DCIT Vs Adhunik Transport Organisation Ltd

Whether when assessee has fulfilled all three ingredients viz. identity, creditworthiness of the investors and genuineness of the transactions, no addition can be made u/s 68 as unexplained cash credit merely on the basis of third party statements, especially without proving an opportunity of cross examination to the assessee - YES: ITAT

- Revenues appeal dismissed: MUMBAI ITAT

Anraj Hiralal Shah HUF Vs ITO

Whether addition on account of bogus transaction can be made merely on the basis of reports of the Investigation Wing if share purchase transactions are supported by documents & D-mat account statements - NO : ITAT

Assessee's appeal allowed: MUMBAI ITAT

2019-TIOL-1771-ITAT-DEL

Ratna Commercial Enterprises Pvt Ltd Vs DCIT

Whether penalty u/s 271(1)(c) can be levied when disallowance came to be sustained only due to the difference in the opinion between the assessee & Revenue for allowability of such disallowance - NO: ITAT

- Assessee's appeal allowed: DELHI ITAT

Seraj Yusha Vs ACIT

Whether failure of taxpayer having turnover of more than sixty lakhs, to get his accounts audited u/s 44AB, calls for levy of penalty u/s 271B - YES: ITAT

- Assessee's appeal dismissed: CUTTACK ITAT

2019-TIOL-2129-HC-AHM-GST

Pranit Hem Desai Vs Additional Director General

GST - Petitioner requests to issue writ of mandamus or any other appropriate writ directing the respondent No.01 to immediately remove attachment of following bank accounts belonging to petitioner No.02 company - In the first round, the writ applicants came before the Court challenging the action on the part of the respondent No.1 in provisionally attaching the bank accounts and the High Court had by its order dated 12 April 2019 disposed of the application 2019-TIOL-831-HC-AHM-GST with certain directions - It appears that no sooner it was pointed out to the respondent No.2 that he could have invoked Section 74 of the Act for the purpose of passing an order of provisional attachment under Section 83 of the Act, having realized its mistake, the respondent No.2 tried to correct the same by issuing a corrigendum dated 26th April 2019 - Court had directed the writ applicants to file their objections to the action taken under Section 83 of the Act by availing the provision under subsection (5) Rule 159 of the Rules - and pursuant thereto the instant order came to be passed wherein it is held that the request of the applicants to withdraw orders issued under Section 83 is devoid of any merit and deserves to be rejected - Special Civil Applications/writ applications filed against this order.

Held: Only question that falls for consideration is whether the respondent No.1 was justified in invoking Section 83 of the Act for the purpose of passing an order of attachment of the bank accounts - Without entering into any other controversy, Bench is inclined to allow all the six writ applications on the short ground that during the period between July 2017 and May 2019, the total input tax credit availed by the writ applicants aggregates to Rs.59,49,18,103/-, whereas the total tax paid during this period aggregates to Rs.63,62,41,525/- and the same is indicative of the fact that against the availment of credit of Rs.59,49,18,103/-, an amount of Rs. 63,62,41,525/- came to be paid by way of tax; that it appears that an amount of Rs.4,13,23,422/- has been paid in excess than the amount of credit availed, therefore, in such circumstances, it cannot be said that the interest of the government revenue is at a stake - even if it is assumed that the allegations as levelled by the department are correct and the credits though not available were wrongly availed since the tax had been paid, though it was not payable having regard to the fact that there was no supply of goods, the availment of credits could be said to be justified on two counts: (1) it is a revenue neutral satisfaction and (2) payment of tax although not payable yet is to be treated if unavailable credits are reversed if they were wrongly paid - decision in H M Industrial Pvt Ltd vs. Commissioner, CGST and Central Excise = 2019-TIOL-460-HC-AHM-GST is relied upon - respondents are also reminded of the observations made by a Coordinate Bench in the case of M/s Patran Steel Rolling Mill vs Assistant Commissioner of State Tax, Unit 2 = 2018-TIOL-2937-HC-AHM-GST - Court had the occasion to consider Section 83 of the State GST Act, 2017 at length in the case of Valerius Industries vs Union of India = 2019-TIOL-2094-HC-AHM-GST - Section 83 of the State GST Act empowers the Assessing Authority to make a provisional attachment of any property of the assessee during the pendency of any proceeding for the assessment or reassessment of any turnover, even though there is no demand outstanding against the assessee, if he is of the opinion that it is necessary to do so to protect the interest of the revenue - This provision has been made, in our opinion, in order to protect the interest of the revenue in cases where the raising of demand is likely to take time because of the investigations and there is apprehension that the assessee may default the ultimate collection of the demand - In other words, Section 83 gives a power to be exercised during the pendency of any proceeding for assessment or reassessment, so that the assessee may not fritter away or secrete his resources out of the reach of the Commercial Tax department when the assessment or reassessment is completed - The expression "for the purpose of protecting the interest of the revenue" occurring in Section 83 of the Act is very wide in its meaning - Further, the orders of provisional attachment must be in writing - There must be some material on record to indicate that the Assessing Authority had formed an opinion on the basis thereof that it was necessary to attach the property in order to protect the interest of the revenue - The provisional attachment provided under section 83 is more like an attachment before judgment under the Code of Civil Procedure - It is a liability on the property - However, the power conferred upon the Assessing Authority under Section 83 is very drastic, far-reaching power and that power has to be used sparingly and only on substantive weighty grounds and for valid reasons - To ensure that this power is not misused, no safeguards have been provided in the Section 83 - One thing is clear that this power should be exercised by the Authority only if there is a reasonable apprehension that the assessee may default the ultimate collection of the demand that is likely to be raised on completion of the assessment - It should, therefore, be exercised with extreme care and circumspection - It should not be exercised unless there is sufficient material on record to justify the satisfaction that the assessee is about to dispose of the whole or any part of his property with a view to thwarting the ultimate collection of the demand - Moreover, attachment should be made of the properties and to the extent it is required to achieve the above object - It should neither be used as a tool to harass the assessee nor should it be used in a manner which may have an irreversible detrimental effect on the business of the assessee - Bombay High Court in Gandhi Trading v. Asst. CIT 3 (1999) 239 ITR 337 Bom. has opined that the attachment should be made, as far as possible, of the immovable properties if that can protect the Revenue - The attachment of bank accounts and trading assets should be resorted to only as a last resort because, the attachment of the bank accounts of the assessee would paralyse the functions and business of the assessee - The Authority, therefore, should exercise the power conferred upon him under Section 83 of the Act with circumspection and fairly and reasonably - No hard and fast rule can be laid down as to how and under what circumstances the power under Section 83 can be invoked by the Authority - The discretion conferred on the Authority shall be brought to bear having regard to the facts and circumstances of each case - It is not permissible for the Authority to equate the provisional attachment envisaged under Section 83 of the Act with attachment in the course of the recovery proceedings - all the six writ applications succeed and are allowed - The orders of provisional attachment of the bank accounts of the writ applicants are hereby quashed and set aside: High Court [para 9, 10, 22 to 30]

- Petitions allowed: GUJARATA HIGH COURT

Sandiyaa Exports Vs CCT

Whether adverting to carelessness in passing an assessment order without following due process by ignoring the assessee's objections to pre-assessment notice makes the assessment invalid - YES: HC

- Assessee's writ petition allowed: MADRAS HIGH COURT

Chhotabhai Retailing India Pvt Ltd Vs ACST

Whether conducting an inspection is construed as completion of the exercise of determination to the best of the Assessing Authority judgment for the purpose of computing limitation period for holding revision u/s 27(1)(a) - NO: HC

Whether limitation period for issuing the revision notice starts from the day when proposal notice was issued and not from the day when inspection was conducted - YES: HC

- Assessee's writ petitions allowed: MADRAS HIGH COURT

2019-TIOL-2627-CESTAT-DEL

Bhiwadi Rolling Mills Pvt Ltd Vs CCE & ST

CX - The assessee is engaged in manufacture of M.S. Flats, Rounds and Squares - A SCN was issued to assessee for demanding Central Excise duty for removing the goods valued @ Rs.27.39 Crores and for imposing penalties on directors, former director and Manager of assessee - Since the assessee is willing to pay Central Excise duty demandable from them, their contentions about violation of principles of natural justice are not being considered - One of the main contention of assessee is that the suppliers of goods had collected Central Excise duty from it while supplying the goods without invoices and some of the suppliers had already deposited the said duty with Department and considerable amount of duty has been confirmed against other suppliers - In the interest of justice and in view of the fact that the assessee is not contesting the duty liability as they want peace of mind, substance and force found in their submissions - However, where the amount of duty has been deposited by the suppliers, the duty liability of assessee is ordered to be reduced by the said amount - But in cases where demand of duty has only been confirmed and not deposited by suppliers, such amount cannot be allowed to be deducted - However, as and when such duty is deposited by suppliers, the Revenue may refund such amount to the assessee - Regarding sale of M.S. Flats, the records resumed by officers and relied upon in SCN and the impugned order clearly show purchase of M.S. Flats by the assessee - This is evident from the profit & loss account of assessee scanned in SCN itself - Once the Revenue has placed reliance on resumed documents and data retrieved from laptop, it cannot be claimed that M.S. Flats were not purchased and sold as such - The documents have to be believed in toto and not in part only - Duty of excise is not demandable from assessee on the quantity of M.S. flats purchased and sold as such - Similarly, the duty of excise cannot be demanded on the quantity of Miss Rolls sold as such by assessee - Penalty on assessee is imposable under Section 11AC of CEA, 1944, as the finished goods have been removed without payment of duty - However, separate penalties are not imposable on Directors and former Director, once the penalty under Section 11AC has been imposed on assessee - Hence, the Commissioner is directed to compute the duty amount payable by assessee: CESTAT

- Matter remanded: DELHI CESTAT

2019-TIOL-2626-CESTAT-ALL

Padma Flashlights Pvt Ltd Vs CCE

CX - M/s Padma Flashlights Pvt. Ltd. and M/s Mahalaxmi Industries are located in Roorkee area of Uttrakhand, where Notfn 50/2003-CE granting area based exemption to the manufacturing units was in existence - The said two units, who are engaged in manufacture of torches were availing the benefit of said Notification, which grants exemption in respect of manufactured excisable goods subject to conditions enumerated therein, to the units located in that area - The Revenue's entire case is based upon the fact that Mumbai unit of assessee had manufactured head units and body unit of the torch which was assembled in Mumbai and it is only thereafter the same were again disassembled and transported to Roorkee - Roorkee units have only assembled the fully manufactured parts and have cleared the torches after claiming the benefit of the notification - The two units located at Roorkee were only manufacturing switches in question and were not in a position to manufacture the full torch - It is well settled law that once the assessments are finalized at the suppliers end, they cannot be reopened and reassessed at the recipient’s end - As such, once it is finalized that Mumbai unit had cleared parts under final assessment, the goods received by the Roorkee unit are also required to be assessed as parts - On this ground, the Revenue’s claim that Roorkee unit received complete torches and no manufacturing was done at their end, cannot be appreciated - Apart from above, it is noted that the assembling of various parts amounts to manufacture in terms of provisions of Section 2(f) of Central Excise Act inasmuch as the same encompasses any incidental or ancillary activity - Even as per Note 6 of Section XVI the conversion of an incomplete article into a complete article would amounts to deemed manufacture - The Amending Notfn 01/2008-CE is applicable only in those cases where the processes undertaken does not amount to manufacture - Inasmuch as the activity at Roorkee was of manufacturing nature, the benefit of the Notification stands correctly availed by them - No justifiable reason found to uphold the impugned orders - Accordingly, the same are set aside: CESTAT

- Appeals allowed: ALLAHABAD CESTAT