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I-T - Notional loss suffered on account of revaluation of stock-in-trade held by rural bank branch at close of year is allowable deduction: HC

I-T - Claim of assessee cannot be modified without filing revised return: HC

I-T - Agricultural income tax paid for apportioned agricultural income cannot overlap into business income as tax payable by assessee for earning business income: HC

I-T - Activity of running printing press & publishing newspaper, cannot be said to be of the nature of trade, commerce or business where such activity has no profit motive & where any profits are used for charitable purposes : HC

I-T - Additions framed on account of unexplained investments is unsustainable where based solely on assumptions & presumptions: ITAT

I-T - Since assessee is carrying on charitable activities as envisaged u/s 2 (15) , assessee is entitled for grant of registration u/s 12AA : ITAT

I-T - Since assessee is willing to substantiate cash payment deposited in his bank account therefore, issue relating to addition of unexplained cash is restored to file of AO : ITAT

Misc - Statute contains distinct provisions for levy of taxes and for imposition of charges and recovery of fees - Observations of HC that though charges are loosely termed as tax, it is, in substance, a fee, is per incuriam : SC LB

NDPS - Prosecution has immensely failed to prove its case beyond reasonable doubt, therefore, it is a fit case to grant benefit of doubt: HC

NDPS - Violation of procedural aspects can be looked into during the course of trial and cannot be deeply analysed at the stage of bail: HC

GST - Section 83 - Attachment beyond one year - State cannot insist on continuing with something which is impermissible under the law: HC

VAT - Proviso to sec. 8(2)(ii) is not ultra vires to the Constitution : HC

CX - Since advertisement service was not used for trading of packaging machines, value of packaging machines for calculating the reversal amount of CENVAT Credit cannot be taken into account: CESTAT

2021-TIOL-2185-HC-AHM-GST

Formative Tex Fab Vs State of Gujarat

GST - Petition is filed seeking a direction against respondent No. 4 to release the provisional attachment of the property on the ground that continuing the attachment after completion of one year is violative and dehors the provisions of Section 83 of the CGST / GGST Act. Held: As the cause is no longer surviving and the provisional attachment made does not survive any longer by virtue of the order dated 23.09.2021, the petition is being disposed of with the word of caution to the respondents that the statutory provision needs to be complied with very strictly and stringently - There must not be any requirement for the parties to approach this Court for compliance of the provisions of law - If there are statutory remedies available, they may take recourse to, however, the State cannot insist on continuing with something which is impermissible under the law - Since the petitioner chooses not to insist for any amount of cost, therefore, the Court has resisted in imposing cost in this matter: High Court [para 12 to 14]

- Petition disposed of: GUJARAT HIGH COURT

2021-TIOL-259-SC-MISC-LB

Jalkal Vibhag Nagar Nigam Vs Pradeshiya Industrial And Investment Corporation

Tax - Water & Sewerage tax - Facts are that on 7 September 1995, a writ petition was instituted by the first respondent under Article 226 of the Constitution of India challenging the levy of water tax and sewerage tax on the premise that the first respondent had, during the construction of the building, not obtained any water from the pipeline laid down by the appellants within the area nor had it made a request for a fresh water connection - Challenge was raised to the validity of Sections 52(a), 55(b)( i ) and 56(b) of the UP Water Supply and Sewerage Act on the ground that they are ultra vires the provisions of Article 265 of the Constitution - Division Bench of the High Court of Judicature at Allahabad allowed a petition under Article 226 of the Constitution of India instituted by the first respondent and directed the appellants to refund water and sewerage taxes levied and collected under the provisions of the Uttar Pradesh Water Supply and Sewerage Act 1975 "UP Water Supply and Sewerage Act" - Review petition against this judgment was also dismissed by the High Court by order dated 9 August 2014 - On 7 August 2015, while entertaining the special leave petition (filed by the Nagar Nigam & Ors .) and issuing notice, this Court stayed the operation of the impugned judgments.

Held:

+ The legislature has distinguished between the expressions "tax", "fee", "cost of water", "meter rent", "penalty", "damage or surcharge" by providing separate provisions under the Act. [para 17]

+ Levy of tax is intended to secure adequate means of finance for the Jal Sansthan to undertake its activities. But the raising of revenue in terms of Section 52(1)(a) is in the nature of a tax. The levy is on premises situated within the area of the Jal Sansthan . [para 24]

+ Clause (b) of Section 55 contains two further restrictions on the levy of water tax by providing that it shall not be levied on premises: ( i ) not situated within the radius prescribed of the nearest stand post or other water works on which water is made available to the public by the Jal Sansthan ; or (ii) whose annual value does not exceed Rs. 360 and to which no water is supplied by the Jal Sansthan . The restrictions which are imposed by Section 55 do not render the tax a fee, nor are they indicative of the tax being charged for the actual use of water. [para 25]

+ Section 52 and Section 56 also indicate that the intention of the legislature … Therefore, the payment of water tax and sewerage tax is regardless of whether the premises are connected with water supply or with a sewer of the Jal Sansthan . There is no exemption from the payment of water tax or sewerage tax as both the contingencies - the premises being connected with water supply (or, as the case may be, with a sewer of the Jal Sansthan ) or there being no such connection- have been covered under the provisions of Section 56. So long as a provision for water supply or a sewerage is made by the Jal Sansthan in the area covered, the occupier or the owner of the premises is liable to pay the taxes. [para 26]

+ Chapter VI makes a clear distinction between a tax, a charge and a fee. The provisions of Section 63 indicate that the recovery of a fee is, broadly speaking in relation to a service which is provided. [para 27]

+ The nomenclature that the legislature has ascribed to the tax does not determine either the nature of the levy or its true and essential character. The legislature may choose a label for a tax. The label however will not determine or for that matter clarify the nature of the levy. The nature of the levy has to be deduced from the nature of the tax, the provision which specifies the taxing event and, as in the case of Section 52, the unit upon which the levy is to be imposed. The tax has been labelled as the water tax or a sewerage tax simply because it is imposed by the Jal Sansthan constituted under the UP Water Supply and Sewerage Act. That does not alter the nature of the levy which in substance is a tax on lands and buildings within the meaning of Entry 49 of List II of the Seventh Schedule. [para 28]

+ There can be no manner of doubt that the levy which is imposed under Section 52 is a tax on lands and buildings situated within the area of the Jal Sansthan for the purpose of imposing the tax. The nomenclature of the tax does not indicate its true character and substance. The charging section indicates in unambiguous terms that it is a tax on lands and buildings. [para 36]

+ …the basis for the levy of the taxes is on the location of premises within the area of the Jal Sansthan as notified by the State Government. Since the respondent's premises are located within the area of the appellant's authority, the respondent is liable to pay the water tax as well as the sewerage tax as the owner and occupier of the premises. [para 36]

+ Levy under Section 52 falls squarely under the ambit of Entry 49 of List II as it is in the nature of a tax and not a fee. Thus, the applicability of Entry 17, which is a non-taxing entry, does not arise. [para 40]

+ The distinction between a tax and fee has substantially been effaced in the development of our constitutional jurisprudence.

+ The distinction that while a tax is a compulsory exaction, a fee constitutes a voluntary payment for services rendered does not hold good. As in the case of a tax, so also in the case of a fee, the exaction may not be truly of a voluntary nature. Similarly, the element of a service may not be totally absent in a given case in the context of a provision which imposes a tax. [para 42]

+ In the present case, the tax has been imposed by the legislature in Section 52 on premises situated within the area of the Jal Sansthan .

+ The levy of the tax does not depend upon the actual consumption of water by the owner or occupier upon whom the tax is levied. Unlike the charge under Section 59 which is towards the cost of water to be supplied by the Jal Sansthan according to its volume or, in lieu thereof on a fixed sum, the tax under Section 52 is a compulsory exaction. The levy under Section 52(1) is hence a tax and not a fee. Moreover, it is a tax on lands and buildings within the meaning of Entry 49 of List II. [para 47]

+ The observations of the Court that though the charges are loosely termed as tax, it is in substance a fee, is per incuriam and in any event not reflective of a correct reading of the provisions of the statute. …statute contains distinct provisions for the levy of taxes and for the imposition of charges and the recovery of fees. The levy under Section 52 is a tax simplicitor and cannot be regarded either as a charge or a fee for a service rendered. [para 48]

+ Appeals stand allowed and the judgment of the High Court of Judicature at Allahabad at its Lucknow Bench dated 7 March 2014 shall stand set aside. The appellants shall be entitled to recover the balance of the dues remaining to be recovered in pursuance of the notice of demand, together with interest at the rate of 9 per cent per annum. [para 49]: Supreme Court Larger Bench

- Appeals allowed: SUPREME COURT OF INDIA

2021-TIOL-2184-HC-KERALA-VAT

Cheerans Structurals Engineers And Contractors Vs CTO

Whether proviso to sec. 8(2)(ii) is ultra vires to the Constitution – NO: HC

- Assessee's appeals dismissed: KERALA HIGH COURT

2021-TIOL-2187-HC-DEL-NDPS

Harish Joshi Vs DRI

NDPS - Appeal has been preferred against the judgment dated 01.09.2018 passed by the l Special Judge, Delhi vide which appellant - Harish Joshi, a Canadian national, has been inter alia held guilty for the offences under Sections 21(c) and 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - Appellant submits that he was forced & threatened to write in his own hand on the papers placed before him, story of some trading/carrying narcotics contrabands and was brutally beaten up and was not even allowed to make a call to his family or the Canadian High Commission.

Held: It is a settled law that an accused is presumed to be innocent unless proven guilty and to prove the guilt, the prosecution is required to substantiate its case by showing that the due procedures prescribed under the NDPS Act have been followed, coupled with the assistance of material witnesses - In the present case, prosecution has not made any efforts to trace out the co-accused Sanjay, who had purportedly brought the substance for delivery to the appellant - The prosecution has even failed to examine the panch witnesses namely, Raj Kumar and Ombir , who would have proved the arrest and recovery - The Panchnama prepared at the spot did not bear signatures of any of the panch witnesses - In addition, the manner in which the offending vehicle was traced, apprehended and recovery was made, also casts a doubt upon the credibility of prosecution case - Further, Satish Kumar (PW-14), Security Officer at DLF Exclusive Apartments, has not also supported the prosecution case - Also, prosecution has failed to substantiate as to how two reports obtained from CRCL had different analysis and as to why opinion of PW-19 with regard to two different reports, one of " Diactyl Morphin " (Heroin) and the other for "Opium" being drawn from two different samples, be not accepted - Court finds that prosecution has immensely failed to prove its case beyond reasonable doubt, therefore, it is a fit case to grant benefit of doubt to appellant/accused - Appellant is acquitted of offences alleged in the present case - Appeal is allowed: High Court [para 37 to 39]

- Appeal allowed: DELHI HIGH COURT

2021-TIOL-2186-HC-DEL-NDPS

Kelvin George Katindasa Vs NCB

NDPS - Pseudoephedrine - Application has filed bail application - Main ground is that the manner in which the samples were drawn was not as per law as the sample were not taken from each packet and this is totally a violation of law in drawing the sample of drugs; that after the recovery of alleged 5 packets, the contents of all the packets were transferred in a transparent polythene and mixed homogeneously and after that two samples of 25 gram each from the mixture were taken; that the petitioner is a young person who has been falsely implicated in the present case; that while issuing notice U/s 50 NDPS Act, the mandatory provisions of Section 50 NDPS Act have not been followed - Case laws cited in support.

Held: The ratio of one case cannot be applied mechanically to other case without considering their factual situation and circumstances because a slight difference in the facts or additional facts makes a lot of difference in precedential value of a decision - Both the contentions are liable to be rejected as they relate to violation of the procedural aspects which can only be looked into during the course of trial and cannot be deeply analyzed at the stage of bail - In the instant case, there is a recovery of huge quantity of Pseudoephedrine i.e. 24.5 Kg. which was recovered from the possession of the petitioner while he was present at the IGI airport for travelling to Tanzania - Supreme Court in the case of Union of India Vs. Prateek Shukla = 2021-TIOL-130-SC-NDPS has cancelled the bail of the petitioner who was found in possession of controlled substance namely acetic anhydride - Looking into the allegations against the petitioner, quantity of the substance recovered and also the fact that the petitioner is a foreigner and bail of the co-accused has been dismissed by this court vide order dated 24.11.2020, no ground for bail is made out - Bail application is dismissed: High Court [para 10, 12 to 14]

- Application dismissed: DELHI HIGH COURT

2021-TIOL-739-CESTAT-MUM

CC Vs Royal Cushion Vinyl Products Ltd

Cus - Issue arises is, whether the adjudicating authority is right by not imposing redemption fine on the ground that the goods were not available for confiscation - As regards Revenue's contention that since the appellant had executed Bond under the Advance License Scheme, goods shall be treated as released under Bond, therefore, the redemption fine could have been imposed, it is found that the Bond was executed exclusively for compliance of condition of Exemption Notification No. 149/95-Cus. - The goods were never seized nor released provisionally against execution of specific provisional release Bond - Therefore, it cannot be said that the goods were provisionally released against specific Bond - Accordingly, no merit found in Revenue's appeal - The impugned order is upheld: CESTAT

- Revenue's appeal dismissed: MUMBAI CESTAT

2021-TIOL-738-CESTAT-MUM

Tetra Pak India Pvt Ltd Vs CCE

CX - The appellant is engaged in manufacture of aseptic packaging material - Apart from that, he is also engaged in trading of packaging material as well as packaging machinery - During the period April, 2007 to March, 2010 in order to promote the sale, appellant advertised for their product packaging materials in respect of both manufactured as well as traded goods - Case of Revenue is that since the advertisement pertained to traded goods of which credit itself was not available, appellant is required to reverse the credit of advertisement service attributed to traded packaging material - The advertisement papers clearly shows that the advertisement is in respect of packaging material and it nowhere indicates the trading of packaging machinery - Since advertisement service was not used for trading of packaging machines, value of packaging machines for calculating the reversal amount of CENVAT Credit cannot be taken into account - Therefore, demand of CENVAT Credit in respect of advertisement services attributed to packaging machine is prima facie wrong - This issue has not been raised by appellant before adjudicating authority, hence the same needs to be reconsidered - Matter remanded to the adjudicating authority to reconsider the case: CESTAT

- Matter remanded: MUMBAI CESTAT

2021-TIOL-737-CESTAT-MAD

Beta Enterprises Vs CGST & CE

ST - The issue involved is as to whether the independent contractor carrying out manufacturing activity in the premises of service recipient would amount to supply of man power and recruitment services - The issue has already been decided by Tribunal vide the orders in G. Ramakrishnan & Others 2019-TIOL-2875-CESTAT-MAD , Arul Prakasam 2021-TIOL-628-CESTAT-MAD and K. Balakrishnan and other 2021-TIOL-560-CESTAT-MAD - Accordingly, the issue is no longer res integra - Following the said orders of Tribunal, impugned order is not sustainable and same is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT