2021-TIOL-NEWS-070, Dated:Wednesday, March 24, 2021

2021-TIOL-NEWS-070| March 24 2021

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INCOME TAX


	2021-TIOL-704-HC-MUM-IT Salsette Catholic Co-Operative Housing Society Ltd Vs ACIT Whether assessment order passed by ITO without giving effect to appellate order and considering provisions of Sec 153(5) & relevant CBDT Circulars, calls for consideration afresh - YES: HC - Case remanded : BOMBAY HIGH COURT 2021-TIOL-703-HC-AHM-IT Mehrunnisa Mohamed Fazal Maniar Vs ITO Whether acquiring fresh information, specific in nature and reliable in character, relating to concluded assessment, which goes to expose the falsity of statement made by assessee at the time of original assessment, is different from drawing fresh inference from the same facts & material which was available with the ITO at time of original assessment - YES: HC Whether where the transaction itself on the basis of the subsequent information, is found to be a bogus transaction, the mere disclosure of that transaction at the time of original assessment proceedings, cannot be said to be disclosure of the "true" and "full" facts and the ITO would have the jurisdiction to reopen the concluded assessment in such case - YES: HC - Assessee's writ application dismissed : GUJARAT HIGH COURT 2021-TIOL-702-HC-AHM-IT Sumandeep Vidyapith Vs CIT Whether the authority from whose jurisdiction the case is to be transferred, has to grant a reasonable opportunity of being heard to the assessee and then pass an order recording his reasons - YES: HC Whether transfer order passed u/s 127 is more in nature of administrative order rather than quasi-judicial order and taxpayer cannot have any right to choose his AO - YES: HC - Assessee's writ application dismissed : GUJARAT HIGH COURT 2021-TIOL-566-ITAT-DEL Sarita Singh Vs Addl.CIT Whether penalty for cash transaction in excess of permissible limit as per Section 269SS, is imposable, where the assessee puts forth reasonable cause for failure to comply with the provisions of Section 271D of the Act - NO: ITAT - Assessee's appeal allowed: DELHI ITAT 2021-TIOL-565-ITAT-DEL Plaza Partners Vs ACIT Whether penalty u/s 271(1)(c) is to be imposed only if the assessee is found to be indulging in concealment of facts or furnishing inaccurate particulars of income - YES: ITAT Whether disallowance of assessee's claim can lead to inference of concealment of income or furnishing inaccurate particulars of income so as to impose penalty u/s 271(1)(c) - NO: ITAT - Assessee's appeal allowed: DELHI ITAT 2021-TIOL-564-ITAT-DEL Philip Mercantile Pvt Ltd Vs ACIT Whether penalty imposed u/s 271(1)(c) is invalidated if the AO omits to specify the exact charges against the assessee between concealment of particulars of income or furnishing inaccurate particulars thereof - YES: ITAT - Assessee's appeal allowed: DELHI ITAT 2021-TIOL-563-ITAT-JAIPUR Nilesh Agarwal HUF Vs ITO Whether addition u/s 68 can be made when the assessee has produced documentary evidence which is neither found to be bogus nor the correctness of the same is doubted by the AO - NO: ITAT - Assessee's appeal allowed: JAIPUR ITAT 2021-TIOL-562-ITAT-JAIPUR Sunder Das Sonkia Vs ITO Whether reopening of assessment can be made merely on the basis of information report from the Investigation Wing of the Income Tax Department - YES: ITAT Whether enhancement of G.P. Rate can be made on the basis of comparison done with previous year G.P. Rate even when there is difference in business of assessee - NO: ITAT - Assessee's appeal partly allowed: JAIPUR ITAT

GST CASE


	2021-TIOL-701-HC-AHM-GST Shardaben Jayantilal Patel Vs UoI GST - In order to get the amount of CENVAT credit of Rs.8,35,435/-, the petitioner firm had submitted its declaration in Form GST TRAN-1 for transitional credit within the stipulated time limit before 27.12.2017 and also complied with all other conditions of Section 140 of the GST Act and the Rules framed thereunder - However, the writ applicant, at the time of suo motu internal audit, came to know that, the transitional credit had not been reflected in their electronic credit ledger due to technical glitches in GSTN system and to resolve the issue, they had raised the grievances on GST portal and furnished necessary check list along with the supporting documents - However, since till date, the amount is not reflected in the electronic credit ledger, the writ applicant has filed petition seeking necessary relief. Held: Bench does not find any fault on the part of the writ applicant while claiming the CENVAT credit - Bench takes notice of the fact that, after various representations made by the writ applicant, the respondents have neither rejected the claim nor resolved the technical issue of transitional credit, which has not been reflected in the electronic credit ledger - Bench, therefore, disposes of the writ application by directing the respondents to consider and act upon the representation dated 30.01.2019 made by the writ applicant and decide the claim of the writ applicant in accordance with law and take appropriate action for transitional credit in the electronic credit ledger of the writ applicant, within a period of four weeks - It is clarified that merits of the eligibility of the claim of transitional credit of Rs.8,35,435/- has not been examined by the Bench: High Court [para 10, 11] - Application disposed of: GUJARAT HIGH COURT 2021-TIOL-691-HC-AHM-GST Rameswar Udyog Pvt Ltd Vs UoI GST - Writ applicants exported the goods on payment of tax under IGST Act for the month of July, 2017 - Certain errors were made while furnishing the details of outward supplies in the Form GSTR-1 on account of which there was a mismatch between the GST portal data and data on the ICEGATE customs portal and hence, the refund of the IGST was not granted for the month of July, 2017 - CBIC issued Circular No.12/2018 -Customs, dated 29.05.2018 providing for the steps to be taken for amending the GST portal data in case of exporters - Accordingly, the writ applicants approached the GST authorities and were allowed to amend 28 invoices on the portal, however, they were not being permitted to amend the remaining 14 invoices on the portal because of technical error on the portal - Writ applicants pointed this out on number of occasions to the authorities, but no positive result was achieved, therefore, the present writ petition. Held: Bench disposes of this writ application with a direction to the respondent No. 4 to immediately act as per the above and sanction the refund, in accordance with law, as claimed by the writ applicants within a period of 12 weeks from the date of receipt of this order - In case of any further difficulty, it shall be open for the writ applicants to revive this writ application: High Court [para 10] - Application disposed of: GUJARAT HIGH COURT

INDIRECT TAX

2021-TIOL-700-HC-AHM-CUS

Pam Agro Industries Vs UoI

Cus - Petitioners are engaged in importing broken cashew kernels for trading of such commodity in the local market - Petitioner prays for issue of a Writ of Mandamus or any other appropriate writ, order holding and declaring Notification No. 53(RE-2013)/2009-2014 dated 2.12.2013 issued by the Director General of Foreign Trade ("DGFT") as ultra vires Section 5 of the Foreign Trade Act, ultra vires Section 14 of the Customs Act and ultra vires Article 14 and 19(1)(g) of the Constitution of India; and consequently striking down this Notification as ultra vires and unconstitutional. Held: ++ As the petitioner has challenged the Constitutional validity of the impugned notification, the petition is held to be maintainable under Article 226 of the Constitution of India. [para 26] ++ It is not in dispute that the petitioners imported cashew kernel (broken) from Vietnamese suppliers for a price ranging from Rs.151/- to Rs.180 /- per kg in Indian currency which is the transaction value ordinarily required to be considered for levy of custom duty as per provision of section 14 of the Customs Act. [para 27] ++ On perusal of the notification 53(RE-2013)/2009-2014 , it is clear that the same is issued under section 5 of the Foreign Trade Act read with paragraph No. 2.1 of the Foreign Trade Policy, 2009-2014, as amended from time to time by prescribing the minimum CIF value of cashew kernels under Chapter 8 of ITC (HS) 2012, Schedule 1 (Import Policy) per kilogram being Rs.288/- for cashew kernel (broken) for HS Code 0801 32 10 and Rs.400/- for cashew kernel (whole) for HS Code 0801 32 20. Since 2013, the MIP for two different categories of cashew kernels broken and whole are in existence. [para 29] ++ From the judgment of this Court [Premium Pulses Products & Kusum Agency - 2019-TIOL-61-HC-AHM-CUS ] it is clear that DGFT has not exercised powers under section 3 of the Foreign Trade Act but has merely authenticated an order which relates to the DGFT in accordance with the authentication rules. Therefore, the contention raised by the petitioners that DGFT has no authority to issue such notification is not sustainable in view of above dictum of law. [para 33] ++ It is emerging from the facts that the petitioner having accepted such price for two of the bill of entries being bill of entry nos. 3673973 and 3715746 and custom duty being paid accordingly, the petitioner now cannot say that such price fixed by the impugned notification is without any rationale. [para 34] ++ In view of the provisions of the Customs Act and Foreign Trade Act, notification issued by the DGFT is to be considered as notification issued by the Central Government which is binding upon the petitioners as the same is issued in exercise of powers vested in the Central Government under section 3(2) of the Foreign Trade Act. In such circumstances, the contentions raised by the petitioners with regard to the validity of the notification fails. The impugned notification cannot be held to be ultra vires to the provisions of the Customs Act or the provisions of the Foreign Trade Act, or Article 14 of the Constitution of India as the same is issued by the Central Government under the powers conferred by the provisions of section 3(2) and section 5 of the Foreign Trade Act. [para 35] ++ Petition being devoid of any merit is dismissed. [para 36]

- Petition dismissed: GUJARAT HIGH COURT

2021-TIOL-699-HC-MAD-ST

West Asia Maritime Ltd Vs Asstt Commissioner of GST & CE

ST - Writ petition was entertained and interim order was granted on 04.05.2018 following an earlier order in W.M.P.No . 35103 of 2016 in W.P.No . 41112 of 2016 dated 23.11.2016 - Respondent-department did not file counter affidavit - The writ petition was heard by the Single Bench and has been dismissed on the ground that the same cannot be entertained in the light of the decision of the Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada Vs. Glaxo Smith Kline Consumer Health Care Limited = 2020-TIOL-93-SC-VAT - Inasmuch as alternate remedy of appeal is available to the petitioner. Held: Bench had an occasion to consider a similar issue in the case of Mahindra & Mahindra Ltd. = 2021-TIOL-502-HC-MAD-CT and noted the circumstances, under which, a writ petition would be maintainable despite availability of an alternate remedy - Bench is of the view that the writ petition could be heard and disposed of on merits leaving it open to the respondent to raise all contentions as was canvassed before this Court both on merits as well on the question of maintainability of the writ petition - Issues raised by petitioner have to be agitated in the writ petition for which a counter affidavit has to be filed by the respondent - Writ appeal is allowed and the order passed in the writ petition is set aside and the writ petition is restored to the file of this Court to be heard along with W.P.Nos.24483 of 2016, 41112 of 2016 and 18838 of 2020 - Since the appellant has the benefit of interim stay of the Order-in-Original dated 15.11.2017 from 04.05.2018, the Order-in- Original dated 15.11.2017 shall remain stayed till the aforesaid writ petitions are disposed of: High Court [para 4, 9, 12] - Writ Appeal allowed: MADRAS HIGH COURT

2021-TIOL-698-HC-MAD-CUS

Kaamdaa Impex Vs CC

Cus - Refund of SAD - Notification 102/2007-Cus - Petitioners submit that claims could not be filed in time as all the documents including respective Bills of Entry had been seized by Directorate of Revenue Intelligence (DRI) on 02.07.2013 and limitation prescribed in the notification had expired when refund claims were filed and, therefore, such delay in filing the refund him cannot be to the disadvantage of the petitioners as the said department was part of the Customs Department.

Held : The said writ petitioners could not have filed the refund claims in absence of the vital documents - Denial of refund claims based on the limitation prescribed under the Notification cannot be justified as all the documents of the said petitioner were admittedly seized as per the Mahazar dated 02.07.2013 - Period up to the time of furnishing of the documents, by the officer of the DRI, required for filing and processing the refund claims under Notification No. 102/2007-Cus dated 14.09.2007 as amended by Notification No. 93/2008-Cus dated 01.08.2008 before the second respondent shall stand excluded - Second respondent is therefore directed to pass appropriate orders on merits keeping the above observation in mind - If the refund claims were filed in time after such period is excluded, the claims may be examined and allowed on merits if the petitioners otherwise satisfy the requirement of Notification No. 102/2007-Cus dated 14.9.2007 as amended by Notification No. 93/2008-Cus dated 01.08.2008 - all the five Writ Petitions stand disposed: High Court [para 23, 28, 29]

- Petitions disposed of: MADRAS HIGH COURT

2021-TIOL-697-HC-MAD-CX

AR Shanmughasundaram Vs CESTAT

CX - Allegation of clandestine removal without payment of duty - Appellant-partner is aggrieved by the order of the Tribunal imposing penalty of Rs.2,00,000/- on him, though the Tribunal reduced the penalty from Rs.50,00,000/- to Rs.2,00,000/- - Revenue challenging the order of the Tribunal insofar as it has set aside the entire duty demanded from the firm and reducing the penalty imposed on the appellant viz., the partner of the firm.

Held:

++ There is a clear missing link between the allegation of clandestine manufacture/removal with that of the assessee firm - This is further established by the fact that duty has been demanded based on a notional fixation by adopting a formula that "X" amount of raw material would result in "Y" amount of finished goods, which cannot be a basis for levy of excise duty, when there is an allegation of clandestine manufacturing/removal - It has been consistently held that when the Tribunal came to the conclusion that the Department did not have sufficient evidence to establish clandestine removal and the Tribunal having considered the evidence on record and come to the factual findings, no question of law would arise for consideration in a tax appeal - The onus was on the Department to prove that there was clandestine manufacture and removal by the assessee-firm and this having not been established to the extent required, Bench finds no error or perversity in the approach of the Tribunal warranting interference - appeals filed by the Revenue are dismissed: High Court [para 41, 44, 45, 50]

++ If the assessee-firm has been completely exonerated, as the allegation of clandestine manufacture/removal having not been established, then the appellant-partner cannot be mulched with penalty - No reason has been assigned by the Tribunal as to why it did not vacate the entire penalty and thought fit to reduce it to Rs.2,00,000/-, though the Tribunal had exonerated the assessee-firm entirely - Therefore, the order passed by the Tribunal, insofar as sustaining the penalty to the tune of Rs.2,00,000/- calls for interference - Penalty imposed on the appellant-partner is set aside and the substantial questions of law are answered in favour of the appellant-partner: High Court [para 46, 48, 50]

- Assessee appeal allowed/Revenue appeal dismissed: MADRAS HIGH COURT

2021-TIOL-693-HC-AHM-CX

Designated Committee-1 Vs EI Dupont India Pvt Ltd

CX - By this application filed, a request is made to grant some more time to comply with the directions issued by this Court in 2021-TIOL-334-HC-AHM-CX - One of the members of Designated Committee has tested Covid Positive and is not available - Time granted to the Designated Committee to pass the final order in accordance with law upto 17th April, 2021 - No further time shall be granted: HC

- Application disposed of: GUJARAT HIGH COURT

2021-TIOL-692-HC-MAD-CUS

Deccan Organics Vs ACC

Cus - Refund of SAD - Single Judge dismissed the writ petition by relying upon the decision of the Supreme Court in the case of Assistant Commissioner (CT), LTU, Kakinada Vs. M/s. Glaxo Smith Kline Consumer Health Care Limited = 2020-TIOL-93-SC-VAT and held that the said writ petition was not maintainable - Bench had an occasion to consider a similar issue in the case of Mahindra & Mahindra Ltd. = 2021-TIOL-502-HC-MAD-CT and noted the circumstances, under which, a writ petition would be maintainable despite availability of an alternate remedy - Availability of alternate remedy is not an absolute bar especially when the legality of entitlement of the refund claim was accepted by the Department pursuant to the decision of the Delhi Tribunal in the case of Gazal Overseas 2015-TIOL-2454-CESTAT-DEL and there have been instances where Writ Courts have been entertaining writ petitions and granting the relief of refund - Issue relating to limitation is a question of law to be considered and Bench finds that the assessee did not have an opportunity to place their submissions before the respondent before even the order impugned in the said petition was passed - Not providing an opportunity of personal hearing would result in violation of the principles of natural justice, which would be one of the grounds to entertain a writ petition - Therefore, Bench is inclined to remit the matter back to the respondent to reconsider the claim of refund only with regard to the aspect of limitation, as the legal position with regard to entitlement of refund has already been settled by the decision of the Delhi Tribunal in the case of Gazal Overseas (supra), which decision has been accepted by the Department - Writ appeal is allowed - Order passed is set aside and the matter is remanded to the respondent for a fresh consideration on the issue relating to limitation alone - exercise to be completed within twelve weeks: High Court [para 10, 17, 18]

- Appeal allowed: MADRAS HIGH COURT

2021-TIOL-167-CESTAT-MAD

MKA Chinnasamy Nadar and Sons Vs CC

Cus - The appellant had filed Bill of Entry under LDC Scheme for the import of "Chick Peas [Tanzania Yellow Gram (Desi Chick Peas)]" classifying the same under Tariff Item 0713 20 20 of Customs Tariff Act, 1975 - The Lower Adjudicating Authority found that the import of Chick Peas had been rejected by FSSAI as the mineral matter content exceeded the maximum standard limit and therefore held that the imported Chick Peas is liable for confiscation under Section 111(d) of Customs Act, 1962, gave option to pay fine under Section 125 of Customs Act, 1962 and imposed a penalty under Section 112(a) of Customs Act, 1962 - An identical issue came up for consideration before Tribunal in case of M/s. O.M.S. Sivajothi Mills 2019-TIOL-2607-CESTAT-MAD - Facts being identical, said case would squarely apply to the case on hand - The redemption fine charged under Section 125 of Customs Act, 1962 is unsustainable and the same is deleted - As regards to levy of penalty under Section 112(a) of Customs Act, 1962, a mere importation that would render such goods liable to confiscation is sufficient to attract penalty - Therefore, the case on hand gets covered under the mischief of Section 112(a) ibid in view of the decision in case of Sankar Pandi 2003-TIOL-1525-HC-MAD-CUS which decision has thereafter been upheld by Apex Court 2017-TIOL-424-SC-CUS , wherein similar penalty has been upheld - However, same is reduced to Rs. 50,000/- : CESTAT - Appeal allowed: CHENNAI CESTAT

2021-TIOL-166-CESTAT-DEL

Rajasthan Housing Board Vs CCE

ST - The appellant ("RHB") is engaged in construction of residential houses from loan sanctioned by HUDCO and other financial institutes and allotting these houses on hire purchase sale and outride sale basis to the consumers against collection of the amounts - Three SCNs were issued to the appellant alleging that activity of collection of said charges is covered under definition of Banking and other Financial Services as mentioned under Section 65(12) of Finance Act, 1994 - The Original Adjudicating Authority has confirmed the demand keeping in view that the service in question has been rendered by appellant being a body corporate - Since the basic function of appellant is to construct the houses and then to sell it either by way of allotment or by way of hire purchase against receiving certain amounts whether in form of ASC charges or hire purchase charges, but the activity is specifically the activity of construction of complexes and as such said amount cannot be made liable to tax for rendering service as that of "Banking and Financial Services" - The appellant is neither such a body corporate as is required for Section 65(12) of Finance Act, 1994 nor the funds as that of ASC charges and hire purchase charges are the income of the appellant, who is held to be engaged in rendering construction services as contrary to Banking and Financial Services - As regards to the other income as that of interest as alleged in impugned SCNs, as per Rule 6(2) of Service Tax Rules, 2006, the value of taxable service has not to include interest on loans and on delayed payments of any consideration for provision of services or sale of property whether movable or immovable - The hire purchase deposits for property which cannot be defined as goods are also out of the scope of taxable value as far as the interest thereupon is concerned - Otherwise also, whatever interest amount received by appellant is confined to the activity with respect to the own products of the appellant i.e. the construction raised by them for being sold, that too, in welfare of economically weaker sections - The findings of Adjudicating Authority and also the allegations of three of impugned SCNs are contradictory to an earlier SCN for the period 01.07.2010 to 31.12.2011 - The ACS fund received by appellant during that period was alleged to be assessed under construction of complex services - As regards to the allegations of suppression of facts, there has to be a positive act of suppression apparent on part of appellant along with an apparent intention to evade payment of tax and there has to be a wilful misstatement as was held by Tribunal in case of Centre for Development of Advance Computering - Admittedly, the appellants were submitting their returns regularly - No question of suppression otherwise is possible - Department has failed to reflect any wilful misstatement - Department is not allowed to invoke extended period of limitation and the adjudication imposing penalties upon appellant is also held to be apparently wrong: CESTAT

- Appeal allowed: DELHI CESTAT

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JEST GST

By Vijay Kumar

Unchartered Audit?

SUB-SECTION (5) of section 35 of the CGST Act reads as:-

(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy ...