2017-TIOL-3237-CESTAT-DEL + Story
DRS LOGISTICS PVT LTD Vs CST: DELHI CESTAT (Dated: August 21, 2017)
ST - Section 65A of FA, 1994 - Composite services - Essential character - Appellant providing services of loading, unloading, together with shifting/transportation of household articles to various customers - Principal aim and objective is transportation of goods and providing of other services are incidental and ancillary to the main purpose of transportation - appellant issues various documents namely, consignment fixed up receipt, collection advice, consignment note, invoice, money receipt etc. to its customers, showing inter alia, the details with regard to the services provided and the charges levied thereon - services are appropriately classifiable under GTA service instead of Cargo Handling Service - Law is well settled that the circular issued by the Board, either in its administrative or executive jurisdiction, are binding on the officers working under it, unless and until it is proved that the clarifications furnished are contrary to the statutory provisions or the law pronounced by the higher judicial forums - Impugned order confirming Service Tax demand of Rs.21,97,73,596/- along with interest and penalties set aside & Appeal allowed: CESTAT [para 8, 10, 11]
Appeal allowed
2017-TIOL-1755-HC-KOL-IT
ARVIND KAYAN Vs UoI: CALCUTTA HIGH COURT (Dated: August 30, 2017)
Income Tax - Writ - Sections 2(29) & 159 & Code of Civil Procedure, 1908 - Section 2(11).
Keywords: Competent to inherit property of deceased - Legal representative - Legal heirs - Member of HUF - Shares transaction & Writ Court.
The Assessee is the son of the deceased defaulter Assesse, Sushil Kumar Kayan. The deceased had two sons namely, the Assessee and Vikrant Kayan. The Assessee had filed his return showing the purchase of shares belonging to his deceased father during his lifetime. A proceeding u/s 159 was initiated against the Assessee in respect of his deceased father. After considering all the factual positions the Tax Recovery Officer found that the Assessee was a member of a HUF along with his deceased father and had severed all relationship with the deceased in 1999. The Appellate authority concurred with the Tax Recovery Officer. Both are of the view that the Assessee and his brother were heirs and legal representatives of their deceased father.
In writ, the High Court held that,
Whether when a dispute arises over the issue of 'legal representative' of the deceased defaulter, provisions of Sec 2(11) of the CPC, 1908 would apply to the income tax cases - YES: HC
++ section 2(29) stipulates that the meaning of legal representative assigned to it in Section 2(11) of the CPC, 1908 would apply to the Income Tax Act. Section 2(11) of the CPC, 1908 stipulates that a legal representative means a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased. It also includes a party who sues or is sued in a representative character on whom the estate devolves on the death of the party so suing or sued;
++ in the case of Nalini Bai Naique, the Apex Court held that, the definition of legal representative given in the CPC, 1908 is inclusive in character and its scope is wide. It is not confined to legal heirs only. It may be a person who may or may not be the heir, competent to inherit the property of the deceased. However, such person is representing the estate of the deceased. It includes heirs as well as persons who represent the estate even without title either as executors or administrators in possession of the estate of the deceased. Such persons are covered by the expression legal representative. Viewed from such perspective, the Assessee is one his heirs and legal representatives of the deceased;
Whether a Writ Court can interfere in an order only if it is passed without jurisdiction, or vitiated by the principles of natural justice or by fraud - YES: HC
++ a Writ Court is not the second Appellate Authority. A Writ Court is called upon to interfere in an order without the Assessee before it, substantiating that, the impugned order is without jurisdiction, or is vitiated by the principles of natural justice, or is a non-speaking one or is vitiated by fraud or actuated by mala fides. None of the grounds noted above are substantiated in the facts of the present case. In such circumstances, the present writ petition is dismissed without any order as to costs.
Assessee's Writ dismissed
2017-TIOL-1754-HC-KOL-CX
SWASTIK OIL REFINERY PVT LTD Vs UoI: CALCUTTA HIGH COURT (Dated: August 31, 2017)
CX - an SCN was issued imposing duty demand on the petitioner-assessee, alleging suppression of relevant facts to evade payment of duty u/s 11A(4)(d) of the Act - Such SCN was issued upon invoking extended period of imitation, which was challenged by the petitioner.
Held - Considering the scope and ambit of Section 11A(4) of the Act, it is clear that the authorities had a period of five years from the relevant date for the issuance of SCN if any of the events listed in the section have occurred - Considering the period of dispute and the date of the SCN in the present case, it is found that the SCN was issued within the stipulated five-year period - A period of one year elapsed and the petitioner's reply to SCN was yet to be adjudicated - The precedent decision in Jiyajeerao Cotton Mills Ltd.-Versus- Income Tax Officer & Ors., relied on by the petitioner would not avail it any aid, as in the present case, from the date of issuance of the SCN, the period could not be said to be barred by limitation - Since the question of limitation cannot be answered conclusively on the basis of the materials made available on record, and the same does not appear from the SCN, it cannot be said the revenue acted beyond jurisdiction in issuing the impugned notice - In totality, the present petition may be seen as an attempt to stall proceedings on superficial grounds - Hence petitioner directed to pay costs - Adjudicating process be completed exepditiously: High Court
Writ petition dismissed
2017-TIOL-1753-HC-J&K-IT
VIJAY KUMAR Vs CIT: JAMMU AND KASHMIR HIGH COURT (Dated: August 8, 2017)
Income Tax Act - Section 80 IB.
Keywords : Fit for use - Manufacture & Video Software Generation.
The Assessee individual was engaged in editing & supplying of audio of background sound to films already shot by customers. He claimed deduction u/s 80IB of the Act. During the course of assessment proceeding the AO rejected the deduction claimed contending that the Assessee was bringing into an existence a video film and his role being limited to that of editing & supply of audio background sound and there was no article or thing having been manufactured by the Assessee as required by the provision of 80-IB of the Act. The CIT (A) concurred with the view of the AO. On further appeal, the Tribunal also upheld the decision of the AO.
On appeal, the High Court held that,
Whether any process which renders a commodity or article fit for use, falls within the meaning of manufacture - YES: HC
Whether video editing to provide background audit to a film also falls within the four walls of manufacture and is thus eligible for Sec 80IB benefits - YES: HC
++ order of assessment was passed in the year 2001-2002 against the assessee, merely on the ground that the assessee was not able to explain the exact scope of activity undertaken by him, which is evidedent from the Paragraph No. 4 of the order passed by the Tribunal. The issue involved in this appeal is no longer res-integra and has already been dealt by the Supreme Court;
++ if an operation/process renders a commodity or article fit for use for which it is otherwise not fit, the operation/process falls within the meaning of the word "manufacture". Applying the above test to the facts of the present case, we are of the view that, in the present case, the assessee has undertaken an operation which renders a blank CD fit for use for which it was otherwise not fit. The blank CD is an input. By the duplicating process undertaken by the assessee, the recordable media which is unfit for any specific use gets converted into the programme which is embedded in the master media and, thus, blank CD gets converted into the programme which is embedded in the master media, and, thus, blank CD gets converted into recorded CD by the afore-stated intricated process. The duplicating process changes the basic character of a blank CD, dedicating it to a specific use. Without such processing, blank CDs would be unfit for their intended purpose. Therefore, processing of blank CDs, dedicating them to a specific use, constitutes a manufacture in terms of s. 80-IA(12)(b) r/w s. 33B of the IT Act;
++ the activity of Video Software Generation has been recognized as Small Scale Industries by Government of India. It is also pertinent to mention the fact that by providing the Audio Software to the Video already shot makes an article fit for use which in turn amounts to manufacture, in view of the Law laid down by the Supreme Court in the case of Commissioner of the Income Tax Vs. Oracle Software India Ltd;
++ the activity of the assessee in supplying the audio of the background sound to the film already shot by the customers, amounts to manufacture within the meaning of Section 80-IB of the Income Tax Act and, therefore, the Tribunal erred in upholding the order passed by the CIT (A) as well as AO by which claim for disallowance was sustained. Accordingly, the order passed by the AO as well as CIT (A) as well as the Tribunal is hereby quashed and the claim of the assessee is allowed.
Assessee's appeal allowed
2017-TIOL-1752-HC-AHM-CT
STATE OF GUJARAT Vs PANASONIC INDIA PVT LTD: GUJARAT HIGH COURT (Dated: September 1, 2017)
Central Sales Tax
Keywords - Branch transfer - Form F - Inter-State sales
The respondent-assessee is a dealer of electronic goods. In the relevant period, the assessee claimed certain transfer of goods by way of branch transfer from Gujarat to Mumbai. Since some of the transactions were covered under the F Forms, to which extent benefit was granted. However, the transactions for which the assessee could not provide F Forms, were treated as Inter-State sales rather than branch transfers. Later, the First Appellate Authority (FAA) also denied the benefit, on grounds that there was no evidence of physical movement of goods as claimed by the assessee. Later the Tribunal noted that the AO had accepted the movement of goods when in essence had taxed them as inter-State sales. It further observed that the FAA had rejected the benefit because the assessee subitted incomplete Form F, and so remanded the matter to the FAA to allow the assessee to furnish fully filled forms.
After hearing the matter, the Tribunal held that,
Whether the department could deny benefit of Form F to an assessee, by questioning the actual movement of the goods, where such movement of goods had not been disputed in the past - NO : HC
++ if apart from non furnishing of F forms, the AO had disputed about the movement of goods, the transactions could not have been taxed as inter-State sales. If the department was aggrieved by the same, it was open for the department to challenge the same before the FAA. Where the department did not do so, it could not seek to reverse the situation.
Revenue's appeal dismissed
2017-TIOL-1751-HC-AHM-CT
STATE OF GUJARAT Vs SUPERB PAPERS LTD: GUJARAT HIGH COURT (Dated: August 11, 2017)
Gujarat Sales Tax
Keywords - Delays & laches - Revisional authority
The respondent-assessee is a dealer registered under the Gujarat Sales Tax Act, and is engaged in manufacturing craft paper. The assessment order passed for the period 01.04.1995 to 31.03.1996, was revised suo motu and a notice was issued to the assessee. In such notice, the assessee objected to the under assessment of the turnover tax, and the non-acceptance of certain sales, leading to a tax demand being imposed on the assessee. On hearing the assessee's representations, the Revisional authority recomputed the tax liability and consequently computed that a ceiling of Rs. 25,97,342/- of turnover would be leftover for the year 1996-97. On appeal, the Tribunal set aside the findings of the Revisional Authority on grounds that such authority had based its actions on the reasoning of the audit party, without independent application of mind.
After hearing the matter, the High Court held that,
Whether the rectification application filed by revenue after an inordinately long delay of about 10 years, could be accepted by the High Court - NO : HC
++ although the Tribunal dismissed the order of the Revisional Authority on 04.02.2005, the Govt. took no steps to challenge the same for close to 10 years, when for the first time rectification application, dated 03.02.2015, was moved before the Tribunal. Such application was subsequently dismissed by the Tribunal on 16.02.2015. Even though the Tribunal rejected the rectification application, the department took two years to move the present petition. Hence present petitions merit being dismissed for delays and laches.
Revenue's appeal dismissed
