2020-TIOL-NEWS-081, Dated: Monday, April 06, 2020

2020-TIOL-NEWS-081 | Monday April 06, 2020

Dear Member,

Sending following links.

Warm Regards,
TIOL Content Team

TIOL PRIVATE LIMITED.

For assistance please call us at + 91 850 600 0282 or email us at helpdesk@tiol.in.

TIOL TUBE VIDEO

GST RO(W)AD AHEAD | Episode 15 | simply inTAXicating

DIRECT TAX


	2020-TIOL-740-HC-KERALA-IT St Josephs Monastery Vs ITO Whether proper reasons and circumstances are to be recorded regarding as to why the assessee was not entitled to exemption being a Religious and Charitable Institution - YES: HC Whether where assessee does not respond to the notices issued under Section 142 is per se sufficient for rejection of review petition - NO : HC - Assessee's writ petition allowed : KERALA HIGH COURT 2020-TIOL-427-ITAT-DEL Surinder Kumar And Sons Huf Vs ITO Whether mere filing of memorandum of gift and affidavit of donor can conclude that gift is genuine if high value gift is received from stranger given without any occasion and during investigation donar has confirmed that he is actually an entry provider - NO : ITAT - Assessee's appeal dismissed: DELHI ITAT 2020-TIOL-426-ITAT-DEL Ratna Commercial Enterprises Pvt Ltd Vs ADIT Whether it is a fit case for re-examination where in respect of proceeds from sale of shares, which the AO proposes to treat as business income, the assessee claims not to be dealing in shares but in mutual funds only - YES: ITAT - Case remanded: DELHI ITAT 2020-TIOL-425-ITAT-AHM DCIT Vs Kaizen Switchgear Products Whether assessee engaged in manufacturing of products namely current transformers and potential transformers is entitled for deduction u/s 10B - YES : ITAT Whether statements recorded during search and survey cannot be basis of addition until and unless such statements are based on corroborative evidences - YES : ITAT - Revenue's appeal dismissed: AHMEDABAD ITAT 2020-TIOL-424-ITAT-MUM ACIT Vs HK Pujara Builders Whether addition u/s 68 for bogus loan can be made merely on the basis of information received from DGIT(Inv.), without support of any other evidence when assessee has furnished all relevant documents and loan confirmations - NO: ITAT - Revenue's appeal dismissed: MUMBAI ITAT 2020-TIOL-423-ITAT-BANG Arunesh Kumar Madan Vs ITO Whether bad debts claimed by the assessee can be allowed u/s 57(iii) or u/s 36(1)(vii) - NO: ITAT Whether interest expenditure can be allowed as a business expenditure, where the assessee does not produce any details to show that the same was incurred in relation to business or that the bank overdraft was used for business purposes - NO: ITAT - Assessee's Appeal dismissed: BANGALORE ITAT

GST CASE

2020-TIOL-748-HC-AHM-GST

Sawariya Traders Vs State Of Gujarat

GST - Writ-applicant No.2 had given his vehicle on rental basis to the transporter for transportation of the goods - While the goods where in transit, the GST authorities detained and seized the goods as well as the vehicle on the ground that the goods were being transported in contravention of the provisions of the Act and the Rules - The position as on date is that the goods as well as the vehicle is in custody of the GST Authorities and a show cause notice in form GST MOV-10 has been issued.

Held: Bench permits the writ-applicants to prefer an appropriate application addressed to the authority concerned under Section 67(6) of the Act for provisional release of the goods and the conveyance - If such application is filed, the authority concerned shall immediately look into the same and pass an appropriate order within one week from the date of receipt of such application - Insofar as the challenge to the form GST MOV-10 is concerned, the writ-applicant shall file an appropriate reply and make good his case that the notice in the form GST MOV-10 deserves to be discharged by relying upon the decision in Synergy Fertichem Pvt. Ltd. vs. State of Gujarat - 2019-TIOL-2950-HC-AHM-GST - Petition disposed of: High Court [para 4 to 6]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-746-HC-AHM-GST

Valimohammed Jusab And 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 and the proceedings, as on date, are at the stage of show cause notice, u/s 129 of the CGST Act and which proceedings shall go ahead in accordance with law - It shall be open for the writ applicant to point out the pronouncement of this Court in the case of Synergy Fertichem Pvt - 2019-TIOL-546-HC-AHM-GST and in particular rely on the observations made by this Court in paragraph Nos.99 to 104 of the said judgment - It is now for the applicant to make good his case that the show cause notice, issued in GSTMOV- 10, deserves to be discharged - Petition disposed of: High Court [para 5 to 7]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-747-HC-KERALA-GST

Festoon Props And Rentals Llp Vs State Tax Officer

GST - Limited prayer of the petitioner is for a direction to the 1st respondent to consider Ext.P10 objection and to hear the petitioner before finalising the proposal for imposition of penalty against the petitioner.

Held: 1st respondent directed to consider the objection of the petitioner and also hear the petitioner before finalising the penalty proceedings under Section 130 of the GST Act - It is made clear that till such time as orders are passed by the 1st respondent, under Section 130 of the GST Act, as directed, and the order communicated to the petitioner, recovery steps for recovery of the penalty amount, including further steps for encashment of the bank guarantee shall not be pursued against the petitioner: High Court [para 2]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-745-HC-AHM-GST

Shakti Motors Vs State Of Gujarat

GST - Writ applicant tried to file the Form GST TRAN-1 on 20th December, 2017 - However, on account of technical glitches i.e. failure in the GST system/error, the writ applicant was unable to save the details relating to the CENVAT Credit and VAT Credit in the Form GST TRAN-1 - the accumulated balance of the Cenvat Credit and the VAT Credit, which was reflecting in the return for the period ending June, 2017 filed under the erstwhile laws could not be carried forward by the writ applicant at the time of filing the Form GST TRAN-1 on 20th December, 2017 due to technical glitches - Writ applicant took up this issue first in point of time with the respondent no.3 but there was no response - based on the order of the co-ordinate Bench and the notice issued, case of the writ applicant has already been recommended to the respondent no.5-the Nodal Officer [IT Grievance] and the recommendations at the instance of the Deputy State Tax Commissioner is positive - Now, it is for the Nodal Officer i.e.the respondent no.5 to look into the recommendations referred to above and take up the issue further with the GSTN - writ applicant has brought to our notice an order No.1/2020/GST issued by the Government of India dated 7th February, 2020.

Held: Bench is of the view that the writ applicant is entitled to seek the benefit of the Order No.1/2020-GST, dated 7th February, 2020 - The order referred to above extends the period for submitting the declaration in Form GST TRAN-1 till 31st March, 2020 for a class of registered person, who could not submit the said declaration by the due date on account of technical difficulties on the common portal - necessary action shall be taken on or before 30th March, 2020 - writ application is disposed of with the direction to the respondent no.5 herein i.e. the Nodal Officer to undertake this exercise at the earliest - The GSTN upon receipt of the proposal from the Nodal Officer shall look into the same and take an appropriate decision in accordance with law, more particularly, keeping in mind the writ applicant should not suffer on account of any technical glitches: High Court [para 11, 12]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-744-HC-KERALA-GST

Daiwik Motors Vs ASTO

GST - In the case at hand, after passing the order as contemplated under the proviso to sub-section (1) if s,129 of the Act, Ext.P7 notice was issued directing the petitioner to show cause as to why the tax and penalty proposed should not be made payable - An opportunity of personal hearing was also afforded on 26.11.2019 - It is at that stage the petitioner had approached this court challenging Exts.P5 and P7 notices.

Held: Contention that the detention itself is without jurisdiction and authority is not acceptable because the officer had mentioned sufficient reason in Ext.P5 for detention of the transport; Whether those reasons mentioned in Ext.P5 will amount to a transit made in contravention of the provisions of the CGST Act or the Rules, is a matter which need to be adjudicated by the 1st respondent before passing an order for payment of tax and penalty as contemplated under Section (3) of Section 129 - it will suffice if the appellant is given an opportunity to participate in the adjudication process, if necessary after filing objections with supporting documents to Ext.P7 notice - Petition is disposed of by inter alia directing that the Bank Guarantee if any furnished for release of the transit shall not be encashed until the expiry of a period of 10 days from the date on which the order if any passed by the 1st respondent is communicated to the appellant: High Court [para 6 to 8]

Petition disposed of: KERALA HIGH COURT

2020-TIOL-737-HC-MP-GST

Flexituff International Ltd Vs UoI

GST - During the relevant period, the petition received a communication from the GST Commissionerate, stating that Cenvat credit on certain input services, inputs and capital goods, which had been claimed by the petitioner, was being disallowed - The petitioner claimed that such credit was legitimate and un-utilised and such credit pertained to the period preceding the introduction of the GST Act - The petitioner claimed to have committed a mistake due to technical error and failed in filing a declaration electronically in Form GST TRAN-1 - The petitioner claimed that in similar circumstances, large number of writ petitions were allowed by various high courts.

Held - Considering the decisions of the High Court and the Supreme Court in Adfert Techonolgies (P.) Ltd., vs. Union Of India, the petitioner is permitted to file or revise their already filed incorrect statutory form TRAN-1 either electronically or manually within a period of 45 days from date of this order - Though the Revenue is at liberty to verify genuineness of petitioner's claim, the petitioner shall not be denied of their legitimate claim of CENVAT/ITC on the ground of non filing of TRAN-1 by 27/12/2017: HC

- Writ petition disposed of: MADHYA PRADESH COURT

MISC CASE

2020-TIOL-738-HC-KERALA-VAT

Jewel Homes Pvt Ltd Vs State Tax Officer

Whether assessee's claims of violation of principles of natural justice are sustainable, if it did not file its reply to SCNs received & produced such objections for the first time before the writ court itself - NO: HC

- Assessee's writ appeal dismissed: KERALA HIGH COURT

INDIRECT TAX

SERVICE TAX

2020-TIOL-543-CESTAT-MUM

Sahara India Tv Network Vs CCGST

ST - It is settled that once the assessee in terms of Rule 2(q) r/w Rule 2(1)(d)(iv) ibid, is liable to pay service tax, then he also becomes a provider of taxable service under Rule 2(r) and consequently becomes a provider of output service under Rule 2(p) ibid and becomes entitled to utilize the Cenvat credit for payment of service tax on reverse charge basis - Rule 5 of the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006 prohibits availing of Cenvat credit and not for utilizing the Cenvat credit to discharge its service tax obligation on reverse charge basis - The period involved in this Appeal is from April, 2008 to March, 2011 whereas the prohibition as per the notification dated 20.6.2012 regarding the utilization of the Cenvat credit by way of amendment in Rule 3(4) ibid, is effected from 1.7.2012 only, therefore during the period in dispute the Appellants i.e. the service recipient were very well within their rights to discharge the service tax liability on reverse charge basis by utilizing the Cenvat Credit - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

2020-TIOL-542-CESTAT-ALL

Mantora Oils Products Pvt Ltd Vs CC, CE & ST

ST - Refund - Appellant had allegedly paid, under reverse charge mechanism, excess amount of service tax and claimed the same as refund - claim was rejected on the ground of limitation - in appeal, the appellant submitted that since the excess service tax was paid under a mistake of law, the same should be treated as 'deposit' and time limitation u/s 11B of CEA, 1944 was inapplicable - as this appeal was rejected by Commissioner(A), appellant is before CESTAT.

Held: Every refund claim arises on account of fact that the same was not required to be paid - refund claim beyond the period of limitation provided under law is totally barred by limitation - Even the fact that the tax was paid under a mistake of law, cannot be adopted for grant of such refund - no justifiable reasons to interfere in the impugned order of Commissioner (Appeals) - appeal is rejected: CESTAT [para 7 to 9]

- Appeal rejected: ALLAHABAD CESTAT

CENTRAL EXCISE

2020-TIOL-541-CESTAT-DEL

Avtec Ltd Vs CCGST & CE

CX - The assessee-company manufactures motor vehicle engines & transportation parts - It was issued several SCNs for the relevant periods, proposing to disallow cenvat credit taken by the assessee for input services received - These services included (i) telephone service, (ii) insurance services, (iii)canteen services,(iv) courier services (v)Air travel services and (vi) rent-a-cab services - The Revenue opined that such services did not qualify as input services - On appeal, the Commr.(A) allowed partial relief, upholding denial of credit on canteen service, air travel service, insurance service and rent-a-cab service - Hence the present appeal.

Held - In respect of insurance and canteen services, these can be disallowed on when provided to a particular employee - In the present case, such services were provided to a group of employees - Hence the same is allowed as an input service - So far as Air Travel Service is concerned, there is no allegation that such service is to be provided to any employee on vacation or for home travel - It is undisputed that the air travel service is received in respect of travel for business purposes - Hence the same is allowed u/r 2(l) of CCR 2004 - In respect of rent-a-cab service, the same is allowable as input service, in light of the decision in Marvel Vinyls Ltd. - Hence the O-i-A disallowing the credit is set aside: CESTAT

- Assessee's appeal allowed: DELHI CESTAT

2020-TIOL-540-CESTAT-DEL

Hero Motocorp Ltd Vs CCGST & CE

CX - The assessee-company is a leading manufacturer of motorcycles - It assails an order passed by the original authority, raising demand for payment of National Calamity Contingent Duty (NCCD), Education Cess (EC) and Secondary & Higher Secondary Education Cess (SHEC) - Demand for interest and penalty was raised as well - The assessee claimed that the NCCD is of the nature of a duty and so the assessee is liable to benefit from exemption notification - Such issue was also raised by the assessee before the Supreme Court and the assessee also deposited part of the NCCD, EC and SHEC during pendency of the appeal before the Supreme Court - However, no penalty was deposited by the assessee.

Held - The Apex Court in the assessee's case had held that NCCD is of the nature of Excise duty and so was entitled to the benefit of exemption notification - In light of such findings, the duty demand raised merits being set aside - The payment for EC & SHEC would also be set aside - The subject order is set aside and the amount pre-deposited by the assessee is liable to be refunded to it: CESTAT

- Assessee's appeal allowed: DELHI CESTAT

CUSTOMS

2020-TIOL-539-CESTAT-DEL

Alberto Bestonso Vs CC

Cus - During the relevant period, a person imported a car and filed BoE - The Revenue observed there to be under-valuation and mis-declaration with intent to evade payment of duty - On adjudication, it was held that the vehicle was imported from a country other than the capital of manufacture - The vehicle was confiscated and the importer was given option to redeem the same on payment of fine along with personal penalty u/s 112 of the Act - The vehicle was redeemed on payment of fine, penalty and applicable duty and the vehicle was released for home consumption - Subsquently, the Revenue invoked extended limitation and issued SCN to the importer alleging undervaluation of the vehicle in question - The noticees approached the SETCOM whereupon the dispute was finally settled - Thereafter, the adjudicating authority initiated proceedings against the appellant on grounds that the appellant indulged in smuggling of high end vehicles and SUVs by resorting to mis-declaration and the value of the vehicles so as to evade appropriate duty - Hence penalty was imposed u/s 114AA of the Customs Act.

Held - The facts in respect of the co-noticee are similar to those applicable onto the appellant - The co-noticee approached the Settlement Commission and got the dispute settled - Hence it is held that the dispute also stands settled in respect of the present appellant, who is co-noticee in the common SCN issued - Hence the subject O-i-O merits being set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2020-TIOL-538-CESTAT-BANG

CC Vs Salgaogar Mining Industries Pvt Ltd

Cus - The assessee is engaged in exporting Iron Ore - For export purpose, it availed services of a vessel to facilitate swift loading of cargo for export - The Department raised duty demand on the shipping stores consumed aboard the vessel - Such demand was set aside by the Commr.(A) - Hence the present appeal.

Held - Though the Department alleged that the vessel was on coastal run, there was no evidence to such effect is put on record either by way of any permission granted for coastal run by Customs or DG Shipping or any copy of the log book of the vessel has been submitted - It is also found from the judgment of the Apex Court in Shantilal Khushaldas and Bros. Vs. Asst. Collector of Customs, Goa that such vessels which are engaged in transshipment of export cargo from the port to the mother vessels stationed at high seas are sea going vessels and are rightly eligible to be held as foreign going vessels in terms of Section 2(21) of the Customs Act, 1962 - It is seen that the vessel in question was engaged in carriage of goods between ports to high seas - In such case, the vessel is a foreign going vessel and so the exemption available to ship stores is rightly held to be exempted: CESTAT

- Revenue's appeal dismissed: BANGALORE CESTAT

HIGH LIGHTS (SISTER PORTAL)

TII

TP - Having regard to principle of consistency, method adopted for calculating ALP in previous years cannot be ignored, particularly when there is no change in facts and law: ITAT

I-T- It is fit case for remand where AO taxes receipts on account of rectification work done, but omits to consider details of such work and rework in respect of component export services activity: ITAT

TIOL CORPLAWS

SARFAESI - There is statutory and efficacious alternative remedy available in form of appeal before Tribunal, Court will not decide case on merits: HC

IBC - If application filed by financial creditor under IBC is admitted against principal borrower then second application can be admitted for same set of claim and default against corporate guarantor: NCLAT

NEWS FLASH

COVID-19 - Spain reports 414 more deaths with 3386 new cases + Iran reports 2274 new cases with 136 fresh deaths + Belgium reports 185 fresh deaths with 1123 new cases + Portugal reports 452 cases; Denmark 278 & Finland 249

COVID19 - Global tally rushing to cross 13 lakh mark in few hours with 71000 deaths

Indian tally inches up to 4400 with 122 deaths & 86 new cases detected today

West Bengal to set up COVID19 policy-making panel; Mamta to involve Nobel laureate Abhijit Banerjee

Anti-COVID19 Fund - Union Cabinet decides to promulgate Ordinance to suspend MPLAD fund for two years and also to reduce MPs' salary by 30%; President, VP & Governors also write to Govt for 30% reduction in pay packet

Wockhardt Hospital sealed after 29 of its personnel test positive for COVID19

Japan finally decides to go for state of emergency up to six months; braces up for stimulus package

Predictably, India's services PMI goes down to 49.3 in March month from 57.5 in Feb month

COVID19 - Tally begins shooting up outside Europe - Russia reports 954 new cases + Philippines 414 cases + Mexico 253 + Indonesia 218 + Israel 181

COVID19 - Diya Lighting - Power demand nosedived by 32000 MW, says Power Minister

COVID19 - Global tally jumps to 12.74 lakh with 69500 deaths + USA tally zooms up to 3.37 lakh with 9600 deaths + France has 93K cases with 8100 deaths + German tally crosses one lakh mark with 1584 deaths + UK tally inching close to 50K with 5000 deaths + Brazilian tally goes up to 11300 with 500 deaths

Indian tally jumps to 4300 with 118 deaths & 328 discharged

COVID-19 - Chidambaram calls for extensive testing

PM reviews India's preparedness to deal with soaring cases of COVID19

IRS Association donates masks, gloves, disinfectants to hospitals in Gurgaon

COVID-19 - Railways converting coaches to achieve target of over three lakh isolation beds