NOTIFICATION

ctariff18_080

Increased Customs duty on specified imports originating from USA - implementation date postponed again to 31st January 2019

CASE LAWS

2018-TIOL-188-HC-ALL-GST

PATEL HARDWARE Vs COMMISSIONER, STATE GST AND 2 OTHERS : ALLAHABAD HIGH COURT (Dated: December 10, 2018 )

CGST - Question raised in this Writ Petition is as to whether the petitioner would have a right of appeal beyond a period of 30 days from the date of penalty order or date of service of the said order on the driver of the truck - facts are that the goods were subjected to seizure proceedings u/s 107 of the UP GST Act - petitioner claims that penalty order was passed on 12.02.2018 but communicated to them on 25.05.2018 and they filed an appeal within a period of three months therefrom - appeal was dismissed as time barred on 06.07.2018 by treating period of limitation as commencing from 12.02.2018 - Petitioner submits that the statutory forum of second appeal viz. Tribunal has not yet been constituted under the Act, which fact the State admits - writ petition is, therefore, admitted on merits.

Held: Phrase "communicated to such person" appearing in Section 107(1) of the Act commends a construction that would imply that the order be necessarily brought to the knowledge of the person who is likely to be aggrieved - Unless such construction is offered, the right of appeal would itself be lost though a delay of more than a month would in all such cases be such as may itself not warrant such strict construction - it is undisputed that the impugned penalty order was served on the driver of the truck while the penalty order is directed against the owner of the goods, therefore, for that reason also it may be accepted that the penalty order had not been communicated to the petitioner prior to the date 25.05.2018 - order dated 06.07.2018 is set aside and it is directed that Appellate Authority may condone the delay and proceed to decide the appeal as expeditiously as possible - Petition allowed: High Court [para 8 to 11]

Petition allowed

2018-TIOL-2613-HC-DEL-IT + Case Story

RAJENDER KUMAR SEHGAL Vs ITO: DELHI HIGH COURT (Dated: November 19, 2018)

Income tax - Writ - Sections 147, 148 & 292BB

Keywords - curable defect - deceased assessee - reason to believe - typographical error

The present petition had been filed by the husband of the deceased assessee i.e., his wife, seeking directions to quash notice issued u/s 148 to the deceased assessee, late Smt. Rukmani Sehgal and to prohibit the AO from conducting proceeding for re-assessment in any manner. In the background, it was explained that the deceased assessee had filed her income tax returns and continued to do so, till her death. The return for AY 2010-2011 was processed in a routine manner and the deceased assessee was intimated about it, after which she died. Consequently thereupon, reassessment notice was issued u/s 148 to the said deceased. The present assessee being a legal representative of the deceased, sought a copy of the "reasons to believe". In response, it was pointed out that the deceased had shown some transactions which led to a claim for losses brought forward, pertaining to one Varun Capital Services Limited. The present assessee protested that this was not correct. However, rejecting the objections, the AO issued a clarification, ostensibly "clarifying" that the entity from which the deceased had received the amounts and claimed losses was different, and that the original "reason to believe" contained a typographical error.

The assessee therefore approached this court, seeking the reliefs that she has claimed, primarily on three grounds: firstly, the Act did not provide any mechanism for issuing and carrying on reassessment in respect of a dead person, if the reassessment notice is issued against a deceased. It was urged, secondly, that the "clarification" issued camouflages the fact that the so called "reasons to believe" was not based on application of mind and was also premised on no reason. The third ground was that the AO completed the reassessment without issuing notice u/s 143(2).

On Writ, the HC held that,

Whether defective reopening notice issued to legal representative of deceased assessee and that too after limitation period, is not curable - YES: HC

Whether When there is no provision to fasten tax liability upon deceased individual and also no pending proceeding, it is impossible for Revenue to impose tax on legal representatives - YES: HC

++ the Division Bench of this Court in case of Vipin Walia,where again the reassessment notice was issued in the name of the deceased and no notice was issued to the legal representative, has held that: "....what was sought to be done by the ITO was to initiate proceedings u/s 147 against the deceased Assessee for AY 2008-09. The limitation for issuance of notice u/s 147 /148 was 31st March 2015. On 27th March 2015, when the notice was issued, the Assessee was already dead. If the Department intended to proceed u/s 147, it could have done so prior to 31st March 2015 by issuing a notice to the LRs of the deceased. Beyond that date it could not have proceeded in the matter even by issuing notice to the LRs of the Assessee...." This court sees no reason to disagree with the decision in Vipin Walia; the summation of the principle applicable, given the plain words of the statute are unexceptionable. The revenue's argument that the "defect" was curable, in regard to the issuance of notice, to a deceased individual, is, in the opinion of this court, untenable. The phraseology of Section 292BB precludes the contention;

++ if the original assessee had lived and later participated in the proceedings, then, by reason of Section 292BB, she would have been precluded from saying that no notice was factually served upon her. When the notice was issued in her name- when she was no longer of this world, it is inconceivable that she could have participated in the reassessment proceedings, to be estopped from contending that she did not receive it. The plain language of Section 292BB precludes its application, contrary to the revenue's argument. This court is of opinion that the absence of any provision in the Act, to fasten revenue liability upon a deceased individual, in the absence of pending or previously instituted proceeding which is really what the present case is all about, renders fatal the effort of the revenue to impose the tax burden upon a legal representative. On the issue, i.e the fatality attached to the completed reassessment in the absence of a notice u/s 143(2), this court notices that the omission renders the assessment or reassessment,void a proposition of law enunciated in Asstt. CIT v. Hotel Blue Moon - 2010-TIOL-08-SC-IT. In view of the foregoing conclusions, the reassessment notice and all consequent proceedings- including the reassessment order-have to be and are, hereby quashed.

Assessee's petition allowed

2018-TIOL-2612-HC-MUM-IT

CIT Vs LARSEN AND TOUBRO LTD: BOMBAY HIGH COURT (Dated: December 4, 2018)

Income tax - Section 194H

Keywords - bank guarantee commission - tax at source

THE assessee company had filed its return for the relevant year and its case was taken in scrutiny. Therein the AO noticed that the assessee had made" payment of "bank guarantee commission" on which no tax" was deducted at source. He was of the" opinion that this payment attracted the requirement of" deducting tax at source in terms of Section 194H. When the matter reached Tribunal, the Revenue's opinion regarding TDS obligation was negatived, following its own" judgment in case of Kotak Securities Limited.

On appeal, the HC held that,

Whether bank guarantee commission which is not in 'the nature of commission paid to an agent', but it is in 'the nature of bank charges for providing banking services', does not attract Section 194H - YES: HC

++ it is seen that in the judgment of Kotak Securities, the Tribunal" referred to Section 194H which requires an "assessee responsible for paying any income by way of" commission or brokerage to deduct tax at source. The" Tribunal was of the opinion that the words "commission or" brokerage" must take colour from each other. The Tribunal" was of the opinion that the payment in question, though" categorized as "bank guarantee commission" is not strictly" speaking payment of commission, since there is no principal" to agent relationship between the payer and the payee. The" Tribunal therefore, held that the requirement of deducting" tax at source emanating from Section 194H in the" present case does not arise;

++ in the present case, the so called bank guarantee commission is not in" the nature of commission paid to an agent but it is in the" nature of bank charges for providing one of the banking" service. The requirement of Section 194H, therefore, would not arise.

Revenue's appeal dismissed

2018-TIOL-2611-HC-MUM-IT

PR CIT Vs POPLEY DIAMOND AND GOLD PLAZA PVT LTD: BOMBAY HIGH COURT (Dated: December 4, 2018)

Income tax - Sections 147 & 148

Keywords - failure of disclosure - scrutiny assessment - validity of reopening notice

THE Revenue Department preferred present appeal challenging the action of ITAT in cancelling the reassessment order u/s 143(3) r.w.s. 147 for the year under consideration, holding that notice u/s 148 was bad in law, without appreciating the fact that in this case no scrutiny assessment was done u/s 143(3) and that the reopening of the case by way of issuance of notice u/s 148 was very much within the purview of law.

On appeal, the HC held that,

Whether an issue which was particularly accepted during previous year after detailed scrutiny, need not be revisited u/s 147 in succeding assessment years without any change in circumstances - YES: HC

++ the counsel for Revenue may be correct in pointing out that in the present case, the Tribunal ought not to have invalidated the reassessment on the ground of no failure of disclosure or that no new material was available with the AO, since the assessment was framed u/s 143(1). However, as noted the particular claim which the AO wants to revisit through the reassessment proceedings, is not a new one. It was started by the assessee for the first time in the A.Y 2000-2001 and was accepted by the Department. Without there being any other change, such issue could not have been reissued in the present assessment year, particularly when the claim was also accepted after scrutiny in the A.Y 2001-2002. In the circumstances, it can be seen that the reason for reopening the assessment lacks validity or in other words, the AO did not have reason to believe that income chargeable tax had escaped assessment.

Revenue's appeal dismissed

2018-TIOL-2610-HC-KERALA-IT

CIT Vs APOLLO TYRES LTD: KERALA HIGH COURT (Dated: November 27, 2018)

Income tax - Section 115J

Keywords - adjustment of depreciation - book profits - withdrawal from reserve

THE assessee company in the previous assessment year on a revaluation of its assets, credited an amount to the revaluation reserve account. While in the current assessment year, the assessee debited Rs.2,72,43,385/- from the revaluation reserve account and adjusted the depreciation arising in the said year. During the course of assessment, the AO found that the profit having not been added on, there could be no deduction claimed. Hence, he added the said amounts to the profit for assessment under MAT. When the matter reached ITAT, it was held that the amount withdrawn from the revaluation reserve account for adjusting the depreciation, should be allowed as deduction while computing the book profits.

On reference, the HC held that,

Whether deduction/exemption which is otherwise permissible under the Act can be disallowed, simply because it was not shown in the profit - NO: HC

++ it is to be noted that if the assessee had added on the amounts to the profit, then u/s 115J, the said amounts would be allowed as deduction u/s 115J. The AO found that the profit having not been added on, there could be no deduction claimed. The First appellate authority and the Tribunal found that there is no ground to decline such exemption to the assessee, merely for the fact that the same was not shown in the profit. The deduction which is permissible under the Act could not have been disallowed.

Reference in favour of assessee

2018-TIOL-2609-HC-MUM-IT

CIT Vs ASIAN PAINTS LTD: BOMBAY HIGH COURT (Dated: December 4, 2018)

Income tax - revenue expenditure - software development expenses

THE assessee company filed its return claiming expenditure incurred for software development as revenue expenditure. During the course of assessment, the AO rejected the claim holding that the same was in the nature of capital expenditure. The matter went before the Tribunal, where it was concluded that the expenditure was a revenue expenditure and therefore, allowable deduction.

On appeal, the HC held that,

Whether software expenses incurred for rapid advancement of technology can be construed as capital expenditure, simply because it had contributed a small degree of endurability - NO: HC

++ it is true that in Tax Appeal No. 1754 of 2011, this Court has admitted the appeal of the Revenue which involves a somewhat similar question as has arisen in the present appeal. However, as noted, the counsel for assessee has cited judgments of this Court clearly holding that the expenditure for software development was a revenue expenditure. In case of Raychem RPG Ltd, the Division Bench upheld the decision of the Tribunal allowing software expenditure as revenue expenditure. In the case of Geoffrey Manners & Co Ltd, this issue once again came up before the High Court, wherein it was observed that the rapid advancement of research also contributes a small degree of endurability, but that by itself does not mean that the expenses incurred cannot be revenue in nature. Since technology advancement is an aspect which must be taken judicial note of, so also, machinery becoming obsolete that there is necessity of acquiring further technology. This is to meet the growing competition and considering trends in the market. Therefore, such expenditure will have to be treated as revenue expenditure. In view of such facts, there is no reason to entertain the Revenue's appeals since no question of law arises.

Revenue's appeal dismissed

2018-TIOL-2608-HC-DEL-IT

PR CIT Vs CARAF BUILDERS AND CONSTRUCTIONS PVT LTD: DELHI HIGH COURT (Dated: November 13, 2018)

Income tax - Sections 10(34), 14A & Rule 8D

Keywords - exempt income - investment in mutual funds - interest on loans - sale of equity shares - short term capital gains

THE assessee company had filed its return declaring income of Rs.6,30,950/- taxable under the head short-term capital gains earned from investment of Rs.38 crores in mutual funds units, which units were also sold/redeemed during the year. The assessee had invested more than Rs.820 cores in equity shares of associated companies, however no dividend income was earned on the equity shares as the shares were not sold or transferred. The assessee had shown interest liability of Rs.153,08,66,463/- and declared interest income of Rs. 41,61,57,245/- under the head "income from other sources. This interest had accrued or was paid by the subsidiaries to whom the assessee had granted loans and advances. The assessee however, did not earn and have any other taxable or non exempt income. The assessee had also incurred administrative expenditure of Rs.5, 15,147/- and had paid Rs.25,34,548/- as fee and taxes for increase in the share capital. Interest and administrative expenses incurred and paid being more than interest received, the assessee did not declare taxable income other than income from sale of mutual fund units taxable as short term capital gains. The assessee had earned dividend income of Rs.19,25,655/- on the investment made in the mutual funds, and this dividend income was claimed as exempt income u/s 10(34). The assessee had disallowed expenses of Rs.70,20,602/- u/s 14A as attributable to the earning of exempt income.

During the course of investment, the AO held that though the investment of Rs. 820 crores in equity shares had not yielded dividend income, this investment must be taken into consideration while computing disallowance u/s 14A for the provision prohibits allowance of any expenditure incurred in relation to exempt income which was not included in the total income by virtue of Section 10. Dividend income earned on shares being exempt, disallowance had to be made on income in relation to earning of dividend on shares purchased. Therefore, Rs.70,20,602/- disallowed by the assessee u/s 14A depicted an eschewed result. The AO computed the disallowance u/s 14A by applying clauses (i), (ii) and (iii) of sub-rule (2) to Rule 8D. Under clause (i), 82% of the interest of Rs.153.08 crores paid on term loan, pre-payment and other charges, debentures and others, i.e. interest of Rs.113.57 crores, was disallowed as expenditure directly incurred for earning exempt income. For computing disallowance under Clause (ii), balance interest of Rs.39.50 crores and average of total investment in the beginning and at the end of the year for the entire assets were considered. Computation under clause(ii) was not made with reference to the investment which had yielded exempt income. Accordingly, disallowance of Rs.27,55,00,000/- was made under clause (ii) of Rule 8D. Disallowance of Rs.4,09,00,000/- being 0.5% of the average investment was made under clause (iii) of Rule 8D(2). For computing disallowance under clause (iii), the average investments at the beginning and at the end of the year and not the investment yielding exempt income were taken as the basis. The AO did not give benefit of setting of interest of Rs. 41.81 crores received by the assessee from the subsidiary companies.

On appeal, the CIT(A) reduced the disallowance to Rs.75,89,66,443.93 by accepting alternative computation made by the assessee. He noticed that interest expenditure was on account of borrowed funds from a bank, interest on debentures, interest paid to corporate bodies and subsidiaries. Interest bearing amount was invested in the shares of the subsidiary companies and for purchase of "Right Call Option" and for making investment in mutual funds of Rs.38 crores, which had been redeemed during the year. On account of money advanced to the subsidiary companies, the assessee had received interest of Rs.41,81,11,353/-. Thus, there was direct and indirect connection between the borrowed funds and the amounts advanced. Interest received should be allowed to be set off from the interest paid to workout the disallowance. The CIT(A) held that in the absence of direct co-relation between the interest paid and investment in shares, no disallowance should be made under clause (i) of sub-rule (2) to Rule 8D. The interest expenditure of Rs.111,27,55,110/- should be taken as an indirect expenditure for computing disallowance under clause (ii) to sub-rule (2) to Rule 8D. Accordingly, indirect interest expenditure relating to investment in shares was computed at Rs.75,84,51,296/-. Thus, the CIT(A) reduced the total disallowance made under Rule 8D to Rs.75,89,66,443/-. This computation of disallowance made by the CIT(A), came to be upheld by the ITAT.

On appeal, the HC held that,

Whether expenditure incurred for earning of exempt income, should only be disallowed u/s 14A r/w Rule 8D - YES: HC

++ the question of netting i.e. reduction of interest received from interest paid for the purpose of computation of disallowance under Rule 8D sub-rule (2) would in a given case require consideration. This question of quantum of deduction u/s 14A r/w Rule 8D is otherwise covered against the Revenue by decisions of the Supreme Court and this Court. Total exempt income earned by the assessee in this year was Rs.19 lakhs. In these circumstances, this Court is not required to consider the case of Revenue that the disallowance should be enhanced from Rs. 75.89 crores to Rs.144.52 crores. Upper disallowance as held in Principal Commissioner of Income Tax vs. McDonalds India Pvt. Ltd - 2018-TIOL-2439-HC-DEL-IT cannot exceed the exempt income of that year. This decision follows the ratio and judgment of the Supreme Court in the case of Maxopp Investments Ltd. vs. CIT - 2018-TIOL-87-SC-IT and the earlier judgments of the Delhi High Court in Cheminvest vs. CIT - 2015-TIOL-2070-HC-DEL-IT and CIT vs. Holcim Pvt. Ltd - 2014-TIOL-1586-HC-DEL-IT;

++ the judgment in McDonalds India Pvt. Ltd. reads that: "....it is that expenditure alone which has been incurred in relation to the income which is includable in total income that has to be disallowed. If an expenditure incurred has no causal connection with the exempted income, then such an expenditure would obviously be treated as not related to the income that is exempted from tax, and such expenditure would be allowed as business expenditure. To put it differently, such expenditure would then be considered as incurred in respect of other income which is to be treated as part of the total income....";

++ there is another error made by the AO in computing the disallowance under clauses (ii) of Rule 8D (2) with reference to the formula prescribed. Numerical B in clause (ii) refers to average value of the investment, income from which does not form part or shall not form part of the total income. The AO for numerical B in clause (ii) had taken the total value of the investment and not the investment that had yielded exempt income. The Delhi High Court in ACB India Ltd. vs. Asstt. Commissioner of Income Tax - 2015-TIOL-872-HC-DEL-IT has held that only average value of the entire investment that does not form part of the total income is the factor which could be covered by the numerical B for computing disallowance under clause (ii) of Rule 8D(2) of the Rules.

Revenue's appeal dismissed

2018-TIOL-2607-HC-DEL-IT

PR CIT Vs JAGSON INTERNATIONAL LTD: DELHI HIGH COURT (Dated: November 2, 2018)

Income tax - Section 14A & Rule 8D

Keywords - exempt income - investment expenditure

During the course of assessment, the AO carried out disallowance of Rs. 15,12,468/- and Rs.13,83,209/- u/s 14A by applying Rule 8D, noticing that the assessee had earned exempt income of Rs. 2,94,299/- in the form of dividend income and had suo moto disallowed an amount of Rs.10,520/- u/s 14A. This disallowance was made by AO without examining the issue/question as to whether the disallowance made by assessee was justified or not.

On appeal, the HC held that,

Whether disallowance u/s 14A r/w Rule 8D need not be invoked by the AO without recording his satisfaction as to the genuineness of claim made by the assessee regarding exempt income - YES: HC

++ the reasoning of the AO cannot be sustained as the Supreme Court in Godrej Boyce Manufacturing Company Limited versus Deputy Commissioner of Income Tax Mumbai & Anr - 2017-TIOL-212-SC-IT after referring to Section 14A has held that Rule 8D is in the nature of best judgment determination as it prescribes a formula for determination of the expenditure incurred in relation to income that does not form part of the total income under the Act, in a situation where the AO is not satisfied with the claim of assessee. The jurisdictional requirement for invoking Rule 8D is recording of satisfaction by the AO that having regard to the accounts of assessee placed before him, it is not possible to generate requisite satisfaction with regard to the correctness of the claim of assessee. It is only then that the provisions of Sub-section 2 and 3 to Section 14A r/w Rule 8D or best judgment determination can be applied. This statutory mandate is not satisfied in the present case.

Case disposed of

2018-TIOL-2606-HC-MAD-VAT

GHARPURE ENGG AND CONSTRUCTION PVT LTD Vs ACCT: MADRAS HIGH COURT (Dated: December 4, 2018)

TNVAT - Writ - Sections 27(1)(a) & 27(3)(c)

Keywords - notice of proposal - refund of excess tax - revision of assessment

During the relevant year, a notice of proposal was issued to the assessee, and consequent to which deemed assessment came to be passed. As per the assessment order passed by the AO, the assessee was entitled to refund a sum of Rs.1,81,31,238/- for A.Y 2013-14 and Rs.1,31,88,267/- for A.Y 2014-15. Therefore, the assessee made the refund claim, followed by various reminders. However, the said request was not considered. Hence, the assessee approached this Court and sought for a direction to the concerned authority to refund the excess amount, as arrived in the assessment order for the A.Ys 2013-14 and 2014-15. The said writ petition was disposed of with a direction to the Revenue Authority to pass appropriate orders on the assessee's application for refund within a period of eight weeks. However, instead of passing an order for refund, the present notice was issued once again, raising the very same contention as raised in the original notice of proposal.

On Writ, the HC held that,

Whether Revenue officer is entitled to revise the assessment in any number of time, provided such revision is within the period of limitation - YES: HC

++ a perusal of the contents of the notice and the present notice would show that they are one and the same in respect of the allegation with regard to the non declaration of the taxable turnover. Further, the present notice does not anywhere indicate as if the earlier assessment made on Sep 09, 2016, is sought to be revised based on certain reasons and circumstances. On the other hand, the present notices are issued, as if it is the original notice of proposal itself, without there being reference to the earlier notice and the assessment orders passed on Sep 09, 2016. No doubt, the AO is entitled to revise the assessment in any number of time, provided such revision is within the period of limitation;

++ however, at the same time, if the AO is proposing to revise the assessment, the notice of proposal to revise such assessment should contain such reasons as to why revision of assessment is sought to be made. In this case, no such reason is found to be stated and on the other hand, the notices are verbatim the same as the one issued previously. Therefore, notices, even though said to have been issued for revising the assessment already made, are not in conformity with the requirement of law for revising the assessment and therefore, the same cannot be sustained. Since the Department themselves have chosen to withdraw the previous notices with liberty to issue fresh notice, these writ petitions are disposed of, by permitting them to withdraw those notices with liberty to issue fresh notice to the assessee in accordance with law.

Case disposed of

2018-TIOL-2605-HC-P&H-CX

CCE Vs YAMUNA GASES AND CHEMICALS LTD: PUNJAB AND HARYANA HIGH COURT (Dated: December 3, 2018)

CX - Assessee submitted that Central Board of Indirect Taxes and Customs has issued circular/instructions dated 11.7.2018 whereby all the pending appeals in High Courts where the tax effect is less than Rs. 50 lakhs are required to be withdrawn by revenue - Assessee stated that the tax effect involved in present appeal is Rs. 40,65,204/- - Revenue was unable to controvert the said instructions and pleads that he has no instructions to withdraw the present appeal - In the present appeal neither the constitutional validity of provisions of an Act or Rule is under challenge nor Notification/Instruction/ Order or Circular has been held to be illegal or ultra vires and particularly keeping in view the tax effect involved, this appeal is disposed of accordingly - However, liberty is granted to revenue to file an application for revival of the appeal in case something survives therein: HC

Appeal disposed of

2018-TIOL-2604-HC-MAD-CUS

SLV TRADING COMPANY Vs CC: MADRAS HIGH COURT (Dated: December 3, 2018)

Cus - A simple prayer sought for in this writ petition is for release of goods declared in Bill of Entry dated 23.10.2018, except the offending goods - There is no dispute to the fact that the imported container was examined by officials and it was found that 552 cartons of offending goods were concealed at the back part of it behind and underneath the declared goods - When such being the case of Revenue and further investigation is in progress, that too, by arresting the proprietor of petitioner, Court is of the view that any order passed on the request of petitioner for releasing the other goods would affect the investigation and further adjudication process and therefore, the petitioner has to only face the investigation and adjudication process, especially, when the allegations made against the petitioner is serious in nature, that about 552 cartons of sewing machine needles were found in excess in the import consignments, which is over and above from the declared goods - As it is now clear that the subject matter goods sought to be released are imported along with offending goods concealed in the same container and that thus, an offence case is made out and investigation is in progress, no reason found to entertain and pass any order in this writ petition: HC

Writ petition dismissed

2018-TIOL-2603-HC-AHM-CUS

SAINATH INDUSTRIES Vs UoI: GUJARAT HIGH COURT (Dated: December 03, 2018)

Cus - What is essentially under challenge is the O-I-O on the ground that competent concerned authority has already rendered a decision and hence the entire exercise undertaken by respondent for issuing the order dated 29.03.2018 was unfortunate, unwarranted and deserves to be quashed and set aside - The respondent submitted that the petitioner could have challenged this order as per the statutory provision of appeal and this court may not exercise its extra-ordinary discretion as alternative remedy is not availed - However, respondents No. 2 and 3 could not justify either re-hearing or rendering the adjudication upon the matter of SCN in any manner - In instant case, as there was no intimation to the subsequent authority, court is not inclined to award any cost but surely would like to record that appropriate communication and inter-departmental exchanges would have avoided - This type of order being passed under which the petitioner was constrained to move this court for seeking appropriate relief - The impugned order is hereby quashed and set aside only on the ground of it being issued without any justification and the same shall have no bearing upon adjudication of the appeal proceedings before the tribunal arising out of the order dated 30.6.2014: HC

Petition allowed

2018-TIOL-2602-HC-AHM-CUS

JINDAL ARYA IMPEX PVT LTD Vs CC : GUJARAT HIGH COURT (Dated: December 13, 2018)

Cus - The Tribunal while dismissing the appeal of assessee had placed reliance upon the decision of Delhi High Court in case of Orion Enterprises 2015-TIOL-1991-HC-DEL-CUS - It was submitted that said decision was subsequently reviewed by Delhi High Court and the court had held in favour of assessee - It was pointed out that Tribunal has, in impugned order, placed reliance upon Notfn 67 issued under Rule 11 of Export (Quality Control and Inspection) Act, 1963 to hold that proportion of non-basmati rice in export being in excess of 20%, the prohibition in terms of notfn applies to all consignments and accordingly, confirmed the order of confiscation and penalty under section 114(1) of Customs Act, 1962 - It was submitted that it is nowhere the case of revenue that the notfn is applicable in case of assessee and therefore, in the absence of assessee having been called upon to show cause in this regard, the Tribunal could not have placed reliance upon the said notfn - Proposed Question stands admitted: HC

Appeal admitted

2018-TIOL-2601-HC-AHM-CUS

ASHOK SHARADBHAI PATEL Vs UoI: GUJARAT HIGH COURT (Dated: December 07, 2018)

FTDR - The petitioner pointed out that in the entire body of SCNs, there are no allegations against Directors - It was pointed out that appellate authority has held the concerned Director liable and responsible for ensuring fulfillment of export obligation and that it was his liability and duty to ensure fulfillment of export obligation, which he failed and neglected to make arrangements for fulfillment of export obligation - It was submitted that in the absence of any such allegations in SCN, the concerned authority was not justified in making out a new case in impugned orders - Reliance was placed upon the decision of this court in Om Vir Singh 2016-TIOL-1409-HC-AHM-CUS, wherein the court has held that by merely providing in the notice that the contents be brought to the notice of directors who may submit their response would not be sufficient notice to them, inasmuch as in notice, no allegations were made against the directors - The court held that such SCN was not a SCN in the eye of law and accordingly, the consequential orders were nullified - Issue Notice returnable on 10th January, 2019 - By way of ad-interim relief, the respondents are restrained from taking any coercive action pursuant to the impugned orders: HC

 

2018-TIOL-2600-HC-MAD-ST

PR CGST & CE Vs CONSOLIDATED CONSTRUCTION CONSORTIUM LTD: MADRAS HIGH COURT (Dated: November 27, 2018)

ST - Whether the Tribunal was right in allowing the appeals filed by assessee without verifying their claim that they completed the services prior to 01.6.2007 and consequently, they are entitled for abatement - The Tribunal took note of an order earlier passed in assessee’s own case 2016-TIOL-1856-CESTAT-MAD - Assessee argued that in impugned common final order, Tribunal straightaway granted relief and quashed the orders passed by Adjudicating Authority without any verification being done with regard to the stand taken by assessee that though the payments were received after 01.6.2007, the services were rendered prior to 01.6.2007 - Since the Tribunal, in said common impugned order, has not given any specific finding with regard to relevant assessment year as to whether the services were rendered by assessee prior to 01.6.2007 though they received the payment after the said date - Assessee is partially right in referring to O-I-O, still court cannot dispense with verification process because the periods involved are different from the periods involved in other cases - Therefore, to that extent, Adjudicating Authority should verify the nature of transactions to ascertain as to whether the decision of Supreme Court in case of Larsen & Toubro Limited 2015-TIOL-187-SC-ST can be applied to the case of assessee - The said common impugned order is set aside and the matters are remanded to Adjudicating Authority - Since the matters have been pending for a quite long period of time, Adjudicating Authority is directed to complete the verification process as expeditiously as possible and preferably within a period of three months: HC

Matter remanded