CASE LAWS
2019-TIOL-13-SC-SERVICE-LB + Case Story
ALOK KUMAR VERMA Vs UoI: IN THE SUPREME COURT OF INDIA (Dated: January 08, 2019)
Central Vigilance Commission Act, 2003 – Writ - Sections 8(1)(a) & (b) & 11; DSPE Act, 1946 – Section 4(1)
Keywords - Bribery charges - Director of CBI - Divestment of powers & functions
The petitioner is the director of the CBI against whom a case of bribery has been made. The complaint regarding bribery was brought forth by the Cabinet Secretary on a complaint received against the Petitioner. The complaint was forwarded to the CVC which initiated the enquiry. During the investigation process, the petitioner made specific allegations against one Rakesh Asthana who is the Special Director, CBI. In light of the entanglements of the corruptions charges, in October, 2018 the CVC issued an interim order against the petitioner divesting him of the powers and functions in respect of the office of the Director, CBI. This interim order was followed by two orders of the DoPT, one which carried the same effect as the interim order of CVC and second appointing one M. Nageshwar Rao as the interim Director of the CBI. The petitioner challenged the three orders. The petition is joined by another petition of one Common Cause which submitted additional prayers to constitute a SIT to probe into corruption by the officers in the CBI and removal of the Special Director, CBI.
On hearing the writ petition, the Apex Court held that,
Whether the expression 'transfer' in section 4B of the DSPE Act, 1946 also means to include actions which impact the functioning of the CBI Director and not just a traditional transfer - YES: SC Larger Bench
Whether CBI Director can be stipped off his powers during interim investigation against him on certain charges - NO: SC Larger Bench
++ in light of the observation made in the case of Vineet Narain and others vs. UOI and anr, an indepth consideration of Section 4A and Section 4B of the DSPE provides the clear legislative intent. This intent is rooted in the purpose of ensuring complete insulation of the office of the Director, CBI from all kinds of extraneous influences as well as for upholding the integrity and independence of the institution of the CBI as a whole. Section 4A(1) of the DSPE Act establishes a committee for the appointment of the Director of the CBI and section 4B(2) provides that “ the Director shall not be transferred except with the previous consent of the Committee”,
++ the term 'transfer', as used in section 4B of the DSPE Act, cannot be understood in its traditional sense and must be interpreted as including actions which impact the functioning of the CBI Director. If the word “transferred” has to be understood in its ordinary parlance then such an interpretation would be self-defeating and would clearly negate the legislative intent. Thus, any order giving rise to a compelling necessity affecting the high position of the CBI must be tested by the opinion of the Committee constituted under Section 4A(1) of the DSPE Act. Thus the orders of the CVC and DoPT should be set aside as not fulfilling the test of legislative intent,
++additionally, as the issue of divestment of power and authority of the Director, CBI is still open for consideration by the Committee, it was directed that until the time the investigation completes, the petitioner was to cease and desist from taking any major policy decisions and will be confined only to the exercise of the ongoing routine functions.
Writ Petition Allowed
2019-TIOL-12-SC-VAT-LB + Case Story
ADDITIONAL COMMISSIONER Vs LOHIYA AGENCIES: SUPREME COURT OF INDIA (Dated: January 08, 2019)
Rajasthan Value Added Tax - Sections 25, 36, 55 & 61; Entry 56 of Schedule IV; Entry 1 of Schedule V
Keywords - Gypsum Board - Gypsum in all its forms - Residual entry
The assessee-company is engaged in dealing in Gypsum Board, which it procures from M/s India Gypsum Ltd. (IGL), which is engaged in manufacturing such items. During the relevant AY, IGL filed application u/s 36 of the Rajasthan Value Added tax Act, seeking to know whether Gypsum Board classified under Entry 56 to Schedule IV of the Act & so taxable @ 4% or else it was classifiable under the residual Entry 1 of Schedule V & so taxable @ 12.5%. The Additional Commr. held that the item in question was to be classified under the latter entry.
During the relevant AY, the assessee's premises were inspected. Thereupon, it was noted that the assessee was discharging VAT @ 4%, despite the goods not being classifiable under Entry 56 of Schedule IV. Hence duty demand was raised for recovery of the differential amount of tax. The appellate authorities sustained such findings. When the assessee filed revision petition before the High Court, such findings were set aside.
On appeal, the Apex Court was of the view that,
Whether the addition of the expression 'in all its forms' to an existing taxing entry, expands its scope & latitude - YES: SC Larger Bench
Whether Gypsum Board can come under the broad sweep of the expression 'Gypsum in all its forms' & so be classifiable under Entry 56 to Schedule IV of the Rajasthan VAT Act, attracting VAT @ 4% - YES: SC Larger Bench
++ it is found that that the amended Entry 56 of Schedule IV of the RVAT, read as ‘gypsum in all its forms’, would include ‘gypsum board’ under the term ‘all its forms’. It can hardly be doubted that a meaning has to be given to the Entry made by the legislature, expanding the original Entry from ‘gypsum’ to ‘gypsum in all its forms’. If the object was to include only ‘gypsum’, then why would the Entry be changed to ‘gypsum in all its forms’? The corollary would also be as to what is meant by ‘in all its forms’, as it is not, as if mere geometrical alteration of a shape would form part of the Entry. In such a situation, the original Entry itself was comprehensive enough to have included it. It is noticed that the view taken by the Bombay High Court in an almost identical situation except that the Entry there was ‘of all forms and descriptions’. But the discussion was more or less confined to the expression ‘of all forms’;
++ a reference to the timeless statement of Hand, J. that ‘words must be construed with some imagination of the purposes which lie behind them’, would require us to construe the expression ‘in all forms’ being added to ‘gypsum’ to naturally include not only just gypsum in its original form but in different forms as well;
++ all these examples show that wherever an expression ‘in all its forms’ is used, it has resulted in an expanded meaning, which is a logical corollary of such an expression being added to the original Entry. To take a view to the contrary in the given situation would amount to giving no meaning to the added expression as there are really not too many possibilities on what could have been included in such an expression;
++ it is noted that in terms of notification No.S.O.36.No.F.12(59)FD/Tax/2014-14 dated 14th July, 2014, the RVAT was amended to include, in Schedule V, a separate Entry under item No.19(viii) ‘gypsum board and other false ceiling material’. Thus, the Legislature by a conscious decision in 2014, sought to create a separate Entry for gypsum board, which was not the case in respect of the assessment years in question. This belies the endeavor to include gypsum board in the residuary Entry, before such specific inclusion as then there would have been no need for such an Entry. The obvious attempt is to exclude it from ‘gypsum in all its forms’ in Schedule IV of RVAT and create a separate Entry in Schedule V, whereafter it would naturally be governed by the tax rate applicable to the Entry in question. Hence the Revenue's appeals are dismissed.
Revenue's appeal dismissed
2019-TIOL-61-HC-AHM-CUS
PREMIUM PULSES PRODUCTS Vs UoI: GUJARAT HIGH COURT (Dated: December 19, 2018)
Foreign Trade (Development and Regulation) Act, 1992 [Act] - In SCA Nos.16765, 17290 and 17573 of 2018, the petitioners have challenged notification no.19/2015-2020 dated 5.8.2017 and seek a direction to the respondents to allow the petitioners to import the goods in terms of the contract - in SCA No.17664 of 2018, the petitioner has challenged notification no.19/2015-2020 dated 5.8.2017, notification no.22/2015-2020 dated 21.8.2017 and notification no.6/2015-2020 dated 4.5.2018 issued by the second respondent Director General of Foreign Trade [DGFT] as well as Trade Notice No.19/2018 dated 25.10.2017 and Trade Notice No.6/2018-19 dated 11.5.2017 and seek permission to clear 15000 MT of Green Moong imported from Gold Key Food Stuff Trading LIC Deira, Dubai, UAE in terms of Proforma Invoice dated 9.4.2018 and also seek permission to clear 40,000 MT of Yellow Peas and 18,500 MT Pigeon Peas imported from Shafaf Foodstuff Trading F.Z.E. Abu Dhabi in terms of Sales Contracts dated 10.4.2018 and 11.4.2018.
Held: On a perusal of the impugned notifications, it is crystal clear that the DGFT has not exercised powers under section 3 of the Act but has merely authenticated an order which relates to the Directorate General of Foreign Trade in accordance with the Authentication (Orders and other Instruments) Rules, 2002 - the contention that the impugned notifications have been issued by the DGFT in exercise of powers under section 3 of the Act, and is, therefore, ultra vires sub-section (3) of section 6 of the Act, does not merit acceptance - the contention that the authentication by the DGFT can be only in respect of administrative orders is not in consonance with the provisions of clause (2) of Article 77 of the Constitution - on a plain reading of sub-section (3) of section 19 of the Act, it is evident that the requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order - in other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament - under the circumstances, apart from a bare assertion, there is nothing to show that the provisions of sub-section (3) of section 19 of the Act have not been satisfied, even otherwise, the contention based upon non-compliance with the provisions of sub-section (3) of section 19 of the Act deserves to be rejected - the challenge to the validity of the impugned notifications, fails - consequently, the petitions also fail, and are, accordingly, dismissed : HIGH COURT [para 12, 13, 16, 18]
Special Civil Applications dismissed
2019-TIOL-60-HC-KERALA-CUS
PLUS MAX DUTY FREE PVT LTD Vs UoI: KERALA HIGH COURT (Dated: December 21, 2018)
Cus - (1) Balanced between the departmental necessity and public interest, is the business banishment the only just measure available pending the investigation? (2) Have the officials been biased - acted in bad faith (3) In an administrative set up, can an official in the lower rung ignore a directive from the higher rung, on any assumed notion - say, that he acted quasi-judicially but the directive is administrative.
Held - The Commissioner of Customs does have the statutory power to suspend the license - and it needs no notice to the affected person, much less an opportunity of hearing - the Chief Commissioner of Customs [Ext.P21] has not interdicted the order of the Commissioner of Customs [Ext.P18]; what he has interfered with is the order of the Superintendent of Customs [Ext.P19] restraining the Company from carrying on its operations in the duty-free shops at the Airport - it is a well-known proposition of law that a void order compels no compliance; its validity can be questioned even collaterally - this proposition has not been fossilized, thus remaining immune from decisional dilution - it is reckoned that, at least to the extent of the Duty Free Shops, the order of the Chief Commissioner binds the authorities - it is allegedly a matter of fudging accounts - and that fudging presumes illegal gains as the motive - and that motive translates into diverting foreign liquor clandestinely into open market - whether that would supply any departmental justification to employ, rather indiscriminately hurl, epithets like 'national security', indiscriminately, as if it were an unpierceable armour the Customs Department wears so none could question it - it is not - the suspension of licence cannot be an arm-twisting devise to compel somebody's presence or to extract what one desires - for securing any witness, the Department has provisions galore in the Customs Act and the Rules - the investigation seems to be in the throes of getting completed - so it is inadvisable for the Court to express any opinion-leave alone rule-on the issue of duty evasion - the Airport Authority's allegations are disturbing, casting a shadow on the investigative impartiality and the departmental detachment - neither seems to be present - going by, at least, the Airport Authority's repeated allegations and affidavit, this Court must conclude that the allegation of bias, vindictiveness, and abuse of power are not entirely baseless - for drawing conclusions at the preliminary stage of investigation-and spreading that first blush opinion as if it were irrefutable-almost amounts to calumny - at this stage, this Court is prepared to believe the officials have not suffered from any bad faith - but they are biased, predetermined - in the minds of both the Company and the Airport Authority, the danger of official bias more than a mere ghost of doubt - under these circumstances, the investigation that has so far taken place need not be scuttled - but from now onwards, until the inquiry or investigation concludes, the Chief Commissioner of Customs will entrust the matter to some other official than Mr.Sumit Kumar, the Commissioner of Customs - because of the finding that it is only a case of bias rather than bad faith, this Court refrains from drawing an adverse inference against the 6th and 7th respondents for their not filing the counter affidavits, at an appropriate stage of the proceedings - the investigation, it seems, began in December 2017, and license suspension took place in April 2018 - besides a bald assertion, the Company officials have been uncooperative, this Court fails to see any other major compelling reason for the authorities to suspend the license - and that allegation of non-cooperation remains unconvincing, for the record presents a different picture - the Customs Department has an efficacious mechanism to impose sufficient checks on the Company to ensure that pending the inquiry, it accounts for every sale transaction - in fact, the Department has not alleged that the Company has been guilty of any malpractice - so it is a question of balancing the equities - pitted against an apprehension of the Company's fudging the account is the public interest: customer convenience and revenue earning - the public interest must prevail - the orders of the Commissioner of Customs and the Superintendent of Customs are set aside and the Customs Department is directed to allow forthwith the Company to carry on its business operations, of course under the strict supervision of the departmental officials, as the Chief Commissioner of Customs deems proper - then, in the interest of investigative fairness, the Chief Commissioner of Customs will entrust to some other officer than the 10th respondent the task of completing the investigation and taking all other consequential measures, but by using the same material so far the Department has gathered - the writ petition is accordingly, disposed of : HIGH COURT [para 54, 57, 59, 60, 62, 72, 77, 78, 97, 98, 101, 103, 105, 106, 107]
Writ Petition disposed of
2019-TIOL-59-HC-MAD-CUS
CC Vs PPN POWER GENERATING COMPANY LTD: MADRAS HIGH COURT (Dated: December 19, 2018)
Cus - Appellant is contending that the appeal filed by Department before Tribunal is maintainable de hors the monetary limit fixed in the Board's circular dated 17.12.2015, as the issue raised is a recurrent issue - Though the tax effect may be low, the circular has carved out exceptions in certain cases and one such exception pertains to classification dispute - The circular itself carves out certain exceptions, the Department should not be foreclosed from raising such a plea before Tribunal and if the Tribunal is satisfied that the case would fall within the exceptional circumstances, then the matter needs to be dealt with on merits or otherwise, the Tribunal will be well within its jurisdiction to close the appeal on the ground of low tax effect - The Department before Tribunal had not specifically pleaded the said point and had it been done, the Tribunal would not have rejected the appeal - However, court do not wish to stand on technicalities - The matter should be remanded to the Tribunal for a fresh consideration - The Tribunal shall hear the Revenue regarding the contentions that the dispute raised by Revenue is a classification dispute and that they are entitled to contest the appeal irrespective of the monetary limit as per Sub-Clause (3) of paragraph 3 of the circular dated 17.12.2015 as reiterated in the instructions: HC
CMA allowed
2019-TIOL-58-HC-KAR-CX
INDIA SUGARS AND REFINERIES LTD Vs CC & CE: KARNATAKA HIGH COURT (Dated: December 07, 2018)
CX - This appeal is listed seeking condonation of delay of 306 days in filing the appeal - Assessee has stated that the reason for delay has occurred on account of skeletal operation being conducted by assessee-company and it is not operating as a full-fledged concern - No doubt, there is a limitation period of 180 days to file the appeal, but there is a delay of 306 days in filing the appeal - The prayer sought by assessee with regard to condonation of delay has to be considered in context of reasons as to why this appeal has been filed by assessee - Assessee is seeking an opportunity of being heard before Tribunal as they were not represented by its representative or by counsel on the day when the final argument was heard and the appeal was disposed off by the Tribunal - Having regard to the fact that principles of natural justice are meant to sub-serve justice in general, delay of 306 days in filing the appeal would have to be condoned subject to the payment of cost of Rs.25,000/- - The same shall be remitted within a period of two weeks - On a bare perusal of impugned order, it is noted that department representative had appeared and was heard, but "none appeared on behalf of the respondent", the respondent being the assessee herein - Both in the appeal filed by department and in the cross objection filed by assessee, there was no representation on behalf of assessee - Consequently, the assessee has not been heard in the matter - Without venturing to adjudicate this appeal on merits, the impugned order is set aside and matter is remanded to the Tribunal for a fresh adjudication in accordance with law after giving an opportunity to both parties: HC
Matter remanded
2019-TIOL-57-HC-AHM-CT
RAJSHREE AUTO ENTERPRISE Vs STATE OF GUJARAT: GUJARAT HIGH COURT (Dated: December 14, 2018)
Gujarat Sales tax - Writ - Sections 41 & 44
Keywords - attachment of property - compliance of pre deposit - pendency of stay
THE assessment order in the case of present dealer came to be passed u/s 41 or 44 of Gujarat Sales Tax Act, in addition to a demand of tax, penalty & interest came to be confirmed. Not satisfied, the dealer approached the FAA, viz., the Joint Commissioner of Commercial Tax, who partly allowed the appeal. The dealer therefore carried the matter before the Gujarat VAT Tribunal, and along with the appeal, it had also moved a stay application. In the meanwhile, during the pendency of the stay application, the Commercial Tax Officer passed an order of attachment of the properties of dealer. Thereafter, the Tribunal by an order, directed the dealer to make payment of Rs.1,00,000/- within a period of one month and further directed that on payment of such amount, the stay would come into operation. In compliance of the said order, the dealer had made payment as directed by the Tribunal. In the light of the order passed by the Tribunal granting stay, the assessee approached the CTO for lifting the attachment; however, such request was turned down.
On Writ, the HC held that,
Whether the Commercial tax Department is permitted to make the order of attachment of dealer's property, during pendency of stay application before the VAT Tribunal - NO: HC
++ the questions that arises for consideration in the present case are: firstly, as to whether the Department was justified in making the order of attachment despite the pendency of the stay application before the Tribunal; and secondly, as to whether after the Tribunal had granted stay against recovery of the amount in connection with the demand raised, whether it is permissible for the Department to continue with the attachment. Insofar as the first question is concerned, the same is no longer res integra as this court in the case of Automark Industries (I) Ltd. v. State of Gujarat, has held that: "....While it is true that under rule 27 of the rules, the CTO is empowered to call upon the dealer to pay the amount assessed within a period of thirty days from the date of service of such notice, however, when the dealer has preferred an appeal together with the stay application within the prescribed period of limitation, the CTO is required to act in a reasonable manner in connection with the notice issued u/d 27 of the Act. That if the stay applications are allowed or partly allowed, the dealer would be required to deposit only a part of the demand covered under the notice or may be even granted complete unconditional stay. In the absence of any exceptional circumstances, there is no warrant for the CTO to proceed to initiate coercive recovery in exercise of powers u/s 44 of the Act by attaching the bank accounts of the dealer...." This decision would be squarely applicable to the facts of the present case, insofar as the first question is concerned;
Whether once the VAT Tribunal had stayed the recovery by virtue of its order, then Commercial tax Department is obligated to lift the attachment on the properties of the dealer - YES: HC
++ as regards the second question, according to the CTO, since the Tribunal has only granted stay against recovery, they are not required to lift the attachment on the property in question. In this regard, a perusal of the provisions of the Gujarat VAT Act, shows that the powers exercised by the CTO while attaching the property of the dealer are relatable to section 46 thereof, which makes provision for special powers of tax authorities for recovery of tax as arrears of land revenue. Sub-section (1) of section 46 of the GVAT Act provides that for the purpose of effecting recovery of the amount of tax, penalty or interest due from any dealer or other person by or under the provisions of that Act or under any earlier law, as arrears of land revenue, the Commissioner, the Special Commissioner, Additional Commissioner and the Joint Commissioners shall have and exercise all the powers and perform all the duties of the Collector under the Bombay Land Revenue Code, 1879. A perusal of the order reveals that the same has been passed u/s 155 of the Code after issuance of notices u/s 152 and 200 thereof. Since the powers exercised by the CTO are u/s 155 of the Code, it evident that the same is in the nature of recovery proceedings. Therefore, once the Tribunal had stayed the recovery by virtue of its order, the Commercial tax Department were bound to respect such orders and lift the attachment on the properties of the dealer.
Assessee's petition allowed
2019-TIOL-56-HC-MUM-IT
PR CIT Vs RAJESH D NANDU HUF: BOMBAY HIGH COURT (Dated: December 18, 2018)
Income Tax - Sections 143(1) & 148
Keywords - Income escaping assessment - Reasons to believe - Re-assessment
THE assessee, an HUF, is the proprietor of a firm, and reflected brokerage income in the relevant AY. It declared income of about Rs 1.34 lakhs in the relevant AY. Its assessment for such AY was completed. Thereafter, the AO proposed to re-open the assessment for the relevant AY, on grounds that the assessee received a gift amount of about Rs 22.7 lakhs from a donor located abroad and that such donor was not related to the assessee. The AO thus questioned the genuineness of the gift. Another reason given was that the return had only been processed u/s 143(1). On appeal by the assessee, the Tribunal held that the AO was obliged to make further, in-depth enquiry and gather material, so as to entertain a belief that income escaped assessment. Hence it found the re-opening of assessment to be invalid.
On appeal, the Tribunal held that,
Whether reasons for re-assessment must disclose the train of thoughts which led to the belief that taxable income had escaped assessment - YES: HC
Whether re-assessment must be based on some material available with the AO and cannot be done in a manner of fishing, i.e., in the hope of finding some incriminating material - YES: HC
++ there can be no dispute that in case where a return of income has been processed under Section 143(1) of the Act, the Revenue has a greater latitude in reopening an assessment. However, even in such cases, the reopening of an assessment can only be done if there is reason to believe that income chargeable to tax has escaped assessment. The reason recorded in support of the reopening notice must disclose the basis of the reasons to believe that income chargeable to tax has escaped assessment. The reasons must provide a link between the material available and the formation of reasonable belief that income chargeable to tax has escaped assessment. The reason to believe must be based on some material available with the AO and no reasonable belief can be formed without some material to support the same;
++ the order of the Tribunal correctly held that the reopening of the assessment cannot be for the purpose of fishing inquiry. The reopening of the assessment has to be based on some material which is available with the AO which would give rise to reason to believe that the income chargeable to tax has escaped assessment. The reasons as recorded in support of the notice to doubt the genuineness of the gift is not based on any material. At the highest, it is only a suspicion subject to enquiry. In fact, this is a case of fishing enquiry. Thus, there is no material available with the AO to have the reason to believe that income chargeable to tax has escaped assessment. Such view taken by the Tribunal cannot be faulted.
Revenue's appeal dismissed
2019-TIOL-55-HC-KERALA-IT
CIT Vs NP ABRAHAM: KERALA HIGH COURT (Dated: December 13, 2018)
Income Tax - Sections 147, 154, 230A & 263
Keywords - Construction of multi-storey complex - Market value of property
THE assessee, along with another person, owned three properties each. In the assessee's portion of the property, there was a two-storeyed building. The assessee then entered into an agreement for developing the property. For this, the land owners agreed to sell 38% of the property to the builder, while the owners retained 62% of the undivided share of the land. During the relevant AY, the assessee filed an application u/s 230A for sale of the property. The AO held that in a wealth tax assessment in a subsequent AY, the valuation was shown at a lower value. The AO relied on the wealth tax assessment as also a valuation proffered by the assessee, valuing the property at Rs.2,43,000/-, vide certificate dated 08.05.1987, in the same year. On subsequent appeal, the Tribunal accepted the valuation adopted by the assessee, on grounds that the value fixed for wealth tax purposes on the basis of rent capitalisation method is not always real, as well as by considering other independent evidence put forth by the assessee.
On appeal, the High Court held that,
Whether the sale consideration of some property can be determined by considering its market value, rather than the value stated in the sale agreement - NO: HC
++ the agreement specifically shows that the consideration to the assessee is 31% of the built up area. What benefit accrues to the assessee is of no consequence. The builder only promised construction of a super built up area in a multi-storeyed complex and handing over of 31% of the area. The consideration which passed from the builder to the assessee is only the cost of construction. This was the specific agreement between the parties. An artificial exercise cannot be carried out, by which the market value of the constructed area can be determined and the same computed as the sale consideration which is not the specific terms of the agreement between the builder and the land owner. The court need not look at whether the assessee kept the area assigned to him, for himself or sold it; which is irrelevant to determine the construction cost. The question with respect to computation is answered in favour of the assessee. In this case, the issue of exemption u/s 54 or 54F does not arise at all.
Revenue's appeal dismissed
2019-TIOL-54-HC-KAR-IT
KRITA ENGINEERING PVT LTD Vs ACIT: KARNATAKA HIGH COURT (Dated: December 19, 2018)
Income tax - Sections 271(1)(c) & 274
Keywords - absence of specific charges - levy of penalty
THE assessee company preferred the present appeal challenging the action of ITAT in upholding the penalty levied by AO u/s 271(1)(c), even though the notice issued u/s 274 did not indicate the specific ground for initiation of penalty proceedings and was thus not in accordance with the provisions of law on the fact and circumstances of the case.
On appeal, the HC held that,
Whether notice issued u/s 274 should specifically state the grounds mentioned u/s 271(1)(c), as to concealment or furnishing of incorrect particulars of income - YES: HC
++ it is pointed out that the substantial question of law under present appeal is covered by the judgment of this Court in case of THE COMMISSIONER OF INCOME TAX AND ANOTHER Vs. MANJUNATHA COTTON AND GINNING FACTORY - 2013-TIOL-536-HC-KAR-IT. Therefore, following the said judgment of this Court, the substantial question of law is answered against the Revenue.
Assessee's appeal allowed
2019-TIOL-53-HC-ALL-IT
GOPAL KESARWANI Vs DGIT: ALLAHABAD HIGH COURT (Dated: December 12, 2018)
Income Tax - Writ - Sections 131 & 153A
Keywords - Pradhan Mantri Garib Kalyan Yojana
THE assessee, an individual, was served SCN u/s 153A of the Act, during the relevant AY. The assessee filed the present writ, apprehending that in the block assessment for those AYs, the AO might include the income declared by the assessee under the Pradhan Mantri Garib Kalyan Yojana, for which the assessee had already paid taxes of about Rs 6.01 crores, despite the fact that under clause 199I of the scheme, the amount of undisclosed income declared in accordance u/s 180 shall not be included in the total income for any AY. This is conditional upon the declarant paying taxes & surcharges u/s 184 as well as penalty u/s 185, within the due date prescribed u/s 187(1).
In writ, the High Court held that,
Whether charges made in an SCN or a chargesheet are not adverse orders or cause of action, due to which writ petition filed against them gets invalidated, due to being premature - YES: HC
++ ordinarily a writ petition should not be entertained against a mere SCN or charge sheet as the challenge is premature. An SCN or charge sheet is not an adverse order or something which constitutes a cause of action unless the same has been issued by a person having no jurisdiction. A writ petition is maintainable only when a right of parties is infringed, which normally happens when a final order imposing punishment or having adverse effect is passed. An SCN by itself in most cases does not require interference unless it is found to be wholly without jurisdiction or wholly illegal. In Union of India versus V.K. Laboratories, the Supreme Court emphasized abstinence from interference at the stage of issuance of SCN and need to relegate the parties before the authorities concerned unless a clear case for lack of jurisdiction or abuse of process of law is made out;
++ considering the written instructions submitted by the Revenue, this court is satisfied that the apprehension and the grievance of the assessee has duly been taken note of by the Revenue and it is hoped that it will be taken into consideration, while making the final assessment order under Section 153A. The court's interference in this matter is not warranted.
Assessee's writ petition disposed of
2019-TIOL-52-HC-MAD-IT
ANIDRUDH KHEMKA Vs CIT: MADRAS HIGH COURT (Dated: December 19, 2018)
Income Tax - Writ - Section 143(3)
Keywords - Stay on recovery of demand
DURING the period of dispute, the AO passed an assessment order in respect of the relevant AY, raising duty demand. The assessee then filed petition seeking tax on the recovery of the duty demanded. The AO directed the assessee to pre-deposit 15% of the duty demanded. The assessee then approached the jurisdictional CIT, seeking stay on the entire amount of tax deposited. However, the CIT rejected the application through a single-line order. Hence the present writ.
In writ, the High Court held that,
Whether an order rejecting the assessee's petition for stay on recovery of duty demanded, is liable to be set aside where the findings in such order have been recorded in a single line - YES: HC
++ it is seen that as against the order of assessment, the assessee has filed an appeal before the CIT (A) and the same is pending. Therefore, it is evident that the order of assessment has not reached its finality. Needless to say that the assessee is entitled to file stay petition before the Appellate Authority and canvas all the points in support of the stay petition. The similar view is expressed by the Judge of this Court in W.P.No.5794 of 2018 dated 05.04.2018. However, in this case, they have gone before the Principal Commissioner and sought for stay, who unfortunately rejected the petition by a single line order, without stating any reason or finding as to why the application is liable to be rejected. Therefore, such order of the CIT cannot be sustained. However, this Court is not inclined to remit the matter back to the CIT for considering the petition once again, since the assessee is entitled to file such stay petition before the Commissioner of Income Tax (Appeal) himself, where the appeal is admittedly pending;
++ thus the order of the CIT is set aside. Consequently, the assessee is directed to file a stay petition before the Commissioner of Income Tax (Appeals) in the pending appeal within a period of two weeks from the date of receipt of a copy of this order.
Assessee's writ petition allowed
2019-TIOL-95-CESTAT-MUM + Case Story
COLOGIX SYSTEMS LTD Vs CCE : MUMBAI CESTAT (Dated: December 18, 2018)
CX - Notfn. 8/2003-CE - What constitutes simultaneous availment - manufacturing and clearing own goods under exemption and branded goods on payment of CE duty by availing MODVAT/CENVAT is not simultaneous availment but clearing own goods under exemption as well as on payment of duty by availing credit, which the notification does not provide, is ‘simultaneous availment' - an interpretation as contended by Revenue would lead to making the notification infructuous/otiose - an interpretation which deviates from the legislative intent and leads to a bsurd results has to be avoided - Central Excise Authorities cannot control the Business plans of a manufacturer - difference of opinion - Matter referred to third Member: CESTAT
Reference to third Member
