2022-TIOL-639-ITAT-DEL

R S Poultry Supplier Vs ITO

Whether failure of assessee in reflecting correct picture of its true profits by not recording consignment sales in regular books of account, merits rejection of books and estimated net profit from suppressed sales - YES: ITAT

-Assessee's appeal partly allowed :DELHI ITAT

2022-TIOL-638-ITAT-BANG

HP India Sales Pvt Ltd Vs JCIT

Whether it is fit case for remand where TDS u/s 40(a)(ia) was deducted in respect of the relevant transactions but where the assessee has received relief in respect of the same without full appreciation of facts - YES: ITAT

-Assessee's appeal partly allowed : BANGALORE ITAT

2022-TIOL-637-ITAT-AHM

Avnish Navinchandra Shah Vs ITO

Whether income can be said to have accrued or arisen only when right to receive amount in question is vested in assessee - YES: ITAT

-Assessee's appeal partly allowed : AHMEDABAD ITAT

Cus - SCNs cannot be stifled to legitimize evasion of Customs duty on technical grounds that the Officers from DRI were incompetent to issue notices and were not officers of customs: HC

Cus - If the provision as stood during the period in dispute are not produced for the attention of the Court, the Courts may, by oversight, end up giving ratio which are not consistent with the provisions as in force: HC

Cus-Internal arrangement - Merely because the Officers of the Customs and CEX Department are selected and deputed to Directorates does not mean that they cease to be Officers of the respective Departments: HC

Cus - Prayer to re-export 'betel nut' imported from Indonesia and Myanmar cannot be acceded to as the question involves determination of various facts, which the authorities would be competent to undertake: HC

GST - Since interpretation of several provisions of law and notifications are involved, writ petition cannot be thrown out at the motion stage on the ground of availability of alternative remedy - Petition has to be heard and decided on merit: HC

GST - Discrepancies found in stock - Tax and penalty deposited - Seeking a re-measure of the stock of coal once the search team left the premises is an afterthought as the stock could not have remained untouched later: HC

GST - No material on record to establish as to when the order was communicated to petitioner - Crucial fact for determining the limitation for filing appeal not ascertained - Matter remanded: HC

GST - Delay of 865 days in filing appeal - SC directive issued upon outbreak of COVID in the year 2020 cannot be applied to an order passed in February 2019: HC

2022-TIOL-869-HC-MP-GST

Ushman Khan Vs State of Madhya Pradesh

GST - Registration of petitioner was cancelled vide order dated 04.02.2019 -Thereafter, with a delay of 865 days, the petitioner preferred an appeal before the Joint Commissioner who dismissed the appeal vide order dated 04.01.2022 and,therefore, the present petition - Petitioner submits that they are entitled for the relaxation as provided by the Apex Court in the matter of Cognisance for extension of Limitation orders in SMW(C) No. 3/2020.

Held: Section 29 of the Act of 2017 is confined to an application for revocation against cancellation of registration whereas Section 107 of the Act of 2017 deals with the provisions of Appeal including limitation to file appeal - The limitation under Section 107 of the Act of 2017 is three months which is evident from the perusal of the statutory provision contained in Section 107 of the Act of 2017 - However, Section 29 of the Act of 2017 is entirely different and only deals with the application for revocation of cancellation of registration - CBIC Circular dated 25.06.2020 deals only with section 29 of the Act, 2017 and not s.107 of the Act and is of no assistance to the case of the petitioner - Furthermore, the directive of Apex Court were issued subsequently upon out break of Covid-19 pandemic in the year 2020 whereas in the present case, the registration was cancelled on 04/02/2019 and the appeal was preferred on 16/09/2021 - Reasoning given by the lower Appellate Authority are just and proper, therefore, petition is dismissed: High Court [para 7, 8, 9]

- Petition dismissed: MADHYA PRADESH HIGH COURT

2022-TIOL-868-HC-MP-GST

S D Associates Vs State of Madhya Pradesh

GST - Petition has been preferred against the order dated 17.08.2021 passed by the appellate authority viz. Joint Commissioner of Sales Tax, Indore whereby the appeal preferred by it against the order dated 02.01.2019 passed by the Deputy Commissioner of State Tax cancelling his registration of Goods and Services Tax has been dismissed as barred by time -  Inasmuch as the appeal had been preferred by the petitioner after two years and seven months from the date of passing of the order.

Held:  There is no material available on record to establish as to when the order passed by the Deputy Commissioner Sales Tax was communicated to the petitioner - That was the crucial fact for being ascertained as it would be that date from which the period of limitation for preferring the appeal would have commenced -  Since the aforesaid aspect of the matter has not been considered by the appellate authority, the impugned order cannot be sustained and is consequently set aside - Matter is remanded to the appellate authority for reconsideration of the matter and decision afresh - Petition is disposed of: High Court [para 5 to 7]

- Matter remanded: MADHYA PRADESH HIGH COURT

2022-TIOL-867-HC-MP-GST

Sanjay Trading Company Vs State of Madhya Pradesh

GST - Petitioner assails the order on the ground that  the search was not carried out in accordance with the provisions of Section 67 of the M.P. GST Act, 2017 inasmuch as to carry out the search under the provisions of Goods and Services Tax Act, the procedure as laid down in Code of Criminal Procedure 1973, is applicable which inter alia stipulates that the search is required to be carried out in the presence of two witnesses but in the present case, no independent witnesses were present and respondent did not seize any material from the premises of the petitioner, therefore, it was obligatory on the part of the Revenue to re-measure the stock of coal lying in the premises. 

Held: If the Panchanama is perused, it is evident that on the date of search itself, the amount of tax and a penalty was deposited by the petitioner as discrepancies were found in the stock and thus there was no question of any kind of seizure - Moreover, there were independent witnesses as well as the petitioner's own representatives who did not raise any objection as regards search, thus, filing of the application before respondent No.5 to re-measure the stock was an afterthought - Moreover, it is beyond comprehension, that once the search team, after search left the premises on 25/01/2022, the stock of coal would have remained untouched and not alienated during the subsequent period - T here is no infirmity as far as the order/letter impugned are concerned - Petition being devoid of merits stands dismissed: High Court [para 8, 9]

- Petition dismissed: MADHYA PRADESH HIGH COURT

2022-TIOL-866-HC-KOL-GST

Imax Infrastructure Pvt Ltd Vs P M The Deputy Commissioner

GST - Petitioner has challenged the impugned order passed by the Dy. Commissioner of Revenue, Directorate of Revenue Intelligence and Enforcement u/s 74(9) of the Act, 2017 on the ground that the same is without jurisdiction inasmuch as the initiation of proceeding under the State GST Act is without jurisdiction and he cannot act as an officer under the State GST Act - Counsel for Revenue raises the point of maintainability of the writ petition on the ground of availability of alternative remedy by way of an appeal before an appellate forum.

Held:  It is a well settled principle that alternative remedy is not always a bar and particularly when the question of jurisdiction is involved in the writ petition and the writ court is very much empowered to entertain the writ petition, if an order or action of an officer is without jurisdiction or there is a violation of principle of natural justice or constitutional validity of a provision of law is involved and prima facie the petitioner has been able to make out a case that the issue involved in this case is the jurisdiction of the officer concerned who has exercised the power of a GST Officer and since interpretation of several provisions of law and notifications are involved, this writ petition cannot be thrown out at the motion stage on the ground of availability of alternative remedy and this petition has to be heard and decided on merit - Respondents to file affidavit-in-opposition within four weeks - There will be conditional stay of the impugned adjudication order dated 3rd March 2022 subject to deposit of 10% of the demand in question by the petitioner within ten days and if such payment is made, no coercive action shall be taken against the petitioner for recovery of the demand in  question - Matter to be listed for final hearing after ten weeks: High Court

- Interim order passed: CALCUTTA HIGH COURT

2022-TIOL-870-HC-MAD-CUS

N C Alexender Vs CC

Cus - Petitioners have challenged the impugned Order-in-Originals passed by the respective jurisdictional officers of the Customs -Other petitioners have challenged the impugned Show Cause Notices issued by the officers from the Directorate of Revenue Intelligence - It is the uniform submission that the respective Show Cause Notices as also the respective impugned Order-in-Originals are without jurisdiction as they emanate from a person who is not a "proper officer" within the meaning of Section 2(34) of the Customs Act, 1962 - Challenge is inspired from the decision of the Supreme Court in Sayed Ali =  2011-TIOL-20-SC-CUS  and the decision in  Canon India Private Limited  =  2021-TIOL-123-SC-CUS-LB and which decision is now the subject matter of a review before the Hon'ble Supreme Court - Writ petition is opposed primarily on the ground that the petitioner has an alternate remedy and that the petitioner has indulged in evasion of customs duty by suppressing the import value and had wrongly availed the benefit of the Customs Notification and, therefore, is also liable to duty and penalty.

Held:

++ Currently, the senior officers in the Directorate of Revenue Intelligence (DRI) consist of Officers of the Customs who are on deputation to the Board. The Officers of the Directorate of Revenue Intelligence (DRI) like their counterparts in the Director General of GST Intelligence (formerly Directorate General of Central Excise Intelligence), are Officers drawn from these Group A and Group B Services of the Department of Revenue, Ministry of Finance.

++ In fact, these officers from the Directorate of Revenue Intelligence (DRI) under the Department of Revenue, Ministry of Finance (MOF) do not cease to be Officers of Custom on their deputation to the said Directorate.

++ Under the Act, the Central Government by a notification can also entrust the function of the customs officers on any other officers from other departments including officers from the State Government and Local Body.

++ Sweeping changes have been brought to the Customs Act, 1962 by Finance Act, 2022 leaving no scope for any doubt as to status of the officers including the officers from the Directorate of Revenue Intelligence (DRI) as officers of Customs.

++ Supreme Court appears to have not been informed about the important changes brought to Section 17 of the Customs Act, 1962 vide Section 38 of the Finance Act, 2011 with effect from 08.04.2011 when it passed its decision in  Canon India Private Limited =  2021-TIOL-123-SC-CUS-LB

++ Thus, over a period of time, the officers of Directorate of Revenue Intelligence (DRI) who are primarily drawn from the Customs Department were also given the task of issuing show cause notice and adjudicating the same in terms of Notifications issued as "Proper Officer", as defined in Section 2(34) of the Customs Act, 1962.

++ Now, under the amended Section 2(34), the word "under Section 5" has been inserted. Thus, what was implicit in the Customs Act, 1962 has now been made explicit in the amendment to the Customs Act, 1962 vide Finance Act, 2022.

++ Such officers can also exercise the powers and discharge the duties conferred or imposed on any other officers of customs who is subordinate to such officers. This aspect was also not brought to the attention of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs case referred to supra.

++ Officers from the Directorate of Revenue Intelligence (DRI) are now explicitly recognized as "Officers of Customs" under the Customs Act, 1962 by virtue of the amendment to the Customs Act, 1962 vide amendment in the Finance Act, 2022.

++ That apart, there is validation of all action taken by such officers under Section 97 of the Finance Act, 2022. Therefore, these writ petitions are liable to be dismissed on the ground that the officers of the Directorate of Revenue Intelligence (DRI) have indeed the power to issue Show Cause Notice. The defence that they are incompetent is no longer available to these petitioners.

++ Both the revenue and assesses have not brought to the attention of the Hon'ble Supreme Court in  Canon India Private Limited =  2021-TIOL-123-SC-CUS-LB that the officers of Directorate of Revenue Intelligence have already been appointed as "Officers of Customs" under Notification issued under Section 4(1) of the Customs Act, 1962.

++ A reading of Section 6 of the Act further makes it clear that it applies only to officers from other departments other than the Officers of the Customs under Section 4 of the Customs Act, 1962. The Officers of the Directorate of Revenue Intelligence (DRI) are not any other officers of the Central Government or the State Government or the Local Authority to be entrusted with the function of the Board and the Customs Officers. The Officers of the Directorate of Revenue Intelligence (DRI) are already officers of the Customs by virtue of the Notification issued under Section 4(1) of the Customs Act, 1962.

++ As the Officers from the Directorate of Revenue Intelligence, Ministry of Finance (MOF) are already "Officers of Customs" before their induction and deputation to the Board in various Directorates, there is no impediment on their being appointed as proper officers for the purpose of Section 2(34) of the Customs Act, 1962.

++ Merely because the Officers of the Customs and Central Excise Department are selected and are deputed in the respective Directorates does not mean that they cease to be Officers of the respective Departments as these Directorates are created only to assist the Board to implement the object of respective fiscal enactments. It is an internal arrangement within the Ministry of Finance, Department of Revenue (DRI)

++ As mentioned above, assessment is neither by the Group 'B' Executive - Gazetted Officer nor by Group 'B' Executive - Non-Gazetted Officer after 08.04.2011. Only, prior to 08.04.2011, the assessment of goods at the port was vested with the Group 'B' Executive - Gazetted Officer. However, after the said date, the fundamental of assessment has undergone a sea change and changed permanently as mentioned above.

++ These fundamental changes brought to the manner of the assessment under the Customs Act, 1962 with effect from 08.04.2011 appear to have not been brought to the attention of the Hon'ble Supreme Court and therefore the assumption in the paragraph Nos.12 to 15 in the case of   Canon India Private Limited = 2021-TIOL-123-SC-CUS-LB   may require a re-consideration insofar as pending cases before the Supreme Court and other Courts.

++ Further, union tax laws undergo periodical amendments during successive Finance Act. The Central Excise Act, 1944, the Customs Act, 1962, Chapter V of the Finance Act, 1994 as also the Income Tax Act, 1961 are no exception. They have undergone several amendments. These changes have a bearing on the law.

++ Therefore, it is important that these are brought to the knowledge of the Court so that the Courts can interpret them and lay down the law to govern the assessees and Department under the respective tax enactments.

++ If the provision as stood during the period in dispute are not produced for the attention of the Court which is seized of the case, the Courts may, by oversight, end up giving ratio which are not consistent with the provisions as in force for the period in dispute.

++ Though the law laid down by the Hon'ble Supreme Court in Canon India Private Limited case referred to supra is a declaration of law under Article 141 of the Constitution of India and, therefore, binding on this Court and, therefore, some of these Writ Petitions would have to be allowed. However, in view of the validations in Section 97 of the Customs Act, 1962 vide Finance Act, 2022, Bench is unable to allow these Writ Petitions.

++ Therefore, there is no merits in these Writ Petitions filed by the respective petitioners challenging the Show Cause Notices issued by the Officers under the Directorate of Revenue Intelligence. Therefore, the consequential orders passed under Section 28 of the Customs Act or under Section 124 and other provisions of the Customs Act also cannot be assailed.

++ That apart, notices issued under the various other provisions of the Customs Act, 1962 cannot be quashed in the light of the law laid down in Canon India Private Limited case referred to supra, as the ratio laid therein is neither applicable to the proceedings under the provisions of the Customs Act, 1962 nor can the impugned Show Cause Notices / Orders-in-Original be quashed in view of the validation in Section 97 of the Finance Act, 2022 to the pending proceedings.

++ However, where reliance is placed on the statement of third party who were not produced for cross-examination before the impugned Orders-in-Originals were passed, Bench is inclined to quash those impugned Orders-in-Originals and remit the case back to the respective adjudicating authority to pass a speaking order de novo.

++ What was implicit in the provisions of the Customs Act, 1962 has been now made by explicit in the amendment to the Customs Act, 1962 vide amendment in Finance Act, 2022. Therefore, these writ petitions are liable to be dismissed by giving liberty to the petitioners to work out their remedy before the alternate forum.

++ Further, show cause notices issued under various provisions cannot be stifled to legitimize evasion of Customs duty on technical grounds that the Officers from Directorate of Revenue Intelligence (DRI) were incompetent to issue notices and were not officers of customs.

++ Insofar as completed proceedings i.e. where proceedings have been dropped prior to passing of Finance Act, 2022 is concerned, the proceedings cannot be revived. However, the pending proceedings have to be decided in the light of the validation in Section 97 of the Finance Act, 2022.

++ In the light of the above discussion, the challenges to the impugned Show Cause Notices and the Orders in Original on the strength of the decision of the Hon'ble Supreme Court in   Canon India Private Limited   = 2021-TIOL-123-SC-CUS-LB fail.

++ In the result, the following Writ Petitions are dismissed with liberty to file a statutory appeal before the Central Excise, Customs and Service Tax Appellate Tribunal (CESTAT) within a period of thirty days from the date of receipt of a copy of this Order:

++ Rest of the Writ Petitions challenging the impugned Show Cause Notices are dismissed by directing the jurisdictional adjudicating authority to pass appropriate orders on merits and in accordance with law preferably within a period 120 days from the date of receipt of a copy of this order.[para 176 to 178, 181, 221, 245, 246, 248, 259, 260, 262, 267, 277 to 281, 284, 285, 287, 288, 290, 297 to 300, 308]

Petitions dismissed: MADRAS HIGH COURT

2022-TIOL-865-HC-MAD-CUS

Global Oil And Company Vs Asstt. CC

Cus - Petitioners have imported a consignment of betelnut from entities based in Indonesia and Myanmar - Goods have been detained and investigation is ongoing with regard to classification and assessment of duty and whether goods are prohibited – Petitioners have moved representations seeking re-export of the consignment sans adjudication, fine and penalty but same are pending – Counsel for Revenue submits that there is no cooperation on the part of the petitioners.

Held: Petitioner is directed to cooperate with the respondents in respect of the pending proceedings and to notices, if any, received from the respondents - Prayer of the petitioners for a direction to the respondents to re-export the consignment is not liable to be acceded to, seeing as the question of re-export involves determination of various facts, which only the authorities would be competent to undertake - Writ petitions are disposed of: High Court [para 6, 8]

- Petitions disposed of: MADRAS HIGH COURT