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2020-TIOL-NEWS-079 | Friday April 03, 2020 |
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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DIRECT TAX |
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2020-TIOL-728-HC-AHM-IT
DDIT Vs Ahmedabad Urban Development Authority
Whether activities of the assessee can be said to be in the nature of trade, commerce and business and Section 2(15) shall be applicable if certain income is earned from providing general utility services, but without intention of profit making – NO : HC
Whether solely because while carrying out the activities for the purpose of achieving the objects of the Trust, certain incidental surplus is generated, the same renders such activity as being in the nature of trade, commerce or business – NO : HC
- Revenue’s appeal disallowed: GUJARAT HIGH COURT
2020-TIOL-727-HC-KERALA-IT
Jyothy Laboratories Ltd Vs State of Kerala
Whether dismissal of the writ petition by the single Judge on the ground that a further consideration would amount to revisiting the request for clarification made by the assessee before the Apex Court is Justified - YES : HC
- Assessee's writ petition disposed of: KERALA HIGH COURT
Whether assessee should be allowed to transact any business or carry out its daily activity if case is already pending in ITAT after allowing assessee to deposit certain percentage of demanded tax - YES : HC
Whether without adhering provision of sub section (3)(iii) of S. 226, can the AO issue notice of garnishee to the bank to obtain full tax demanded money of assessee - NO : HC
- Assessee's writ petition disposed of: KERALA HIGH COURT
2020-TIOL-417-ITAT-KOL
Avinash Shaw Vs ITO
Whether expenses incurred on payment of driver's salary and fuel & lubrication, warrant being disallowed, if it is not proven that they were incurred in relation to the assessee's business - YES: ITAT
Whether expenses incurred on business conference is to be disallowed in part, where though such expenses are incurred for business purposes, no bills or vouchers in support of such claim, are put forth - YES: ITAT
-Assessee's appeal partly allowed: KOLKATA ITAT
Whether incidental income & profit from distribution of prasad to devotees by the assessee registered as charitable trust falls under commercial activities which is hit by second proviso of section 2(15) of the Income Tax Act, 1961 - YES: ITAT
Whether in absence of some concrete proof that the charitable trust has given some undue benefit to the related party, the exemption claimed u/s 11 & 12 cannot be denied on the basis of violation of section 13(1)(c)(ii) on the basis of conjectures of the AO - YES: ITAT
- Revenue's appeal dismissed: JAIPUR ITAT
CRP Associates Vs ACIT
Whether statement recorded during the course of survey u/s 133A can be replied upon as conclusive evidence - NO: ITAT
Whether papers and documents found and seized during course of survey u/s 133A can be relied upon as conclusive evidence - YEA: ITAT
- Assessee's appeal partly allowed: AHMEDABAD ITAT
Whether claim of deduction u/s 54B can be denied merely because assessee has not filed valid revised return - NO : ITAT
- Revenue's appeal dismissed: AHMEDABAD ITAT
Shaunak Shailesh Shah Vs ITO
Whether where the assessee fails to discharge his onus regarding the the genuineness of the cash deposits even after the opportunity to prove has been provided by the AO, the addition u/s 68 cannot be deleted - YES: ITAT
- Assessee's appeal dismissed: AHMEDABAD ITAT
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GST CASES |
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2020-TIOL-734-HC-P&H-GST
Knlights Automotives And Plastic Inc Vs UoI
GST - Respondents were directed to permit the petitioner to file Form 'TRAN-1' by the extended date - Review application filed by UOI against the said order - An earlier review application moved by the UOI stands dismissed by this Court, vide judgment dated 29.11.2019 in the case of M/s. Ajay Hardware Industries Pvt. Ltd. observing that there was an effort to re-agitate the matter, which is not within the laid down parameters of seeking a review; that the appropriate remedy for the Revenue would be to approach the Supreme Court by filing an appeal - following the said judgment, present Review Application is hereby dismissed: High Court [3, 4]
- Application dismissed: PUNJAB AND HARYANA HIGH COURT
2020-TIOL-733-HC-P&H-GST
Shiv Om Trading Company Vs State Of Punjab
GST - Petitioner had approached the Court when the goods were confiscated u/s 130 of the Act and pursuant to order dated 24.10.2019, the respondents were directed to release the detained goods/vehicle subject to payment of demanded tax as well as 100% penalty along with furnishing of personal bond equal to value of the goods to secure the amount of fine and accordingly, the goods were released upon compliance - incidentally, goods were confiscated vide order dated 20.07.2019 and which order, admittedly, is an appealable one - petitioner submits that on account of pendency of the present petition, they did not avail the statutory remedy - counsel for Revenue fairly submits that if such appeal is filed within 15 days, respondents would not raise any objection to the condonation of delay in filing such appeal - petition disposed of: High Court [para 5]
- Petition disposed of: PUNJAB AND HARYANA HIGH COURT
2020-TIOL-732-HC-P&H-GST
Shri Sai Trading Company Vs State Of Punjab
GST - Petitioner had approached the Court when the goods were confiscated u/s 130 of the Act and pursuant to order dated 04.10.2019, the respondents were directed to release the detained goods/vehicle subject to payment of demanded tax as well as 100% penalty along with furnishing of personal bond equal to value of the goods to secure the amount of fine and accordingly, the goods were released upon compliance - incidentally, goods were confiscated vide order dated 19.07.2019 and which order, admittedly, is an appealable one - petitioner submits that on account of pendency of the present petition, they did not avail the statutory remedy - counsel for Revenue fairly submits that if such appeal is filed within 15 days, respondents would not raise any objection to the condonation of delay in filing such appeal - petition disposed of: High Court [para 5]
- Petition disposed of: PUNJAB AND HARYANA HIGH COURT
2020-TIOL-731-HC-KERALA-GST
Pulickal Industries Vs State Tax Officer
GST - Petitioner has approached this Court under Article 226 challenging Exts.P3A to P3(n), whereby the assessment order under Section 2 of the State Goods and Service Tax Act 2017 has been passed, inter alia on the ground that the petitioner had, vide intimation dated 25.11.2019, informed regarding closure of the business.
Held: Petitioner has a remedy of appeal under Section 107 of the Act - On a plain and simple language of section 29 of the Act, even if the person stops the business resulting in cancellation of the registration, the liability accrued till such time cannot be waived or diminished - Petition is dismissed: High Court [para 4]
- Petition dismissed: KERALA HIGH COURT
2020-TIOL-730-HC-KERALA-GST
Fawas Associated Agencies Vs Assistant State Tax Officer
GST - While transporting two consignments of TMT steel in a Goods Vehicle from Perumbavoor to Muvattupuzha supported by invoices Exts.P1 & P1(a) and Exts.P2 & P2(a) e-way bills were detained on 27.09.2018 alleging that the e-way bills were not valid as the number of the vehicle in Part-B of the e-way bills was not entered - Petitioner submits that considering the notice and particularly the opening line of the same to be as an order, the petitioner preferred an appeal under Section 107 of the aforementioned Act, where the limitation is three months, but condonable is only one month - That appeal was dismissed vide Ext.P8 dated 14.08.2019, received on 13.11.2019, as the notice was not appealable - Incidentally, Ext.P9 adjudication order dated 21.11.2018 was passed, while the aforementioed appeal was pending - Issue is whether Ext.P4 dated 28.09.2018 demanding tax and penalty from the petitioner on account of detention of the vehicle and the goods can be construed to be an adjudication order as per the provisions of Section 129(5) of the Act.
Held: On a plain and simple reading of the provisions of the Act, sub-section (3) of Section 129 envisages that the proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and, thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c) and on payment of the amount referred to in sub-section (1) all the proceedings in respect of notice specified in subsection (3) shall be again to be concluded - The expression 'order' used in sub-section (3) can in common wording can be construed to be an order - The litigants do not have the acumen of legalities of the order particularly when the word 'order' is reflected in sub-section (3) - The appeal was filed on 11.10.2018 and the adjudication order dated 21.11.2018 was issued during the pendency of the appeal - The appeal could have been rectified by an amendment appropriately to be against the adjudication order - The authorities ought not to have adopted a rigid approach and rejected the appeal as not maintainable - At the best, request of the petitioner could have been construed in the manner for the amendment of the appeal, challenging the adjudication order in order to overcome the maintainability of the appeal - the impugned order Ext.P8 dated 14.08.2019 received on 13.11.2019 is, therefore, set aside - Appeal is restored granting liberty to the petitioner to challenge the order dated 21.11.2018 (Ext.P9) in accordance with law - Petition disposed of: High Court [para 6 to 8]
- Petition disposed of: KERALA HIGH COURT
2020-TIOL-729-HC-KERALA-GST
Emmar Trading Company Vs State Tax Officer
GST - The business engaged in by the petitioner was trading of plywood, which resulted into huge loss and, therefore, the petitioner submitted online application on 29.04.2019 seeking cancellation of registration evidenced by Ext.P3 acknowledgement - During the year 2017-18, the petitioner had marginal transactions and had filed returns accordingly under the new Act which is evident from Exts.P4 and P4(a) - Even in the year 2018-19, petitioner has not effected any business transaction and as such filed monthly returns showing Nil transactions - The petitioner has filed 12 monthly returns from April/2018 to March/2019 evidenced by Exts.P5 and P5(a) - The business was actually discontinued from 01.04.2019 onwards and the same was duly communicated to the Assessing Officer - petitioner submits that Section 62 [Assessment of non-filers of returns] of CGST Act would not have come into force in view of the fact that the petitioner had submitted a request for cancellation of the registration u/s 29 of the Act.
Held: Writ petition is liable to be dismissed solely on the ground of non-disclosure of the issuance of show cause notice dated 14.5.2019 which is conveniently omitted from the pleadings - There is no scope for interference as warranted under Article 226 of the Constitution of India, when the petitioner has a remedy of appeal as provided under the Act - Petition fails and hence is dismissed: High Court [para 4]
- Petition dismissed: KERALA HIGH COURT |
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INDIRECT TAX |
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SERVICE TAX
ST - Issue is whether the service tax amount of Rs. 67,238/- is recoverable from the appellant towards the value of construction of approach roads to weigh bridges installed by the appellant at the site of the customers.
Held: Present roads have been constructed to facilitate the movement of the transport vehicles to weigh bridges and is not a part of the residential complexes, therefore, its value cannot be subjected to service tax - parallel sought to be drawn by the AR by relying on the Board letter B1/6/2005-TRU dated 27.07.2005 is without merits - appellant has rightly excluded the cost of construction of approach roads from the total value of construction of weigh bridges in claiming the abatement under the respective notifications No. 15/2004-ST dated 10.09.2004 or 1/2006-ST dated 01.03.2006 - impugned order, being devoid of merits, is set aside and appeal is allowed with consequential relief: CESTAT [para 3, 4]
- Appeal allowed: CHANDIGARH CESTAT
ST - Pursuant to investigation by the department, the appellant was informed that certain amounts were due from the appellant towards the alleged service tax liability in respect of various services that were received by the appellant-bank from Foreign Service provider as also in respect of services provided by the appellant-bank to various foreign persons - Appellant promptly effected the payment of various amounts demanded, albeit, under protest - Subsequently, a show-cause notice dated 3.9.2008 was issued to the appellant - After following the due process, the Commissioner vide the impugned order has confirmed the demand in the show-cause notice along with interest and penalties, however, Commissioner has dropped the penalty u/s 78 of the FA, 1994 - appellant is before the CESTAT.
Held:
Issue No. 1: Commission received by appellant from Money Exchange Houses abroad
++ Insofar issue No.1 namely "Commission received by appellant from Money Exchange House abroad" is concerned, this issue is no more res integra and has been consistently held by the Tribunal as export of service and, therefore, not liable to service tax under Finance Act, 1994 - Kerala State Financial Enterprises Ltd. - 2011-TIOL-329-CESTAT-BANG & Muthoot Fincorp Ltd. - 2009-TIOL-2256-CESTAT-BANG relied upon. [para 9]
Issue No. 2: Service charges paid to Foreign Banks against the service received by the appellant-bank
Issue No. 3: Service charges paid to Master Card International
++ As regards service charges paid to foreign banks against the service received by the appellant-bank and service charges paid to Master Card International are concerned, Bench finds that the said services fall in the definition of 'Import of Service' and the same was made liable to service tax on reverse charge basis with effect from 18.4.2006 in view of the decision of the Bombay High Court in the case of Indian National Ship Owners Association - 2008-TIOL-633-HC-MUM-ST, which was upheld by the apex court also and accepted by the Department - Therefore, up to 18.4.2006, appellants are not liable to pay service tax on reverse charge basis: CESTAT [para 9.1]
Limitation:
++ Commissioner himself has admitted that short-payment of service tax is not deliberate but owing to the reason of system failure - Commissioner has dropped the penalty u/s 78 by resorting to Section 80 of the Finance Act - Once the penalty under Section 78 is dropped, it means that the Original Authority did not find that there was an intention to evade payment of service tax on the part of the appellant - The essential condition for invoking the extended period of limitation is that there should be an intention to evade payment of service tax and the same is absent in the present case and, therefore, the extended period of limitation cannot be invoked.
++ In the present case, the Show-Cause notice was issued on 3.9.2008 for the period 1.9.2004 to 31.7.2007, and the entire period up to 31.3.2007 is barred by limitation in view of the decision of the Tribunal in the case of Rochem Separation System (India) P. Ltd. - 2015-TIOL-120-CESTAT-MUM which has been upheld by the Bombay High Court - 2018-TIOL-2015-HC-MUM-ST - impugned order is not sustainable in law - same is set aside by allowing the appeal of the appellant with consequential relief: CESTAT [para 9.2]
- Appeal allowed: BANGALORE CESTAT
CENTRAL EXCISE
CX - CENVAT credit taken on "HR Plates/MS Plates/ Cheq. Plates" etc. is denied on the ground that the said goods were used for supporting of structures and hence cannot be considered as Inputs or Capital goods - appeal to CESTAT.
Held: Period in dispute is from 01.09.2011 to 31.08.2012 - Tribunal, in the case of the appellant itself, on the similar set of facts, for the period 01.09.2012 to 31.07.2013 has allowed the cenvat benefit on the disputed goods by its Final order no. A/85202/2019 dated 25.01.2019 - issue arising out of the present dispute is no more open for any debate - impugned order is set aside and appeal is allowed: CESTAT [para 5, 6]
- Appeal allowed: MUMBAI CESTAT
LG Polymers India Pvt Ltd Vs CCT
CX - CENVAT credit availed on the basis of debit notes has been denied on the ground that the appellant was unable to produce co-relating documents - appellant in their appeal before CESTAT have submitted that they are now in possession of the invoices covering each of the debit notes and will be able to substantiate their credit claim - for proper verification of the claim, matter remanded to the original authority: CESTAT [para 3, 4]
- Matter remanded: HYDERABAD CESTAT
CUSTOMS
Cus - The assessee-company is a subsidiary of M/s Baxter Pacific Investments Pvt Ltd., Singapore, which holds 99.99% shares in the assessee-company, which is engaged in importing pharmaceutical products and healthcare products, devices and equipments in India - The assessee's case of valuation of imports made by it from its AEs had been settled earlier by the the SVB vide an O-i-O - Such order was reviewed after expiry of each span of three years and the last order expired in 2015 - Thereafter, the assessee submitted the declaration as required under the CBIC Manual, based on which as well as on the previous valuation orders, a fresh order was passed - Against such order, an appeal was filed by the Department and the same was disposed off in its favor - Hence the present appeal by the assessee.
Held - R ule 3 (3) (a) of the Customs Valuaton Rules provides that where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price - It is not intended that there should be an examination of the circumstances in all cases where the buyer and the seller are related - Such examination will only be required where there are doubts about the acceptability of the price - Where the proper officer of customs has no doubts about the acceptability of the price, it should be accepted without requesting further information from the importer - In the present case, the valuation of goods imported by the assessee from the related Companies has been examined number of times since 2002 and it was found that the relationship has not influenced the price, hence the declared value will be accepted under Rule 3 (3) (a) - Perusal of Rules 3(3)(a) and 3(3)(b) makes it clear that they provide different means of establishing the acceptability of a transaction value - Thus, it becomes clear that Rule 3 (3) (b) cannot be made applicable while deciding the transaction value in the present case - Thus the findings of the Commissioner (Appeals) do not have any legal basis: CESTAT
Held - There is nothing on record to show that the relationship of the importer and exporter influenced the price - Hence adopting Rule 3(3)(b) was not relevant - Moreover the Commr.(A) also considered the gross profit of the assessee for several AYs and found there to be no explanation for the same - However, it is seen that in furtherance of Rule 3 of CVR, profit margins are not a factor to reject the transaction value if all conditions u/r 3(3)(a) are fulfilled - As the conditions therein are satisfied, the Commr.(A) erred in rejecting the transaction value - It is also seen from the data on record that the operating profit margin of the assessee is less than the average of similar companies - This goes to show that the relationship between importer and exporter did not influence the price of the goods imported by the assessee from its related companies - Hence the subject O-i-A merits being quashed: CESTAT
- Assessee's appeal allowed: DELHI CESTAT
CC, CE & ST Vs Novopan Industries Ltd
Cus - Officers of Anti-Evasion Section, Hyderabad-I Commissionerate visited the factory on 16.04.2010 and found that they had removed 509 reels of base paper of various varieties from the warehouse without filing an Ex-bond bills of entry and without paying customs duty - during investigation, the respondents paid the Customs duties along with interest - Commissioner upheld the demands of duty and interest and imposed penalties, as proposed, except for confiscation of the goods under section 111(j) of the Customs Act, 1962 - Revenue's appeal is against non-confiscation of the goods and non-imposition of penalty under section 112(b) of the Customs Act, 1962.
Held: Bench finds that there is an inherent contradiction and ambiguity in the impugned order itself - In para 13 (iii) of the order, Commissioner has recorded that assessee has stated, even during the personal hearing, that the goods were available in the factory premises; however, in paragraph 17, it is observed that the goods have not been seized and are not available for confiscation - In view of the contradictory stand taken by the Commissioner, Bench finds it is a fit case to be remanded back to the original authority to record the correct position regarding availability of goods for confiscation (not availability of goods within the bonded warehouse) and pass an order accordingly - Matter remanded: CESTAT [para 6 to 9]
- Matter remanded: HYDERABAD CESTAT
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