2019-TIOL-1906-ITAT-KOL

DCIT Vs UM Cables Ltd

Whether commission paid to non-resident agents for services performed in connection with the procurement of orders from foreign customers is not liable for deduction of tax at source and thus no disallowance can be made u/s 40(a)(i) - YES : ITAT

- Revenue's appeal dismissed: KOLKATA ITAT

2019-TIOL-1905-ITAT-MUM

Oil Field Instrumentation India Pvt Ltd Vs ADDL CIT

2019-TIOL-2279-HC-AHM-GST

Mohd Sahil Jakir Vs State Of Gujarat

GST - Detention of truck and goods - Referring to provisions of section 129 of the CGST Act, it was submitted by the petitioner that the same do not contemplate detention of goods on any ground other than the grounds stated therein and that, undervaluation of an invoice cannot be a ground for detention of goods under section 129 of the CGST Act when all the necessary documents as required under section 68 of the CGST Act read with rule 138(A) of the rules have been furnished - Attention is also invited to the to the report of valuation of stock of the petitioner as prepared by Value Team Professional (Government registered Valuer) prepared for Additional Commissioner of Commercial Tax to point out the basis on which, the market value has been computed by him and based on which the respondents sought to confiscate the goods of the petitioner.

Held: Valuation report dated 30.08.2019 does not inspire any confidence - Notice to be issued returnable on 3 rd October 2019 - By way ad-interim relief, the respondent-authorities are directed to forthwith release truck along with the goods contained therein - petitioners, however, shall file an undertaking to the effect that in case, ultimately, they fail in the case, they shall pay the amount of liability under the impugned order: High Court [para 3, 3.1]

- Ad interim relief granted: GUJARAT HIGH COURT

2019-TIOL-2278-HC-UKHAND-GST

PVR Ltd Vs State Of Uttarakhand

GST - Petitioners are running a multiplex in Dehradun and in Rudrapur and had opened their multiplexes in the cities of Dehradun and Rudrapur in pursuance of the order dated 07.06.2011, whereby a policy decision was taken by the State of Uttarakhand that for a new multiplex which will be opened in the State, no entertainment tax will be charged from it and it will be exempted from payment of entertainment tax for a period of five years or till the multiplex recovers its costs of construction, whichever is earlier - petitioners have already availed their entertainment tax for more than two and a half years and in the aeanwhile, since the Goods and Services Tax came into force w.e.f. 01.07.2017, the petitioners are subjected to GST regime and the earlier exemption granted to the petitioners will not operate - Petitioners would argue that in other States [States of Uttar Pradesh and Rajasthan] where a similar situation had come up and difficulties were being faced by the multiplex owners, the State has come forward for their help and they have applied a compensatory scheme in their favour - Counsel for the State argued that under the GST regime nothing can be done.

Held: Bench is of the view that since a new tax regime has come into force w.e.f. 01.07.2017, the earlier benefit which the petitioners were getting as per the Government Order dated 07.06.2011 will not operate now in their favour - However, the petitioners would be at liberty to apprise the State Government of these facts which they have raised before this Court in the present writ petitions, such as about the compensatory scheme made by the States of Uttar Pradesh and Rajasthan and in case the petitioners are able to convince the State Government for bringing a similar scheme here, the State Government may pass appropriate orders in the matter in accordance with law, as expeditiously as possible but preferably within twelve weeks - Petition disposed of: High Court [para 7 to 9]

- Petitions disposed of: Uttarakhand HIGH COURT

2019-TIOL-2277-HC-AHM-GST

Meena Agency Ltd Vs State Of Gujarat

GST - While the goods were being transported, the same came to be intercepted by the second respondent and were detained/seized on the ground that e-way bill was not tendered by the petitioner - second respondent issued impugned notice for confiscation of the goods under section 130 of the CGST Act and provisions of other relevant statutes - Petitoner submits that immediately upon the vehicle being seized on 17.09.2019, the petitioner paid the amount of tax and penalty on 18/19.09.2019, therefore, the goods and the conveyance seized by the respondents may be released subject to the final outcome of the proceedings under section 130 of the CGST Act; that the petitioner is an established agency and is not a fly-by-night operator and hence, the respondents have no reason to apprehend that if, ultimately, any order is passed against the petitioner, they would not be in a position to recover the differential amount.

Held: Court is of the opinion that the petitioner may respond to the notice issued under section 130 of the CGST Act and submit its response thereto - petition is partly allowed with a direction to the second respondent to forthwith release the truck along with the goods contained therein as the petitioner has already paid the amount of tax and penalty, subject to the final outcome of the proceedings under section 130 of the CGST Act and under other relevant statutory provisions - petitioner shall appear before the second respondent on 04.10.2019 at 10:00 a.m and the respondent shall pass a reasoned order as envisaged under section 130 of the CGST Act: High Court [para 8.1, 9, 9.1]

- Petition partly allowed: GUJARAT HIGH COURT

2019-TIOL-2276-HC-DEL-GST

Savan Retailers Pvt Ltd Vs UoI

GST - Petitioner submits that respondents have blocked the ITC of Rs.58,16,444.00/- of the petitioner without any showcause notice, hearing or reasons, and no provision of law has been cited to justify the said blocking of the credit due to the petitioner.

Held: Respondents to examine the petitioner's grievance and to unblock the petitioner's ITC balance, if the blocking is found to be unjustified - Decision in this regard should be taken positively within the next four working days - However, in case, the respondents have any justification for the said blocking of the ITC of the petitioner, they shall file their reply explaining the reasons therefor within ten days from today with advance copy to counsel for the petitioner, who will file a rejoinder thereafter - Matter to be listed on 15.10.2019: High Court

- Matter listed: DELHI HIGH COURT

2019-TIOL-2280-HC-DEL-MISC

Almighty Techserv Vs Directorate Of Logistics

Miscellaneous - Cus – Supply, installation and maintenance of 74 video scopes at various field formations of CBEC - video scopes are used by custom officers to examine the goods at sea ports, air cargo complexes, inland containers depots, etc. and assist in identification and detection of contrabands and smuggled items - Petitioner seeks seting aside the order dated 7.12.2018 whereby respondent No. 1 has awarded the contract to respondent No. 2 as also for issuance of a direction to respondent No. 1 to place the original records pertaining to the contract in question before this Court.

Held:

+ Respondent No. 2 was only trying to gain an unfair advantage by leaving the column blank in the Price Schedule - If we compares the prices quoted by the petitioner and respondent No. 2 we find that the custom duty would have an impact on the price and, therefore, is a determining factor to decide the L-1 bidder - Thus, in the particular facts and context of this case, leaving the column of custom duty blank makes us reach a conclusion that respondent No. 2 was only waiting to see the price bid of the petitioner and then interpret the blank column to suit its convenience - Hypothetically speaking, if respondent No. 2 had been the lowest bidder with a huge difference of price between it and the petitioner it could have interpreted the blank column to state that he would claim custom duty, as it was paid by him and was a statutory due - We are afraid that in tenders such ambiguous biddings cannot be permitted - Had respondent No. 2 been genuine about its stand it would have mentioned in the custom duty column or elsewhere in the bid that the prices quoted were all inclusive and no reimbursement of custom duty would be sought - Thus, the contention of petitioner that the bid was non-responsive and invalid has merit: High Court [para 44]

+ If a tenderer is permitted to leave certain columns blank, this would be an open ended tender and it would be very easy for any tenderer to give its own interpretation to the price bid, post the opening of the price bids, depending on the level at which it is placed in terms of its total bid - such a practice in matters of tenders cannot be permitted as it would be against the very ethos, sanctity and confidentiality of tenders: High Court [para 43]

+ It is clear from a reading of the Instructions that the tenderer was required to fill in all columns of the tender form, and if the tender form was incomplete, the same ought to have been rejected: High Court [para 42]

+ Assuming that the landing charges were to be levied on notional basis at the rate of 1% then having known that respondent No. 2 had subsequently imported the video scopes, landing charges should have been added to the price quoted by respondent No. 2, as well - this action of respondent No. 1 is also not justified, more particularly, because the adding of the 1% notional landing charges has made a difference to the price bid of the petitioner and has adversely affected the determination of L-1 bidder: High Court [para 45]

+ Apex Court has held that where there is substantial public interest involved, or where the transaction is malafide or there is arbitrariness in the award of contract, the Constitutional Courts can interfere - In this context, respondent No. 2 had filed an affidavit before this Court on 28.5.2019 stating therein that in the month of February, 2019 they had imported the video scopes from a Company in USA and had orally submitted that substantial part has thus been performed and only commissioning remains - respondent No. 2 was well aware that the present writ petition has been filed in which on 18.12.2018 an order was passed making the award of the contract subject to the outcome of the writ petition - In fact, the counsel for respondent No.2 had entered appearing on 18.2.2019 and was well aware of the order dated 18.12.2018 at least from the said date - After becoming aware of the matter being sub judice, respondent No. 2 had chosen to import the video scopes in the later part of February, 2019 - Thus, all that can be said is that this was at his own peril - Therefore, to claim prejudice at this stage on the ground that only commissioning remains has no merit - Whilst, it may be true that respondent No. 2 may have imported the video scopes, but this cannot be such a factor in the facts of this particular case which would make the Bench shut its eyes to the arbitrariness in the decision making process: High Court [para 52]

+ Bench is of the view that there is complete arbitrariness in the decision making process by which the tender has been awarded to respondent No. 2 - This apart, respondent No. 1 has also violated various conditions of the tender as well as the circular issued by the Department concerned pursuant to the decision of the Apex Court in Wipro Ltd. - 2015-TIOL-79-SC-CUS - Having come to this conclusion, Bench quashes and sets aside the Letter of Award dated 12.11.2018 issued in favor of respondent No. 2 – Bench, however, clarifies that the official respondent is free to advertise a fresh tender for procurement of the video scopes, depending on their requirements - Needless to state that both the parties are free to participate in the said tender if and when advertised by respondent No. 1: High Court [para 53]

- Writ petition allowed: DELHI HIGH COURT

2019-TIOL-2790-CESTAT-DEL

CST Vs Marketing Times Automobiles Pvt Ltd

2019-TIOL-2789-CESTAT-MAD

Steel Strips Wheels Ltd Vs CCT, CGST & CE

CX - The assessee-company manufactures detergent, toilet soap & cleansing powder - The assessee also availed Cenvat credit - Upon audit, it was alleged that the credit availed by the assessee was inadmissible as the invoice was not in the assessee's name - Hence an SCN was issued proposing to recover the amount allegedly wrongly taken and utilized cenvat credit - On appeal, the Commr.(A) sustained the duty demand but reduced the quantum of the penalty - Hence the present appeal by the assessee.

Held - Perusal of Rule 9 of CCR makes it clear that in order to avail cenvat credit, the manufacturer or provider of output or input service, must produce the documents mentioned in Rule 9(1)(a) - The invoice is an admitted document, perusal of which shows that it contains the details required to be mentioned in compliance of Rule 9, except for that the assessee's name as the consignee was not mentioned in it and only the name of another entity was mentioned in the invoice as the buyer - Hence even if the Revenue's case for the invoice to have no inadvertent mistake in the invoice is concerned, the only different it makes is that instead of the appellant, the other entity would be entitled to avail the credit - There is no case to deny the availment or utilization of credit - The assessee also put forth several correspondences addressed to it, acknowledging that the name of the buyer entity was erroneously mentioned in the invoice - The competent officer upon due verification acknowledged the inadvertent mistake and conveyed the same to the Asst Commr., mentioning that the assessee herein is genuine - Such letter was brought to the Revenue's notice much prior to the order of the original adjudicating authority - Hence the adjudicating authority erred in ignoring the verification done by the Revenue itself - While these errors were brought to the notice of the Commr.(A), the appellate authority nonetheless confirmed the demands - Hence the O-i-A in challenge was passed with a biased mind ignoring legal propositions and factual aspects of enquiry conducted by the Revenue itself and so merits being quashed: CESTAT

- Assessee's appeal allowed: DELHI CESTAT

2019-TIOL-2787-CESTAT-MAD

Harita Fehrer Ltd Vs CGST & CE

Kirtilal Kalidas Jewellers Pvt Ltd Vs CCGST & CE

Cus - The appeal is filed by assessee against impugned order challenging the rejection of refund claimed of the amount paid by assessee as late filing charges - There is no doubt that imposition of late filing charges is not mandatory but it is only subject to non-satisfaction as to the sufficiency of reasons - It is a matter of record that the assessee made its first import and accordingly filed the Bill of Entry on an earlier occasion dated 28.07.2017, which was assessee’s first import - It is also an undisputed fact that the assessee was regularly importing cut and polished diamonds through Mumbai Airport - Revenue has not disputed the date of arrival of impugned goods at the notified airport, it is not the case of Revenue that the goods imported are contraband nor is it the case of Revenue that there was total prohibition for import activity at the Coimbatore Airport - Undisputedly, Coimbatore Airport is one of the notified airports in the country in terms of Customs Act and it is also a fact on record that the assessee was asked not to effect imports at that particular airport, for whatever reasons - When an Act mandates certain things, it is assumed, subject to tests by the Courts, that anything done contrary to such mandates of law are not acceptable and it is equally unacceptable to narrow down the applicability of such statutes by the implementing authorities - Therefore, when an item is imported at a notified airport, the authorities cannot find fault with such import for want of proper officers, which is not the concern of the importer - Statute notifies an airport and through law requires appointment of appraising staff and if no such officers are appointed, then such deficiency which is not attributable to an importer cannot force an assessee to search for alternate options and in any case, the appointment or otherwise as above of proper officers is not the choice of the importer - It is a fact borne on record that the importer made sincere efforts and even went to the extent of requesting for engaging an appraiser, at its cost, which is undisputed by the Revenue - Tribunal do not see any delay on the part of assessee in filing the Bill of Entry; and if there is no delay, the same cannot be attributed to the assessee - In such a situation therefore demanding late filing charges cannot sustain and consequently, the demand as well as the impugned order is set side: CESTAT

- Appeal allowed: CHENNAI CESTAT

2019-TIOL-2786-CESTAT-MAD

Arihant Groups Vs CC

TII

TP - ALP of specified domestic transactions has to be established by comparing such transactions with unrelated parties only: ITAT

TP - Matter for determination of ALP calls for remand if additional evidences placed on record were brushed aside while drafting such computation: ITAT

TP - Entity engaged in software products are not comparable to those engaged in rendering SWD services, in absence of segmental reporting: ITAT

TIOL CORPLAWS

Arbitration & Conciliation Act, 1996 - Arbitrator's appointment cannot be challenged at section 34 stage if his interest in the matter was not challenged during arbitration proceedings: HC

SEBI Act, 1992 - Recovery proceedings against legal representative cannot continue after death of defaulter: SAT

SEBI Act, 1992 - Fault of investors does not mitigate the liability of broker in violation of securities laws: SAT