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CASE LAWS
2018-TIOL-2246-HC-MAD-IT + Case Story
A SRIDEVI Vs ITO : MADRAS HIGH COURT (Dated: October 04, 2018)
Income Tax - Writ - Sections 147 & 148.
Keywords: Change of opinion - Fresh information - Full and true disclosure - Period of limitation - Reassessment - Tangible material & Unexplained income.
The reassessment was initiated in the case of the assessee by issuing notice u/s 148. During the course of hearing, the assessee was asked the details of sources and nature of cash deposits and to file the copies of bank accounts and other evidences. The AO on scrutiny of bank accounts, completed the reassessment by adding the short fall in cash withdrawal of Rs.10.50 lakhs as unexplained income. However, the AO once again reopened the assessment by issuing notice u/s 148 for the reason that one S.Nagarajan has received a sum of Rs.2.75 crores from the deceased L.S.Abinesh, husband of the assessee, for purchase of property through his bank account and that sources for such advance made require to be verified. The assessee objected the reopening by contending that during the course of the first reassessment proceedings, copies of bank statements, receipts and payments account were produced including the sources of all deposits made and that the assessment was completed after due verification of all receipts and payments and the sources and therefore, the proposal to reopen to re-verify the source of advance given to S.Nagaraj amounts to change of opinion. It was also informed that there was no material available to conclude that the income had escaped assessment for issuing notice u/s 148. However, the AO rejected the objection. It was also contended that the very reopening of the assessment for the second time was beyond four years and therefore, was barred by limitation.
In writ, the High Court held that,
Whether any fresh information filed before the AO during the process of re-assessment u/s 147, which gives force to the belief of the AO that certain income of the assessee had escaped assessment, can be construed as tangible material for reopening the assessment once again - YES: HC
++ it is evident that the present issue, namely, the advance made to the said S.Nagarajan to the tune of Rs.2.75 crores for purchase of property was not the issue during the earlier reassessment proceedings. Accordingly, in pursuant to the earlier reopening of the assessment under section 147, an order of assessment was passed on 30.12.2011 under section 143(3) read with section 147 of the Income Tax Act, 1961. Only during the course of such re-assessment proceedings, the assessee has filed the statement of receipts and payments, wherein payment made to S.Nagarajan as advance to the tune of Rs.2.75 crores has also been referred to. Such material filed before the Assessing Officer, during the earlier re-assessment proceedings also containing the disclosure of advance made to S.Nagarajan is sought to be relied on by the assessee to contend that there was full and true disclosure of all material facts before the Assessing Officer and therefore, invoking the first proviso under section 147 to reopen the assessment beyond the period of limitation, cannot be sustained. On the other hand, the said material is sought to be relied on by the Revenue as a tangible material for reopening the assessment once again. It is not in dispute that the original assessment can be reopened at any number of times within the period of limitation prescribed under section 147 read with section 149. In this case, admittedly, the reopening of the assessment was initiated after the period of four years. In order to justify such reopening after such limitation period, the Revenue has to satisfy that any one of the ingredients as stipulated under the first proviso to section 147 is satisfied;
++ the original return filed by the assessee did not reflect the subject matter income, namely, the advance made by the assessee to the said Nagarajan of a sum of Rs.2.75 crores. When the earlier reopening proceedings was initiated with issuance of notice under section 148, the assessee did not file a fresh return by disclosing the subject matter income and on the other hand, she made a request to treat the return already filed for the assessment year 2009-10, as the one filed in response to the said notice. Therefore, it is evident that the original return filed by the assessee, which is sought to be treated as that of the return filed in response to the notice under section 148, did not disclose truly and fully the material facts, more particularly, in respect of the subject matter transaction. Therefore, such transaction which came to the notice of the Assessing Officer, while reopening the assessment earlier, is certainly, a tangible material, based on which, the present reopening under section 147, can be resorted to. Admittedly, this material was not existing at the time of original assessment. No doubt, it is sought to be contended that the said material was placed before the Assessing Officer during the earlier reassessment proceedings and however, he has not taken note of the same. I have already pointed out that the earlier reopening of the assessment was based on some other issue and therefore, the assessee is not justified in contending that no new material is available before the Assessing Officer for the present reopening;
Whether since alleged escapement of income exceeds One lakh rupees, reopening in such case can be done within the period of six years from the end of relevant AY as prescribed by section 149(1)(b), and thus, the same cannot be said to be barred by limitation - YES: HC
++ the assessee filed the original return on 30.07.2009 and the same was processed under section 143(1). Thereafter, the earlier reopening notice under section 148 was issued on 21.02.2011, admittedly within time. Consequently, the reassessment order under section 143(3) read with section 147 was passed on 30.12.2011. Perusal of the said order would show that the Assessing Officer has re-assessed the income and finally arrived at the quantum of tax payable, surcharge and interest. Therefore, it is evident that the original order of assessment made under Section 143 (1) have been re-assessed on 30.12.2011, and thus, the same is to be construed as having merged with the above reassessment order dated 30.12.2011. However, if the second reopening is sought to be done, after the above said re-assessment, still, the same has to be done within the limitation prescribed under the first proviso to Section 147 read with Section 149. The relevant assessment year is 2009-10. The end of such assessment year fell on 31.03.2010. Admittedly, the escapement of assessment alleged in this case exceeds One lakh rupees. In view of the time limit prescribed under section 149(1)(b), such reopening can be done within the period of six years from the end of the assessment year 2009-10. Taking note of the fact that end of the assessment year 2009-10 fell on 31.03.2010, the impugned notice under section 148 having been issued on 15.03.2016, I am of the view that the same is well within the period of six years and therefore, I find that the impugned reopening of the assessment is not barred by limitation as contended by the assessee.
Assessee's writ petition dismissed
2018-TIOL-2245-HC-MAD-IT
ASWANI ENTERPRISES Vs ACIT : MADRAS HIGH COURT (Dated: September 25, 2018)
Income Tax - Sections 2(22)(e) & 147.
Keywords: Change of opinion - Deemed dividend & Reassessment.
The assessment was completed in the case of the assessee. However, the same was reopened by the AO u/s 147, on the basis of some information received from the DCIT, Chennai, who was the AO of one M/s.Pallava Granite Industries India Pvt Ltd (PGIIPL) stating that the company had made advances to the assessee. The AO was of the opinion that since the two partners of the assessee firm were the shareholders in the PGIIPL holding 46.35% and 43.02% respectively in the share capital of the PGIIPL and since the PGIIPL made advances to the assessee, in which, the two shareholders had substantial interest, the liability of the assessee for treating the receipt of advance from the PGIIPL as 'deemed dividend' within the meaning of Section 2(22)(e) was required to be considered for the relevant AY.
However, the assessee's contention was that they received advances as trade advances and also purchase of mining land by the PGIIPL from time to time and that those were continued to be disclosed as 'advances' in the assessee's financial statements as the transfer formalities were to be completed, which involved transfer of mining licence and other regulatory approvals. The assessee further contended that those advances were made pursuant to agreements for sale. However, the AO rejected the contention of the assessee. On appeal, both the CIT(A) and the Tribunal upheld the decision.
On appeal, the High Court held that,
Whether having regard to prima facie fact that the assessee didn't disclose all necessary materials during original assessment, which is also confirmed by both the appellate authorities, decision of the AO to reopen the assessment of the assessee u/s 147 cannot be taken as mere change of opinion - YES: HC
++ the CIT (A), while confirming the order passed by the Assessing Officer, held that complete facts were not filed by the assessee firm before the Assessing Officer at the stage of original assessment, from which, he could have formed the opinion as to the taxability or otherwise to the tune of Rs.2,22,34,064/- under Section 2(22)(e) of the Act. Thus, in the absence of vital facts in place before the Assessing Officer, the CIT (A) confirmed the reopening to be valid and proper. The correctness of the factual findings recorded by the Assessing Officer and the CIT (A) was tested by the Tribunal. The Tribunal independently examined the matter and held that when there was no information before the Assessing Officer regarding the shareholding pattern of the company or its accumulated profits, it cannot be said that the assessee disclosed all necessary materials for the assessment in this regard. It was further held that the Assessing Officer had no occasion to examine the advances received from the company from the angle of taxability of the sum under Section 2(22)(e) of the Act and that it was not a case of change of opinion'. Therefore, the reopening of assessment was not a case of change of opinion, but it was a case where the assessee did not disclose fully and truly the material facts necessary for the assessment.
Assessee's appeal dismissed
2018-TIOL-2237-HC-MAD-VAT
SHAWNTHARYA AGENCY Vs CTO: MADRAS HIGH COURT (Dated: October 01, 2018)
VAT- Writ - Centralized mechanism - Mis-match issues & Re-do assessment.
The assessee company filed its return for the relevant AY. During the assessment proceedings, the AO mentioned that the main issue was related to the mis-match, based on the sales details gathered from the Departmental Website. Further, it also mentioned that such purchases were not reported in the given return of the assessee. Hence, the said mis-match issue which was already been considered by this Court, with certain guidelines and directions were also issued as to how the mis-match issue has to be dealt with by the AO, and the matter had to go back to the AO, for re-doing the assessment.
In writ, the High Court held that,
Whether matter warrants remand where an assessment order is not in compliance with guidelines issued by the jurisdictional High Court for matters involving mis-match issues - YES: HC
++ the main issue involved in this case is relating to mis-match and covered by the decision of this Court made in JKM Graphics Solutions Vs. CTO, W.P.No.105/2016 etc., dated 01.03.2017, wherein this Court held that, if this centralized mechanism is not put in place exclusively for such purpose, it would result in notices and orders being issued by the respective AO without even the knowledge of the AO of the other end dealer resultantly no action being taken against other end dealer, assuming, he is at fault. Therefore, it is high time the Department wakes up and stops the one way approach and examine the matter in a holistic manner so that the defaulting dealer is brought to books;
++ hence,the Writ Petitions are allowed and the notices/orders either original or appellate or revisional are set aside and the matters are remanded to the respective AO, to undertake a fresh exercise by conducting a thorough enquiry in consultation with the AO of the other end dealer for which purpose the Commissioner of Commercial Taxes shall empower the Assessing Officers to seek information from other circles as well and in the mean time to evolve a centralized mechanism to exclusively deal with the cases of mismatch;
++ consequently, the matter is remitted back to the Assessing Officer for re-doing the assessment, after giving due opportunity of personal hearing to the assessee and by following the order made in the given writ petition.
Case Remanded
2018-TIOL-2236-HC-MUM-VAT
ALUDECOR LAMINATION PVT LTD Vs STATE OF MAHARASHTRA: BOMBAY HIGH COURT (Dated: October 12, 2018)
Maharashtra Value Added Tax Act, 2002 - Section 26(6).
Keywords - Financial hardship - Grant any liberty & Stay application.
The assessee company filed its return for the relevant AY 2011-12. During the assessment proceedings, the AO took notice that the assessee filed an application for stay of the order dated 30-3-2017 which was u/s 26(6). Further, the Joint Commissioner of Sales Tax (Appeals) IV, upheld the order passed by the Deputy Commissioner of Sales Tax relating to the period AY 2011-12. It stated about the 'aluminum composite panel' was classifiable under the residuary Schedule Entry E-1 of the Act. On appeal, the Tribunal also sought stay of the order which was the subject matter of appeal.
In writ, the High Court held that,
Whether if the assessee is in grave financial hardship and is unable to deposit the same, making it is clear that if the assessee is entitled to approach the Tribunal in regard to grant any liberty - YES: HC
++ thus, according to the Court, the order of the Tribunal is a reasonable order where it has been passed after taking into consideration, the submissions of the parties and finding that the issue is debatable directed the assessees to deposit 25 % of the duty as a condition precedent to the stay of the order;
++ no reason to interfere with the order passed by the Tribunal. Thus, seeks liberty to apply/approach to Tribunal. Final hardship was not a contention urged before the Tribunal during hearing of the stay application leading to the order. Nor has the assessee demonstrated before Court that its financial situation has become precarious after the passing of the order. Hence, there no inclination to grant any liberty. However, it is clear that if the assessee is otherwise entitled to approach the Tribunal for variation of the order and or for the expeditious hearing of the Appeal, this order will not prohibit the assessee from doing so.
Assessee's writ petition dismissed
2018-TIOL-2235-HC-AHM-VAT
SHREENATHJI SAKHI SEVA MANDAL Vs STATE OF GUJARAT: GUJARAT HIGH COURT (Dated: October 11, 2018)
Gujarat Value Added Tax - Tender & VAT registration.
The assessee-society registered under the Mission Mangalam Scheme framed by the State Government. Further, the Revenue-society, being organization fully funded by the State Government and engaged in the activities of education in the tribal areas. These schools were residential boys schools, residential girls school as well as Day schools. Where, the students of the schools would need regular meals. Therefore, the Revenue invited tenders from interested agencies to apply with their rates for supplying three meals a day to the students of residential schools and two meals a day for non residential schools. Hence, the assessee in response applied to such tender invitation. However, the assessee's tender was rejected by the Revenue on the ground that the assessee did not fulfill several essential requirements of the tender.
Further, the Project officer made a list of such non compliances to the assessee. However, the case of the assessee was rejected as the assessee was not able to fulfill the essential conditions. Hence, the Bid of Revenue was within the ceiling imposed by the Government across the State for supplying meals to the Government and other similar schools.
Having heard the parties, the High Court held that,
Whether VAT registration can be made valid, if conditions of eligibility i.e the tenderer must have minimum turn over of Rs. 6 crores in one of the two immediately preceding years under the VAT Act - YES: HC
++ these documents were not before the authorities when the assessee's tender was examined and rejected as per communication dated 13.7.2008. Nevertheless, the objections of Revenue regarding not obtaining VAT registration for the past period and not showing VAT clearance for the past two years needs to be appreciated in light of these documents and facts;
++ this however does not fulfill the necessary requirements of the tender conditions. The assessee admits that the VAT registration was valid only for a short time and stood cancelled barely about two months later. This was because the assessee had not filed the requisite returns. It is not the case of the assessee was not required to be registered under the VAT Act or that there was any other general or special exemption which would enable the assessee not to obtain such registration. As noted, one of the important conditions of eligibility was that the tenderer must have minimum turn over of Rs. 6 crores in one of the two immediately preceding years. If the assessee claims that it fulfills such requirement, immediate question of registration under the VAT Act would become valid. The authorities were therefore, correct in not accepting the assessee's declaration that it fulfilled the necessary requirements merely based on said certificate issued by the Assistant Commissioner of State Tax, Vadodara.
Assessee's petition dismissed
2018-TIOL-2234-HC-AHM-WT
VASUDEV FATANDAS SAWLANI Vs WTO: GUJARAT HIGH COURT (Dated: October 9, 2018)
Wealth Tax Act, 1957 - Writ - Section 17.
Keywords - Acquisition of assets & Escaped assessment.
The assessee-individual filed his return for the relevant AY. During the assessment proceedings, the AO issued notice against the assessee which stated that, the AO had reason to believe that income chargeable to tax for the AY 2013-14 had escaped assessment u/s 17. Further, the AO called upon the assessee to file a return within thirty days of the receipt of the notice. However, the AO rejected the objections given the assessee and alsp observed that the assessee had not established the nexus between unsecured loans and other liabilities in connection with the assets, also assessee had not explained it to acquire the assets of the wealth. Subsequently, the AO also noticed that in the computation of income filed by the assessee for the AY 2007-08 and onwards, the assessee had claimed interest expenses under the head “income from other sources”. Hence, the order of AO was upheld.
In writ, the High Court held that,
Whether the AO has the power to assess or reassess the net wealth u/s 17, if the net wealth is chargeable to tax having escaped assessment - YES: HC
++ the assessee's contention that the loans were raised to acquire such capital assets would require exemption and therefore assessment. While disposing of such an objection, the Assessing Officer correctly observed that the assessee had not showed co-relation between the borrowing and the acquisition of assets. He noticed that in the return, the assessee had claimed interest expenditure in relation to income is from other sources.
Assessee's writ petition dismissed
2018-TIOL-2233-HC-ALL-IT
CIT Vs SHRI BAJRANG LAL JINDAL: ALLAHABAD HIGH COURT (Dated: October 04, 2018)
Income Tax - Section 263.
Keywords - Benami transactions & Realm of speculation.
The assessee-individual filed his return for the relevant AY. During the assessment proceedings, the AO had completed the assessment after making necessary inquiries and, the order passed by the AO cannot be considered to the erroneous or prejudicial to the interests of the Revenue without appreciating u/s 263. On appeal, the CIT(A) rejects the order of AO. On further appeal, the Tribunal held against the order of the CIT passed u/s 263 by which the CIT had held that the regular assessment order passed by the ITO was erroneous and prejudicial to the interest of the Revenue.
On appeal, the High Court held that,
Whether based on the categorical finding made by the Tribunal, can be said that the AO can pass any order, which was either erroneous or prejudicial to the interest of Revenue and revoke the provisions u/s 263 - NO: HC
++ the orders passed by the authorities concerned reflect that in fact the AO had given notice to the assessee once again and had examined the entire benami transactions. Nothing had been left to imagination or to the realm of speculation. The verification had duly been made by the AO and then only the addition had been made. The CIT in fact sought to reach to the exercise without leading to any different results. The Tribunal therefore, has made a categorical finding of fact of the judgement that it could not be said that the AO had passed any order, which was either erroneous or prejudicial to the interest of revenue in order to revoke the provisions of Section 263 of the Act.
Revenue's appeal dismissed
2018-TIOL-2232-HC-MAD-VAT
SHANMUGA MOTORS Vs CTO: MADRAS HIGH COURT (Dated: October 03, 2018)
VAT- Writ - Mis-match issues
The assessee is a dealer who filed returns for the relevant AY. During the assessment proceedings, the AO proposed a notice and hence an order was passed by the Revenue. However, the AO made grievance aganist the assessee as the assessee had not followed the directions and guidelines issued by this Court, while dealing with mis-match issue of cases made in WP.No.105 of 2016 etc., in JKM Graphics Solutions Vs. CTO. Hence, the case was remanded back to AO.
In Writ, the High Court held that,
Whether matter warrants remand where an assessment order is not in compliance with guidelines issued by the jurisdictional High Court for matters involving mis-match issues - YES: HC
++ no dispute to the fact that except for AY 2016-2017, in all other assessment years, one of the issue pertains to mis-match. The said issue was already considered by this Court and a common order was passed, wherein, certain guidelines and directions were issued as to how the mis-match issue has to be dealt with by the Assessing Officer, by adopting centralized mechanism;
++ it is evident that any order passed without complying with the stated directions or guidelines, cannot be sustained, if the issue involved pertains to mis-match. Therefore, this Court is of the view that the matter has to go back to the Assessing Officer to re-do the assessment, once again on merits and in accordance with law, by following the procedures and guidelines issued in mis-match cases, as stated supra. But, at the same time, such remand to the Assessing Officer, by showing indulgence to the assessee, can be done only by putting them on some terms, in view of the fact that the assessee failed to give their reply, except for assessment year 2012-2013 and also not utilized the opportunity of personal hearing. Therefore, all these writ petitions are disposed of.
Case Remanded
2018-TIOL-2231-HC-AHM-IT
PR CIT Vs GUJARAT STATE FINANCIAL SERVICES LTD: GUJARAT HIGH COURT (Dated: October 15, 2018)
Income Tax - Section 14A,(1), (2) & Rule 8D.
Keywords - Interest-bearing funds - Interest-free funds - Tax-free income
The assessee company filed its return for the relevant AY. During the assessment proceedings, the AO observed that the assessee had invested its funds in investments earning tax free income and therefore disallowed interest expenditure of about Rs 5.78 crores, u/s 14A r/w Rule 8D. On appeal, the Tribunal restricted the disallowance which could be attributed to such activity to about Rs 15.44 lakhs. Hence the Revenue's appeal.
On appeal, the High Court held that,
Whether disallowance u/s 14A r/w Rule 8D can automatically be made where assessee has both interest-free & interest-bearing funds available with it & which are invested in securities earning tax free income - NO: HC
it is demonstrated that the assessee had availed of mixed funds i.e. interest free as well as interest bearing funds and utilized them for making investments into securities earning tax free income and the rest applicability of the Section 14A read with Rule 8D would be automatic.
++ the judgment of the Supreme Court in case of Maxopp Investment Ltd. in context of similar challenge of the Revenue stating that Section 14A relates to expenditure incurred in relation to income not includable in total income. Section 14A(1) provides that for the purposes of computing total income under Chapter-IV no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. As per Section 14A(2), the Assessing Officer would determine the amount of expenditure incurred in relation to such income which does not form part of the total income in accordance with the method as may be prescribed, if having regard to the accounts of the assessee he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure. The method for such purpose has been prescribed under Rule 8D of the Rules. Also Rule 8D(1) substantially reiterates what Section 14A(2) provides. Hence, the Assessing Officer would be authorized to determine the expenditure to be disallowed in relation to earning tax free income in terms section 14A(2), where having regard to the accounts of the assessee of the previous year he is not satisfied with the correctness of the claim of expenditure made by the assessee or the claim made by the assessee is that no expenditure has been incurred in relation to income which does not form part of total income;
++ hence, in other words, the judgment in case of Maxopp Investment Ltd., does not lay down a proposition that the moment it is demonstrated that the assessee had availed of mixed funds i.e. interest free as well as interest bearing funds and utilized them for making investments into securities earning tax free income and the rest applicability of the Section 14A read with Rule 8D would be automatic. Hence, the Court is consious that neither in M/s. Max India Ltd., Punjab & Haryana nor in Gujarat State Fertilizer and Chemicals case, this High Court had noticed the judgment of the Supreme Court in case of Maxopp Investment Ltd.
Revenue's appeal dismissed
2018-TIOL-2230-HC-KOL-CUS
VORA ENTERPRISES Vs UoI: CALCUTTA HIGH COURT (Dated: October 05, 2018)
Cus - Revenue submits that, pursuant to the order dated February 2, 1995 passed in a writ petition filed at the instance of petitioner, the petitioner was required to deposit 50% of amount in cash and the balance 50% by bank guarantee - In such circumstances, it would appropriate to direct authorities to compute the assessable value in terms of order dated September 7, 2000 passed by CEGAT within a period of four weeks - The petitioner will produce the documents of deposit of cash and furnishing of the bank guarantee before such authorities: HC
Writ petition disposed of
2018-TIOL-2229-HC-MEGHALAYA-CX
MEGHALAYA MINERAL PRODUCTS Vs CCE & ST: MEGHALAYA HIGH COURT (Dated: June 05, 2018)
CX - Appeals of assessees have been allowed by Tribunal and the case remanded back for deciding the issues de novo after providing reasonable opportunity to assessees therein, with a further direction that fresh evidence, may be admitted as per law - Assessees would submit that this Court has already decided Central Excise Appeal vide order dated 14.02.2018, in which same judgment was under challenge - While allowing the said appeal, order of the Tribunal has been modified to the effect that the Adjudicating Authority while deciding all the issues will also decide the issue with regard to applicability of the period of limitation and the extended period of limitation in issuance of demand notice by the respondents - Instant three appeals are taken up for final disposal at the admission stage, same are allowed - The Adjudicating Authority shall decide all the issues de novo as directed vide judgment impugned including the issue of extended period of limitation, in the light of the circular No. 1063/2/2018-CX providing, that the extended period of limitation would not be available to the department: HC
Appeals disposed of
2018-TIOL-2228-HC-MUM-CX
CCE Vs KPIT CUMMINS GLOBAL BUSINESS SOLUTIONS LTD: BOMBAY HIGH COURT (Dated: October 01, 2018)
CX - This Appeal under Section 83 of FA, 1994 r/w Section 35G of CEA, 1944 challenges the order 2015-TIOL-400-CESTAT-MUM - In view of the Circular/ Instructions dated 11th July, 2018 issued by Central Board for Indirect Taxes and Customs, Revenue seeks to withdraw this appeal - Accordingly, appeal dismissed, as withdrawn: HC
Appeal dismissed
2018-TIOL-2227-HC-KOL-CX
MARS PLYWOOD INDUSTRIES PVT LTD Vs CCGST & CX: CALCUTTA HIGH COURT (Dated: October 11, 2018)
CX - There was a stock of unlabelled and unstamped plywood manufactured by assessee - The stock may not have been very large but it is an admitted position that it was not taken into account at the time of calculation of demand, by the respondent - A thorough adjudication on facts is required to ascertain whether there was any quantity of unlabelled and unstamped plywood - Whether the assessee had entered this stock in the Daily Stock Account R. G.–1 according to Rule 10 of CER, 2002 - What is the amount of duty that is to be adjusted against this stock of goods and in that event what would be the ultimate demand of the respondent - These questions of fact and law can be best answered by Tribunal or the adjudicating authorities below - Thus, issues are remanded back to the Tribunal for de novo adjudication upon hearing the parties within four months: HC
Matter remanded
2018-TIOL-2226-HC-KOL-CX
CST Vs CALCUTTA INDUSTRIAL SUPPLY CORPORATION: CALCUTTA HIGH COURT (Dated: October 04, 2018)
CX - The assessee is engaged in the business of cleaning factory premises - According to them, they are not assessable to service tax for rendering this service whereas, according to the revenue, they are - The Tribunal held in favour of assessee - Therefore, the question is whether the assessee is assessable to 0% service tax or 12.36% service tax - Thus, this issue has a direct relationship with the rate of duty - In fact, in Calcutta Industrial Supply Corporation, in relation to a similar dispute concerning the respondent as to whether cargo handling service is assessable to service tax or not, the Supreme Court has admitted the appeal - Appeals dismissed on the ground that this Court has no jurisdiction to entertain it - The assessee is given liberty to take out appropriate proceedings in an appropriate forum with regard to self-same cause of action: HC
Appeals dismissed
2018-TIOL-2222-HC-MUM-CX
HINDUSTAN PETROLEUM CORPORATION LTD Vs CCGST & CE: HIGH COURT BOMBAY (Dated: October 15, 2018)
CX - Tribunal had, by its order, confirmed the demand of interest for the period commencing from the date of taking CENVAT credit till the day it was voluntarily reversed - Tribunal disregarded the certificate issued by the Chartered Accountant without giving any reasons and concluded that the appellant did not have excess unutilized credit available during the impugned period - appeal filed by assessee before the High Court.
Held: Chartered Accountant certificate shows month-wise balance of CENVAT credit available and which indicates that the wrongly taken credit was not utilized by the appellant so as to charge any interest - disregarding the CA certificate makes the order bad as being an order without reasons, therefore, impugned order set aside and appeal restored to the file of the Tribunal for fresh consideration - appeal disposed of: High Court [para 6, 9]
Matter remanded
2018-TIOL-2221-HC-MUM-CUS
UoI Vs IMTIAZ IQBAL POTHIWALA: BOMBAY HIGH COURT (Dated: October 16, 2018)
Cus - s.130 of the Customs Act, 1962 - Confiscation of seized gold - Tribunal setting aside the order of confiscation and, therefore, Revenue in appeal.
Held:
+ A finding of fact, unless it is perverse, will not give rise to a substantial question of law and so also an interference from a finding of fact, will not alter its character as one of facts - appreciation of evidence would also be a question of fact in the absence of the same being perverse and/or contrary to the settled position of law - If the impugned order of the Tribunal has taken a view, which is a possible view, then this Court would not interfere with the finding of fact arrived at by the Tribunal: High Court [para 6]
+ Gold is an item which is notified u/s 123 of the Act and it provides that burden of proof in case of notified goods, would be upon the person from whose possession and/or the person who claims ownership of the goods to prove that the seized goods are not smuggled goods - However, before the aforesaid burden could be cast upon the person who claims to be the owner of the seized goods, the Revenue should be able to establish that the goods seized under Section 110 of the Act, was on a reasonable belief that the imported goods were smuggled goods - Therefore, where seizure is a subject of challenge on the ground of absence of reasonable belief then, the question of burden of proof on the person, claiming to be the owner of the goods, would arise only when the challenge to seizure is, negatived - since the Respondent has not challenged the seizure, the burden of proof in this case is upon the Respondent to establish that the seized gold bars are not smuggled: High Court [para 7]
+ Counsel for Revenue was unable to show to the High Court any confessional statements that the seized confiscated gold is a smuggled gold made either by Respondent No.1 and/or his Drivers/ Employee/ Agents - no fault can, therefore, be found in the impugned order dated 3rd June, 2005 on the above question - substantial question of law is answered in the affirmative i.e. in favour of the Respondent-Assessee and against the Appellant-Revenue: High Court [para 8(A)]
+ Tribunal has, on appreciation of facts, come to a conclusion that the Respondent No.1 has discharged his burden under Section 123 of the Act, that the 575 gold bars seized on 8th March, 2000 were not smuggled gold - This finding of fact has not been shown to the High Court, to be perverse - Since it is a possible view on the available facts and the evidence produced by Respondent No.1; the question being one of finding of fact, based on appreciation of the evidence, would not justify interference by the High Court with the impugned order of the Tribunal; both questions are answered in favour of the Respondent and against the Appellant - Revenue Appeal is dismissed: High Court [para 8(B), 9, 10]
+ Counsel for the Revenue seeks a stay of this Order for a period of six weeks to enable Revenue to approach the Supreme Court - Respondent objects and points out that even though the Tribunal had passed an order as far back as 2005, Respondent had yet not released the gold, in the absence of any stay and, therefore, no stay be granted - Considering the fact that the gold has been in possession of the Revenue since 2000, no injustice would be caused to the Respondents if this order is not implemented for a further period of four weeks - Stay granted for a period of four weeks: High Court [para 12 to 15]
Appeal dismissed
2018-TIOL-2220-HC-MUM-CUS
PNP POLYTEX PVT LTD Vs UoI: BOMBAY HIGH COURT (Dated: October 17, 2018)
Cus - Petitioner seeking a writ of mandamus etc. for ordering and directing the respondent to forthwith reimburse the demurrage and detention charges along with interest - Petitioner submits that this payment of demurrage charges arose on account of the malafide action on the part of the respondent in not accepting the transactional value declared of goods imported in February 2013; that although the Tribunal by its order dated 14 th May 2013 upheld the Petitioner's contention, respondent took over three months before allowing the release of goods on the ground that it was in the process of filing an appeal to the Supreme Court.
Held: Mere fact that the Respondent did not release the goods as they were in the process of filing an Appeal to the Supreme Court would not, by itself, lead to the conclusion that the decision was mala-fide - All this is a matter of evidence and can be best adjudicated before the Civil Court by leading evidence; it requires determination of factual issues - High Court is, therefore, not inclined to entertain the Petition - remedy, if any, available to the Petitioner, is to file a suit in a Civil Court where above aspect can be considered - It is made clear that the time spent in bona fide prosecuting the present Petition would be excluded by virtue of Section 15 of the Limitation Act, 1963, if the Respondents do raise a plea of limitation - Petition dismissed: High Court [para 4 to 6]
Petition dismissed
