9911796707
TMI Blog2022 (7) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... ter of F.Y. 2016-2017. Application disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by the A.O. 7.5. In brief, the OHA concluded that Apple Watches were not just watches but transmission devices and, therefore, had to be assessed under the residuary entry. In effect, the stand taken by the petitioner that the tax qua the said devices would get attracted at the rate of 12.5%, was accepted by the OHA. 7.6. Consequentially, a fresh assessment order was passed on 26.02.2018. This resulted in the tax demand being reduced to nil. 7.7. Enthused by this, the petitioner filed an application for refund of Rs.2 crores made over as a pre-deposit. As noticed above, after some back and forth, in this Court, the said amount was refunded to the petitioner, with interest. 8. Therefore, the only aspect that needs to be adjudicated is: whether the respondent has correctly invoked the provisions of Section 74A of the Act by issuing the impugned show-cause notice dated 15.11.2018, qua the order dated 22.03.2017 passed by the OHA and the consequent assessment order dated 26.02.2018 passed by the AO. 9. We may also note that this Court, via the very same order whereby it had directed the refund of the amount made over by the petitioner as predeposit, had also directed the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lines case. 11.4. Mr Satyakam has informed us that in another matter concerning the Garg Roadlines, which pertained to refund, also travelled to the Supreme Court and like in the other matter, the SLP has been converted to an appeal. However, in this matter we are told the operation of the judgment of this Court dated 22.03.2017 has been stayed. Analysis and Reasons: 12. We have heard learned counsel for the parties and perused the record. According to us, insofar as the dispute with regard to classification is concerned, it was clearly, in this case, a mixed question of fact and law. 13. The OHA, via its order dated 22.03.2017, considered the contentions advanced by the petitioner as well as the respondent. It is thereafter that the OHA concluded that Apple Watches were essentially transmission devices. The relevant portion of the order is extracted hereafter: "xxx xxx xxx I have heard both the parties and I am of the view that if Apple Watch is fully synced with the main device only then it would show correct time and it would not work if it is not paired and synced with the main device like an Iphone 5S or above category and the correctness of time cannot be ensured if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, has refuted this contention and in this behalf, has drawn our attention to Section 76 of the Act. Section 76 of the Act reads as follows: "76: Appeals to Appellate Tribunal (Rules 57A to 57C) (1) Any person aggrieved by a decision made by the Commissioner under sections 74, 84 and 85 of this Act may appeal to the Appellate Tribunal against such decision: PROVIDED that no appeal may be made against a non-appealable order under section 79 of this Act Explanation. The Commissioner does not appeal to the Appellate Tribunal but may make a re-assessment of tax where he is of the opinion that further tax is owed. xxx xxx xxx" 16. We are of the view that Mr Shah is right, an appeal would lie from the order passed by the OHA, which is an order passed under Section 74, and which is one of the sections referred to in Section 76(1). This provision enables an appeal to be preferred with the Appellate Tribunal. 16.1. The explanation to Section 76 of the Act (extracted above), on which reliance is placed by Mr Satyakam, to contend that no appeal would lie against the order of the OHA, seems to be confined to those cases where the Commissioner chooses not to appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018 is predicated, it appears that the said authority based its decision on the following reasons: (i) It found the issue "interesting". (ii) There were revenue implications for the department, which were not limited to a particular quarter but could possibly extend to an "indefinite period". (iii) The issue could have revenue implications in other matters, as well i.e., in respect of other manufacturers/traders as well. (iv) The matter fell in the technical domain i.e., whether the paired products could be used independently. (The concerned authority, we believe, is alluding to the fact that whether the watch is to be used without the mobile device.) Which is, in a sense a replication of the second concern raised by the concerned authority, which also veered around revenue implications. (v). The possibility of the other manufactures pairing products bearing different rates of tax and thus getting unintended benefit of lower rate of tax. 18. None of these issues zeroed down on what was the error committed by the OHA. As noted above, the concern of the respondent primarily was that it could have revenue implications, both in the concerned quarter, as well as in the fut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. xxx xxx xxx 10. The phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income Tax Officer is unsustainable in law…" 18.4. Since no such aspect is referred to in the reasons furnished to the petitioner, the impugned notice, in our view, cannot be sustained. 19. We may also note that the concern that this decision would impact revenue collections in the future, we are told, has been neutralized, as watches now attract a uniform tax rate of 12.5%. 19.1. The rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
