News Update

Nobel Prize for Physics goes to three scientists for study of electron dynamics in matterTremors of 5.5 magnitude scare NCR region; Epicentre is close to NepalCore Sector grows by 12% in August monthDRI lands hard punch on illicit wildlife trade; 955 live Gangetic Turtles rescued, 6 persons apprehendedOver 30 Lakh Audit Reports filed on I-T e-filing portal till Sept 30India, B'desh hold Joint Working Group on Trade meet; deeper trade ties, sustainable development on agendaRecycling on Wheels Smart-ER - Govt flags off new initiative for recycling e-wasteDecriminalisation of offences - A positive stepBSF seizes 2.7 kg drugs and China-made drones in PunjabInflation Reduction Act of America: Lessons for Indian Tax Administration!Crypto fraud in HP - Commoners lose over Rs 200 CroreST - Refund - Once it is found that assessee was not liable to be subjected to tax, it would not be bound by the limitation as prescribed u/s 11B of the Act: HCUS Speaker McCarthy on cusp of being voted outGST - ITC Refund - Zero Rated supplies - COVID-19 - Extension of time limit - Benefit of notification 13/2022-CT not provided as same was issued after rejection of application - Respondents to process application and grant interest: HCPope Francis does not mind blessing same-sex marriageST - Revenue has not denied the fact that service if at all rendered by appellant, was works contract per se, same cannot be taxed prior to 01.06.2007: CESTATWHO recommends Malaria vaccine developed by Oxford Univ and Serum InstituteST - In view of CBEC circular 112/06/2009-ST if the service provider providing various services to exporter, but has registration under one service, refund cannot be denied on this ground: CESTATElon Musk blasts Justin Trudeau for suppressing free speech in CanadaI-T- Writ Court's intervention is warranted only where the matter entails arbitrariness, lack of jurisdiction or contravention of principles of natural justice ; issues relating to assessment or manner of computation of income can be looked into by ITAT: HCWhatsApp bans over 74 lakh accounts in IndiaI-T - Show Cause Notice issued under Section 142(1) is invalidated where it allows only three days' time to the Assessee to file response thereto: HCCBDT receives over 30 lakh tax audit reports till Sept 30I-T- Draft assessment order merits being quashed where passed without considering reply submitted by Assessee to Show Cause Notice received: HCIndonesian President flags off BRI-funded high-speed train ‘Whoosh’ connecting China at 350 km per hourI-T- As per settled precedent, re-opening of assessment is invalidated, where it is triggered by change of opinion on part of the AO : HC
Service Tax - Appeal - Pre-deposit - Pay or Perish? - HC recalls its own order and remands case to CESTAT - Another Sad Stay Story

DDT in Limca Book of Records - Third Time in a rowTIOL-DDT 2405

PLEASE recall our Story "Service Tax - Appeal - Pre-deposit - Pay or Perish?" in TIOL- DDT 2285 - 03.02.2014.

In a service tax appeal, the adjudicating authority had confirmed a demand of about Rs. 33 Crores. The service was in relation to irrigation projects of the Government of Andhra Pradesh. The assessee would have been under the genuine impression that no Service Tax was payable as identically placed assessees were not paying any tax; the department targeted some contractors and issued notices. There was confusion with some parties getting relief at appellate stages and some not getting such benefit. In this case, the CESTAT ordered pre-deposit of about Rs. 30 Crores (of the 33 Crores demand) of tax and also ordered payment of interest in addition. Penalty was mercifully waived. 2013-TIOL-1779-CESTAT-BANG

On appeal, the High Court passed a very quotable order observing that the indiscriminate denial of the power of waiver is like telling the party to pay or perish. 2014-TIOL-137-HC-AP-ST However the High Court still ordered pre-deposit of 50 per cent of the tax demanded.

The harried assessee had to approach the Supreme Court.

The Supreme Court on 19.02.2014 ordered stay of recovery till 28th March 2014. The case was listed on two more days and on 07.05.2014, the Supreme Court allowed the assessee to withdraw the Special Leave Petition, so as to approach the High Court by filing a review application.

And the assessee returned to the High Court with a review petition.

In Review the High Court on perusal of the Tribunal's order found that several contentions urged on behalf of the petitioner were taken into account, and they were dealt with extensively. But from the order, it did not appear that the ground of financial incapacity or inability was dealt with by the Tribunal, obviously because it was not pressed. The discussion was undertaken mostly on the contentions, touching upon the legality, or prima facie case.

The High Court recalled its own earlier order and setting aside the Tribunal's order, remanded the case to the Tribunal for the exclusive purpose of paving the way for the petitioner to urge the ground of their financial weakness, or inability, before the Tribunal.

The Department was directed not to take any coercive steps to recover the amounts involved, till the disposal of the Stay petition by the Tribunal.

The Stay matter reached all the way till Supreme Court and it is back to where it all started.

Please see 2014-TIOL-1231-HC-AP-ST

Babuji do you own ship/aircraft/yacht? Inform Department by 15 September

AS reported by TIOL on 22 July, Government has notified the Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the limits for Exemption of Assets in Filing Returns) Rules, 2014 under the Lokpal and Lokayuktas Act, 2013 on 14.07.2014.

As per the Act and the Rules framed there under, every public servant shall file declarations, information or return as the case may be regarding his assets and liabilities as on the 31st day of March every year to the competent authority, on or before the 31st day of July of that year. As per Section 2 of the Act, "Public Servant" covers all Central Government servants (Groups A, B and C). Therefore, all Central Government servants are required to file the declaration, including the lowest.

The returns as per the new rules are to be filed on or before the 15th day of September2014.

DoPT requests all Ministries/Departments to bring the provisions of the Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the limits for Exemption of Assets in Filing Returns and the limits for Exemption of Assets in Filing Returns) Rules 2014 to the notice of all concerned for compliance.

One of the particulars required to be furnished by every employee is details of Motor Vehicles/Aircrafts/Yachts/ Ships owned by the Government Servant!

The statement also seeks details of Jewellery, Bullion and valuable thing(s) - now, what does this mean?

The Form-II statement ends by seeking details about "Any other assets". Perhaps what they mean is that they wish to cover any other thing(s) which they could not visualize as of now - eg. An iPhone, a communication satellite, a pet Labrador or a German Shepherd etc. etc.

And last but not the least, the Government servant is also required to furnish details about the properties owned by spouse and dependent children.

Are any Help Desks set up to assist the public servant in filling up this return?

DoPT Letter in F. No. 11013/3/2014 - Estt(A), Dated: July 23, 2014

Central Excise Supdt and Inspector arrested by CBI - Hot chase

A Superintendent of Central Excise was arrested in Vadodara on Friday for accepting a bribe of Rs.10,000 for issue of a Central Excise Registration Number!

When the CBI team confronted the Superintendent immediately after the acceptance of the bribe amount, his Inspector who had processed the application of the complainant on file, tried to escape from the office building with the relevant file. He also tore apart the relevant document containing his signature & the Superintendent's signature and threw the torn pieces near the boundary wall of the office in an attempt to destroy the evidence. However, the Inspector was chased and caught by the CBI. The torn pieces of the relevant documents have also been recovered. Cash amount of Rs. Three Lakhs was recovered from the residence of the Superintendent apart from relevant documents. The Inspector was also arrested. Both are under CBI custody.

Trying to buy that yacht?

FM explains his concept of Retrospective Taxation and Stagflation

WHILE replying to the discussion on the Finance Bill, the Finance Minister Arun Jaitley said,

Assuming there is a tax collected over a period of 40 years and the tribunal comes to a finding that there is some technical flaw in this, are we going to refund 40 years of taxation already collected? Therefore, we retrospectively legislate to legitimise what has already been collected. That is a sovereign right. So, I cannot be faulted for saying that Parliament has a sovereign right. But I have said, as a policy the present Government will not use that right to create new liabilities. That is an assurance we wanted to give to investors within the country and investors outside so that we are able to assure people of a stable tax regime.

Stagflation: It is actually a contradiction in terms. If you have stagnation, that is normally a sign of recession because there is no economic activity. In inflation, the money supply is increased. So, there is a lot of activity otherwise. But there are rare cases and that is why this term ‘stagflation' was coined to indicate that you have a slowdown in the economy and inflation at the same time; and therefore it was referred to as stagflation. I think, it will be too extreme to say that we had reached that situation. Our growth had slowed down but that there was stagnation may be perhaps an overstatement. It is this slowdown which we really need to fight today.

No Need of Robes for Lawyers in Lower Courts and no coats during summer

A black coat is a symbol for a lawyer, but when you enter a crowded court in summer, the stink emanating from these coats with daily accumulation of sweat is unbearable. It seems the Tamil Nadu Federation of Women Lawyers has represented to the Bar Council of India seeking relaxation of the dress code for Advocates during summer.

It is already there. As per the Bar Council of India Rules,

Legal Corner IconWearing of Advocates' gowns shall be optional except when appearing in the Supreme Court or in High Court


except in Supreme Court and High Courts during summer wearing of black Coat is not mandatory.

Though it may be difficult to wear those black coats during summer, is it proper to see lawyers agitating outside the courts and on the roads in their black coats and robes?

Wonder what these lawyers are doing? They are throwing stones at policemen!

Company Law - Govt. Notifies Class of Companies for Section 203

AS per Section 203(1) of the Companies Act, 2013,

203. (1) Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,-

(i) managing director, or Chief Executive Officer or manager and in their absence, a whole-time director;

(ii) company secretary; and

(iii) Chief Financial Officer:

Provided that an individual shall not be appointed or reappointed as the chairperson of the company, in pursuance of the articles of the company, as well as the managing director or Chief Executive Officer of the company at the same time after the date of commencement of this Act unless,-

(a) the articles of such a company provide otherwise; or

(b) the company does not carry multiple businesses:

Provided further that nothing contained in the first proviso shall apply to such class of companies engaged in multiple businesses and which has appointed one or more Chief Executive Officers for each such business as may be notified by the Central Government.

Now the Government has notified the class of companies as per the above proviso, as public companies having paid-up share capital of rupees one hundred crore or more and annual turnover of rupees one thousand crore or more which are engaged in multiple businesses.

MoCA Notification Dated: July 25, 2014

Jurisprudentiol – Wednesday's cases

Legal Corner IconService Tax

Appellants are only collecting advertising and same is forwarded to various newspapers for publication - since they are not undertaking any activity connected with making, preparation, display etc., they are not an ‘Advertising Agency' - no Service Tax payable - orders set aside and appeals allowed: CESTAT

THE main activity of the appellant is to serve Mulay Group of Companies as agent for advertising in newspapers etc. by collecting the proforma of the advertisements through Mulay Group of Companies and forwarding the same to the desired newspaper for advertisement. If any person who wants to publish any advertisement in any of the newspapers directly goes to the newspaper, company does not give any discount. However, if the advertisement has been sent to the desired newspaper through commission agent the publishing newspaper company will give 10 to 15% discount in the form of commission. The appellants are only collecting and forwarding the advertisement to the desired newspaper and not performing anything concerning making, preparation, display or exhibition of advertisement. Hence the appellants are not providing any service which comes under the scope of advertising agency service.

Income Tax

Whether the expression 'Tax, Duty, Cess or Fee or by whatever name called' mentioned in provisions of Sec 43B brings under its sweep port dues payable by assessee to government agency - NO: ITAT

THE assessee is a Special Purpose Vehicle designed for completion of work as per the agreement entered into between Maharashtra Maritime Board (MMB) and Balaji Leasing & Industries Co. Ltd. - a group concern of the assessee's company. During assessment, AO had noticed that the assessee had claimed wharfage expenses/port dues of Rs.1.23 crores as compared to the last year expenditure at Rs.0.08 crores. When called for an explanation in this aspect, the assessee company submitted that it had entered into an agreement with Maharashtra Maritime Board (MMB) on 17.3.02. Pursuant to the said agreement, the assessee company started operation from one berth at Dighi Port. As per the said agreement, the assessee company had to pay the royalty to MMB for cargo handling at Dighi Port.

The issue before the Bench is - Whether the expression 'Tax, Duty, Cess or Fee or by whatever name called' mentioned in the provisions of Sec 43B brings under its sweep port dues payable by the assessee to a government agency. And the answer of the Tribunal is NO.

Central Excise

Registration - Inclusion of pipelines in ground plan of refinery - pipeline is primarily meant for transportation of raw material - No justification for inclusion in ground plan - CESTAT

THE appellant is engaged in the manufacture of motor spirit, high speed diesel and liquid petroleum gas falling under Chapter Heading No. 2710 of the Central Excise Tariff, 1985. They have a valid registration, granting registration to their factory at village Agasod, Bina Distt. Sagar (M.P.). The appellant filed an application to amend their approved ground plan of Central Excise registration to include the pipeline laid down from Wadinar (Gujarat) state to the refinery at Bina (M.P.). As per the appellant, the pipelines laid down on various parts of the land and areas in India/used for the ground pipelines were forming of integral part of premises of the refineries.

Their request was turned down by the department and the assessee is in appeal before the CESTAT.

Tomorrow is Ramadan - Id Mubarak

Legal Corner Icon

See our Columns Wednesday for the judgements

Until Wednesday with more DDT

Have a nice day.

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