ITO Vs Jaisukhrai Ramniklal Sheth

Whether the entire purchases made by an assessee deserve to be disallowed, where quantitative details establish fact of purchases made, even if some purchases are made from dubious sources to avoid payment of VAT or Sales Tax - NO: ITAT

- Revenue's appeal dismissed: MUMBAI ITAT

2019-TIOL-2407-ITAT-DEL

Deepak Kumar Gupta and Sons HUF Vs ITO

Whether addition of income can be made in reassessment proceedings based on documentary evidence collected during search and as consequence of assessee's failure to explain logic of low profit marin in sale transaction of huge old gold jewellery at far place by person - YES : ITAT

- Assessee's appeal dismissed: DELHI ITAT

2019-TIOL-2406-ITAT-HYD

Naveen Kumar Kaparthy Vs ITO

Whether audit of accounts is required where no books of accounts are maintained in the first place & whether the provisions of Section 44AB can be said to have been violated - NO: ITAT

Whether therefore if no books of accounts are maintained and mandate of Section 44AB is not violated, consequently, no penalty is attracted u/s 271B - YES: ITAT

Whether penalty can be imposed after applying net profit rate, which runs contrary to the settled law that no penalty can be imposed on ad hoc disallowance or additions made on estimate basis - NO: ITAT

- Assessee's appeals allowed: HYDERABAD ITAT

2019-TIOL-2405-ITAT-MUM

Mahindra and Mahindra Ltd Vs DCIT

Whether mistake committed by AR on behalf of assessee, would fall under the ambit of mistake apparent on record committed by Tribunal warranting rectification u/s 254(2) - NO: ITAT

Whether when AR admits at time of hearing that specific ground was not pressed by him in view of retrospective amendment in the statute, then same would only constitute mistake committed by AR on behalf of assessee - YES: ITAT

- Assessee's M.A dismissed: MUMBAI ITAT

Juwi India Renewable Energies Pvt Ltd Vs UoI

GST - Petitioner has challenged rejection of its request seeking extension of the period for filing TRAN-1.

Held: Issue involved is no more res integra inasmuch as Court has extended the period to file/revise the TRAN-1 by the registered persons by 31.12.2019 – petitioner is also entitled for similar benefits: High Court [para 2]

- Petition disposed of: KARNATAKA HIGH COURT

2019-TIOL-2750-HC-AHM-GST

Mahmmadbhai Pirabhai Sadhriyat Vs UoI

GST - Petitioners have challenged the order of confiscation of vehicles and in respect of which an option of redemption on payment of redemption fine is given by the Additional Commissioner.

Held: A perusal of the impugned order-in-original reveals that the same has been passed under the provisions of the Central Goods and Services Tax Act - It is not the contention of the petitioners that the adjudicating authority lacks the jurisdiction to decide the matter - The only contention is that the impugned order is an unreasoned order and is in breach of the principles of natural justice - When the petitioners were served with the show cause notice and were provided an opportunity of hearing, it cannot be said that the impugned order suffers from breach of the principles of natural justice - As regards the contention that the impugned order is a non-speaking order, having regard to the contents of the impugned order in original, it is not possible to state that the same is a non-speaking order - settled legal position in view of the apex court ruling in Chhabil Dass Agarwal - 2013-TIOL-40-SC-IT is that when the Act provides complete machinery for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner (Appeals) - petitions are accordingly dismissed as not maintainable: High Court [para 6, 7, 8, 9, 11]

- Petitions dismissed: GUJARAT HIGH COURT

2019-TIOL-493-AAR-GST

GST - Applicant is a registered society providing security services and scavenging services to various hospitals under the State government - they seek a ruling on whether they are liable to pay GST on the portion of the payment received on account of the bonus paid or payable to the persons it deploys as security personnel.

Held: It is evident that the security personnel engaged are at no point employees of the State government - applicant is not a manpower recruitment agency - State government is not recruiting any security personnel through the applicant - latter is an employer of the security personnel deployed and is responsible for paying all statutory dues, including employer's contribution to EPF, ESI etc. - employer's contribution to EPF, ESI etc. and payment of bonus at the Government approved rate are components of the applicant's expenditure and is entitled to pass on this liability to the recipient, who in terms of the agreement, is apparently ready to bear that liability - since such an agreement does not create a master and servant relationship between the recipient of service and the security personnel, payment received from recipient on account of bonus is not guided by paragraph 1 of Schedule III - applicant is, therefore, liable to pay GST on the portion of the payment received from recipient on account of bonus paid or payable to the persons it deploys as security personnel: AAR

- Application disposed of: AAR

2019-TIOL-492-AAR-GST

GST -  Appellant's question is related to the components of the amount that the licensor, as supplier of the service of leasing of immovable property, is charging on it - they are not related to the supplies the applicant makes or intends to make - Authority cannot, therefore, provide a decision to the applicant in the form of an advance ruling - applicant is rejected in terms of s.97(2) of the CGST Act, 2017: AAR

- Application rejected: AAR

2019-TIOL-491-AAR-GST

GST - Supply as specified in the contract between the applicant and the ISRO Propulsion Complex, Mahendragiri for establishment of Integrated Cryogenic Engine & Stage Test facility wherein both goods and services are supplied is a Composite supply in terms of s.2(30) of the CGST Act, 2017 - supply being a Works Contract in terms of s.2(119) of the Act, notification 45/2017-CTR is not applicable - Entire transaction is taxable at the rate applicable to the  supply of Works Contract: AAR

- Application disposed of: AAR

2019-TIOL-490-AAR-GST

GST - Applicant is an Apex society registered under Tamil Nadu Co-operative Societies Act, 1961 with headquarters at Kancheepuram - Administrator is the Joint Director of Sericulture and the Director of Sericulture, Salem is the functional registrar of this Co-operative organisation - it is stated that the Government's share contribution will constitute 51% of the total share capital of the applicant and sanction of Rs.1,70,000/- towards the state participation is accorded - subsequently, Ministry of Textiles, Government of India, infused capital of Rs.1,17,49,000/- under National Silk Yarn Bank Scheme during 1995-96 - section 51 of the CGST Act, 2017, stipulates the class of persons liable to deduct TDS and in terms of section 51(d), the category of persons liable to abide by the provisions of TDS is provided by notification 33/2017-CT as superseded by notification 50/2018-CT which notifies the date of 1st October, 2018 on which the provisions of s.51 shall come into force - Applicant is not a society under the Societies Registration Act, 1860 - It was established by the Industries Department of the Govt. of Tamil Nadu based on the G.O of State Government of Tamil Nadu to develop co-operative silk twisters, reelers etc. - the G.O specifies that the government's share contribution will constitute 51% of the total share capital of the federation, however, the submissions of the applicant state that the equity share holding of the government at the maximum had been at 38.86% in 1980 and is currently at 30%, therefore, it deduces that the applicant is not a body with 51% or more participation of the government by way of equity, hence the Government of Tamil Nadu does not control the applicant - therefore, the applicant is not a person or category of person stipulated under notification 33/2017-CT as superseded by 50/2018-CT and consequently, are not liable to abide by the provisions of TDS: AAR

- Application disposed of: AAR

2019-TIOL-64-NAA-GST

Director General of Anti-profiteering Vs Vatika Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant has alleged profiteering by the respondent in respect of supply of construction services inasmuch as the respondent has not passed on the benefit of ITC by way of commensurate reduction in the price of the apartment purchased - DGAP in its report has submitted that ITC as a percentage of the turnover that was available to the respondent during the pre-GST period was 0.30% and during the post-GST period was 0.20% - inasmuch as the respondent had neither benefited from the additional ITC nor had there been a reduction in the tax rate in the post-GST period, therefore, the provisions of s.171 are not attracted in the present case.

Held: There is no reason to differ from the report of DGAP and, therefore, the Authority agrees with the findings of the DGAP that since there was no reduction in the rate of tax nor there was increased additional benefit on account of ITC, hence the provisions of s.171 are not liable to be invoked notwithstanding the contention of the applicant that a credit note of Rs.1,12,080/- was passed on to him; that the applicant has not substantiated his allegations during the course of the hearings and also that the DGAP had already considered the subject issue during its investigation and found that the same was extraneous to the computation of profiteering - as the instant case does not fall under the ambit of anti-profiteering provisions of s.171 of the Act, the application filed is not maintainable, hence the same is dismissed: NAA

- Application dismissed: NAA

2019-TIOL-3470-CESTAT-HYD

Associated Enterprises Vs CC, CE & ST

ST - The assessee is a partnership firm engaged in development and sale of apartments - They entered into a Development for Exchange agreement with Husam-Ud-Darein Trust, a wakf owned by Hazrat Zia Ali Ziaee for development of a residential complex named Nasr Apartments on the land owned by the said Trust - They undertook construction on the land from December 2005 to March 2009 - A General Power of Attorney (GPA) was also entered into between the land owner and the assessee, according to which the land owner gave the entire land for development to the assessee and in return the assessee agreed to give 1/3rd of total built-up area comprising of 28 flats to the land owner while the remaining 2/3rd of the built-up area comprising 56 flats will be with the assessee - After constructing the semi-finished flats, assessee entered into separate sale deeds for undivided share of land and construction agreements with the prospective buyers for completion of construction and customization of semi-finished flats - All the fully constructed residential units were handed over to the respective owners prior to 2010 after obtaining the occupancy from competent authority - In impugned order, it is held that the assessee had undertaken construction of residential complex services prior to 01.06.2017 and thereafter, works contract services and the demand was confirmed accordingly along with interest and penalties were imposed under section 77 & 78 - The issue of taxability of services rendered either as construction of residential complex services or as works contract service by builders of residential complexes prior to 01.07.2010 is no longer res integra - It has been decided in case of M/s Krishna Homes 2014-TIOL-402-CESTAT-DEL - This ratio was followed in series of orders by various judicial fora including by this bench - As the present demand pertains entirely to period prior to 01.07.2010, the demands are not sustainable and same are set aside - Consequently, the demand of interest and imposition of penalties are also set aside: CESTAT

- Appeal allowed: HYDERABAD CESTAT

2019-TIOL-3469-CESTAT-KOL

BSNL Vs CCE

ST - A SCN was issued to assessee for recovery of Service Tax short paid by them in some months along with interest and proposing penalties U/s. 76 and 78 of FA, 1994 - Admittedly, assessee has paid Service Tax in excess in some months during 10/2000 to 03/2004 as they were not able to estimate their correct Service Tax liability and to be on the safer side, they used to pay Service Tax provisionally which were never less than Service Tax actually payable by them, which were adjusted by them during subsequent months - The Tribunal in the assessee's own cases in General Manager, BSNL - 2014-TIOL-1422-CESTAT-DEL and in case of BSNL 2011-TIOL-2026-CESTAT-DEL have allowed adjustment of excess Service Tax paid against short payment of Service Tax - In respect of second ground of application of wrong rate of tax, it is observed that the services were provided by assessee during 10/2000 to 13-05-2003 when the rate of tax was 5% whereas, the value of taxable services were received during 14-05-2003 to 03/2004 when the rate of tax was 8% - It is well settled that the rate of tax shall be the rate as applicable on the date of provision of taxable services and not the date of receipt of value of such taxable services - The case of assessee is covered by decisions in cases of Vistar Const. (P) Ltd. 2013-TIOL-73-HC-DEL-ST and Bharati Tele-Ventures Ltd. 2013-TIOL-1532-CESTAT-MUM - The demand in instant case is barred by limitation as for the self same period, the Commissioner vide the earlier adjudication order dated 30-03-2007 has held that the assessee has been regularly filing ST-3 returns and reflecting payment of Service Tax and that there is no suppression of fact or intent to evade payment of duty and also the case of assessee is covered by the decision of Tribunal in their own case in BSNL 2009-TIOL-402-CESTAT-AHM - In view of the said discussions, the impugned order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

CENTRAL EXCISE

2019-TIOL-3468-CESTAT-KOL

Bhawani Press Metal and Body Building Pvt Ltd Vs CCE & ST

CX - The Modvat credit sought to be denied on the basis of supplier's private register, alleging short receipt of inputs vis-à-vis figures shown in invoices evidenced by so called private register of M/s Vinayak Metal & Chemicals and alleging non-entry of receipt of goods on the basis of assessee's gate register - The Department has not pointed out any instance of non-receipt of materials, non-uses of materials for final production or manufacture and has not disputed the documents supporting the receipt of materials - Since the gate register is not a prescribed document in terms of Cenvat Credit Rules, 2004 and the purposes of which is only to show the receipt of the materials at the factory gate, it cannot be held to be a conclusive evidence so as to arrive at the finding of the non-receipt of the goods - Further, when the goods have been entered in the statutory records, modvat credit cannot be denied - When the details of inputs stand entered into the statutory register, non-entry of the same in the private record maintained by the third party, will not dis-entitle the assessee to avail credit, specially, when there is no allegation or evidence showing non-receipt of such inputs - As such, no merit found in the Revenue's contention: CESTAT

- Appeal allowed: KOLKATA CESTAT

2019-TIOL-3467-CESTAT-BANG

CCE Vs Bharat Petroleum Corporation Ltd

CX - The assessee, manufacturer of petroleum products, have imported Reformate, an intermediate high Octane stream generated in petroleum refinery which was further blended with low octane/high olefin content intermediate stream to produce desired quantity of Motor Spirit commonly known as petrol, which is cleared on payment of duty - Two SCNs were issued demanding ineligible input credit availed and utilized while proposing penalty under Rule 15 of CCR, 2004 r/w Section 11 AC of CEA, 1944 - Revenue's case is that the reformate imported by assessee is nothing but Motor Spirit commonly known as Petrol - The assessee submits that reformat and motor spirit commonly known as petrol are different and therefore the exclusion clause under Rule 2(k) of CCR, 2004 is not applicable to reformat - The Chemical Examiner has tested only 4 parameters and gives report that the sample is in general agreement with Motor Gasoline - Per contra, the assessee have submitted various test reports conducted in refinery for the reformat and it is seen that the parameters are different from that of Motor Spirit as per BIS Euro III specifications - The test reports submitted by Chemical Examiner are not comprehensive - In respect of petroleum products, test reports of BPCL who are experts in the field are to be more relied upon than the test report given by Chemical Examiner - Reformate falls under 2710 1119 as under 'other motor spirit' i.e. other than SBPS - The Commissioner has gone through the literature, various test reports and the classification of the impugned product and has rightly held that reformate is correctly classifiable under 2710 1119 as a 'residual entry' - Relying upon the CESTAT's decision in case of Tuftween Petrochemicals 2005-TIOL-319-CESTAT-DEL , Commissioner finds that what is excluded from purview of input under Rule 2k of CCR, 2004 is motor spirit commonly known as petrol and motor spirits which are not known as petrol in common parlance cannot be said to be excluded - Thus, the Chemical Examiner Report is not comprehensive and therefore, it cannot be concluded on basis of the report that impugned product i.e., reformate is motor spirit adhering to BIS: 2796-1995 standards for EURO II, III, IV Standards - Therefore, it cannot be called motor spirit commonly known as petrol as is understood in common parlance - The report of BPCL who are experts in the field is to be relied upon in comparison to Chemical Examiner's report which is not comprehensive and conclusive - No reason found to interfere with impugned orders: CESTAT

- Appeals rejected: BANGALORE CESTAT

CUSTOMS

P Ramakrishna Bhattar Vs CCT & CE

Cus - 2186.900 grams of gold ornaments was seized from the shop of late Padmanabha Bhattar at Alappuzha during 1973 - The proceedings that were initiated pursuant to the search culminated in an order passed by the 1st respondent confiscating the seized gold ornaments and imposing penalty on the said Padmanabha Bhattar - Tribunal by its order dated 07.06.1996 directed release of the gold on payment of redemption fine of Rs.40,000/- and penalty of Rs.15,000/- - it would appear that the redemption fine and penalty were not paid to the department till 2018 - In the meanwhile, Sri.Padmanabha Bhattar expired and one of his sons approached the 1st respondent for release of the gold - It is stated that he was asked by the respondents to produce the legal heir ship certificate to establish his claim as a legal heir and further, he was also informed that the gold that was seized from his father had since been disposed by the department and at that stage, in 2002, the only thing possible was a refund of the sale proceeds of the gold that was disposed by the department - In the writ petition, it is the case of the petitioner that thereafter, in 2018, the legal heirs of Padmanabha Bhattar paid the penalty amount of Rs.15,000/- and also the redemption fine of Rs.40,000/- that was ordered by the CEGAT in 1996 and it is on the basis of the said payment that the petitioner has now approached this Court seeking a direction to the respondent authorities to return the gold that was seized from late Padmanabha Bhattar in 1973 – Respondents, in their affidavit, stated that no one had approached the authorities until 2001 when a relative of the original owner of the goods approached the Assistant Commissioner, who, in turn, directed him to produce relevant documents including payment proof, details of successors, etc. for processing his claim for return of gold ornaments which was already belated by the said time - It is stated that thereafter, it was only in 2017 that a power of attorney holder of deceased Padmanabha Bhattar sent a letter seeking redemption of gold on the basis of the CEGAT orders of 1996 - It is also stated that the offer of Rs.40,000/- towards redemption fine for release of 2186 grams of gold ornaments that were seized in 1973 cannot be justified for release of the gold ornaments, and at any rate, the said gold ornaments are no longer with the department since they were disposed within a reasonable period after the order of the CEGAT in 1996, on finding that there were no claimants for the seized gold at the relevant point in time.

HELD: Directions given by Supreme Court in Civil Appeal Nos.4711 & 4712/2011 to return the gold about 50 years from the date of seizure, on the petitioner paying the redemption fine that was fixed earlier, together with interest for the period since the passing of the final order of the statutory authorities till the date of payment of the redemption fine, can only be seen as issued under Article 142 of the Constitution of India - On going through the statutory provisions under the Customs Act, Bench finds that it is unable to accept the contention of the petitioner that it would be open to an assessee under the Customs Act/Gold Control Act to approach the statutory authorities more than 20 years after the date of the adjudication order of the CEGAT seeking a release of the gold ornaments seized from him by paying the redemption fine amount that was fixed in 1996 - As the prayer sought for in the writ petition cannot be granted, the writ petition is dismissed: High Court [para 4]

- Petition dismissed: KERALA HIGH COURT

2019-TIOL-3471-CESTAT-HYD

CC Vs MMTC Ltd

Cus - The assessee is a Government of India Undertaking engaged in various businesses including importing and selling of coal - M/s NTPC engaged in generation of thermal electricity and entered into an agreement with the assessee according to which the assessee would import coal as per the requirements of NTPC and supply it to them - The price of coal depends upon the price at which the assessee imports coal, relevant duties and taxes and freight and a service charge of Rs. 34/- per MT - Revenue was of the opinion that the transaction in question amounts to high sea sales of coal between assessee and M/s NTPC and therefore the service charges of Rs. 34/- per MT received by assessee should be included in assessable value under Section 14 of Customs Act, 1962 - There is no evidence on record to show that MMTC is the canalising agency for import of coal as per EXIM Policy during the relevant period or that the coal was sold in High Sea Sales basis - The agreement between the MMTC and NTPC is for supply of coal as NTPC requires it and MMTC imports and supplies it - The sale of goods was not a high sea sales which was affected after clearing from the Customs - Otherwise, NTPC, the buyer would have filed the Bill of Entry and cleared the goods - The mere fact that the bids for import were finalised by assessee after approval of NTPC, would not change the nature of transaction - There is no evidence that there is any privity of contract between the overseas supplier of coal and M/s NTPC - It is true that the definition of "Importer" under Section 2 includes the owner of goods or anyone who holds himself out to be the importer but in this case no evidence is brought out that M/s NTPC are either the owner or have held themselves out to be the importer - This contention of Revenue is completely baseless - The service charges paid to the assessee by M/s NTPC cannot, therefore, be included in the assessable value - The impugned order is correct and calls for no interference: CESTAT

- Appeal rejected: HYDERABAD CESTAT

TP - As long as AO has evidence before him to come to prima facie conclusion that there is escapement of income, reopening is valid even though it is based on audit objection: ITAT

TP - mere report of TPO holding international transaction as legitimate, is no benchmark for establishing date of commencement of business: ITAT 

If application filed by taxpayer u/s 154 was allowed by AO resulting in refund which was proposed to be adjusted towards tax for next year, no dispute survives for adjudication: ITAT

TIOL CORPLAW

SEBI - Compounding of offences under Companies Act does not take away SEBI's power of prosecution for securities law violations: HC

IBC, 2016 - Insolvency application u/s 9 is not maintainable against government company in existence of collusion between some employees & operational creditor regarding work order: NCLAT

SEBI - For lack of due diligence in issuing share certificates, RTA cannot be restrained from accepting fresh clients if no loss has occurred to investors: SAT