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2019-TIOL-NEWS-205 Part 2| Friday August 30, 2019
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Dear Member,
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TIOL Content Team
TIOL PRIVATE LIMITED.
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DIRECT TAX |
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2019-TIOL-1974-HC-DEL-IT
Shree Bhavani Power Projects Pvt Ltd Vs ITO
On Writ, the High Court holds that there is a non application of mind by the AO while reopening the assessment. If the deduction u/s 80IA claimed by the assessee was not allowed in the first instance, and the intimation sent to the assessee u/s 143(1), then the question of any escaped income does not arise. Hence, the notice issued by the AO u/s 148 and the order rejecting the objections of the assessee to the reopening of the assessee is set aside.
- Assessee's Writ petition allowed: DELHI HIGH COURT
2019-TIOL-1973-HC-DEL-IT
Pr.CIT Vs Federal Mogul Goetze India Ltd
On appeal, the High Court holds that the concurrent determination both by the CIT (A) and ITAT on the justification for the prior period expenses incurred by the assessee and the factual finding of the ITAT that the assessee is having surplus funds which it could part with for the business interests of its subsidiary is plausible and hence, it does not call for interference.
- Revenue's appeal dismissed: DELHI HIGH COURT
2019-TIOL-1972-HC-DEL-IT
Pr.CIT Vs Radico Nv Distilleries Maharashtra Ltd
On appeal, the High Court holds that there is no reason to entertain the present appeal as the ITAT has clarified the subsequent developments which resulted in the assessee's settlement application being revived before the Income Tax Settlement Commission (ITSC) and the further proceedings depends on the outcome of the proceedings before the ITSC.
- Disposed of: DELHI HIGH COURT
2019-TIOL-1971-HC-MAD-IT
P Sivalingam Vs Pr.CIT
On Writ, the High Court holds that the revisional authority is vested with powers to condone delay under proviso to Section 264(3) without any statutory cap qua length of delay. Thus, the delay for AY 2012-13 is condoned and both matters would been taken up and heard out on merits.
- Disposed of: MADRAS HIGH COURT
2019-TIOL-1970-HC-KOL-IT
CIT Vs Peerless General Finance And Investment Company Ltd
On appeal, the High Court holds that there is no merit in the appeal with regard to the AY 2002-2003, but for AY 2003-2004 the issue is alive and thus, the issuance and service of the notice of appeal are dispensed with counsel and this appeal is lists for hearing on 14th November, 2019.
- Case Deferred: CALCUTTA HIGH COURT
2019-TIOL-1969-HC-KAR-IT
Rinku Chakraborthy Vs DCIT
On Writ, the High Court holds that the writ jurisdiction against the order of the Tribunal in dismissing the miscellaneous petition as time barred is not available to the assessee as it is a discretionary order. However, the assessee ought to have preferred an appeal u/s 260A before the High Court, if any substantial question of law arose in the matter.
- Assessee's Writ petition dismissed: KARNATAKA HIGH COURT
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GST CASES |
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2019-TIOL-1991-HC-MUM-GST
Hardcastle Restaurants Pvt Ltd Vs UoI
GST - Petitioner challenges the order dated 16th November 2018 passed by the National Anti-Profiteering Authority and wherein amount of profiteering is determined as Rs.7,49,27,786/- - It is pointed out to the Bench that the order was passed by four members of the Authority,while the application itself was heard only by three members and, therefore, the impugned order is in breach of principle of natural justice - Counsel for Revenue submits that that the hearing by the three members and the order being passed by four members of the Authority is only a procedural irregularity and is not substantive in nature; that no prejudice is shown to be caused to the Petitioner by one more member passing the order along with the three who heard the application - Counsel appearing for the Respondents has sought time to address the Bench on this issue and bring to its notice decision of Court in support of his contentions.
Held: At the request of the Counsel for the Respondent Revenue, Petition is adjourned to 11th September, 2019 - Ad-interim relief, if any, granted earlier to continue till the next date: High Court [para 5, 6]
- Matter adjourned: BOMBAY HIGH COURT
2019-TIOL-1990-HC-KAR-GST
Raj Enterprises Vs ACCT
GST - The writ-appellant had filed a petition to challenge an order of detention u/s 129(1) of the CGST 2017, as well as notice issued u/s 129(3) of the Act - The petitioner's counsel claimed that the notice invoked u/s 129(1)(b) which proceeds on the footing that the petitioner is the owner of the goods - The petitioner claimed that as per Board Circular dated 31.12.2018, which lays that for purposes of Section 129(1) of the CGST Act, if the invoice or any other specified document accompanies the consignment of goods, either the consignor or the consignee would be deemed to be the owner of the goods - Hence the petitioner claimed that the provisions of Section 129(1)(a) would be attracted, in which case, the penalty would be payable u/s 129(1)(a) and not u/s 129(1)(b) - Later, the Single Judge of the High Court permitted the petitioner to file additional documents and directed the authorities concerned to pass a speaking order - The petitioner had filed reply to detention order but no reply to the SCN u/s 129(3) was filed.
Held - The petitioner can always contend before the authority concerned that in view of Circular dated 31.12.2018, the petitioner would have to be treated as the owner of the detained goods - Therefore, the penalty payable would be as per Section 129(1)(a) - Though the SCN proceeds on the footing that the provisions of Section 129(1)(b) are applicable, the authority concerned would have to consider the applicability of Section 129(1)(a) and if prayed to such effect, whether the petitioner is entitled to benefit u/s 129(1)(c) of the CGST Act - Hence the authority concerned is directed to keep such factors in mind when passing a speaking order as per the directions of the Single Judge - Time to file the additional explanation to the notice along with the documents is extended by a period of one week from today: HC
- Writ appeal disposed of: KARNATAKA HIGH COURT
2019-TIOL-1986-HC-AHM-GST
National Enterprise Vs State Of Gujarat
GST - Litigation has something to do with the seizure of the conveyance and the goods u/s 129 of the CGST Act, 2017 - authority has already proceeded for the confiscation of the vehicles and the goods in question u/s 130 of the Act - However, as on date, the limited relief which is prayed for is for the release of the vehicles and the goods seized by the authority under the Act.
Held: If the requisite amount towards tax and penalty is deposited with the authority, vehicles as well as goods shall be released at the earliest - If the proceedings under Section 130 of the Act have already been initiated, the same may continue subject to the final outcome of all the writ applications: HC
- Interim relief granted: GUJARAT HIGH COURT
2019-TIOL-1985-HC-KERALA-GST
Vera Display And Storage Products Pvt Ltd Vs State Tax Officer
GST - Petitioner challenges the order dated 13.06.2019 of the Single Judge; contends that the Single Judge ought to have considered the writ petition on the merits of the impugned order because the same suffers from the illegality of denial of opportunity of personal hearing - Bench is of the considered opinion that such a ground would be available before the Appellate authority while challenging the impugned order, hence it is not persuaded to interfere on that ground: HC
GST - Appellant contends that Section 107(6) of both the CGST Act and the KSGST Act stipulates a pre-condition for deposit of 10% of the disputed amount of tax for maintaining an appeal; that since the entire amount in dispute is secured through the Bank Guarantee furnished, which the department can encash in case the appeal is dismissed, the insistence for deposit of 10% in compliance with the stipulations under Section 107(6) will work out to prejudice to the appellant - Bench views that the above mentioned point is not germane for consideration in this writ appeal and this was not an issue agitated before the Single Judge - Bench also notices that a statutory appeal is yet to be filed - If the petitioner is intending to seek exoneration or waiver from the pre-conditions stipulated, it is for them to take steps, if any, available, either before the Appellate Authority or before any other appropriate forum - writ appeal is hereby disposed of by leaving liberty to the appellant as mentioned above - nonetheless, encashment of the Bank Guarantee furnished is kept in abeyance until disposal of the appeal: High Court [para 3, 6, 7]
- Petition disposed of: KERALA HIGH COURT
2019-TIOL-1984-HC-KERALA-GST
Vera Display And Storage Products Pvt Ltd Vs State Tax Officer
GST - Petitioner challenges order made u/s 129 of the Act - petitioner, by furnishing bank guarantee has obtained release of goods detained - objection of the Government Pleader is that instead of availing the remedy of appeal, the writ petition is filed without showing one or the other circumstance which attracts jurisdiction of this Court under Article 226 of Constitution of India and hence the writ petition is untenable.
Held: Without expressing a view on merits, the writ petition is dismissed - as the petitioner apprehends encashment of bank guarantee, there shall be a stay of encashment of bank guarantee for two weeks - petitioner, in the meantime, should avail the remedy of appeal and the appellate authority disposes of the stay application within the two week period: High Court [para 4, 5]
- Petition dismissed: KERALA HIGH COURT
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MISC CASES |
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2019-TIOL-1988-HC-JHARKHAND-VAT
Brahmaputra Metallics Ltd Vs State Of Jharkhand
Whether the assessee is entitled to claim ITC on purchase of coal which is used by it for generation of electricity in its integrated captive power plant which in turn is utilized for manufacturing and processing of its finished goods for sale - YES: HC
Whether in absence of production of statutory declaration form JVAT 404, the claim of ITC can be denied despite availability of substantial evidence indicating valid purchase of inputs after payment of Input Tax - NO: HC
Whether production of JVAT 404 forms is a mandatory condition for availing the benefit of ITC on purchases as per section 18(6) of the JVAT, 2005 - NO: HC
- Assessee's writ petition allowed : JHARKHANDHIGH COURT
2019-TIOL-1987-HC-MAD-VAT
Sudirman Paper Pvt Ltd Vs State Tax Officer
Whether for revised assessment under TNVAT & CST Act, it is necessary to issue notice in the name of the transferor company as it was paying taxes in its name prior to amalgamation - YES: HC
- Disposed of: MADRAS HIGH COURT
2019-TIOL-1968-HC-P&H-VAT Excise And Taxation Commissioner, Haryana Vs Indian Oil Corporation Ltd
On appeal, the High Court held that, the present appeal has been filed after a delay especially when the Tribunal has already given the detailed reasons for not accepting the vague grounds for delay. Thus, this casual approach on the part of the Revenue is not acceptable, especially when high stakes involving public exchequer are involved.
- Revenue's appeal dismissed: PUNJAB AND HARYANA HIGH COURT |
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INDIRECT TAX |
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SERVICE TAX
2019-TIOL-1989-HC-ALL-ST Premier Car Sales Ltd Vs CCE & ST
ST - The assessee is an authorised dealer of Hyundai brand motor vehicles - It provided taxable services of Business Auxiliary Services, Service of Motor Vehicle and Transport of Goods by Road - Before the jurisdictional Asst Commr. of Service Tax, the assessee claim refund of tax paid on logistics charges, on grounds that it had already paid VAT on the same and that both VAT & service tax could not simultaneously be levied - However, such refund claims were rejected on grounds that the application had been filed beyond limitation as well as on grounds of unjust enrichment, as the assessee submitted no proof that the incidence of service tax paid had not been passed on to any other person - On appeal, the Commr.(A) held that the service tax had been correctly imposed on the logistic charges & so no question of refund would arise - The Tribunal later observed that an application for refund is governed u/s 11B of the Act, which prescribed one year limitation period - It then held that as there was no provision for extending such period, the refund claim had been filed beyond the limitation period - Hence the present appeal was filed by the assessee.
Held - Limitation - Perusal of Section 11B clarifies that an application for refund must be filed within one year from the relevant date - While the assessee did not dispute that the refund was claimed beyond limitation, it was argued that the duty had been paid under protest and that by virtue of second proviso to Section 11B, the time period would not hinder the refund in favor of the assessee - However, before the Tribunal, the assessee conceded that the service tax was not deposited under protest, thereby getting disentitled from benefit of second proviso to Section 11B of the Act - In light of the same and the settled legal position, the application for refund of service tax was rightly rejected - The Tribunal's order suffers from no infirmity: HC
Held - Merits - Service tax was levied on the logistics charges charged by the assessee on the transportation of car at the buyer's doorstep and the same amounts to service of transportation/delivery of goods on which the appellant paid Service Tax - The assessee moved application for refund subsequent to order passed by VAT authorities simultaneously levying VAT on the logistics charges - It stands settled by the Apex Court in Imagic Creative that levy of VAT and Service Tax are mutually exclusive - They should be held to be applicable, having regard to the respective parameters of service tax and sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract - It may consist of different elements providing for attracting different nature of levy - Hence it is difficult to hold that in cases of this nature, VAT is payable on the value of the entire contract - Where it is held by the lower authorities that service tax is rightly levied, there can be no occasion to refund the same, such findings must be upheld when there is nothing on record to controvert such findings - Hence the present appeals are devoid of any merit: HC
- Assessee's appeals dismissed: ALLAHABAD HIGH COURT
2019-TIOL-2468-CESTAT-MAD A P Enterprises Vs CST
ST - The assessee filed a claim for refund being the service tax paid by them under category of Survey and Exploration of Mineral Services - The department was of the view that part of refund claim is hit by limitation under section 11B of CEA, 1944 and also that the service tax is paid by assessee therefore they are not eligible for refund - The contracts entered by assessee do not show that the activities explained would fall under Survey and Exploration of Mineral Services - For this reason, assessee is not liable to pay service tax during the disputed period on the consideration received under such contracts - When the amount has been paid wrongly by mistake and when service tax is not leviable on the activity, the amount paid does not take the colour of service tax - If the amount paid which does not take the colour of service tax, the same has to be refunded to the claimant subject to the provision of unjust enrichment - For such refund, the time-limit under section 11B is not applicable - However, taking note of the fact that the refund is rejected not only on the ground of time bar but as well on unjust enrichment, the matter is remanded to the adjudicating authority to reconsider this issue of unjust enrichment - The assessee would be eligible for refund, if they are able to prove that the refund is not hit by unjust enrichment: CESTAT
- Matter remanded: CHENNAI CESTAT
2019-TIOL-2467-CESTAT-DEL
Kumaon Mandal Vikas Nigam Ltd Vs CCE & ST
ST - Assessee is a State Government Undertaking and their appeal before the Commissioner (A) was dismissed on limitation, as the same was filed at a delay of about 297 days - The assessee had also filed a writ petition before the Uttarakhand High Court which was disposed of by observing that the O-I-O is an appealable order and the assessee may file appeal within 30 days before the competent authority, hoping that the said authority shall not throw the appeal merely on the ground of limitation - However, the Commissioner (A) dismissed the appeal on limitation - The order of Uttarakhand High Court, appears to have either not been brought to the notice of Commissioner (A), or the Commissioner (A) failed to take notice of the same, as it appears from the impugned O-I-A - Tribunal also at the time of passing of Final Order skipped to take notice of order of Uttarakhand High Court, which was mentioned in the statement of facts - Thus, it appears to be mistake of fact apparent on record, committed by this Tribunal, while disposing the appeal - From the order of Uttarakhand High Court, it is apparent that the High Court granted indulgence, while relegating the matter to the appellate authority, to dispose of the appeal on merits - Appeal is allowed by way of remand to the Commissioner (A) who is directed to hear the appeal on merits and pass a reasoned order in accordance with law: CESTAT
- Matter remanded: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-2466-CESTAT-AHM
Apar Industries Ltd Vs CCE & ST
CX - During the relevant period, the Revenue pointed out that the assessee-company had not paid service tax on certain services - Upon visiting the assessee's factory, the officers of the Preventive Unit observed that the assessee had not paid service tax under RCM in respect of Manpower Supply service, security service and GTA service - Hence duty demand was raised with interest & penalty being imposed - The same was paid by the assessee, whereupon the case was closed and no SCN was issued - The assessee availed Cenvat credit of the service tax paid on such services and informed the Revenue - Thereafter, an SCN was issued proposing to deny credit on grounds of there having been suppression of facts with intent to evade payment of tax and that as per Rule 9(1)(bb) of CCR 2004, credit was inadmissible where suppression of facts is involved - Such denial of credit vide the O-i-O was sustained by the Commr.(A) - Hence the present appeal.
Held - The assessee paid the duty demanded with interest & penalty upon being pointed out by the Revenue - Hence neither any SCN was issued nor any O-i-O passed on the issue of non payment of service tax - The proceedings in respect of demand of service tax came to an end - This closure shows there to be no suppression of facts involved - If the Revenue opined there to be any suppression of facts, there was no option but to issue SCN and pass O-i-O invoking proviso to Section 73(1) - Since there is no case covered under proviso to Section 73(1), there is no suppression - Moreover, the Revenue itself directed the assessee to pay penalty u/s 76 and did not invoke Section 78, which pertains to penalty imposed for suppression of facts - Hence all this goes to show there to be no suppression of facts with intent to evade payment of penalty - Thus Rule 9(1)(bb) is not invokable here and so the denial of cenvat credit is untenable: CESTAT
- Assessee's appeal allowed: AHMEDABAD CESTAT
2019-TIOL-2465-CESTAT-MAD
Arignar Anna Sugar Mills Vs Commissioner of GST & CE
CX - The assessee-company is engaged in manufacturing Sugar - As part of the manufacture process, Bagasse is generated as a waste product - During the relevant period, the Revenue proposed to treat the bagaqsse as exempted goods manufactured by the assessee - Hence duty demand was raised under Rule 6(3) of CER on grounds that the assessee is liable to pay an amount equivalent to the value of the clearance of Bagasse - Hence the present appeal.
Held - The issue at hand is whether the assessee is liable to pay an amount equivalent to the 10%/6%/5% of the clearance of Bagasse - The issue at hand stands settled by the Tribunal's decision in M/s. Kichha Sugar Company Ltd., Vs CGST,CC & CE, Dehradun - It was held in this judgment that the main condition for Rule 6 was the obligation of a manufacturer or producer of final products and did not extend to the by-products released during the process of manufacture of main products that too without the involvement of any such activity, which may be termed as manufacture - It was then held that irrespective of the amendment to Rule 6(1), there arose no liability to pay duty as demanded and that no credit was to be reversed for the period in question - Therefore, following such findings, the duty demand raised in the present case is unsustainable: CESTAT
- Assessee's appeal allowed: CHENNAI CESTAT
CUSTOMS
2019-TIOL-2464-CESTAT-AHM
B N Thakkar And Company Vs CC
Cus - The impugned order was passed by Principle Commissioner, whereby the CB license of assessee was suspended in a Custom case where the export goods were found to be overvalued and in that custom case, the SCN was issued on 07.09.2017 and the same was adjudicated vide order dated 26.02.2019 - Thereafter, vide the impugned order dated 30.04.2010 the suspension order was passed - There is no dispute that the goods with reference to which the suspension order was passed was seized on 10.03.2017 and the SCN was issued on 07.09.2017 - If at all the revenue is of view, customs broker should be prohibited from carrying out the work of customs broker, the license should have been suspended immediately after detection of the case by the customs authority whereas in the present case admittedly, the order for suspension was passed almost after 2 years from the date of seizure - The judgment of this Tribunal in P. Sawasji & Co was passed taking reliance of Bombay High Court judgment in case of National Shipping , being an identical issue involved, following the said order, Tribunal do not agree with the Commissioner in passing suspension order - Accordingly, the impugned order is set aside: CESTAT
- Appeal allowed: AHMEDABAD CESTAT |
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HIGH LIGHT (SISTER PORTAL) |
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