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I-T - For purposes of reopening assessment, only true and correct state of law can form basis for reason to believe escapement of income from assessment : ITAT

I-T - Since Pr. CIT has taken action merely on basis of audit objection while AO made proper inquiries at time of framing assessment u/s. 143(3) r.w.s 147, assessment order cannot be said to be prejudicial to interest of Revenue: ITAT

I-T- I n absence of any evidence to show that assessee has incurred any extravagant expenditure for maintaining a lavish life style or has performed any marriage function, addition on presumption and surmises is not sustainable in law :ITAT

ST - Omission by Commissioner not to separately deal with the case laws cited, if required, can be corrected by Tribunal, if at all the same is approached - Petition dismissed: HC

ST - Works Contract - Composition scheme is only an option available to the appellant and cannot be enforced: CESTAT

ST - Where value has already been split as per state law and VAT has been paid on goods component of composite works contract, no service tax can be levied again on such component by taking recourse to Rule 2A(ii) of ST Valuation Rules, 2006: CESTAT

2021-TIOL-2174-HC-AHM-VAT

Aspen International Pvt Ltd Vs State of Gujarat

In writ, the High Court observes that the transactions in question appear to be genuine as the assessee was able to furnish evidence of high seas sale transactions, which were accepted. In light of the same, the Court finds the demand for pre-deposit of 20% of duty demand is on the higher side and that lower demand of 5% pre-deposit would suffice.

- Writ petition disposed of: GUJARAT HIGH COURT

2021-TIOL-2172-HC-MUM-ST

Hover Automotive India Pvt Ltd Vs UoI

ST - Petitioner submits that they had quoted several case laws and submitted various international jurisprudence and the Commissioner has recorded that on consideration of such case laws, he did not find the same to be applicable to the present case - Petitioner submits that since no other reason has been assigned why such case laws did not appeal to the Commissioner the same amounts to a clear violation of the principles of natural justice which ought to be a ground for entertaining the writ petition - Reliance is placed on the decision in M/s. Commercial Steel Limited] = 2021-TIOL-234-SC-GST-LB to contend that mere availability of the statutory appellate remedy does not oust the jurisdiction of the Court exercising power of judicial review under Article 226 of the Constitution of India.

Held: Petitioner has not asserted any of the fundamental principles of natural justice, as understood in the traditional and contemporary sense, viz. audi alteram partem or nemo debet esse judex in propria causa , to have been breached - There is no complaint from the side of the petitioner that he was not heard by the Commissioner prior to the order-in original being made or that fair, adequate and reasonable opportunity to place the case/defend the proposed action was not extended - It is also not the complaint that the order has not assigned reasons in support of the conclusion reached - The petitioner is left aggrieved because the impugned order does not say, in so many words, as to why the authorities cited by it were not considered to be applicable - Such error [omission of the Commissioner not to separately deal with the authorities cited], if required, can be corrected by the Tribunal, if at all the same is approached - Writ petition stands dismissed - Petitioner is not precluded from pursuing appellate remedy in accordance with law: High Court [para 11, 15, 16, 17]

- Petition dismissed: BOMBAY HIGH COURT

2021-TIOL-731-CESTAT-MAD

Touchstone Infrastructure And Solutions Pvt Ltd Vs CCT & CE

ST - Appellant provides finishing services on works contract basis to various parties - The appellant charges a single amount for the entire contract without invoicing separately for the goods and the services - The appellant paid VAT on the goods component reckoning 70% of the total contract of the value of the goods as per the provisions of Tamil Nadu Value Added Tax Act and Rules and paid service tax on 30% of the total contract value - Case of the Revenue is that since the appellant could not ascertain the actual value of goods transferred, it should have paid service tax under composition scheme.

Held:

+ It is nowhere laid down that the 'tax payer shall opt for the Composition Scheme' or that 'the taxpayer shall pay tax according to the composition scheme' as wrongly understood by the officer issuing the show cause notice, the Original Authority as well as the Appellate Authority - For the period prior to 01.07.2012, the demand in the show cause notice based on enforcing the composition scheme upon the appellant, which is only an option available to the appellant, cannot be sustained and needs to be set aside: CESTAT [para 8]

+ From 01.07.2012, service tax became payable on all services except those which are in the negative list. The composition scheme has been abolished and valuation has to be done as per new Rule 2A of the Service Tax (Determination of Value) Rules, 2006. Revenue's case is that the appellant is not covered by Rule 2A (i) at all and the value of service has to be determined as per Rule 2A (ii). [para 9, 10]

+ Following ratio of the Supreme Court in Safety Retreading Co. (P) Ltd. ( = 2017-TIOL-28-SC-ST ), Bench holds that where the value has already been split as per the state law and VAT has been paid on the goods component of the composite works contract, no service tax can be levied on such component again taking recourse to Rule 2A(ii) of Service Tax (Determination of Value) Rules, 2006. The demand for the period post 01.07.2012 also needs to be set aside on this ground.

+ Since the demand of service tax does not sustain, the demand of interest under Section 75 and imposition of penalty under Section 76, 77 and 78 do not also survive. [para 14]

+ Impugned order dated 27.08.2018 is set aside and the appeal is allowed with consequential relief. [para 15]

- Appeal allowed: CHENNAI CESTAT