NOTIFICATION
cnt94_2017
CBEC notifies new Customs exchange rates effective from October 06, 2017
CASE LAWS
2017-TIOL-2095-HC-MUM-ST
PHOTOLIBRARY INDIA PVT LTD
Vs CST : BOMBAY HIGH COURT (Dated: September 12, 2017)
ST - the assessee is engaged in the business of licensing of images through its website. The assessee claimed to have no service tax liability as it was dealing in services of copyrights, which were outside the purview of service tax - The revenue claimed that services of copyright were taxable under the heading "Online Information and Database Access or Retrieval" and the same was communicated to the assessee - The assessee's appeal before the Commr.(A) was dismissed on grounds that the assessee was charging money from customers for allowing them to download images hosted on the assessee's website, and so the service was covered under the head proposed by revenue - This view was upheld by the Tribunal.
Held - considering the nature of the assessee's activities, it is clear that if the prospective buyer wants to download the image from the assessee's website, a price quotation is offered by the assessee and only upon the receipt of payment by the prospective buyer that a link is provided for downloading the image - Further considering the definition & scope of "Online Information and Database Access or Retrieval" service, although the assessee may not be charging anything for accessing its website, it does charge a user for downloading images - Thus such activity would fall under the category of "Online information and database access or retrieval services" - Considering the findings of the Tribunal, w.r.t. the assessee's submissions of copyright services being non-taxable, the Tribunal held that where the images could be viewed for free, but their downloading was not, in either case, the copyright of the images became incidental as the main activity was of making the information available - Moreover, the precedent of Dewsoft Overseas Pvt.Ltd. v. Commr. Of Service Tax, New Delhi relied on by the assessee was inapplicable as it involved entirely different facts - Hence the orders of the Commr.(A) and the Tribunal warrant no interference: High Court (Para 2,4,6,7,8,9,10)
Appeal dismissed
2017-TIOL-2094-HC-MAD-VAT
ANGEL LABEL DIVISION Vs ASSISTANT COMMISSIONER (CT) : MADRAS HIGH COURT (Dated: August 17, 2017)
Tamil Nadu Value Added Tax Act, 2006 & Central Sales Tax Act, 1956 - Writ - Sections 19(1), 19(2)(iv) & (v) & (vi); 8(1) & 8(2)
Keywords - refund of input tax credit
The assesse is a dealer registered under the aforementioned Acts, and is engaged in manufacture of hosiery garments. The assessee claimed to purchase inputs from registered dealers on which tax was paid, and that such tax-paid inputs were used in the manufacture of final products. The final products were then sold within the state as local sale and outside the state as inter-state sale. The assessee claimed that the latter type of sale was backed by C-Form declarations under the CST Act, attracting 2% tax. The assessee was aggrieved by an amendment to Section 19(2) of the TNVAT Act, to the effect that input tax credit would be allowed in excess of 3% of tax for the purposes specified in Clause (v) of the same, which dealt with sale in the course of inter-State trade or commerce falling u/s 8(1) of the CST Act. The assessee claimed that the said amendment did not touch upon the right or permissibility to avail input tax credit vested with the assessee, who used tax paid goods as inputs in the manufacturing process or in the processing of goods in the State and such restriction w.r.t. quantum of input tax credit was only w.r.t. the goods purchased within the State from a registered dealer and sold in the course of inter-State trade or commerce against Form-C declarations. Subsequently, the impugned orders were passed, directing the reversal of input tax credit availed by the assessee.
On hearing the writ appeal, the High Court held that,
Whether an assessee could be directed to refund input tax credit availed on duty-paid inputs, where the assessee was not covered under the limitation clause of the concerned legal provision - NO : HC
Whether an appeal pending against a precedent relied on by an assessee would be tantamount to a stay on such order passed by the lower Court or the lower authority - NO : HC
++ the well settled legal position is that mere pendency of an appeal will not amount to stay of the order passed by the lower Court or the lower authority. In the instant case, the appeal is yet to be numbered and therefore, as on date, the respondent State is bound by the decision rendered by this Court in Everest Industries Limited v. State of Tamil Nadu and another. The issue involved in the said case pertain to interpretation of the proviso to Section 19(2)(v) of the TNVAT Act. The Court, after elaborately hearing the arguments on either side, held that a plain reading of the provisions of subsections (1) and (2) of Section 19 of the TNVAT Act would show that, as long as specified goods, which suffer tax are used for any of the purposes set out in clauses (i) to (vi) of sub-section (2) of Section 19, the dealer should be able to claim the input tax credit, with a caveat in so far as clause (v) is concerned encapsulated in the proviso to Section 19(2) of the TNVAT Act, and therefore, the limitation provided in the proviso would apply only vis-a-vis the purpose specified in clause (v) and not qua other purposes set out in clauses (i) to (iv) and (vi) of Section 19(2) of the TNVAT Act.
++ applying such interpretation to the present case, the impugned orders merit being set aside. Moreover, the assessee's objections to the revision notice were not fully and effectively considered while passing the impugned orders. Hence the light of the precedent decision in Everest Industries Limited v. State of Tamil Nadu and another the assessments need to be redone. Matter remanded back to revenue for fresh consideration.
Case remanded
2017-TIOL-2093-HC-MAD-VAT
BABU AUTOMOBILE Vs DCTO : MADRAS HIGH COURT (Dated: September 12, 2017)
Tamil Nadu Value Added Tax Act, 2006 - Writ - Section 27(3)
Keywords - Burden of proof - Filing of incorrect/incomplete return
The assessee is selling two-wheelers and spare parts, and is registered with the revenue under the TNVAT Act. For the AY 2014-15, the revenue issued a notice alleging that a verification of purchase details of the assessee fro other dealers, revealed that purchase value of Rs.1584362/- made by the assessee had not been reported. Hence the revenue proposed assessment u/s 27 of the Act along with levy of 150% penalty u/s 27(3). The assessee acknowledged the non-inclusion of purchases to be on account of clerical mistake and claimed to have kept the purchases as closing stock for 2015-16. Subsequently, the revenue passed an order holding that the assessee had accepted the defect of non-reporting of purchases and only after issue of notice, had come forward with such plea. Further, the revenue alleged that in Annexure V to Form I for the month of June 2015, the stock value reported was Rs.170923/- and there could not be closing stock of above Rs.18 Lakhs. Therefore, the revenue concluded that the assessee had not maintained correct accounts and had not filed correct and complete returns. Hence the proposals in the SCN were confirmed. The Appellate authority confirmed the assessment order and dismissed the assessee's appeal.
On hearing the writ appeal, the High Court held that,
Whether penalty for filing incorrect/incomplete returns was imposable, where the assessee was able to establish that the closing stock register showed the entire value and that the omission was genuine and there was no intent to defraud the revenue - NO : HC
++ it is seen that the assessee has admitted their mistake that the purchases effected by them were not accounted for in the year 2014-15. However, their specific case is that the same is accounted for in the closing stock of the year 2014-15, as they intended to sell the stock during the AY 2015-16. Unfortunately, the assessee did not produce their purchase ledger, stock register, balance sheet etc., before the AO. The explanation that is said to be given now is by stating that the AO did not call for these documents. The burden of proof is on the assessee to prove that there was no suppression. One factor, which appears to be correct is that the assessee has not availed any ITC on the alleged purchase suppression. This factor is a main factor to be noted to examine the conduct of the assessee/dealer. The Appellate authority rightly observed that the assessee did not produce any documents before the AO or before the Appellate authority.
++ one more contention advanced by the assessee is that there is no cause of action for levying penalty. It is submitted that if the assessee is able to establish before the Appellate authority that the closing stock register showed the entire value, then it has to be seen as to whether the conduct of the assessee was willful or there was deliberate attempt on the part of the assessee to evade payment of tax. This aspect has to be considered for levying penalty under Section 27(3), though the assessee in its objections, having not specifically pointed out the same. This being a legal issue, it is always open to the AO or the Appellate authority to consider the aspect.
++ thereby, this Court is inclined to remand the matter to the Appellate authority for fresh consideration. Accordingly, this writ petition is allowed, the impugned order is set aside and the matter is remanded to the Appellate authority with a specific direction to the assessee to produce all the records before the Appellate authority along with the memorandum of grounds of appeal raising additional grounds.
Assessee's writ petition allowed
2017-TIOL-2092-HC-DEL-MISC
DEVASHISH GARG Vs DRI : DELHI HIGH COURT (Dated: September 22, 2017)
Misc. - the appellant's passport was impounded before seizure without initiation of proceedings under the Passports Act 1967 - So aggrieved, the assessee challenged such action as being unauthorised - However such impounding order was upheld by the Single Judge - Held - Considering Section 10 of the Passports Act, 1967 and the Apex Court decision in Suresh Nanda v. CBI, wherein it was clarified that impounding could be only in terms of Section 10 (3) of the Passport Act, 1967 and which had to be preceded by the procedure prescribed in Section 10 (1), the Single Judge was clearly aware of such precedent decision - However, instead of quashing such order, the Single Judge permitted retention of the passport and facilitated its onward transmission to the Regional Passport Officer, amounting to its impounding - Such action was frowned upon and decried by the Apex Court in the aforementioned decision, where it strongly stated that a court was not empowered to impound a passport, and that Section 104 of the Code of Criminal Procedure sanctioned the impounding of any document or object other than a passport - Thus such impounding of the appellant's passport was not in order, and the directions forwarding the passport to the Regional Passport Office merit being quashed - Appellant's passport to be released: High Court (Para 2,4,5,6)
Appeal allowed
2017-TIOL-3610-CESTAT-MUM+ Story
M/s NIZAM LADJI Vs CCE & C : MUMBAI CESTAT (Dated: September 8, 2017)
ST – There is no appellate remedy provided in VCES, 2013 – In absence of such remedial provision, appeal is not maintainable before Tribunal – Appeal dismissed – Chief Commissioner to examine the case of false declaration u/s 111 of the FA, 2013: CESTAT [para 2]
Appeal dismissed
2017-TIOL-3609-CESTAT-MUM + Story
DR YASHWANT DHUME Vs CCE & C : MUMBAI CESTAT (Dated: September 8, 2017)
ST - There is no appellate remedy provided in VCES, 2013 - In absence of such remedial provision, appeal is not maintainable before Tribunal - Appeal dismissed - Chief Commissioner to examine the case of false declaration u/s 111 of the FA, 2013: CESTAT [para 2]
Appeal dismissed
