2020-TIOL-1045-HC-KAR-IT

Shri Vitthalray Souharda Pattin Sahakari Niyamit Vs UoI

In writ, the High Court finds that issues in question are resolved in favor of the assessee vide the judgment in M/s Swabhimani Souharda Credit Cooperative Ltd vs. Government of India and others. The court holds that the assessee qualifies as a cooperative society as per definition thereof u/s 2(19) of the I-T Act and that it is eligible for benefit u/s 80P. It also holds that the attachment of the assessee's bank accounts is unwarranted and directs that they be de-freezed.

-Writ petition allowed: KARNATAKA HIGH COURT

CIT Vs Tech Mahindra Ltd

Whether telecommunication and per diem expenses when computing deduction u/s 10A as well as expenses incurred in respect of insurance of employees who visit factory premises of the client - YES: HC

- Revenue's appeal partly allowed : KARNATAKA HIGH COURT

2020-TIOL-1041-HC-KAR-IT

CIT Vs Infosys BPO Ltd

On appeal, the High Court observes that the issues at hand in the present matter stand settled in favor of the assessee vide the judgment in the case of COMMISSIONER OF INCOME-TAX Vs. YOKOGAWA INDIA LTD. and so dismisses the present appeal.

- Revenue's appeal dismissed: KARNATAKA HIGH COURT

CIT Vs Vijaya Bank

On appeal, the High Court finds that the issues raised in the present appeal stand settled in favor of the assessee vide the judgment in the case of COMMISSIONER OF INCOME TAX-IV, AHMEDABAD Vs. SHREE RAMA MULTI TECH LTD. and so dismisses the present appeal.

- Revenue's appeal dismissed: KARNATAKA HIGH COURT

CIT Vs DSL Software Ltd

On appeal, the High Court observes that the tax value involved in the present appeal is lesser than Rs 1 crore as specified in Circular dated 08.08.2019 and hence dismisses the same, with liberty to revive such appeal if tax value exceeds such amount.

- Revenue's appeal dismissed: KARNATAKA HIGH COURT

Satish Saraf Vs DCIT

Whether penalty u/s 271(1 )( C) is leviable where all particulars are correctly disclosed and income is merely estimated - NO: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

Saurashtra Color Tones Pvt Ltd Vs ITO

Whether section 153C, being non obstantive provision, would override section 147, hence AO has no jurisdiction over the other persons u/s 147,if material backing the reasons, is seized during search - YES: ITAT

- Assessee's appeal allowed: DELHI ITAT

C K Rajan Vs State of Kerala

Whether special rebate u/s 12 of the Kerala VAT Act can be allowed to unregistered dealers - NO: HC

- Assessee's petition dismissed/In favor of Revenue: KERALA HIGH COURT

UoI Vs Brand Equity Treaties Ltd

GST - Delhi High Court had read down the provision viz. Rule 117 of CGST Rules, 2017 as being directory in nature insofar as it prescribes the time-limit for transitioning the credit and held that the same would not result in the forfeiture of the rights in case the credit is not availed within the period prescribed; that petitioners assessees who have filed or attempted to file form TRAN-1 within the aforesaid period of three years as prescribed by the Limitation Act shall be entitled to avail the Input Tax Credit accruing to them; that they are permitted to file relevant TRAN-1 form on or before 30.06.2020 - accordingly, the High Court had directed the respondents Revenue to either open the online portal so as to enable the petitioners to file the declaration TRAN-1 electronically or accept the same manually; that other taxpayers who are similarly situated should also be entitled to avail the benefit of this judgment; that it would be an erroneous approach to attach undue importance to the concept of “technical glitch” only to that which occurs on the GST Common portal, as a pre-condition, for an assessee/tax payer to be granted the benefit of Sub-Rule (1A) of Rule 117; that the time limit prescribed for availing the input tax credit with respect to the purchase of goods and services made in the pre-GST regime, cannot be discriminatory and unreasonable; that there has to be a rationale forthcoming and, in absence thereof, it would be violative of Article 14 of the Constitution - Revenue has filed Appeal before the Supreme Court.

Held: Notice to be issued - Matter to be heard along with SLP(C) No. 26626 of 2019 and SLP (C) D. No. 38404 of 2019 and in the meantime, the operation of the impugned order shall remain stayed: Supreme Court Larger Bench

- Order stayed: SUPREME COURT OF INDIA

2020-TIOL-1047-HC-KAR-GST

Poonam Anand Kishore Vachhani Vs ACCT

GST - Petitioner had granted lease of property owned by her to M/s. Alfara'a Infra Private Limited ('Alfara') under a lease agreement dated 1st July 2017 - Certain proceedings were initiated by the Assistant Commissioner of Commercial Taxes under the provisions of the CGST Act, 2017 and KGST Act, 2017 pursuant to which the premises were sealed on 22 nd September 2018; that although the property was unsealed on 17 th July 2019, it was again sealed on the very same day - Petittioner has, therefore, prayed for - (a) Direct the 1st Respondent to un-seal the premises and handover the physical possession of the schedule premise to the Petitioner forthwith, by issuance of the Writ of Mandamus or any order or writ in the nature of a Writ of Mandamus; or in the alternative (b) Direct the 1st Respondent to instruct the 2nd Respondent to participate in the un-sealing proceedings and consequently direct the Respondents to handover the possession of the schedule premise to the Petitioner forthwith, in a time bound manner, by issuance of writ of Mandamus or any other order or writ in the nature of a Writ of Mandamus - Petitioner further argues that she is not getting monthly rents and is facing hardship for no fault on her part.

Held: Undisputed fact is that the petitioner has leased her property in favour of Alfara - It is petitioner's claim that Alfara has defaulted in paying monthly rent - In view of the admitted position that Alfara is in possession of the premises in question as a tenant on the strength of lease deed dated 1st July 2017, the prayer to issue a writ of mandamus and handover the premises in question to the petitioner cannot be granted in writ proceedings, as parties shall be governed by terms of lease - In the circumstance, petition is misconceived and is accordingly dismissed - Bench clarifies that dismissal of this petition does not come in the way of petitioner seeking recovery of possession of the leased premises from Alfara by approaching appropriate forum in appropriate proceedings: High Court [para 7, 8]

-Petition dismissed : KARNATAKA HIGH COURT

2020-TIOL-1046-HC-P&H-GST

Amba Industrial Corporation Vs UoI

GST - Petitioner challenges vires of Rule 117(1A) of CGST Act, 2017 and seeks direction to Respondent to permit Petitioner to electronically upload form TRAN-1 or avail input tax credit in monthly return GSTR-3B - Petitioner contends that issue involved is squarely covered by judgment of this Court in the case of Adfert Technologies Pvt. Ltd. - 2019-TIOL-2519-HC-P&H-GST , SLP filed by Revenue against aforesaid decision havine been dismissed – Petitioner also submits that Delhi High Court in the case of Brand Equity Treaties Ltd. 2020-TIOL-900-HC-Del-GST has permitted Petitioners to file TRAN-I on or before 30.06.2020 and further directed the Respondents Revenue to permit all other similarly situated tax payers to file TRAN-I on or before 30.06.2020; that this opinion has been approved in SKH Sheet Metals Components = 2020-TIOL-1031-HC-DEL-GST .

Held: Delhi High Court though has not declared Rule 117(1A) ultra vires the Constitution, nonetheless treated as violative of Article 14 of Constitution of India being arbitrary, discriminatory and unreasonable – in the instant case, the Petitioner has challenged vires of Rule 117 (1A) of Rules, however Bench does not think it appropriate to declare it invalid as it is of the considered opinion that Petitioner is entitled to carry forward Cenvat Credit accrued under Central Excise Act, 1944 - Repeated extensions of last date to file TRAN-1 in case of technical glitches as understood by Respondent vindicate claim of the Petitioner that denial of unutilized credit to those dealers who are unable to furnish evidence of attempt to upload TRAN-1 would amount to violation of Article 14 as well Article 300A of the Constitution of India - In view of decision of this Court in the case of Adfert Technologies Pvt. Ltd. (supra) and Delhi High Court in the case of Brand Equity Treaties Ltd. (supra) present petition deserves to be allowed and is accordingly allowed - The Respondents are directed to permit Petitioner to upload TRAN-1 on or before 30.06.2020 and in case Respondent fails to do so, the Petitioner would be at liberty to avail ITC in question in GSTR-3B of July 2020 - respondents would be at liberty to verify genuineness of claim(s) made by Petitioner: High Court [para 7 to 9]

-Petition allowed : PUNJAB AND HARYANA HIGH COURT

2020-TIOL-134-AAR-GST

Dipesh Anil Kumar Naik

GST - Activity of the sale of developed plots would be covered under the clause 'construction of a complex intended for sale to a buyer' - Thus, the said activity is covered under 'construction services' and GST is payable on the sale of developed plots: AAR

- Application disposed of: AAR

2020-TIOL-133-AAR-GST

Pratham Agro Vet Industries

GST - Information provided by the applicant indicates that the product under consideration has not been obtained by milling rice but rather consists of Rice husk of poha and mamra and Sludge/ Wax oil - Thus, the product is clearly not Rice Bran in light of the meaning of Rice Bran as defined in Merriam Webster Dictionary - Rice Bran (22+Oil) shall be classified under Chapter heading 3825 9000 as the residual entry of the miscellaneous chemical products and attracts rate 9 % CGST and 9 % SGST under vide Sr no 98 of Schedule III of notification 1/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-132-AAR-GST

Jay Jalaram Enterprises

GST - J.J.'s POP CORN manufactured from raw corn/maize grains, which, by heating turn into puffed corns/popcorns and then to make it palatable other ingredients like salt and turmeric powder along with oil are added to it fits the description as 'Prepared foods obtained by the roasting of cereal' -classifiable under residual tariff entry CSH 1904 10 90; attracts GST @18%, Entry Sr. No. 15 of Schedule III of Notification No.1/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-131-AAR-GST

Deendayal Port Trust

GST - "Input Tax Credit" shall be NOT be available on the project development services like Programme management consultancy, Marketing Consultancy, Land levelling and other related works, Roads, Water, Electricity, & Drainage Infrastructure and other related works for development of Smart Industrial Port City (SIPC) i.e. construction of an immovable property - clauses (c) and (d) under sub-section (5) of Section 17 of the CGST Act, specifically deny input tax credit in respect of works contract services or goods and services used for construction of an immovable property: AAR

- Application disposed of: AAR

2020-TIOL-130-AAR-GST

Sawai Manoharlal Rathi

GST - Going by the definition of "aggregate turnover", the Applicant is required to consider the value of both the taxable supply i.e. "Renting of immovable property" and exempted supply of service provided by way of extending deposits, loans or advances for which they earned interest income, to arrive at "Aggregate Turnover" to determine the threshold limit for the purpose of obtaining registration under the GST Act: AAR

- Application disposed of: AAR

2020-TIOL-129-AAR-GST

Magnam Netlink Pvt Ltd

GST - Applicants have been awarded a contract for design, construction, supply, installation and commissioning of a Dairy Plant for the Bihar State Milk Cooperative Federation Ltd. - applicant contends that since in the present contract they have fulfilled all the requirements stipulated under Entry No. 3(v)(f) of Notification No. 11/2017-Central Tax (Rate) , the applicable tax rate should be CGST 6%; that without prejudice since Part - B of the referred contract clearly includes design, supply, installation & commissioning of the dairy plant and machinery, the same must at least be included in the referred Entry No. 3(v)(f) of the said Notification.

Held: Supply of Pouch Filling Machine with online pouch coding machine of Make-Domino, is not an immovable property and hence supply of the same cannot be termed as supply of 'works contract' - moreover, Pouch Filling Machine with online pouch coding machine of Make-Domino, is already in existence before supply and there is no construction at site to bring up a new original item in existence - Furthermore, Pouch Filling Machine with online pouch coding machine of Make-Domino is to be used for packing the milk - This process is to take place after the milk has already gone under various processes of filtration, straining, chilling, pasteurizing, cream processing, standardising etc. - Agricultural Produce as defined under clause (vii) of Paragraph 4 of Notification No. 11/2017-Central Tax (Rate) shall not include further processed produce other than such processing as done by a cultivator or producer which does not alter its essential characteristics - Therefore the milk on which processes have been carried out by other than a cultivator or a producer shall not fall under Agricultural Produce - The milk when brought to process by the said Pouch Filling Machine would have already gone under various processes of filtration, straining, chilling, pasteurizing, cream processing, standardising curding etc and the essential characteristics of milk would have been already altered, therefore the said machinery cannot be said to be used for processing agricultural produce - Concluded that the supply of Pouch Filling Machine with online pouch coding machine of Make-Domino, as well as other supplies of civil work and electro-mechanical work will NOT fall under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate) : AAR

- Application disposed of: AAR

2020-TIOL-128-AAR-GST

Mount Fab Packaging Llp

GST - BOPP (Biaxially Oriented Polypropylene) Laminated PP Woven Sacks used in packaging industries are appropriately classifiable under Chapter 39 of the GST Tariff and not 6305 of the GST Tariff: AAR

- Application disposed of: AAR

SERVICE TAX

CENTRAL EXCISE

2020-TIOL-885-CESTAT-CHD

Shree Flavours Pvt Ltd Vs CCE

CX - Appellants were engaged in manufacture of 'flavoured chewing tobacco' and were also working under the 'Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 and were paying duty under the Compound Levy Scheme as per duty determined on the basis of capacity of their packing machines - The appellants filed two refund claims for Rs.82,97,885/- and Rs.1,14,79,949/- with the Jurisdictional Assistant Commissioner and also surrendered their Registration Certificates on 26.08.2011 - Their claims were rejected by the Jurisdictional Officer on the ground that the cash refund of unutilized Cenvat credit, which was filed by the appellants, was not eligible for sanction in terms of the Cenvat Credit Rules, 2004 along with Capacity Determination Rules, 2010 – lower authorities denied the refunds, therefore, appeal before CESTAT.

Held: Appellants submit that the similar issue has been decided by this Tribunal in their own case vide Final Order No. A/53520-53521/2018-EX[DB] dt. 28.11.2018 in appeal no. E/50099/2018 & E/50245/2018, granting the cash refund for the unutilized Cenvat credit on closure or suspension of the production by the appellants – Issue is, therefore, no longer res integra – impugned orders set aside and appeals allowed with consequential relief: CESTAT [para 6, 8]

- Appeals allowed: CHANDIGARH CESTAT

Grasim Industries Ltd Vs CCE

CX - The assessee is a manufacturer of Viscose Staple Fibre (BSF) - They were taking cenvat credit on Furnace Oil used as "fuel" in manufacture of Wood Pulp, partly captively consumed in the same factory for manufacture of dutiable VSF and partly cleared at Nil rate of duty to Sister Unit at Nagda (MP) for manufacture and clearance of dutiable VSF - The revenue views that the re-credit of cenvat taken by assessee on its own which was earlier reversed was in violation of Rule 6(1) of CCR, 2002 - The assessee was reversing the cenvat credit on furnace oil used as fuel in the manufacture of dutiable VSF and exempted Wood Pulp, a part of which was being stock transferred to Sister Unit at Nagda for the manufacture of dutiable VSF - Subsequently, the assessee came to know that the High Courts and the Tribunal in large number of judgments had taken the view that the provisions of Rule 6 of CCR, 2002 are not attracted to "inputs intended to be used as fuel" - Thereafter, assessee informed the jurisdictional authorities that they intend to take cenvat credit on furnace oil - Further, assessee vide their letter dated 29/08/2003 which is on record informed the Department that they had taken credit only partially till 28/02/2003 on furnace oil used as fuel and they intend to avail the balance credit for the period from 01/04/2000 to 28/02/2003 in the month of September, 2003 - Subsequently, they have also informed the Department that since credit on fuel input was not required to be reversed, they had taken full cenvat credit - Further, Apex Court decision in the matter of Gujarat Narmada Fertilizer Company Ltd. 2009-TIOL-96-SC-CX finally settled the issue and reversed the judgment of the High Court and the Tribunal - The assessee deposited the entire cenvat credit which was also appropriated in the impugned order - Assessee have also deposited Rs. 1,52,39,714/- towards interest under intimation to the Department which fact has also been accepted by Department - Re-taking of credit by assessee on furnace oil used as input was not with any malafide intention but was consistent with the prevalent judicial precedent in favour of assessee - It is settled legal position that when there are conflicting judgments and the issue is finally resolved by Supreme Court then in such circumstances, penalty should not be imposed - The imposition of penalty of Rs. 11,00,000/- on the assessee under Rule 13/15 Clause (1) of CCR, 2004 is not sustainable in law and therefore, same is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

CUSTOMS

2020-TIOL-883-CESTAT-MAD

SGM Enterprises Vs CC

Cus - Issue is whether the appellant is eligible for refund of the excess duty paid without challenging the assessment - The said issue stands settled by the decisions relied upon and wherein it is held that the appellant need not challenge the assessment before claiming the refund of excess duty - Following the same, Bench is of the view that the adjudicating authority ought to have considered the refund claim on merits - The impugned order is, therefore, set aside and matter is remanded to the adjudicating authority, who is directed to process the refund claim on merits: CESTAT [para 5]

- Matter remanded: CHENNAI CESTAT

I-T - Writ court is required to intervene where factual findings being assailed before it are not found to be perverse in any manner: HC

TP - Assessment framed on non-existent entity u/s 143(3) r.w.s. 92CA is sustainable: ITAT

TP - TPO can apply benefit test for disallowing expenses in toto, ignoring purpose of expenses: ITAT

TIOL CORPLAWS

Arbitration and Conciliation - If jurisdictional issue goes to root of arbitral proceeding, they should not be overlooked: HC

Arbitration and Conciliation - Having invoked mechanism of Emergency Arbitrator, jurisdiction of Court u/s 9 of Act cannot be invoked and petition is not maintainable: HC