2020-TIOL-359-HC-MUM-IT

PR CIT Vs JSW Steel Ltd

Whether as per mandate of Section 153A(1), any assessment or re-assessment proceedings which are pending as on date of search, would stand abated - YES: HC

Whether provisions of Section 153A(1) enable an assessee to submit new claims in proceedings, which were hitherto not claimed in regular returns, where an assessment gets abated & so is not finalised - YES: HC

Whether returns filed by assessee for the six assessment AYs in terms of Section 153A(1)(a) would be construed to be a return of income under Section 139 - YES: HC

- Revenue's appeal dismissed: BOMBAY HIGH COURT

2020-TIOL-238-ITAT-AHM

Rakesh Bhikhabhai Vs PR CIT

Whether there is no illegality in selling shares at face value by mutual understanding between parties and there is no understatement of LTCG - YES : ITAT

- Assessee's appeal allowed: AHMEDABAD ITAT

2020-TIOL-237-ITAT-JAIPUR

Swapanlok Apartment Pvt Ltd Vs DCIT

Whether where the genuineness of cash transaction exceeding the prescribed threshold towards acquisition of land satisfies the test of business expediency of a real estate firm, no disallowance s warranted u/s section 40A(3) - YES: ITAT

- Assessee's appeal allowed: JAIPUR ITAT

2020-TIOL-236-ITAT-DEL

Reliance Medico Pvt Ltd Vs ITO

Whether in the absence of evidence to prove genuineness of cash credits in the lender's account affording loan to an assessee is liable to default u/s 68 - YES: ITAT

- Assessee's appeal dismissed: DELHI ITAT

2020-TIOL-358-HC-MAD-GST

ACCGST & CE Vs Daejung Moparts Pvt Ltd

GST - Both the writ petitioners are engaged in the business of manufacture - It is not in dispute in both cases there was some delay in filing the return and paying the GST within the time - Therefore, the Revenue, by relying upon Section 50 of the CGST Act, resorted to recover interest on the delayed payment - Such recovery proceedings culminated into the impugned bank attachments for recovery of Rs.41,74,617/- [Indian Overseas Bank, Maraimalai Nagar] and Rs.1,00,91,755/- [Indian Overseas Bank, Sriperumbudur] - According to the writ petitioners, the impugned bank attachment proceedings were issued in violation of the principles of natural justice and without passing any order determining the liability to pay interest - Revenue contested the writ petitions by claiming that payment of interest under Section 50 of the Act, 2017 is automatic; that once a delayed payment of tax was made, liability to pay interest on the same becomes automatic, for which no separate proceedings need to be initiated for determining such interest liability and in support of the said contention reliance is placed on the Division Bench order of the Telengana High Court in Megha Engineering and Infrastructures Limited = 2019-TIOL-893-HC-TELANGANA-GST - In the matter of both the Writ Petitions, orders were passed viz. 2019-TIOL-1802-HC-MAD-GST and 2019-TIOL-1289-HC-MAD-GST and wherein the Bench held that upon payment/adjustment of the admitted liability of Rs.22,39,413/- and Rs.9,15,121/ - respectively, the attachment orders would be set aside - Revenue has filed Writ appeals against these orders -In view of the difference of opinion between the Judges constituting the Division Bench, the matter was referred to the Chief Justice under Clause 36 of the Letters Patent, on the issue as to whether under Section 50 of the CGST Act, the interest on delayed filing of the Returns arises automatically or on assessment and after considering the explanation offered by the Assessee and whether at all that explanation has to be considered by the Assessing Officer and then pass further orders - consequently, the matter has been placed before the Single Judge pursuant to an order passed by the Chief Justice.

Held:

+ Two issues arise for the third view viz. ( a) Whether the delayed filing of returns attract the interest liability on the assessee automatically? and (b) Whether the Writ Appeals ought to have been entertained?

+ (a) Whether the delayed filing of returns attract the interest liability on the assessee automatically?

++ A reference to the third Judge has to be made only when two different views are expressed by the Judges in the Division Bench - In this case, except the view on the maintainability of the writ appeals, Bench finds that the issue regarding automatic interest liability is not the issue, where two different or contra views are expressed by the Judges - A careful perusal of sub Sections (2) and (3) of Section 50 would show that though the liability to pay interest under Section 50 is an automatic liability, still the quantification of such liability, certainly, cannot be by way of an unilateral action, more particularly, when the assessee disputes with regard to the period for which the tax alleged to have not been paid or quantum of tax allegedly remains unpaid - Likewise, whether an undue or excess claim of input tax credit or reduction in output tax liability was made, is also a question of fact which needs to be considered and decided after hearing the objections of the assessee, if any - Therefore, though the liability fastened on the assessee to pay interest is an automatic liability, quantification of such liability certainly needs an arithmetic exercise after considering the objections if any, raised by the assessee - It is to be noted that the term "automatic" does not mean or to be construed as excluding "the arithmetic exercise" - In other words, though liability to pay interest arises under section 50 of the said Act, it does not mean that fixing the quantum of such liability can be unilateral, especially, when the assessee disputes the quantum as well as the period of liability - Therefore, though the liability of interest under section 50 is automatic, quantification of such liability shall have to be made by doing the arithmetic exercise, after considering the objections of the assessee - first issue is answered accordingly: High Court Third Judge on reference [para 23, 24, 29]

+ (b) Whether the Writ Appeals ought to have been entertained?

++ In both the writ petitions, the respective writ petitioners are not disputing their liability to pay the interest on the delayed payment of tax - On the other hand, they are disputing the quantum of interest claimed by the Revenue by contending that the interest liability was worked out on the entire tax liability instead of restricting the liability to the extent of tax unpaid - It is further seen that the writ petitioners have placed some worksheets, wherein they have claimed some ITC credit for every month as well - Their grievance before the Writ Court was that the impugned bank attachment ought not to have been resorted to without determining the actual quantum of liability, therefore, it is evident that the dispute between the parties to the litigation is not with regard to the very liability to pay interest itself but only on the quantum of such liability.

++ In order to decide and determine such quantum, the objections raised by each petitioners shall have to be, certainly, considered - Undoubtedly, unilateral quantification of interest liability cannot be justified especially when the assessee has something to say on such quantum - The Writ Court thus, in the above line, has disposed the writ petitions, that too, on a condition that the petitioner in each case should pay the admitted liability of interest - A careful perusal of the direction issued by the Writ Court does not indicate anywhere as to how the Revenue is prejudiced by the said order, especially when the Revenue is given liberty to pass an order in a manner known to law and communicate the same to the petitioners, after considering their objections.

++ Writ Appeals preferred against the said orders of the Writ Court, as observed by Dr. Vineet Kothari, J., are wholly unnecessary, therefore, Bench is in agreement with the view expressed by Dr. Vineet Kothari, J., as it find tshat entertaining the writ appeals is not warranted, since the Writ Court has not determined the interest liability of each petitioners against the interest of the Revenue in any manner and on the other hand, it only remitted the matter back to the Officer concerned to determine the quantum of such liability.

++ Second question with regard to the maintainability of the writ appeals is answered accordingly. [para 31 to 33]

- Writ appeals dismissed: MADRAS HIGH COURT

2020-TIOL-11-AAAR-GST

Nagpur Integrated Township Pvt Ltd

GST -   Applicant is a SPV into development of land and construction of flats to be given out on lease as per the agreement of lease entered by them with customers - developed units would be transferred to prospective customers through an agreement wherein the allotment is given to customer referred to as lessee - the lessee agrees to take on lease from Developer (applicant) and applicant agrees to lease out to respective buyer the respective flat as mentioned specifically in the agreement - Applicant had approached the Authority for Advance Ruling and sought to know as to whether the transaction is outside the purview of GST as a transaction in immovable property and, if not, what is the appropriate classification and rate of GST - the AAR observed that t here is a taxable supply in the subject case, which is a supply of services in the form of construction of a complex, building, civil structure or part thereof, including a complex or building to their prospective lessees, a part of which i.e. flats are intended to be handed over to the buyer, for which consideration is received by the applicant in instalments, on completion of work, slab wise viz. the developed units will be transferred to the prospective customers through an agreement wherein the allotment is given to customers - Held that, in the form of construction service, a composite supply of works contract as defined in s. 2(119) of the Act is provided to prospective lessee in compliance of an agreement and the same is taxable under GST laws - Inasmuch as the transaction between applicant and lessee is taxable under GST and it is not a transaction in immovable property [Rental and leasing services SAC 9972 11]; that supply is a composite supply and classifiable under SAC 9954(ii) attracting GST @18% - Appeal to AAAR.

Held:  Bench has gone through the draft agreement and observed that although the appellant has projected the said transaction as a lease transaction of residential unit in an apartment/building and has also drafted agreement in such a way to project it as a lease transaction, the said transaction cannot be a lease transaction but is an agreement for construction of residential flats - in the present case, the agreement has taken place during the construction of the project and the lease payments are made slab wise before the completion of the project and which almost never happens in the lease of a flat or a unit - under the CGST Act, what is exempted from tax is services by way of renting of residential dwelling for use as residence - appellant has got the land on a long term lease from Maharashtra Airport Development Authority (MADC) wherein the developments happening out of the agreement have to abide by the basic tenets of the agreement with MADC - thus the residential flats being booked by the appellant are flats with agreement to construct and cannot be coloured  by the ‘lease agreement' word being used throughout the agreement under consideration - it is seen that almost 95% of the amount comprising the lease consideration is paid before the possession of the apartment - it is difficult to believe that a lessee will commit such amount before moving into or enjoying the flat - suffice to say that it is nothing but a sale transaction projected as a lease transaction - project is also RERA registered and the objective of the RERA Act is to regulate the sale of building, apartment etc. - said fact and interpretation by the Bombay High Court in the case of Lavasa Corporation also shows that the said transaction is not a lease - findings and order of the Authority for Advance Ruling agreed upon and appeal dismissed: AAAR

- Appeal dismissed : APPELLATE AUTHORITY FOR ADVANCE RULING

2020-TIOL-31-AAR-GST

Sakshi Jhajharia

GST - Applicant intends to supply to the State government the service of crushing food grains - the Government will send to the applicant the whole, unpolished food grain for processing and the applicant will return the grain after crushing - said processed food grain will be used for distribution through the Public distribution system (PDS) - applicant seeks a ruling as to whether the above activity is exempt under Sl. no. 3 or 3A of 12/2017-CTR. 

Held: If the applicant's agreement with the State government binds both the supplier and the recipient in such a way that neither can divert the food grains to any use other than distribution through PDS, the Applicant's composite supply of crushing the food grains belonging to the State government and delivery of the crushed grains will be an activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution and its supply would be exempt under Sl. no. 3A of 12/2017-CTR provided the proportion of the packing materials in the composite supply in value terms does not exceed 25%: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

 

 

 

CUSTOMS

2020-TIOL-286-CESTAT-MUM

Oil And Natural Gas Corporation Ltd Vs CC

Cus - At the time of filling the Bills of Entry for assessment, the appellant did not submit the requisite certificates issued by the competent authorities before the assessing authority and accordingly, the duty liability on merit was assessed, without extending the benefit provided under Notification No. 515/86-Cus. - The said certificates were subsequently obtained by the appellant and submitted before the customs authorities along with the refund applications - refund applications were rejected by lower authorities and in further appeal matter was remanded by Tribunal - In denovo proceedings, the original authority took up de novo adjudication proceedings in respect of five applications and sanctioned refund in respect of three cases - In respect of the remaining cases, the original authority rejected the same, holding that the assessment order passed in respect of the Bills of Entries in terms of Section 17 of the Customs Act, 1962 were not appealed against and thus, it is not open to the party to question the correctness of the order of adjudicating authority subsequently by way of filing the refund claim applications - said order upheld by Commissioner(A), hence importer is before the CESTAT in the second round of proceedings.

Held: In this case, the assessment made in the Bills of Entries was not appealed against by the appellant and also the said assessment had not been modified or altered by the assessing authority - Larger Bench of Apex Court in the case of ITC Ltd. Vs. Commissioner of Central Excise, Kolkata - IV - 2019-TIOL-418-SC-CUS-LB have ruled that the scope of the provisions of refund u/s 27 ibid cannot be enlarged and the same has to be read with the provisions of Section 17, 18, 28 and 128 ibid; that the provisions u/s 27 ibid cannot be invoked in the absence of amendment or modification having been made in the Bill of Entry, on the basis of which assessment has been made - In view of the above settled position of law that in absence of challenge of the assessment order, refund application cannot be filed or entertained by the authorities, Bench is of the considered view that rejection of the appeal filed by the appellant is in conformity with the statutory provisions - no infirmity in the order passed by Commissioner(A), hence the same is upheld and appeal is dismissed: CESTAT [para 5, 6]

- Appeal dismissed: MUMBAI CESTAT