Department is bound by the circular as modified by the Office Memorandum. Had the circulars/Office Memorandum not been in force, it may have been a different matter altogether. In the circumstances, the writ petition is disposed of by holding that the petitioner shall be entitled to a stay of the demand subject to its depositing the installments as required by the order dated 14.06.2016 and that the future refunds can be adjusted only to the extent of the balance amount directed to be paid as a condition for the stay. 2016 (9) TMI 1193 Application for approval under section 10(23C) rejected - Held that:- It can thus be seen that generating certain surplus after carrying out educational activities by itself would not indicate that the institution did not exist for educational purposes but for the purposes of making profit. Whether the surplus so generated was utilized for the purposes of educational activities also would be a relevant consideration. Be that as it may, when the petitioner contends that the Commissioner had not taken into account correct figures and was thus misguided into coming to the conclusion that the petitioner had generated sizeable profit, it would be appropriate to request the Commissioner to reconsider the issue with the assistance of the petitioner. Before doing so, we may dispose of two peripheral grounds. First is regarding charging of fees higher than what was prescribed by the fee regulatory committee. On this issue also, the petitioner's stand has been that no excess fee was charged. It was only collection of form application money which gave a wrong picture. Even this aspect, it would be open for the petitioner to point out to the Commissioner upon remand. The last objection of the Commissioner is regarding non-filing of the audit report as required under the 10th Proviso to section 10(23C). This proviso provides that where the total income of the trust or institution referred to in clause (vi) besides others without giving effect to the exemption clauses exceeds the tax exemption limit such trust or the institution shall get its accounts audited and furnish the same alongwith return of income. This requirement obviously would arise at the time of filing of the return and not at the time of filing of application for approval and was therefore, wrongly invoked by the Commissioner for rejecting the application. In case of American Hotel and Lodging Association Educational Institute vs. Central Board of Direct Taxes and others reported in [2008 (5) TMI 17 - SUPREME COURT OF INDIA ] the Supreme Court had occasion to examine these provisions and held that the threshold conditions are actually existence of an educational institution and approval of the prescribed authority for which every applicant has to move an application. Various provisos under section 10(23C) for requirements and the same of the provisos were seen as laying down monitoring conditions in order to make the section workable. In case of Queen's Educational Society (2015 (3) TMI 619 - SUPREME COURT ) it was observed that if the activities of the institution are not genuine or are not being carried in accordance with the conditions subject to approval, the exemption must forthwith be withdrawn. If the case of the Commissioner was that the petitioner did not fulfill the requirements of the third proviso, it has not been elaborated in the impugned order. However, we leave this question also open. In view of above discussion, the impugned order is set aside. The proceedings are placed back before the Commissioner for fresh consideration and disposal in accordance with law. The petitioner will have opportunity to place additional material and made submissions before the Commissioner before final order is passed, which shall be done bearing in mind the observations made by the Supreme Court in case of Queen's Educational Society ( 2015 (3) TMI 619 - SUPREME COURT ) and other decisions cited therein preferably by 31.12.2016. 2016 (9) TMI 1192 Grant of interim orders - grant of stay - Held that:- The Officer, while considering the Stay Application, should consider the three factors pointed out above, should see as to whether the assessee has made out a case for grant of unconditional interim order/conditional interim order, or for rejecting the application for stay, in toto. Therefore, to do such exercise, reasons have to be recorded, and there is no such reasons assigned in the impugned order presumably, because, the first respondent, being a Subordinate Officer, would be bound by the circulars issued CBDT. Considering the fact that, in respect of two cases, pertaining to the two assessment years 2007-08 and 2008-09, the petitioner has succeeded before ITAT, and other Appeals are also pending, and those Appeals should also be heard by the Commissioner of Income Tax Appeals -11. So far as the assessment order, dated 06.09.2016, for the years 2010-11 to 2012-13 is concerned, it is submitted by the learned counsel appearing for the petitioner that the certified copy of the order is yet to be received by them, and they would challenge the same before the Tribunal. Thus the Appeals filed by the petitioner for the assessment years 2010-11 to 2012-13, have already been disposed of, and the impugned assessment is relating to the year 2013-14, it would be suffice to direct the fourth respondent-Commissioner of Income Tax (Appeals)-11 to consider the Appeal Petition filed by the petitioner on merits and in accordance with law, as expeditiously as possible, preferably, within a period of eight weeks from the date of receipt of a copy of this order. Until the disposal of the Appeal, no action for recovery shall be initiated by the respondents. 2016 (9) TMI 1191 Deduction under Section 80HHC to be worked out without giving effect to the provision of Section 80IA(9) - Held that:- Admitted facts are that on identical issue, this Court has in case of Commissioner of Income Tax vs. Atul Intermediates [2014 (4) TMI 676 - GUJARAT HIGH COURT] held that nothing contained in Section 80HHC suggests that the deduction provided therein was immune from any outside influence that the provision was impregnable by any other statute or enactment. Accepting any such theory would lead to incongruous results. It was held that the provision of sub section (9) of Section 80IA would have to be applied while considering the assessee's claim for deduction under Section 80HHC of the Act. Thus, the issue was decided against the assessee. Ordinarily, therefore, we would reject such a question without any further discussion. Assessee, however, pointed out that different High Courts have taken different views on the topic. The Supreme Court has granted SLP and is in seizing of the controversy. Learned Judges of the Bench, who heard the appeals, were divided in their opinion each passing reasoned order. In view of this disagreement, the issue is now referred to the larger bench. These orders are reported in case of Assistant Commissioner of Income Tax vs. Micro Labs Ltd. reported in [2015 (12) TMI 708 - SUPREME COURT ]. Learned counsel for the assessee, therefore, submitted that these questions may also be kept pending or, at any rate, be allowed to be re-agitated. If by the time this appeal is taken up for hearing, the decision of the Supreme Court is available. In view of the binding judgement of this Court which squarely covers the issue, we are unable to accept either of the two suggestions. Today, insofar as this Court is concerned, the question is governed by the decision in case of Atul Intermediates. In absence of any extraordinary reasons, we are duty bound to follow the judgement. Such question is, therefore, rejected. The last surviving suggestion of counsel for the assessee, however, needs to be accepted. He submitted that the certificate in terms of Section 261 of the Income Tax Act may be granted with respect to this question. Section 261 of the Act which pertains to appeal to Supreme Court provides inter alia that an appeal to High Court shall lie from any judgement of the High Court, in any case which the High Court certifies to be fit one for appeal to the Supreme Court. In the present case, when we notice that different High Courts have taken different views, the Supreme Court has granted SLP, the appeal is pending hearing at the hands of larger bench on account of difference of opinion between the two learned Judges of the Bench, such a fitness certificate is required to be and is hereby granted. 2016 (9) TMI 1190 Refund of excess amount paid under Kar Vivad Samadhan Scheme Rules, 1998 - Held that:- Under normal circumstances, the respondent would be justified in stating that no refund is payable on any amount paid pursuant to the declaration made under Section 88, in the light of the statutory embargo under Section 93. However, the facts of the present case are different and amount has been paid based on interim direction. The further fact which has to be taken note of is that the petitioner succeeded in the earlier petitions, which were allowed by order dated 23.02.2001 and the said order was implemented by giving effect to the stay order and the Department passed consequential order on 21.09.2001, wherein it has been stated that there is a reduction in the demand of ₹ 2,97,627/-. That apart, the case also having been settled under the KVSS, the petitioner is entitled for refund of the excess amount paid as per the actual amount payable as per the revised demand pursuant to the order passed in the earlier Writ Petitions. Accordingly, the Writ Petition is allowed and the impugned order is set aside and the respondent is directed to refund the excess amount paid by the petitioner, viz., ₹ 76,292/-. However, the plea for interest stands rejected. 2016 (9) TMI 1189 Depreciation on pay loaders - nature of asset - Held that:- Pay loaders are used on hire for excavation of soil and are also used equally for transport of the excavated soil. Pay loaders are also registered as “motor vehicles” with the road transport authorities. In that view of the matter the contention of the assessee was upheld. - Decided against revenue 2016 (9) TMI 1188 Entitlment to deduction under section 80-IB - assessee had not filed audit report in Form No.10CCB along with the return of income - Held that:- The submission of the audit report u/s.80IB can be filed even during the course of assessment proceedings. See Murli Export House [1995 (8) TMI 4 - CALCUTTA High Court ] 2016 (9) TMI 1187 Expenditure on the issue of convertible debentures - nature of expenditure - revenue or capital expenditure - Held that:- In the present case, a part of the convertible debentures has been converted into equity shares, for which the assessee has incurred expenses. According to the assessee, the expenses incurred were in respect of issuance of convertible debentures. The facts indicate that a portion of the convertible debentures was converted into equity shares and thereby, the assessee company got enduring benefits. Since capital can be raised by converting debentures into equity shares, we are of the view that expenditure incurred by the assessee on conversion of convertible debentures into equity shares would have to be treated as capital expenditure. - Decided in favour of the Revenue 2016 (9) TMI 1186 Reopening of assessment - Held that:- There is no bar under the I.T. Act, 1961 regarding issue of notice u/s 148 of the Act after completion of assessment u/s 143(1) of the Act. The Assessing Officer had satisfied the ingredients of section 147 of the Act and therefore, it was open to the Assessing Officer to exercise that power, not with-standing the fact that there were other remedies open to him under the Act. Taxability on amount received - relevant assessment year - amount admittedly pertains to more than fifteen earlier years - credit of tds - Held that:- The Hon’ble Supreme Court in Rama Bai VS CIT (1989 (11) TMI 2 - SUPREME Court ) has held that Interest on enhanced compensation awarded under the Land Acquisition Act accrues year after year and not on the date of granting enhanced compensation. In view of this articulation of law by the Hon'ble Apex court, there can be no question of charging the entire amount of interest to tax in the year of receipt as has been done by the authorities below. Tthus CIT(A) was not justified in charging to tax the amount of interest received in the year, which obviously did not relate to the year in question. A careful perusal of the provision indicates that the credit for TDS can be allowed only for the assessment year for which the corresponding income is offered for taxation. There can be no question of allowing credit for the TDS in the assessment of a year for which the matching income is not offered for taxation. In other words, both the income and credit for TDS go hand in hand and cannot be disassociated from each other. As the amount of interest on which tax has been withheld is not chargeable to tax in the instant year, the assessee cannot equally be allowed credit for TDS on such interest income against other income. When confronted with this position, the ld. AR contended that since the AO allowed credit for such TDS, the Tribunal cannot disallow the same. We are not convinced with the submission. The patent reason for not disallowing credit for such TDS by the AO is that he charged to tax the entire interest income in the year in question and impliedly following the prescription of section 199, allowed the credit for TDS. As the interest income is held to be not chargeable to tax in the year under consideration, the assessee cannot be allowed to avail credit for TDS on such interest income against tax on his other income. To sum up, the interest income of Rs.Rs.13,91,472/ - is not chargeable to tax and further no credit for TDS of Rs.l,41,825 on such interest can be allowed in the instant year. 2016 (9) TMI 1185 Disallowance of foreign exchange fluctuation loss - loss arising on revaluation of outstanding loans on the balance sheet date on the ground that same is capital loss and is not allowed as deduction - Held that:- Notional loss which arises owing to adverse fluctuation in foreign currency rates as on 31-03-2008 which led to restatement / revaluation of interest bearing loans denominated in foreign currency extended by the assessee company to its foreign AE in UAE and which could not be proved by the assessee company to have been extended for trade/business purposes , the presumption shall arise that loan is on capital field until the same is rebutted by the assessee company and hence the said notional loss arising on restatement/revaluation of foreign currency loans as on the date of Balance Sheet as on 31-03-2008 due to adverse foreign exchange fluctuations cannot be allowed as deduction u/s 37(1) of the Act while computing income of the assessee chargeable to tax under the Act. In the instant case the assessee company is not able to demonstrate that the loans/advances granted by the assessee company to its foreign AE in Emirates of Dubai in UAE was in the nature of trade/business advances for the purposes of business of the assessee company which has been in-fact actually utilized by its foreign AE for its business purposes. Hence keeping in view the peculiar facts and circumstances of the case as set out above , we dismiss the appeal filed by the assessee company - Decided against assessee. 2016 (9) TMI 1184 Unexplained source of the cash deposits - Held that:- The assessee has deposited cash in bank to the tune of ₹ 16,18,000/- for which the assessee has explained by way of cash flow statements , cash book , bank book/summary, bank statements etc. to justify the sources of the cash deposit which mainly is claimed by the assessee to have arisen from business receipts from dress designing business, receipt of interest income in cash from Manohar Ahuja and re-deposit of cash withdrawn from the bank accounts as set out above. The assessee has submitted paper book which contained various bank statements, cash book and summary charts to explain that shortage of cash was only to the tune of ₹ 4,29,452/- and not ₹ 16,18,000/- as alleged by the authorities below and submitted that to the extent of ₹ 4,29,452/- addition is sustainable and acceptable to the assessee . These contentions along with documents and cash flow/summaries submitted have not been verified by the authorities below. In our considered view and in the interest of justice and fair play, we set aside and restore this issue back to the file of the A.O. for verification , examination and enquiry of the claim of the assessee , in the light of the cash flow statement , summaries, cash book, bank statement and other relevant evidences which the assessee files to support her contentions in her defense with respect to the deposit of the cash in the bank , and also in the light of any other explanation which the AO may require for proper adjudication of the issue on merits . The A.O. shall thereafter frame the assessment de-novo on merits after considering all the evidences and explanation furnished by the assessee on merits. Needless to say proper and adequate opportunity of being heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law. - Decided in favour of assessee for statistical purpose. 2016 (9) TMI 1183 Applicability of section 50 on transfer of building - non-depreciable asset - calculation of short term capital gain against long term capital gain claimed by the appellant - Held that:- In the present case no asset is depreciable asset, hence provisions of section 50 are not applicable and since plot and construction being an investment, for earning rent therefore, for the purpose of calculating long term capital gain indexed cost is to be calculated for both plot as well as structure. - AO directed to calculate long term capital gain on transfer of building as it has been held for a period of more than 36 months - Decided in favour of assessee Scope of section 50C - transferred the asset through unregistered “Deed of assignment” prior to 1.10.2009 - Held that:- Section 50C was not applicable to the case of the assessee during the relevant period as the sale agreement in question was unregistered document and was not assessed by the stamp valuation authorities. The word “assessable” has been incorporated only w.e.f. 1.10.2009 (Finance Act 2009), therefore, provision of section 50C will not apply on unregistered documents. Hence learned CIT(A) wrongly confirmed the action of the Assessing Officer regarding substitution of full value consideration from ₹ 1200/- per square meter to ₹ 1300/- square meter by applying provisions of section 50C of the Income Tax Act. Even otherwise no opportunity of being heard was granted before switching over from ₹ 1200/- per square meter to ₹ 1300/- per square meter which is even otherwise bad in law and against the principles of natural justice. - Decided in favour of assessee. 2016 (9) TMI 1182 Disallowance of business expenditure - scholarship to the children of members, payment to legal heirs of members and gifts to members - Held that:- The volume of earning of the assessee bank are mainly made through its members. These expenses are incurred by the assessee bank to attract the members confidence and loyalty towards the bank in the prevailing competition so that the members place their deposits with the assessee bank and also continue to borrow funds from the assessee bank in order to improve the profit earning and income of the assessee bank. We have also considered that the amount spent on the aforesaid expenditures is very marginal compared to the amount of interest realized on the advances made to the members by the bank and amount of deposit made by the members with the bank. Under these circumstances the amount spent on scholarship to the children of members, payment to legal heirs of members and gifts to members could be said to be expenditure incurred wholly and exclusively for the purpose of business since the amount was spent for keeping alive its good image amongst its members and ensuring that goodwill and continuity of business with the members. In view of above mentioned facts and circumstances, we find that the assessee had incurred above stated expenditure for promoting the business, even though there is no legal obligation to incur these expenditure but the assessee had incurred it for preserving business connection and goodwill of the business. Therefore, in view of above findings, we allow the aforesaid expenditure as business expenditure under Section 37 of the Act.- Decided in favour of assessee Addition on the basis of Annual Information Return data - AO made this addition on the basis of AIR information pointing that assessee has received interest on securities from the party named “Backbay Reclamation” - Held that:- The assessee had explained before the lower authorities that there cannot be any party such as “Backbay Reclamation” which indicates that details were incomplete and also incorrect. The ld.CIT(A) has not given consideration to the submission of the assessee that the Assessing officer was failed to point out the complete detail of the said transaction because of which the transactions remain unexplained. In view of the above stated facts and circumstances, we consider that the addition was made in absence of complete particulars of the transactions which could not identify any such income earned by the assessee. Because of incomplete information and particulars relating to source of interest payment supplied by the AO to the assessee, the transactions could not be traced out. In view of above stated facts and circumstances, the addition made by the Assessing Officer is not justified. - Decided in favour of assessee 2016 (9) TMI 1181 Reference to valuation officer - whether CIT(A) erred in referring the valuation of land to the Valuation Officer? - Held that:- In the course of assessment proceedings, the assessee has filed valuation report supporting the value as on 01.04.1981 alongwith building which is disputed by the ld. Assessing Officer and calculated Long Term Capital Gains. Aggrieved by the order, the assessee filed an appeal before the ld. Commissioner of Income Tax (Appeals). In appellate proceedings, the ld. Commissioner of Income Tax (Appeals) dealt with judicial decisions of Tribunal and High Court and directed the ld. Assessing Officer to refer to the valuation officer. The Revenue is disputing the action of the ld. Commissioner of Income Tax (Appeals) in directing to valuation officer. The assessee claimed cost of acquisition as on 01.04.1981 based on the valuation report. The assessee has a option to adopt as per provisions of the Act which she has rightly followed. On combined reading of both provisions, the ld. Commissioner of Income Tax (Appeals) powers are co-terminus with the ld. Assessing Officer and within provisions of law on referring to the valuation officer. Hence, considering the provisions of law, material on record and judicial decisions, we are not inclined to interfere with the orders of the Commissioner of Income Tax (Appeals) who has dealt exhaustively on provisions and facts viz-a-viz explanation of the assessee and we dismiss the grounds of the Revenue. 2016 (9) TMI 1180 Capital gain on inherited land sold - indexed cost of improvements - Held that:- It is a fact that the assessee has filed a detailed cash flow shown different sources from which the money has been brought in. The assessee also has explained that during those days bank accounts were not so common and large families use to keep cash with themselves as most of the receipts were from agriculture and other allied sources. The fact that without improvements the assessee would not have received this amount is also pointed out. The learned Dr has not raised any specific objection to the cash flow other than the opening balance, the non banking of cash and production of records for the past 26 years from 1.4.1981 onwards. The learned Counsel has requested the Hon. Bench to have a pragmatic approach in respect of old records as normally people miss or misplace records after a reasonable period. In the circumstances and facts of the case, it is evident that the assessee has made substantial improvements to the land which is supported by year wise cash flow. The Assessing Officer has simply ignored the cash flow stating various other reasons. The Ld. CIT(A) has considered the cash flow and in order to compensate any probable defects and omissions has made an estimated disallowance of 40% which the learned DR during the course of hearing has accepted as correct except for the size of the amount. However, to meet the interest of justice, the disallowance of cost of improvement is directed to be fixed at 45% of the cost claimed, i.e., the assessee is eligible for 55% of the improvement cost claimed. This will take care of defects pointed out by the Assessing Officer and Ld. DR including the opening cash in hand. Customs 2016 (9) TMI 1169 Confiscation of seized gold under Sections 111(d) and 111(p) of the Customs Act, 1962 - imposition of penalty under Section 112(b) of the Customs Act, 1962 - contravention of the provisions of Section 11 of the Customs Act, 1962 read with Section 3(1) of the Import & Export (Control) Act, 1947 - foreign marked gold weighing 19831.805 gms - import of gold prior to or after prohibition - prohibition in import of gold bars vide notification dated 25th of August, 1948 - whether the gold bars acquired before of after prohibition and is seizure and confiscation of gold bars justified if acquired after issuance of prohibition notification? Held that: - though the initial onus was on Revenue to prove the illegal import of gold and that such illegal import stand established when almost 20 Kg. of gold with foreign marking was confiscated in the year 1950. Since the gold was seized in the year 1950, it would be believed to have been imported soon before that as such gold imported would not be kept as such for a long period as alleged that it was imported between the years 1941 to 1949. In fact, the prohibition of import of gold came into force on 25th of August, 1948. Therefore, for more than two years, it is unbelievable that imported gold will be retained as such. Such stand of the Revenue has to be examined keeping in view the stand taken by the assessee that he purchased the gold when there was no prohibition and also stated that he purchased it from Reserve Bank of India through brokers. The assessee has failed to discharge the special fact within his knowledge as to when the gold was purchased and through whom the purchase of the gold was made. To avoid the rigour of prohibition, the onus was on the respondent being a fact within his special knowledge, thus, in terms of Section 106 of the Evidence Act, the onus was on respondent and thereafter his wife to prove that the gold imported is prior to prohibition vide notification dated 25th of August, 1948 and or has been purchased from the Reserve Bank of India. - there is no proof of any of these facts - learned Tribunal erred in law in holding that mere assertion that gold has been purchased cannot partake the character of proof of legal purchase. Seizure and confiscation of gold bars justified - petition disposed off - decided in favor of Revenue. 2016 (9) TMI 1168 Prayer for issuance of writ of certiorarified mandamus to quash the circular - accept application for the grant of Custom Broker Licence - permission to write examination, conducted under the Regulation 6 of Customs Broker Licence Regulation, 2013 (CBLR) - whether Inspite of eligibility for being recognized as a Customs Broker, in accordance with Rule 5 (f) (ii) of CBLR, the petitioner not allowed to sit for the written examination is justified? - Held that : - when certain qualifications are listed out under the Regulations, it can be taken as an illustrative and not exhaustive. The Authorities are required to examine the nature of qualification possessed by the candidates, and as to whether, it would fall within the scope and ambit of the required qualification as per the Regulations contemplated under CBLR. The petitioner has been successful, both, in the written examination and oral examination. Also, the qualifications possessed by the petitioner are in conformity to the Regulation 5 (f)(ii) of CBLR - the respondents directed to consider the petitioner's application and grant Custom Broker Licence within a period of three weeks - this order shall not be treated as condition precedent, and the legal issue raised by the respondents left open - writ petition disposed off - decided in favor of petitioner. 2016 (9) TMI 1167 Mis-declaration of goods in the shipping bills - confiscation of export goods under section 113 of the Customs act, 1962 - option to pay redemption fine of ₹ 20 lakh under section 125 of the Customs Act, 1962 - imposition of penalty of ₹ 10 lakh under section 114 (ii) of Customs act 1962 - Duty drawback at ICD - export of man-made fiber jeans - detention of goods - provisional release of goods on execution of bank guarantee - whether the mistake committed is bonafide and no mens-rea involved? - Held that: - the mis-declaration of the details of the goods made in the shipping bills was not intentional and it has arisen in due to a bona fide mistake. This view is further strengthened by the fact that the appellant himself has informed the customs authorities about the mistake even before the consignment was taken up for examination. The Commissioner in the impugned order has fairly recorded that the mistake could not have gone unnoticed. - there is absolutely no malafide. Confiscation and penalty imposed on the ground that the party failed to file an amendment to the shipping bill as required under law even after they realized that they had filed wrong particulars. Similar issue decided in the case CCE, Calcutta - II vs. India Aluminium Co. Ltd [2010 (9) TMI 275 - SUPREME COURT OF INDIA] - the steps by way of penal action not warranted - confiscation and penalty set aside - appeal allowed - decided in favor of appellant. 2016 (9) TMI 1166 Enhancement of Anti Dumping Duty - rubber chemicals known as PX13 (6 PPD) - Mid Term Review - Notification No. 92/2011-Cus. dated 20.09.2011 - imports of subject goods from PR China and Korea RP - Rule 23 of Anti Dumping Rules indicate the powers of the DA to review the need for continued imposition of any AD duty on its own initiative or upon request by any interested party - Held that: - the decision in the case Rishiroop Polymers Pvt. Ltd. vs. Designated Authority Addl. Secretary [2006 (3) TMI 143 - SUPREME COURT OF INDIA] is relied upon. It was held if there is significant change in the facts and circumstances that it is considered necessary either to withdraw or modify appropriately the AD duty which has been imposed the DA can act accordingly. The procedure envisaged has been followed by the DA. The DA has considered volume effect of dumped margin, price effect, price under selling, price suppression and depression and other economic parameters relating to domestic industry before reaching the conclusion. The injury to the domestic industry is likely to recur in case the present AD duties are not modified. The definitive AD duty has been revised based on such recommendation by the DA - the imposition of AD duty per-se cannot be challenged. Appeal dismissed - decided against appellant. 2016 (9) TMI 1165 Provisional release of betel nuts – seizure – evidence produced as to the ownership of the goods – whether rejection of provisional release of goods is proper and justified? – Held that: - Even if no owner is coming forward to claim the goods then also it is a settled proposition of law that the goods should be released to the person from whose custody the goods were seized. In the present case as per the case records there is no indication till date that seized betel nuts are of foreign origin. No evidence has been brought by the Revenue on record that betel nuts are absolutely prohibited or banned for importation into the country. Betel-nut unfit for human consumption – test carried out by Food Analyst, Guwahati – Held that: - provisions of Food Safety & Standards Act, 2006 are implemented by the State Govt. and not by the authorities under the Customs Act, 1962. Such objection can be raised only when the goods are being imported through regular Custom stations. The request of the Appellant for provisional release of seized betel nuts rejected by the Adjudicating authority was improper and legally not correct. It is ordered that seized betel nuts should be provisionally released to the Appellant after executing a bond for the full value of the goods with one solvent surety equal to 25% of the value of the seized goods. Appeal allowed – decided in favor of appellant. 2016 (9) TMI 1164 Revocation of CHA license - forfeiture of security deposit - smuggling of R-22 gas - Regulation 22 of the CBLR, 2003 - time limits prescribed under CBLR of 90 days prescribed for submission of the enquiry report after the issue of show cause notice - contravention of CBLR - Held that: - the decision in the case A.M. Ahamed & Co. vs. Commissioner of Customs (Imports), Chennai [2014 (9) TMI 237 - MADRAS HIGH COURT] is relied upon where it was held that the observance of time limits should be followed strictly. What constitutes offence report has not been spelt out in the regulation, the same will have to be inferred from the circumstances of the case. From the records it is found that the licensing authority namely the Commissioner of Customs (Import & General) has been apprised of the matter by the DRI on 13.08/2014. This may be practically considered as the offence report. The show cause notice proposing revocation has been issued on 28.10.2014. The inquiry report which is mandated to be completed within ninety days from the date of the show cause notice has been filed only on 11.03.2015, very much beyond the ninety days time limit prescribed for the same. The order of the lower authority issued without adhering to the time schedule liable to be set aside - revocation of license and forfeiture of security not justified - appeal allowed - decided in favor of appellant. 2016 (9) TMI 1163 100% EOU - DTA sale of prawn seed - production and export of shrimp and processed shrimp - Notification 13/81-Customs - Notification 123/81-central Excise dated 02-06-1981 - whether the impugned prawn seed have been removed from the EOU into the DTA or whether they emanate from the Hatchery of M/s Magunta Exports which is not part of EOU and which has been taken on lease by the Assessee and if it falls within the former, what would be the manner and method of calculation of duty liability? Held that: - the decision in the case of WATERBASE LTD. Versus COMMISSIONER OF CUS. & C. EX., GUNTUR [2005 (12) TMI 429 - CESTAT, BANGALORE] followed. The allegations in the show cause show cause notice and the conclusions in the impugned order are without solid foundation, without evidence and premised on presumptions and assumptions. Deand of duty, confiscation of consignments and imposition of penalties set aside - appeal allowed - decided in favor of appellant. Service Tax 2016 (9) TMI 1179 Failure to comply with condition of pre-deposit - Computation of service tax liability - includability/excludability - cost of freight charged from the clients and paid out to the transporters - Held that:- prima facie, there appears to be some substance in the petitioner’s assertion that the cost of freight which is charged from the clients by the petitioner and paid out to the transporters should be excluded in assessing the service tax. Therefore, to calculate the amount actually payable by the petitioner on account of service tax, the order impugned dated March 19, 2015 passed by the Commissioner of Service Tax (II) is set aside and the Commissioner is requested to look into such aspect of the matter on the basis of the papers that may be presented by the petitioner to pass a fresh order. Statutory pre-deposit - Section 35F of the Central Excise Act, 1944 - failure to pay - petitioner says that the appellate remedy is not efficacious since the petitioner has to deposit in excess of ₹ 2 crores under Section 35F of the said Act of 1944 - Held that:- in the event the fresh order finds the petitioner liable to any sum in excess of ₹ 20 crores, the petitioner will be liable to pay costs assessed at ₹ 50,000/- to the department. If the final amount found to be due from the petitioner is less, such costs need not be paid. - Petition disposed of Central Excise 2016 (9) TMI 1178 Demand of interest - Whether the interest is chargeable from the date of original adjudication order or from the date of issuance of the adjudication orders in de-novo proceedings, once the demand of duty was upheld by the Tribunal but only the quantum of duty was ordered to be re-adjudicated in de-novo proceedings - Held that:- Section 11AA of the Act provides that if an assessee fails to pay duty within three months from the date of determination, he is liable to pay interest thereafter. Explanation 1 and 2 thereof will not be applicable in the present case as in the case in hand the duty determined has not been reduced or increased by the appellate authority. Rather, it is a case where the Tribunal finding merit in the contention raised by the respondent remanded the matter back to the adjudicating authority for fresh determination of the amount of duty payable, which necessarily means that the impugned order had lost its significance and it is only the order passed after remand, which would be applicable and enforceable. Once in terms of the order passed by the adjudicating authority after remand by the Tribunal, there is no delay in deposit of duty by the respondent in view of Section 11AA of the Act, the demand of interest is not justifiable. - Decided against the Revenue 2016 (9) TMI 1177 Clandestine removal of goods - Whether appellant was manufacturing Zinc Ingots for the entire period from 1996-1997 to 2000-2001 or started such Zinc Ingot manufacturing few days before the search - Held that:- the case of the Revenue is that appellant was manufacturing Zinc Ingots right from 1996-1997 as appellant had the Zinc Ingot making Bhattis all through. Appellant has taken a plea that Zinc Ingots cannot be manufactured from Zinc Ash/Dross. However, scientific literature produced by the Revenue during hearing before us do indicate that Zinc Ingots can be made out of Zinc Ash/Dross (Gaad). Statement of Shri Sunil Kumar Gupta partner of the appellant, clearly stated that he did not know the names and addresses of the persons who send them the material for processing. The challans under which materials are received indicate the processes of grinding and melting were required to be done and other processes of casting and sieving are scored off. The statement of Shri Deb Nath Bhattacharya (Accountant) of the appellant confirmed the rate of processing to be ₹ 1.50 per Kg. of material received and that ingot manufacturing started in the last few days. Shri Prabir Hazra, Proprietor of M/s. Super Galvanizing Works in his statement dt. 31.08.2000 stated that he is getting Zinc Ingots manufactured out of Zinc Dross supplied from M/s. Sylvan Chemicals and also produced two challans dt. 22.07.2000 and 05.08.2000. However it is observed from copies of these challans that none of these were signed by Sri Prabir Hazra but have been signed by one Shri P.Samanta. Cross-examination of Shri Prabir Hazra was asked by appellant and the same was allowed by the Adjudicating Authority. Efforts were made by the Adjudicating Authority to call Shri Prabir Hazra but he did not turn up. A finding is given by the Adjudicating Authority that Shri Rohit Gupta, on behalf of the appellant during personal hearing on 06.01.2006, submitted that appellant would not make further request to call the cross examinees. However, it is observed from the record of personal hearing in Revenue s paper book that there is no concessions to the effect that cross-examination of witnesses will not be insisted. Rather the plea of Shri Rohit Gupta was to call Shri Hazra and Shri Bansal again which was accordingly ordered by the Adjudicating Authority in the record of the personal hearing. In view of the above statements of Shri Prabir Hazra and Shri Bansal cannot be relied upon against the appellant. It is a well accepted legal proposition now that a statement has to be accepted as a whole and Revenue cannot pick and choose the portions of a statement favourable to them. It the entire statement of Shri Deb Nath Bhattacharya is accepted then Zinc Ingot manufacturing was started by the appellant in the last few days of seizure of Zinc Ingots. There is no other evidence indicating manufacture of Zinc Ingots from 1996-1997 to 1999-2000. Documentary evidences gathered by the investigating agency do raise suspicion but a suspicion howsoever grave cannot take the place of proof. Accordingly department's argument that all processing done by the appellant, for the relevant period, was only manufacturing of ingots, is not acceptable and is rejected. Further a case of clandestine removal cannot be based only on statements unless corroborated by other positive evidences. Further even if it is assumed that appellant was manufacturing Zinc Ingots all through the period from 1996-1997 to 2000-2001 then also 100% yield cannot be obtained from Zinc Ash/Dross received by the appellant. Yield of Zinc Ingots will depend upon the percentage of metal content contained in Zinc Ash/Dross. It is also observed from the show cause notice that for the entire period 1996-1997 to 2000-2001 value of Zinc Ingots has been taken at a uniform rate of ₹ 65 per Kg. as per calculations made in Annexure I to the show cause notice. The method adopted is not reliable and logical in view of the fluctuating nature of market forces. Accordingly duty calculated and demanded in the show cause notice is not correct and legally not sustainable. Therefore, clandestine removal is not proved against the appellant. Confiscation in lieu of redemption fine - 20.44 M.Ts of Zinc Ingots - Demand alongwith interest and penalty - Held that:- it was argued by the appellant that this quantity seized/confiscated will be eligible to small scale exemption. We are of the opinion that this aspect is required to be deliberated by the Adjudicating Authority in the light of this order as this claim was not made before the Adjudicating Authority. This issue regarding confiscation/duty payment with respect to 20.440 MT of seized Zinc Ingots is thus remanded to the Adjudicating Authority by setting aside order portion (i) of the OIO for denovo consideration after affording an opportunity of personal hearing to the appellant. - Appeal partly allowed and partly remanded 2016 (9) TMI 1176 Whether stock-taking of goods manufactured by the Appellant has been correctly done by the officers of DGCEI and the Income Tax authorities to determine shortages and clandestine removal of goods - Imposition of penalty - Held that:- there is no other positive evidence on record that any finished goods have been cleared without payment of duty. Adjudicating authority has gone by the presumption that shortages of 1147.110 MT of Silico Manganese and 492 MT of Ferro Manganese calculated by the departmental/Income Tax authorities must have been clandestinely removed. It is now a well settled legal proposition that no case of clandestine removal can be held to be proved on the basis of presumptions, assumptions and surmises. Secondly, it has already been observed by us that stock taking done by the department is hypothetical and full of flaws. In the case of clandestine removals there should be positive evidence to indicate clandestine activity like seizure of finished goods in transit, purchase of extra raw materials, excess consumption of power etc. In this present case before us even the Appellant has not admitted to have made any clearances clandestinely. The finished goods are cleared by the Appellant on actual weighment basis in containers/trucks and it is not the case of the Revenue that any less quantity is cleared by comparing final goods quantities shown in the clearance documents and the DSA quantity. In view of the observations and settled proposition of law, case of the department regarding clandestine removal is not sustainable against the Appellants, except shortage of 6.750 MT of Silicon Manganese admitted by the Appellants. So far as imposition of penalties upon the Appellants are concerned, it is observed that once clandestine removal case booked against the Appellants does not sustain then there is no point in imposing penalties upon the Appellants. Accordingly Appeals filed by the Appellants are required to be allowed, except to the extent contained in the next paragraph. So far as shortage of 6.750 MT of Silico Manganese, in packed condition is concerned, Appellants in Appeal accepted this shortage. Further in their reply to the show cause notice, before the Adjudicating authority, also Appellant accepted this shortage. Order-in-Original, passed by the Adjudicating authority, is required to be upheld. This shortage of 6.750 MT of Silico Manganese is required to be accounted for in the DSA and liable to duty if not already accounted for. - Decided partly in favour of appellant 2016 (9) TMI 1175 Valuation - captive consumption - Frequency or periodicity of costing in terms of CAS-4 - whether the CAS 4 based costing of Iron Ore Concentrate is to be done on an annual basis or for a lesser durations of 2/4/5 months, as and when the raw material costs varied - no sale of iron ore concentrate by the appellant - clearance to sister unit for further use is subjected to excise duty and valuation for such duty has to be worked out in terms of Rule 8 of Valuation Rules, 2000 - appellants followed different value during the same financial year based on revision of costing within the year more than once. Held that:- it is an admitted fact that the appellants themselves did not follow costing to arrive at deemed transaction value for each clearance. They have considered a period of many months and worked out the costing, in terms of CAS-4 for that period and paid duty. Thereafter, they revised said costing when there are changes in raw material cost. That being the case, we find that the reliance placed by the appellant on the principle that time of removal is relevant and, hence, annual costing is not tenable, is unsustainable. The fact remains that while the duty liability has to be discharged at the time of removal of excisable goods in a situation where there is no sale transaction and known value, the deemed transaction value has to be constructed based on costing method which necessarily will involve an averaging of cost for a period, considering all the parameters. It is neither the case of the appellant nor there is such an approved standard for arriving at cost of excisable goods for each individual clearance. When at the time of each clearance of excisable goods for captive consumption the exact transaction value could not be arrived at the relevant time the duty has to be paid on a provisional basis and upon arriving at the costing applying CAS-4 and the assessable value in terms of Rule 8 of Valuation Rules final determination of duty liability has to be made. In the present case, admittedly no provisional assessment was resorted to by the appellant. Hence, the determination of actual cost much later on the clearance resulted in certain adjustments and payments by the appellant. Para 8 of guidelines issued by the Institute of Cost & Works Accountants of India on CAS-4 deals with periodicity of CAS-4 Certificates. On perusal of the guidelines by the ICAI, we find while arriving at costing based on CAS-4 the correct method will be to determine the same based on actual audited data as per the account year of the company. To that extend we find the CAS-4 cost price arrived at on annual basis by the Revenue is correct procedure. Quantification of differential duty - duty paid in excess in certain months has been availed as credit by sister unit - time barred - Held that:- even though there is no provisional assessment in the present case, the duty determination on the inter-unit transfer is made on annual costing. As such when the Department arrived at cost on annual average basis the duty liability, excess or shortage has also to be determined on such basis. It is not tenable while for arriving at per unit duty liability the whole year data is considered for costing, for total duty liability only months when short payment was noticed were considered. In other words when CAS-4 based annual costing formed basis for arriving transaction value, the overall duty liability/short payment should be arrived at after considering duty already paid during that year on such goods. We find the reasoning given by the Original Authority against adjustment of already paid duty as untenable. Section 11B has no application in such situation, when the appellants duty liability is determined on annual CAS-4, the duty already paid during said period has to be adjusted. The question of unjust enrichment has no relevance here. There is no refund considered here. The point that the duty paid in excess in certain months has been availed as credit by sister unit hence, cannot be adjusted towards short payment also not tenable. The demand arose based on annual costing. Such cost price in terms of Rule 8 will apply to all clearances made during the relevant year. Admittedly, duty already discharged has to considered for arriving at overall short payment. Selectively applying the said cost price only for months when the clearances were below such cost price is not legally sustainable. It is found that the Original Authority has not fully examined the issue of time bar raised by the appellant. Intimations of price revision followed by CAS-4 Certificates have been given to the Department. Monthly statutory returns with duty payment details have been filed. The existence of more than one cost certificates during different months in one financial year is apparently in the knowledge of the Department. Hence, the question of time bar requires closer scrutiny. Since we intend to remand the case to the Original Authority on the quantification of duty demand, this aspect also has to considered by the Original Authority for a clear finding. - Appeal partly allowed by way of remand 2016 (9) TMI 1174 Confiscation of seized SS Ingots - Recovery of Central Excise duty - confirmation of demand was drawn from certain private records recovered from the premises of the appellant unit and various statements given by the Director, Authorized Signatory, Gate Keeper of the appellant unit and other persons like transport drivers etc. - denial of cross examination - violation of principles of natural justice as due opportunity not being extended to the appellants to defend their case Held that:- as seen from the findings of the Original Authority the charge against the appellants regarding clandestine production and removal are considered to be supported by recovery of parallel set of invoice, private records, confessional statements of transporters, confessional statement of various concerned persons and inquiries conducted at various ends. It is apparent that the statements of various persons have been relied upon to draw the conclusion. In other words, the case is not only based on documents. Necessarily in such situation the appellants should have an opportunity to clarify their side by cross examining the persons who gave statement relied upon. This legal position has been fairly well settled by the Hon’ble Punjab& Haryana High Court in a recent decision in the case of G-Tech Industries vs. UOI [2016 (6) TMI 957 - PUNJAB & HARYANA HIGH COURT]. We consider it proper to remand the matter back to the Original Authority to follow the procedure set out in Section 9d of the Act and also follow guidelines as explained by the Punjab & Haryana High Court (supra). Accordingly, the impugned order is set aside. The matter is remanded back to the original authority for the decisions afresh. Due opportunity shall be given to the appellant to defend their case including personal hearing. - Appeal allowed by way of remand 2016 (9) TMI 1173 Valuation - includability - freight incurred in transportation of goods manufactured - post clearance from the factory to the place or site of the buyers - Held that:- it is evident that the goods have been delivered to the buyer at the factory gate as is evident from the invoice and the purchase Orders by reading together. In the invoices, the appellants have charged sales tax and have also reflected the freight separately in most of the cases. Further, it is an admitted fact that in most of the cases of clearance, the goods after manufacturing in the plant of the appellant, are subject to pre delivery inspection by the buyer and are ascertained in favour of the particular buyer before the delivery. Accordingly, we hold that the, transfer of ownership takes place at the factory gate when the goods are delivered. Therefore, the ld. Commissioner have erred in holding that the goods manufactured and cleared by the appellant, shall not be valued under Section 4(1)(a) but under Section 4(1)(b). We hold that the valuation shall be done in the appellants case only under Section 4(1)(a), as explained by Hon'ble Supreme Court in the case of C.C.E. Mumbai Vs. Official Liquidator for Brimco Plastic Machinery Pvt. Ltd. [2015 (10) TMI 2281 - SUPREME COURT]. - Decided in favour of appellant with consequential relief 2016 (9) TMI 1172 Export of goods procured against CT-1 certificate after processing and not in the same condition - entitlement of benefit of Notification No. 42/2001 CE(NT) dated 26.06.2001 - contravention of condition of Notification - Held that:- there is no allegation against the appellant for non filing of undertaking/declaration of the department and the fact of the goods has not been disputed by both the sides. In that circumstances, on the decisions of I.O.C Ltd. Vs. Commissioner of Central Excise, Calcutta-II [2004 (6) TMI 222 - CESTAT, KOLKATA] is applicable to the facts of this case wherein this tribunal observed that the commissioner in his order has also admitted that the documents have been filed and the facts of export have been accepted. The department's grievance is that the superintendent of Central Excise did not attend the export. It was not required. The appellant was governed by self removal procedure and to such cases Rule 173-0 was applied. It was the appellant's option to export under supervision of either the Excise authorities or the Customs Authorities. The commissioner is competent to relax the procedural provision under Rule 12/13 or the Central Excise rules, 1944. In the instant case, it was incumbent upon the Commissioner to grant relaxation from the procedure from the procedural provisions. This Tribunal has observed that when the show cause notice itself admits that export have been taken place after, there is no procedural irregularities in removal of the goods otherwise the SRN was not cleared, then the refinery operations would have come to stoppage. In this case, it is not disputed the goods procured by the appellant has been exported, therefore, I hold that the appellant has complied with conditions of the said notification and there is no demand of duty is sustainable against the appellant. - Decided in favour of appellant 2016 (9) TMI 1171 Deemed Manufacture - emergence of clean oil through the processes, such as, Dehydration, Distillation, Clay Polishing and Filtration from waste and used oil - clean oil were packed in bulk packs of drum and sold to industrial customers - application of Chapter note 4 of Chapter 27 of schedule to the Central Excise Tariff Act, 1985 - Held that:- for applying the Chapter note 4 to any goods for examining, whether, manufacture has taken place, it is essential to establish (i) either there is labeling or re-labeling of containers, (ii) there is re-packing from bulk packs to retail packs (iii) such treatments have adopted, so that product is rendered marketable to consumer. From the show cause notice and relied upon documents for issue of show cause notices, we do not find that Revenue could establish that the goods emerged after removal of impurities from waste oil have been marketed to consumer. In fact, there was not a single invoice raised to a consumer, establishing that the goods were marketable to consumer. All the invoices were for bulk packing and sold to industrial customers. Further, there was no evidence of labeling or re-labeling or for re-packing into retail packs. We, therefore, hold that all the show cause notices involved in the four appeals in hand lack, prima facie, evidence for leveling charges leveled and unsustainable. Hence, the two Orders-in-Original impugned in four appeals in hand, are set aside. - Decided in favour of appellant 2016 (9) TMI 1170 Recovery of Cenvat credit - Reversal of Cenvat credit under Rule 6(3) passed on to the buyers - laminates manufactured by appellant - Department alleged that appellants wrongly paid Central Excise duty and wrongly passed on Cenvat Credit to their buyers - Held that:- if Cenvat Credit was not admissible to them, then the Revenue should have issued show cause notice for reversal of Cenvat Credit availed by them. The show cause notice is issued for recovery of amount under Rule 6(3)(b) ibid, & the amount to be recovered under Rule 6(3)(b) ibid, is possible only when the Cenvat Credit is admissible. We find that contradictory stands were taken in the said show cause notice by the Revenue. Therefore, the show cause notice is not sustainable. - Decided in favour of appellant with consequential relief CST, VAT & Sales Tax 2016 (9) TMI 1162 Levy of tax on discount received from the suppliers - Section 25 of the Kerala Value Added Tax Act, 2003 - total purchase not reported in the annual return and audited accounts, discount deducted from the total value of the bill and input tax credit disallowed to that extent - the appellate authority remitted the matter back for the purpose of deciding only one issue as to whether the disallowance of input tax on discount received was justified or not, and assessing officer considered the entire matter afresh - whether there is any justification on the part of the assessing authority in having taken a different view in the matter despite the direction issued by the appellate authority? Held that: - There is no doubt about the jurisdiction of the assessing officer in a case where it is noticed that part of the turn over of the business of a dealer has escaped assessment to tax in any year or return period or has been under assessed or has been assessed at a rate lower than the rate at which it is assessable or any deduction has been wrongly made therefrom or where any input tax or special rebate credit has been wrongly availed of, the assessing authority may, at any time within five years from the last date of the year to which the return relates, proceed to determine, to the best of its judgment, the turnover which has escaped assessment to tax. The question is whether such a method can be adopted when the appellate authority had remitted the matter back to the assessing officer. The appeal was filed by the assessee and therefore the question considered in the appeal was only regarding the entitlement of the petitioner for input tax credit. The issue as to whether discount has to be added on to the total turnover was not an issue pending before the Tribunal. It is apparent from the materials placed on record that the assessing officer had taken a different view from what has been taken earlier by issuing a fresh notice under Section 25 (1) of the Act. Merely for the reason that there had been a mistake committed by an earlier Officer, it is not open for the Officer considering the same again to have a different view. Revenue authorities also had a right of appeal and no such opportunity had been availed of at the relevant time. The question whether the discount has to be added to the turn over was not a matter which ought to have been taken up afresh especially when no appeal had been filed by the revenue authorities. - the assessing officer not justified in re-opening the assessment already made as far as the addition of discount to the turn over is concerned. What was to be considered by the assessing officer was only whether input tax credit is liable to be made or not - petition allowed - decided in favor of petitioner. 2016 (9) TMI 1161 Proportionate dis-allowance of Input Tax Credit - Madhya Pradesh Value Added Tax Act, 2002 - by-product oil cake - commodity oil cake declared tax free under Section 16 by specifying in Entry No.3 of Schedule I of the Act - manufacture of oil - Input Tax for consumption or use of manufacture of oil, entitle the petitioners to Rebate of Input Tax (ITR) from the tax payable on sale of oil by such manufactures - explanation inserted, Sub Clause (6) of Clause (a) of Sub Section (1) of Section 14 of the Act stating where a manufacturing process results in the manufacture of Schedule I as well as Schedule II goods, Input Tax Rebate should be computed after apportioning the Input Tax in proportion to the value of Schedule I and Schedule II goods so manufactured - amendment then became an Act vide Madhya Pradesh Value Added Tax (Second Amendment) Act, 2014 with the modification that the explanation inserted in the Act by Ordinance has been given a retrospective effect from 01.04.2006. The effect of the above amendment is that the petitioners are deprived of the benefit of ITR in respect of Input Tax paid by them for purchase of raw material used or consumed by them for / in the manufacture of Schedule II goods, viz. 'oil' from oil seeds, which was available to the petitioners in terms of Section 14 (1) (a) (2) of the Act - whether retrospective amendment introduced with retrospective effect is justified and holds good? It is well settled that by inserting an Explanation in statute, the main provision of the Act cannot be defeated or enlarged. Ordinarily, the purpose of Explanation is to clarify that it is already enacted and not to introduce something new. The 2014 amendment was obviously introduced for the purpose of rectifying the obvious error in Section 14. The object which cannot be introduced by Explanation since an Explanation cannot be read as changing or as interfering with the incidence of the levy. It is not done, particularly when legislative clarity is required since the statutory provision imposes a tax, to untangle the legislative confusion. Explanation to Section 14 of the M.P. VAT Act, as introduced by Amendment Act of 2014 and amended in 2015, would apply prospectively. However, the legislature has power to validate the judicial invalid levy retrospectively by bringing Validation Act. Explanation to amendment of Section 14 to apply prospectively - writ petition allowed - decided in favor of petitioner. 2016 (9) TMI 1160 Revision of assessment - inspection of the place of business by the Enforcement Wing Officials of the Commercial Taxes Department - Tamil Nadu Value Added Tax, 2006 - hosiery garments - local sales of cloth and inter-State sale of garments with stitching charges, sale ratio of garments - hosiery garments sales within the State are camouflaged as cloth sales - entire cloth sale disallowed and treated as hosiery garment sales - notice issued by Assessing officer without applying his mind and solely on report given by Enforcement wing officials - whether the notice issued by Assessing officers are correct and will bound the petitioner keeping in view the fact that Assessing Officer did not apply his mind while issuing the pre-revision notices and mechanically issued notices by verbatim repeating the allegations made against the petitioner by the Enforcement Wing Officials? Held that: - the decision in the case of Madras Granites P. Ltd., Vs. CTO, Arisipalayam Circle[2002 (10) TMI 767 - MADRAS HIGH COURT] is relied upon. It was held that by merely endorsing the findings of the Inspecting Authorities and implementing in-toto, the Assessment Proceedings which were issued without independent thinking by the authority, are condemnable. The notice issued by the Assessing Officers dated 10.05.2016 itself is defective and it is an outcome of total non-application of mind as it is a verbatim repetition of the observations of the Enforcement Wing Officials. This is clear because while recording the statement from the petitioner, the view of the Inspecting Officers has also been recorded in the statement dated 25.01.2016. - writ petition allowed - it is kept open for the Assessing Officer to pass orders of assessment afresh in accordance with law, after giving an opportunity of personal hearing to the petitioner - decided in favor of petitioner. 2016 (9) TMI 1159 Demand of input tax rebate - cancellation of refund of input tax credit - Section 47(2) of the Madhya Pradesh Value Added Tax Act, 2002 - edible oil - whether demand of input tax credit refunded earlier justified? - Held that: - the proper course in construing revenue Acts is to give a fair and reasonable construction to their language without leaning to one side or the other but keeping in mind that no tax can be imposed without words clearly showing an intention to lay the burden and that equitable construction of the words is not permissible. It is equally well settled legal proposition that consideration of hardship, injustice or anomalies do not play any useful role in construing taxing statutes unless there is some real ambiguity and the regard must be had to strict letter of law. The notice must mention the grounds on which the action is proposed to be taken and if the notice mentions one ground but the action has been taken on some other ground, the same would amount to violation of principle of natural justice. The impugned order dated 10.1.2012 cannot be sustained in the eye of law, as from perusal of the notice, Annexure P/4, dated 20.11.2009, it is found that the order has been passed on the grounds de hors the grounds mentioned in the notice dated 20.11.2009. In other words, the impugned order has been passed in violation of principle of natural justice. On perusal of the proviso to Section 14(3) of the Act, it is evident that the words "from the close of relevant financial year" are used instead of the words "subsequent years". In the instant case, the refund of the amount of input tax rebate relates to the assessment year 2006-2007. The assessment was made in respect of the aforesaid year by an order dated 28.4.2009, i.e., from the close of relevant financial year. Therefore, the assessing authority has rightly awarded the refund of input tax rebate to the petitioner to which he was entitled as the case of the petitioner is squarely covered in view of proviso to section 14(3) of the Act. Demand of input tax credit not sustainable - petition allowed - decided in favor of petitioner. 2016 (9) TMI 1158 Validity of assessment order - Bihar Sales Tax Act - Central Sales Tax Act - Form H left out for consideration reassessment proceedings - penultimate sale before export of the goods under Section 5(1) of the CST Act - Held that: - reassessment proceedings ought to have been commenced and completed before expiry of the period of two years from the date of communication of the appellate order. After several years i.e. more than period of one decade, no reassessment order has ever been passed and directly demand notice dated 8 th March, 2013 has been issued and the review application has been decided after the appellate forum has decided the appeal. All the assessment order passed hereby quashed - petition allowed - decided in favor of petitioner. Indian Laws 2016 (9) TMI 1157 Dishonor of cheques - proceedings in complaint case under Sections 138 of the Negotiable Instruments Act, 1881 - liability after resignation - Held that:- The contention of learned counsel for the respondent is that Forms-32 as placed on record were filed on 23rd April, 2004 and 7th April, 2004 showing an ante-dated resignation of the Directors w.e.f. 20th March, 2000 and 6th September, 2002 of Nimish Maheshwari and Brij Maheshwari respectively, thus it was not sufficient to absolve the liability under the Negotiable Instruments Act. The certificates filed do not prove conclusively that the petitioners actually resigned on 30th March, 2000 and 6th September, 2002 and this issue can be decided during trial only. Thus find force in the contention of the learned counsel for the respondent that since the registration for resignation of the petitioners w.e.f. 30th March, 2000 and 6th September, 2002 is post the cause of action which arose after the legal notice dated 28th January, 2004 was issued. Thus only after the parties lead the evidence, it can be determined whether the petitioners actually resigned on 30th March, 2000 and 6th September, 2002 or not. No ground to interfere in the order summoning the petitioners 2016 (9) TMI 1156 Breach of Contract - Recovery of certain money from U.P. Rajya Vidyut Utpadan Nigam Limited - based on contractual matter for which remedy lies in common law - availment of Article 226 to claim any money in respect of breach of contract or tort or otherwise - Held that:- In Kerala State Electricity Board and another Vs. Kurien E. Kalathil and others [2000 (7) TMI 920 - SUPREME COURT], Court said that interpretation and implementation of a clause in a contract cannot be subject-matter of a writ petition. Whether a contract envisages actual payment or not is a question of construction of contract. If a term of contract is violated, ordinarily remedy is not the writ petition under Article 226. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Disputes arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies have power to contract or deal with property like private parties. Such activities may not raise any issue of public law. When it is not shown that contract is statutory and parties are within the realm of their authority, contract between the parties is in the realm of private law. The disputes relating to interpretation of terms and conditions of such contract cannot be agitated in a petition under Article 226 of the Constitution. The same has been reiterated in many other cases. therefore, in view of the same, mandamus sought by petitioner is nothing but grant of a money decree in extraordinary equitable jurisdiction under Article 226 which ought not to have been granted. - Decided against the petitioner
← Older Newer →

Quick Updates:

What's New:
Latest Case Laws

What's New:
Latest Notifications

What's New:
Latest Circulars

F: Stock damaged in recent floods

F: GST on Solar Plant

A: PENALTY ON DIRECTORS CONTRAVENING EXPORT REGULATIONS UNDER FOREIGN EXC...

A: Difference between “License” and “Royalty”

A: Penalty proceedings under Section 130 of the CGST Act cannot be initia...

N: Inland Container Depots for loading and unloading of goods - Seeks to ...

C: Guidelines to Stock Exchanges, Clearing Corporations and Depositories

T: Supreme Court Upholds Validity of Re-Assessment Notices Issued During ...

F: Transfer of ITC without filing ITC-02

F: assessment order

F: INTERMEDIARY SERVICES OR EXPORT SERVICES

H: Revision: Hospital receipts verified, partial refunds & fees paid subs...

F: ITC Issue in case of Acqusition of Company in Insolvency

H: Goods matched documents like e-way bill and invoices; detention order ...

H: Goods Inspection Matches E-Way Bill, Lack of Tax Evasion Intent Quashe...

H: Income tax reassessment validity: AO initiated proceedings u/s 147 ins...

H: Reassessment Rules Interpretation: Taxpayer Wins Over Accommodation En...

H: Sale-purchase loss disallowed unreasonably by tax officer, commercial ...

H: Building sale value can't determine depreciation; actual consideration...

H: Loan to equity conversion attracts income tax on excess share premium ...

H: Property purchase: Joint owners pay via banking channels before regist...

H: Tax exemption limit for leave encashment: Local authorities' employees...

H: Tax assessments beyond 6-year limit quashed, satisfaction note lacked ...

H: Cash found in lockers linked to temple trust and educational foundatio...

H: Microphone Tech Classification: Functionality Over Technology.

H: Exemption from Social Welfare Surcharge on duty-free imports via scrips.

H: Claim for performance pay not an operational debt under IBC; Multiple ...

A: Director Identification Number

A: No GST is applicable for the services provided by the Director under p...

A: Income Tax Act Revamp (Comprehensive Review): Status and Suggestion on...