2020-TIOL-NEWS-046 Part 2, Dated: Monday, February 24, 2020

2020-TIOL-NEWS-046 Part 2 | Monday February 24, 2020

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DIRECT TAX


	2020-TIOL-430-HC-DEL-IT PR CIT Vs Sugam Vanijya Holding Pvt Ltd On appeal the High Court condones the delay and admits the appeal on issue as to whether in stage of pre-commencement of business, interest derived from borrowed funds invested in fixed deposits with banks, would be taxable under heading Income from Other Sources. - Case deferred: DELHI HIGH COURT 2020-TIOL-428-HC-MP-IT PR CIT Vs Prabhakar Paper Mills Pvt Ltd On hearing the matter the High Court dismissed the appeal of the Revenue on the ground of low tax effect, while leaving the question of law open for adjudication. - Revenue's appeal dismissed: MADHYA PRADESH HIGH COURT 2020-TIOL-427-HC-MAD-IT CIT Vs Shasun Chemicals and Drugs Ltd Whether deduction u/s 80HHC is barred by provisions of Taxation Laws (Second Amendment) Act where it is claimed by exporters having turnover lower than Rs 10 Crores - NO: HC - Assessee's application allowed: MADRAS HIGH COURT 2020-TIOL-284-ITAT-CHD Ranjit Singh Vs ITO Whether addition u/s 69 for cash deposits can be upheld if assessee fails to prove genuineness of sale of land transaction as identity proofs of buyers and their confirmation is not submitted and documents of ikrarnama and cancellation deed do not bear signatures of buyers - YES : ITAT - Assessee's appeal dismissed: CHANDIGARH ITAT

GST CASES

2020-TIOL-59-SC-GST

National Anti-Profiteering Authority Vs Hardcastle Restaurants Pvt Ltd

GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - Constitutional validity of Section 171 of the Act read with Rule 126 of the CGST Rules and other cognate provisions is under challenge and the petitions in this regard are pending before the High Courts of Delhi, Bombay and Punjab & Haryana - Twenty writ petitions are pending before the Delhi High Court and two writ petitions which are the subject matter of the present Transfer petitions are pending before Bombay High Court.

Held: Bench considers it appropriate and proper that in the interests of a uniform and consistent view on the law, all the writ petitions should be transferred to the High Court of Delhi, where earlier writ petitions are already pending - Registries of the respective High Courts are requested to immediately transfer the papers of the proceedings of the writ petitions to the High Court of Delhi: Supreme Court [para 2, 3]

- Petitions transferred: SUPREME COURT OF INDIA

2020-TIOL-446-HC-AHM-GST

Hanuman Trading Company Vs State of Gujarat

GST - Writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST, 2017 and which shall go ahead in accordance with law - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST particularly paragraphs 99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged – Writ application disposed of: High Court [para 6 to 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-445-HC-AHM-GST

Synergy Fertichem Pvt Ltd Vs State of Gujarat

GST - Writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST, 2017 and which shall go ahead in accordance with law - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST particularly paragraphs 99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged - Writ applications disposed of: High Court [para 7 to 10]

- Applications disposed of: GUJARAT HIGH COURT

2020-TIOL-444-HC-AHM-GST

Moon Traders Vs State of Gujarat

GST - Writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST, 2017 and which shall go ahead in accordance with law - It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd V/s. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST particularly paragraphs 99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged - Writ application disposed of: High Court [para 6 to 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-443-HC-AHM-GST

Maruti Traders Vs State of Gujarat

- Application disposed of: GUJARAT HIGH COURT

INDIRECT TAX

SERVICE TAX

2020-TIOL-344-CESTAT-HYD

Film Nagar Cultural Center Vs PR CCT

ST - The assessee is a club - During the relevant period, the Central Excise Department observed that the assessee was providing services, facilities and advantages to its members in respect of (i) Membership Fee, Contribution to Building Fund, Membership and Sports Subscription, Sports Receipts, Card Room Charges, Guest Room Charges, New Year & Other Function Receipts, Guest Fee, Minimum User Charges, Tambola Receipts, Banquet Hall Receipts & Miscellaneous Receipts - Duty demand was raised with interest and penalties.

Held - It is undisputed that the amounts have been collected by the appellant from their own members - The assessee might be rendering same services to non-members as well and may also be generating a surplus - However, these factors do not change the character of the assessee as that of a club or association - As settled by the Apex Court in the case of State of West Bengal vs Calcutta Club Ltd - 2019-TIOL-449-SC-ST-LB and several previous judgments, no service tax can be levied on a club or association on the amounts collected by them from their own members either towards subscription or towards some other services because the club is held to be not a different legal entity but the same as that of the members - Since there is no distinction between the identity of the members and the identity of the club, there is no service provider - service recipient relationship in such transactions - Hence, no service tax can be levied upon the assessee & the demands merit being quashed: CESTAT

- Assessee's appeal allowed: HYDERABAD CESTAT

CENTRAL EXCISE

2020-TIOL-429-HC-KERALA-CX

Faizal RM Vs CESTAT

CX - The assessee is a contractor operating a petrol pump - The same is owned and operated by a company - The assessee later found out that his bank account had been attached since the assessee had not remitted the tax demand raised - As the bank account was connected with all business transactions & the assessee's appeal against the relevant order was not considered, the assessee filed writ petition, seeking that the attachment be lifted - The High Court directed the assessee to furnish bank guarantee, which was furnished - While the matter was posted for hearing, the Revenue directed the bank to release the bank guarantee executed by the assessee - The assessee was told to furnish an order from the court so as to obtain stay on recovery notice - The assessee filed the present writ, claiming that it would incur irrepairable losses if the bank guarantee is released before disposal of appeal.

Held - Considering such facts and circumstances, both sides should ensure that the bank guarantee in question be kept alive and be renewed timely, until the matter is disposed off by the Commr.(A) - Hence the Revenue officials concerned are directed to not encash the bank guarantee furnished by the assessee - It is also seen that the bank issues a demand draft, being the proceeds of encashment of bank guarantee - The Revenue officers concerned are directed to return the same to the bank, which is to take steps to renew it as a bank guarantee: HC

- Writ petition allowed: KERALA HIGH COURT

CUSTOMS

2020-TIOL-431-HC-AHM-CUS

Heavy Metal and Tubes India Pvt Ltd Vs PR CC

Cus - The petitioner-company deals with Stainless Steel Seamless Tubes and Pipes falling HSN Code 7304 - It is a manufacturer and is holding the GST Registration - The petitioner exported goods under the various invoices of payment of the IGST from the Mundra Port - However, on account of a clerical error, the amount of the IGST was not mentioned in the shipping bills - In such circumstances, the shipping bills were amended for the purpose of getting the details of the IGST, incorporated in the shipping bills - The petitioner claimed that the Revenue authorities were not responding to the request with regard to the sanction of the refund of the IGST paid - Hence it filed the present writ seeking that the Revenue authorities concerned be directed to sanction the refund of IGST paid with regard to goods exported - The petitioner also sought interest on the principal amount of refund.

Held - The Deputy Commissioner of Customs at Mundra Port is directed to look into the matter and take action at the earliest - The decision be communicated to the petitioner in writing: HC

- Writ petition disposed of: GUJARAT HIGH COURT

HIGHLIGHTS (SISTER PORTAL)

TII

TP - Re-opening of assessment is unsustainable if there is no omission on part of assessee to disclose facts necessary for assessment: HC

TP - If comparables selected by TPO are functionally dissimilar to assessee company, they cannot be included in final list of comparables for benchmarking purposes: ITAT

TIOL CORPLAWS

IBC - Insolvency application against Flipkart quashed for bringing section 9 application before crystallisation of debt: NCLAT

Competition - Increased rates of telecom services come under radar of CCI provisions even if such rates are in conformity with section 21A of TRAI: CCI

IBC - Even after passing of award by Arbitrator, if corporate debtor does not honour award then operational creditor is right in invoking jurisdiction of NCLT u/s 9 of IBC : NCLAT

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