CASE LAWS
2018-TIOL-876-HC-AHM-IT + Case Story
ASMAN INVESTMENT LTD Vs ACIT: GUJARAT HIGH COURT (Dated: March 01, 2018)
Interest Tax Act, 1974 - Sections 2(5B) & 10.
Keywords: Credit institution - Earned interest - Finance company - Income from investment - Share trading activity & Utilization of surplus funds.
The assessee company, had returned income for the relevant AY under the Income tax Act. However, the assessee stated that it was not a finance company and had not earned any interest which could be subjected to tax hence, it did not file any return under the Interest tax Act. During the assessment proceeding under Income Tax Act, the AO noticed that the company had earned interest income of Rs.1.70 crores on which tax under the Interest Act was payable but the company had not filed any return. Accordingly, a notice u/s 10 of Interest Act was issued to the assessee for reassessment of the company's liability under the Act. In reply, it was contended that the assessee was not an investment company and did not derive any income from investment. It was also pleaded that the assessee was trading in shares and securities and had derived income from such business which was duly offered to tax under Income Tax Act. The assessee had also submitted that out of the total interest earned, an amount of Rs. 16.72 lakhs was received from the credit institutions and therefore, out of the purview of Interest Act. But, since the assessee failed to produce any supporting material for its contention, the AO rejected the same. In addition, the AO, not being satisfied, had stated that assessee was covered u/s 2(5B) and therefore, the interest earned by assessee was liable to tax under the Interest Act.
On appeal, the FAA was of the opinion that the assessee was engaged mainly in the activities referred to u/s 2(5B) of Interest Act. On further appeal, the Tribunal observed that when a company had multiple main objects, an individual object might lose significance. The assessee had listed three main objects which in the opinion of the Tribunal were sufficient to bring the company within the fold of financial company as defined u/s 2(5B).
On appeal, the High Court held that,
Whether objects enshrined under the MoA and AoA are only determinative of the nature of company, but not the activities conducted during particular financial year - YES: HC
Whether interest earned by a finance company by advancing funds for trading in shares and securities, are chargeable to tax under the Interest tax Act, 1974 - YES: HC
++ from the perusal of MoA and AoA, it is seen that the main objects of the company were to carry on the business as an investment company and for that purpose to invest in and acquire, hold shares, bonds, stocks, securities. To invest money in personal security and on other securities, and to lend and advance money to such persons, firms, companies as found expedient and to purchase for investment or resale and to deal in land, house and other properties. As correctly observed by the Tribunal, the main objects of the company may have been divided in three parts. Nevertheless, all three purposes were clearly in the nature of the investment business. The first object directly referred to the business of an investment company which would include investment in and acquisition of shares, bonds, stocks, securities. The second object again was directly in the nature of investing money in personal securities, in land, shares. The third main object was also of purchasing for investment or resale and to deal in land and other immovable properties. As noted, the definition of term 'financial company' includes several sub-clauses. Sub-clause (ii) thereof refers to an investment company. In addition, the term 'loan company' is included in subclause (iv) which would include a company which carries on, as its principal business, the business of providing finance, whether by making loans or advances or otherwise. As noted, subclause (vi) would bring within the fold of the term financial company, a miscellaneous finance company. Thus, very clearly, the assessee was incorporated for carrying on exclusively the business of an investment company and a loan company;
++ the contention of the assessee's Counsel that not the objects of the company but its real activities during a financial year which should be used as a parameter to decide the status of the company, cannot be accepted. Firstly, his contention was that awaiting other projects, the company has parked its available funds in shares and stocks and yet further surplus was invested in fixed deposits. Accepting this contention would lead to a situation where for the purpose of ascertaining whether a company is a financial company or not, its category from year to year would have to be examined ignoring the objects for which the company is incorporated. This brings to the question whether the interest earned by assessee company can still be taxed under the Interest Act. In this context, it was the contention of Revenue's counsel that the interest was not earned by company on any loan, but was generated out of its deposits. It was argued that the year under consideration was an initial year of the company. Since no good project was coming forth, therefore, in order to avoid keeping the funds idle, the assessee had advanced money and earned interest income and also carried out activities in trading in shares and securities. Thus, clearly even according to the assessee, the interest was earned by advancing its funds. In the result, the question is answered against the assessee.
Assessee's appeal dismissed
2018-TIOL-875-HC-AHM-IT + Case Story
BANCO PRODUCTS INDIA LTD Vs DCIT: GUJARAT HIGH COURT (Dated: March 26, 2018)
Income tax - Section 35(2AB)
Keywords - grant of approval by Authority - R&D facility - recognition by Ministry - weighted deduction
The assessee company, engaged in business of manufacturing of automotive gaskets, radiators and similar other automobile parts, had returned its income of Rs 20.23 crores, after claiming deduction of Rs.1.26 crores u/s 35(2AB). The case was then taken up for scrutiny, wherein the assessee pointed out that it had set up Research and Development facilities by incurring expenditure which was duly recognized by the Ministry on Sep 02, 2007. In the meantime, the assessee also applied for approval of the facility, which was approved by the concerned authority on Oct 22, 2008. The assessee thus pleaded that the expenditure incurred even before the grant of approval would be recongnised for deduction u/s 35(2AB). The AO however did not grant such deduction for the period prior to April 01, 2008 on the ground that approval was granted specifically for a period of two years from April 01, 2008 to Mar 31, 2010.
On appeal, the CIT(A) upheld the order of AO by observing that the approval was received only in F.Y 2008-09. On further appeal, the Tribunal pointed out that the facts were somewhat contradictory as it was not clear when the application for approval was made and when actually approval was granted. The Tribunal therefore, remanded the proceedings for fresh consideration by the AO.
On appeal, the HC held that,
Whether setting up of R&D facility demands incurring of certain expenditure and hence prior period expenses should not be disregarded for weigted deduction u/s 35(2AB), once such facility was recognized by Government - YES: HC
++ the main requirements of Section 35(2AB) are that the expenditure should be on scientific research on in house research and development facility as approved by the prescribed authority. As observed by this Court in case of Claris Life sciences Ltd. and Delhi High Court in case of Maruti Suzuki India Ltd., this provision is aimed at encouraging in house research and development facilities for specified purposes. The legislature recognised the weighted deduction on such expenditure and the approval of such facility by the prescribed authority is a prime condition. In case of Claris Life sciences Ltd., this Court examined a situation where the Tribunal had allowed the assessee's claim of deduction u/s 35(2AB) when such expenditure was incurred during the period prior to the date of approval by the prescribed authority. The Court noted with approval the conclusion of the Tribunal that the provision is made for giving a boost to research and development facilities in India and once the facility is approved, entire expenditure so incurred in developing the same has to be allowed by way of deduction. It may be that as pointed out by the Revenue, all events i.e. incurring of expenditure, applying for approval and grant of approval happened in the same financial year. However, this was not the basis on which the Court has confirmed the decision of the Tribunal. Then the judgment in case of Claris Life sciences Ltd. was followed by Delhi High Court in case of Maruti Suzuki India Ltd., to hold that, for availing deduction u/s 35(2AB), what is relevant is not the date of recognition mentioned in the certificate of the prescribed authority or even the date of approval, but the existence of recognition;
++ in view of the decisions of Claris Life Sciences and Maruti Suzuki, this Court has no hesitation in allowing the assessee's claim for deduction u/s 35(2AB). Shorn of any controversy, documents on record would suggest that at any rate, the assessee had applied for approval of research and development facility to the prescribed authority and such approval was duly granted. The AO and the FAA restricted the assessee's claim for deduction in relation to such expenditure which was incurred prior to April 01, 2008 on the ground that the approval was granted for two years after such date. A combined reading of the judgment of this Court in case of Claris Life sciences Ltd. and judgment of Delhi High Court in case of Maruti Suzuki India Ltd., would show that period during which the approval is granted is not relevant as long as such approval has been granted and expenditure has been incurred for the specified purpose;
++ the provision is aimed at promoting development of in house research and development facility which necessarily would require substantial expenditure which immediately may not yield desired results or could be corelated to generation of additional revenue. The legislature therefore, having granted special deduction for such expenditure, the same should be seen in light of the purpose for which it has been recognised. Research and development facility can be set up only after incurring substantial expenditure. The application for approval of such facility can be made only after setting up of the facility. Once an application is filed by the assessee to the prescribed authority, the assessee would have no control over when such application is processed and decided. Even if therefore, the application is complete in all respects and the assessee is otherwise eligible for grant of such approval, approval may take some time to come by. The claim for deduction cannot be defeated on the ground that such approval was granted in the year subsequent to the financial year in which the expenditure was incurred.
Assessee's appeal allowed
2018-TIOL-874-HC-AHM-IT + Case Story
GUJARAT COOPERATIVE MILK MARKETING FEDERATION LTD Vs ITO: GUJARAT HIGH COURT (Dated: May 9, 2018)
Income Tax - Sections 17(2), 192, 194, 201(1), 201 (1A) & Rule 3(2) & 3(e).
Keywords - Concessional education facility - Perquisite - Tuition fees of children of employees - TDS.
The assessee, Cooperative Milk Marketing Federation, having its dairy at Anand, had filed its return for relevant AY. During assessment AO noticed that the assessee had not treated amount paid towards part payment of tuition fees of children of its employees made to Anandalaya Education Society, which imparts education and therefore, it amounts to perquisite to that extent in the hands of the employees of the assessee, as per provision of Section 17(2) of the Act, and hence, liable for deduction of TDS. The AO issued a notice u/s 201(1) and 201 (1A) in this matter to assessee. The assessee replied that the contribution to Anandalaya Education Society was a concessional education facility given to the employees to facilitate education of their children, no perquisite arose in the hands of the employees, and therefore, no tax was deducted at source. This reply did not find favour with the AO, who ordered issuance of demand notice. The AO also charged penal interest. On appeal, CIT (A), and Tribunal upheld the order of AO.
After hearing parties, the High Court held that,
Whether if an employer provides education subsidy to a school where children of its employees pay only part school fee, such subsidy is to be taxed in hands of employees as perquisite - NO : HC
Whether rule 3(e) gets triggered only when free education is provided by employers to the wards of its employees - YES : HC
++ children of the employees of assessee are studying in Anandalaya Education Society and are paying fees at a subsidized rate. It is equally true that the recurring deficit of the Society is being recouped by the contributions made by the assessee based on number of students representing the employees’ wards, and it is under these circumstances that the assessee contributed Rs. 5,91,030/- and Rs. 6,43,126/- for AY 2000-2001 and 2001-2002 respectively. Thus, the burden borne per child per month has never crossed Rs. 1,000/- by the assessee, and therefore, there would be no question of any perquisite arising in the hands of the employees of the assessee, and therefore, deduction of TDS would also be not permissible;
++ from the wordings of Rule 3(e) of income tax rules, it can be said that it would be applicable only for free educational facilities, as nothing is mentioned therein of concessional educational facilities. Contributions to the Anandalaya Education Society is towards the deficit of the fees towards wards of the employees, and therefore, rule 3(e) would not apply to the facts of this case and hence, no perquisite would arise in the hands of the employees for the assessment years in question. The legislation amended the said rule only for subsequent period to include even concessional education facility. Therefore, Rule 3 (2) read with Section 17 of the Act cannot be said to have been violated and the assessee cannot be held liable to recover tax u/s 201 [1] to the extent the tax is due from its employees. In the result, Tax Appeal is allowed.
Assessee's appeal allowed
2018-TIOL-873-HC-AHM-IT
PANCHMAHAL STEEL LTD Vs ACIT: GUJARAT HGIH COURT (Dated: March 28, 2018)
Income Tax - Sections 115JAA & 226(3)
Keywords - Pre-deposit - MAT credit
THE assessee company filed returns for the relevant AY. On assessment, its income for such AY was computed under MAT provisions. The assessee claimed that such tax paid for such AY was available to it by way of MAT credit u/s 115JAA. During assessment for the following AY, the AO raised duty demand. When the assessee sought stay on recovery of such demand, the AO directed the assessee to pre-deposit about Rs 2.62 crores within seven days. When the assessee re-iterated such request before the Pr CIT, the same was denied. However, the assessee was directed to approach the AO and seek adjustment of MAT credit available.
Meanwhile, the AO sent notice u/s 226(3) to the assessee's bank, asking it to pay over sum in credit of the assessee, for recovery of entire tax dues. Hence the present writ was filed by the assessee.
On hearing the writ, the High Court held that,
Whether MAT credit can be utilised to pay pre-deposit imposed for granting stay on recovery of further duty demanded - YES: HC
Whether the assessee's banker can be directed to pay the assessee's duty liability, where the assessee is seeking such adjustment of pre-deposit against available MAT credit - NO: HC
++ this court is concerned with a case where the assessee has already preferred an appeal against the order of assessment. As per the CBDT directives, ordinarily, in such a case, upon depositing 20% of the disputed tax dues, further recoveries would be stayed. This is what even the AO had provided. The assessee wishes to utilise the MAT credit for making such payment. The Principal Commissioner has permitted the assessee to approach the AO who upon verification that such credit is available, would accept the assessee's request. Thus even the Department is not averse to adjusting the assessee's MAT credit if not already utilised towards the 20% of the disputed tax dues;
++ for full verification, let the assessee approach the AO. However, in the meantime, the drastic action initiated by the AO must be suspended. This is for various reasons. As of now, there is nothing on record to suggest that the assessee is not correct in contending that MAT credit in excess of 20% of tax dues is available for adjustment. Further, the assessee's statutory and labour wage liabilities cannot be suspended, unless there are strong reasons to do so. Prima facie, it would also appear that other issue of the cash credit facility, is not something that can be utilised by way of garnishee order for recovering tax dues of the assessee. This Court has taken a view that bank is not the debtor of the assessee in such a case;
++ under the circumstances, the notice dated 23.3.2018 under section 226(3) of the Act issued by the Assistant Commissioner of Income-tax is set aside. The assessee shall approach the Assessing Officer latest by 5.4.2018 pointing out the extent of MAT credit available for adjustment and request for such adjustment towards 20% of the assessee's disputed tax dues.
Assessee's writ petition allowed
2018-TIOL-872-HC-AHM-VAT + Case Story
GEETATEX Vs DCST: GUJARAT HIGH COURT (Dated: March 08, 2018)
Gujarat Value Added Tax - Writ - Sections 41AA & 67
Keywords - DEPB license - Tax amnesty scheme
THE assessee, a partnership firm in dealing in textile & other goods, also exported the same. On such exports, the assessee received benefits under the DEPB scheme. Since the accruued DEPB was freely transferable, the assessee would often sell such DEPB to importers of various goods. The assessee filed returns for the relevant AY. Before assessment was completed, the State Legislature inserted Section 41AA into the Act. Under the new provision, if an assessee paid additional tax & fulfiled other requirements, the tax declarations filed by such assessee would be accepted without scrutiny.
While assessments for the five relevant AYs were pending, the assessee claimed benefit u/s 41AA for them, and also submitted evidence of payment of additional tax. However, the AO did not pass a formal order either accepting or rejecting the declarations. The AO did not also proceed with the assessments for the five AYs. After about two years, the assessee was served an SCN raising duty demand with interest & imposition of penalty for the DEPB sales made during each of the five AYs. Later, the revisional authority noted that the despite the assessee's DEPB sales were under the Department's scanner, the assessee had yet made declaration u/s 41AA & obtained an order by misguiding the Department. It was also observed that pursuant to search of the assessee's premises, it was revealed that apart from selling clothes, the assessee also sold DEPB license on which no sales tax was paid. On this account, duty demand was raised with interest & imposition of penalty for each of the five AYs. The assessee's revision petitions against such orders were subsequently dismissed by the Tribunal. Hence the present appeal.
In writ, the High Court held that,
Whether an application seeking benefit under a tax amnesty scheme aimed at reducing litigation, can be rejected on mere grounds that the applicant might get away with alleged tax evasion, despite the applicant satisfying all requisite conditions - NO: HC
Whether the rejection of declarations made under a tax amnesty scheme would automatically entail tax liability for the applicant - NO: HC
++ an analysis of section 41AA would show that the provision was in the nature of a general amnesty. The State Legislature having noted that despite efforts made for simplification of assessments there are large number of pending disputes which had clogged the system, introduced a one-time amnesty scheme. The scheme was peculiar on two counts viz., unlike the settlement schemes under the Income-tax Act, 1961 or the Customs or Central Excise Act, it is not an ongoing scheme and covered only the assessments which were pending and which related to AY 1999-2000 and earlier years. Thus, this was a one-time scheme. Secondly, unlike in case of other settlement proceedings in the above referred Acts, there was little element of examination of the declaration made by an assessee desirous of availing benefit of the scheme. Once the assessee applying for such a scheme fulfilled the eligibility conditions and paid the additional taxes, his assessment would be deemed to have been completed. The competent authority thereafter had no jurisdiction to question the declaration made by the assessee which would be in the realm of scrutiny assessment envisaged under subsection [3] of Section 41 of the Act. Quite apart from the plain language used in Section 41AA, for more emphasis, sub-section [1] of Section 41 was made notwithstanding anything contained in sub-sections [2] and [3] of Section 41AA. Further, even in the proviso granting benefit to one who availed the scheme, the Legislature has consciously provided that the same would be available irrespective of the fact whether notice under sub-section [3] of section 41 was issued or not. In other words, even if the scrutiny assessment under sub-section [3] of Section 41 had commenced, the dealer could make a declaration under Section 41AA and if fulfilled other conditions, the benefit flowing from such scheme would flow;
++ to be able to get the benefit of the said provision, a dealer had to satisfy two sets of conditions viz., [i] which is inbuilt in subsection (1) of Section 41AA which requires that the dealer had paid taxes due on the basis of declaration made in the return before the specified date; that such tax did not exceed Rs. 25,000/= and lastly that he paid additional amount of Rs. 1,000/=; if the tax paid was less than Rs. 15,000/= or paid Rs. 2,000/=, if such tax was in the range of Rs. 15,000/= to 25,000/=. The second set of conditions flows from sub-section [3] of Section 41AA and these are in the nature of disqualifications. These disqualifications are : [a] dealers whose books of account, registers, documents have been impounded or seized under section 59 of the Act, or [b] dealers who had availed tax exemption or tax deferment under any of the incentive schemes of the Government of Gujarat. As soon as these conditions – positive as well as negative are fulfilled – a dealer would be entitled to the benefits flowing from the said section. In fact, the section does not envisage any formal acceptance of a declaration by the competent authority. The deeming fiction would automatically and immediately kick in. This is not to suggest that even if a declaration itself is found to be wrong, erroneous or as per the declaration, a dealer is found wanting in any of the conditions, he can still claim benefit of the scheme merely because he had made a declaration. To this extent, the role of the authority certainly is envisaged, but not beyond. To suggest that even when a dealer makes declaration; even if such a dealer is otherwise eligible fulfilling all conditions of Section 41AA of the Act, such a declaration could be rejected, would be wholly incorrect;
++ to suggest that in such a case a dealer may get away with tax evasion since his very initial declaration in the return may itself be incorrect, begs the question. If any such declaration still permitted a scrutiny at the hands of the assessing authority of the correctness of the declarations in the return, the very purpose of inserting Section 41AA would frustrate and the situation would be brought back to the stage of assessment under sub-section [3] of Section 41 of the Act – something which the Legislature intended to avoid;
++ the revisional authority has committed a serious error in exercising revisional powers. This court also agrees with the counsel for the assessee that even if the assessee's declarations under Section 41AA of the Act were to be rejected in exercise of such revisional powers, the revisional authority could not have assessed the assessee's tax liability. Either at the hands of the original authority or the revisional authority, if any such declaration is treated as invalid or in any other manner rejected, the natural consequence would be that the assessee's pending assessment would be completed in terms of Section 41 of the Act. Mere rejection of the declaration under Section 41AA of the Act would not result into automatic tax liability being confirmed against the assessee. In fact, the revisional authority proceeded in a summary manner and completed assessment at its own level by allowing a brief time and intervention to the assessee. The Tribunal proceeded on erroneous facts, and therefore, committed a legal error. Considering the Tribunal's factual conclusions which suggests that the Tribunal was under impression that the assessee's documents and books of account were seized prior to making declaration u/s 41AA of the Act – something even the Department had not contended. Had the Tribunal been correct in such factual conclusion, the legal conclusion of the Tribunal would be unexceptionable. The Tribunal in another case [M/s. Devkrupa Industries v. State of Gujarat : Decided on 30th July 2008] where it is found that the disqualifications flowing from of Section 41AA [3] did not arise, held that the Department could not reject a dealer's declaration. Since the revisional authoritie and the Tribunal exceeded their jurisdiction, the Tribunal's orders are set aside.
Assessee's Writ Petition Allowed
2018-TIOL-871-HC-AHM-ST
GUJARAT PULSES MANUFACTURING ASSOCIATION Vs UoI: GUJARAT HIGH COURT (Dated: March 15, 2018)
ST - the petitioner, an association, challenged SCNs raising duty demand with interest on the transportation of Tur Dal - The SCNs also proposed to impose penalty - Subsequently, the erstwhile CBEC issued a Notfn which amended a previous exemption Notfn to include pulses and other existing products contained therein - Thereupon, the CBEC also issued a clarificatory Circular, by virtue of which service tax on transportation of Tur Dal was fully exempted - The issue at hand is as to whether service tax on transportation of Tur Dal would have to be paid for the period prior to issuance of the Circular.
Held - Till when the exemption Notfn. was issued, no tax was being levied on transportation of Tur Dal - This was based on trade as well as the Department's belief that the existing Notfn., which had been amended by the new one, already covered this product - Hence, when the exemption Notfn was issued, it could be said that the exemption would be available only from the date of the Notfn - Thus, no tax can be levied for the period prior to such Notfn. - Also during the period of dispute, the normal period of limitation u/s 73(1) for recovery of unpaid or shortpaid service tax was 18 months - The conditions of willful & conscious evasion of duty, which justify invocation of extended limitation are missing in the present case - The trade paid no service tax on transportation of Tur Dal & the department raised no demand as well - Hence SCNs proposing duty demand beyond normal period are set aside: High Court (Para 2,3,5,10,11,12)
Writ petition allowed
2018-TIOL-870-HC-MAD-ST
MEENA ADVERTISERS VS DIRECTOR GENERAL GST: MADRAS HIGH COURT (Dated: April 12, 2018)
ST – Petitioner, a proprietor of an advertising firm, praying for quashing of the summons dated 2.1.2018 issued by the 2nd respondent and to direct the respondents 1 and 2 to transfer the files pertaining to the petitioner's case to the Jurisdictional Authorities/ Officers, viz., the respondents 3 and 4 for further proceedings.
HELD: It is settled position that summons cannot be quashed or injuncted and this Court in the case of M.M.Exports - 2007-TIOL-110-SC-CUS held that the writ petition was not maintainable to quash the summons and dismissed the writ petition -similar issue was considered in W.P.Nos.30066 & 30094 of 2017, dated 7.1.2017 and the writ petitions challenging the summons issued by the DRI was dismissed – by applying the above decision to the facts of this case, the only conclusion that has to be arrived at is to dismiss the writ petition -the respondents 1 and 2 have categorically stated that investigation is being carried out and the petitioner was carrying on business in Mumbai and in the Centralised Registration Certificate the Mumbai office was not registered -furthermore, the Circular [No.1056/05/2017-CX dated 29.7.2017] referred to by the petitioner does not make it mandatory for investigation to be transferred to a different location - it is for the investigating authority to take a decision in the matter -hence, the prayer sought for by the petitioner cannot be granted - in the result, the writ petition is dismissed and the respondents 1 and 2 are directed to issue fresh summons clearly indicating as to what are all the documents or materials that the petitioner should produce : HIGH COURT [para 5, 6, 7]
Writ Petition dismissed
2018-TIOL-869-HC-DEL-CUS
NARCOTICS CONTROL BUREAU Vs SAAD ANSARI: DELHI HIGH COURT (Dated: April 10, 2018)
Narcotics Drugs and Psychotropic Substances Act, 1985 [NDPS Act] –Vide impugned judgment, the Additional Sessions Judge acquitted respondent no.1 for the offences punishable under section 20(b)(ii)(B) read with section 28 and 29/20 of the NDPS Act and respondent no.2 for the offences punishable under section 20(b)(ii)(C) and section 29 of the NDPS Act :
HELD - the Trial Court held that non-production of the log book of official vehicle by the complainant Azad Singh goes to the root of the matter and casts shadow of doubt on the visit of NCB officials to Brij Palace Hotel, Paharganj - non production of the CCTV footage of hotel casts doubt on the prosecution case -neither any call connection between the respondents was shown nor the source of drugs was verified by the NCB officials despite the availability of phone numbers of the respondents -there was non-compliance of section 41 and 42 of NDPS Act -since, it was the admitted case of the prosecution that they had prior secret information, provisions under section 41 and 42 of NDPS Act were squarely applicable and the case was not covered by section 43 of the NDPS Act - considering the findings of the Additional Sessions Judge, particularly the fact that when the case property was opened in the Court, it was not found properly deposited and sealed - this Court, therefore, concurs with the view expressed by the Additional Sessions Judge -hence, the impugned judgment acquitting the respondents cannot be said to be perverse warranting interference of this Court - leave to appeal is dismissed : HIGH COURT [para 7, 8, 9]
Criminal Leave Petition dismissed
2018-TIOL-868-HC-MAD-CUS
DGFT Vs DIMARK TRADERS: MADRAS HIGH COURT (Dated: April 19, 2018)
Cus - Writ Appeals are directed against the final orders in M.P.Nos.1,1,1 of 2012 in W.P.Nos.23687, 24090 and 24542 of 2012, dated 10.9.2012, by which, the Writ Court directed provisional release of the goods, as assessed by the customs authorities concerned and on the respondents depositing an amount equivalent to 25% of the said value/furnishing the personal bond for the balance 75% of the assessed value of the goods :
HELD - inasmuch as the writ petitions have been disposed of, vide order dated 9.11.2012, and in the light of the decisions in the cases of South Eastern Coalfields Ltd. [(2003) 8 SCC 648], Prem Chandra Agarwal and another [(2009) 11 SCC 479] and Banibrata Ghosh and Others [(2009) 3 SCC 250], nothing survives in the instant writ appeals filed against interim orders - accordingly, the Writ Appeals are dismissed : HIGH COURT [para 5, 6]
Writ Appeals dismissed
2018-TIOL-867-HC-MAD-CUS
KOSMIC STUDIOS Vs CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION: MADRAS HIGH COURT (Dated: April 13, 2018)
Cus - Vide impugned order, application for settlement filed by the petitioner was held to be not admissible and was not allowed to be proceeded with vide section 127-C(1) of the Customs Act, 1962 [Act] – WP filed:
HELD - the SCN proposes to reject the value declared by the petitioner and fix the actual value of the goods and also confiscate the same in terms of section 111(d) & (m) of the Act and proposes to impose penalty against the importers - therefore, the petitioner is entitled to maintain the application before the Commission as there is a SCN for confiscation and it would fall within the definition of 'case' as defined u/s 127-A(b) of the Act - this view is supported by the judgment of Division Bench of this Court in the case of V.C.Mohan - 2007-TIOL-700-HC-MAD-CUS - the Writ Petition is allowed and the impugned order is set aside -the matter is remanded to the Settlement Commission for fresh consideration : HIGH COURT [para 2]
Writ Petition allowed
2018-TIOL-866-HC-MAD-CUS
ROSHAN OVERSEAS Vs CC: MADRAS HIGH COURT (Dated: April 25, 2018)
Cus - Appellant is aggrieved against the dismissal of their writ petition against the O-i-O dated 20.6.2013 passed by the Commissioner of Customs, Tuticorin -the main grievance of the writ petitioner before the writ Court was that they were not given an opportunity to cross-examine any witness - therefore, the O-i-O impugned in the writ petition cannot be sustained, as there is violation of principles of natural justice.
HELD: the Adjudicating Authority [AA] passed the impugned order admittedly after issuing the SCN and also affording an opportunity of personal hearing to the writ petitioner - therefore, it cannot be contended that the AA violated the principles of natural justice - whether the reasons stated by AA in not providing an opportunity to cross-examine are sustainable or not is the question that has to be considered and answered only by re-appreciation of all the facts and circumstances, which has to be done only by the next fact finding authority, namely, the appellate authority - it is well settled that in a case involving fiscal nature, availing of statutory appellate remedy has to be first exhausted and hence, the party cannot come to this Court directly and file a petition under Article 226 of the Constitution of India - the filing of the very writ petition itself against the order of the AA is not maintainable, as the appellant/writ petitioner is having statutory and efficacious appellate remedy before the appellate Tribunal, in this case, CESTAT - the Writ Appeal stands disposed of - the appellant is granted four weeks time to file an appeal before the Appellate Tribunal : HIGH COURT [para 12, 13, 14, 15]
Writ Appeal disposed of
2018-TIOL-1490-CESTAT-DEL
MAIHAR CEMENT Vs CCE & ST: DELHI CESTAT (Dated: April 05, 2018)
CX - the assessee company manufactures Cement & clinker - It mostly discharged its excise duty on MRP basis u/s 4A of the Act - For the other part it paid duty on transaction value - On audit, the Department noticed that the assessee was charging & collecting VAT from its buyers - It was also noticed that under a Govt scheme offering 25% refund of VAT paid by entities in backward areas, the assessee had received a refund of VAT - Thus Department opined that deduction from VAT from Transaction Value was admissible only for the amount of tax actually paid or payable - It appeared that the State Government deposited the subsidy amount admissible towards payment of VAT on behalf of the assessee but the assessee collected full VAT - Hence demand was raised for differential amount - Held - A similar issue has come up before the Tribunal in the case of Shree Cement Ltd V/s Commissioner, involving similar facts - In this case, under Schemes of the Rajasthan Government, subsidy amount was paid through VAT challan - In the schemes in the present case, the same is allowed through book adjustment against VAT payable for the subsequent period - Following such decision, the duty demand is set aside: CESTAT (Para 1,6,7,9,10)
Appeal Allowed
