2022-TIOL-847-ITAT-PUNE

Sanjay Amrutrao Satav (HUF) Vs ITO

Whether claim for deduction u/s 54B allowed by AO after due verification and examination of details filed cannot be send for verification again in exercise of power u/s 263 by PCIT - YES : ITAT

Whether where AO examined claim and takes plausible view, assessment order cannot be termed as erroneous - YES : ITAT

- Assessee's appeal allowed: PUNE ITAT

2022-TIOL-846-ITAT-PUNE

Swasthiyog Pratishthan Vs DCIT

Whether compensation paid to trust in lieu of benefit availed by specified persons and rent paid by specified person is adequate - YES : ITAT Whether specified persons has availed benefit from trust without paying any compensations - NO : ITAT

- Assessee's appeal allowed: PUNE ITAT

2022-TIOL-845-ITAT-CHD

Sunita Goyal Vs Pr.CIT

Whether in absence of any evidence or fact rebutting claim of the assessee, order passed after due enquiries as per record by AO cannot be set aside on mere inferences and presumptions u/s 263 - YES : ITAT Whether suspicions of PCIT cannot be basis for setting aside validly passed assessment order - YES : ITAT

- Assessee's appeal allowed: CHANDIGARH ITAT

2022-TIOL-1057-HC-ALL-GST

Paras Jain @ Rohan Jain Vs UoI

GST - Petitioner has allegedly issued fake invoices from 76 bogus firms to various business buyers without supplying of goods or services and have availed ineligible Input Tax Credit amounting to Rs.343 crores - Bail application filed. Held: Court finds that there is no dispute that the applicant is involved in an economic offence of considerable magnitude and gravity - The applicant is in jail since 18.2.2022 and there is no allegation that he had any prior criminal history of any economic offence or otherwise against him - The seriousness of the offences alone is not conclusive of the applicant's entitlement to bail, as held by the Supreme Court inter alia in Sanjay Chandra vs. Central Bureau of Investigation (2012) 1 SCC 40 - Taking into consideration the provisions of law and the fact that the Commissioner is empowered to recover the due amount and propose for abating the proceedings and as the trial will take its own time to conclude, this Court finds this to be a fit case where discretion could be exercised in favour of the applicant - Applicant is in jail since 18.2.2022 and has no criminal history - Without expressing any opinion on the merits of the case, the Court is of the view that the applicant has made out a case for bail - Applicant is directed to be released on bail on his furnishing a personal bond and two sureties each in the like amount to the satisfaction of the court concerned subject to conditions inter alia applicant will furnish bank guarantee of Rs.50 lacs in favour of the opposite party: High Court

- Application allowed: ALLAHABAD HIGH COURT

2022-TIOL-1056-HC-ALL-GST

Singh Group Vs State of UP

GST - Cancellation of registration - Appeal was dismissed as time barred, treating the date of the order impugned therein to be 11.09.2019 whereas undisputedly, the date of filing the appeal by the petitioner is 18.09.2021. Held : Once the Government exercised its powers and reached a satisfaction (that there were defects on the common portal with respect to service of orders) and, provided relaxation of limitation with respect to an order for cancellation of registration, it would defy plain logic to restrict that benefit to proceedings for revocation of such orders and to not extend the same to appeal proceedings - That construction if made, would give rise to an absurd situation - There would exist two dates of order cancelling a registration, one for the purpose of filing an application to revoke that order and another to file appeal there against - The reason for relaxation of limitation being generic and external to the nature of remedies available under the Act, whether by way of revocation application or by way of appeal and, the relaxation of limitation being founded on defect or difficulty in service of order to be impugned in such proceedings, that relaxation of limitation would apply to both remedies - It may not be forgotten, under various orders passed by this Court and the Supreme Court, the period of limitation to file appeals etc. was suspended from 15.03.2020 to 28.02.2022 due to COVID-19 pandemic - In such circumstances, the appellate authority has clearly erred in rejecting the appeal as time barred - The order dated 31.03.2022 is set aside and the matter is remitted to the appellate authority to pass a fresh orders, strictly in accordance with law, treating the appeal filed by the petitioner to be within limitation - Writ petition is allowed: High Court [para 8, 9, 10, 12]

- Petition allowed: ALLAHABAD HIGH COURT

2022-TIOL-91-AAR-GST

South Indian Federation of Fishermen Societies

GST - Rate of tax on Marine Engines coming under HSN Code 8407, when used as part of boats of HS code 8902 (being used as part of fishing vessels) is 5% GST under Sl.no.252 of Notification no.01/2017-CT-Rate - In respect of spare parts, no ruling is extended for the reason that the applicant has not produced documents establishing details of spare sales; for want of documentary substantiation, no ruling is offered with respect to spares: AAR GST - Supply of materials and labour while rendering warranty services during the warranty period, free of cost, does not attract GST separately: AAR GST - Ruling in respect of Rate of tax applicable for collection of charges made towards supply of materials and labour towards repair of fishing vessels, of heading 8902, is not extended for the reason that the applicant has neither produced any copy of the contract nor agreement for supply of repair or maintenance service of fishing vessels: AAR GST - Puff Insulated ice boxes is not a part of fishing vessel falling under Customs Tariff Heading 8902 and hence is not eligible for the concessional rate of GST as per entry at Sl.No.252 of Schedule I of Notification No. 01/2017 Central Tax (Rate): AAR GST - Ruling in respect of Rate of tax on marine engine coming under HSN Code 8407 supplied to Defence Department for patrol, flood relief and rescue operations is not extended for the reason that the Applicant has not filed any documentary evidences along with the application to substantiate that the engines they supply are being used in boats used by defence departments: AAR

- Application disposed of: AAR

2022-TIOL-1058-HC-MP-SERVICE

UoI Vs Ravindra Vaidya

Service - Audit party of the appellant department had noticed that the respondents (Preventive Officers) are drawing HRA @ 20% while they are posted at Pithampur Area which is not in the list of X and Y Category and they are entitled for 10% HRA as per Rules, therefore, recovery was recommended and the same has been started - Respondents approached the Central Administrative Tribunal inter alia on the ground of violation of principle of natural justice as before making such recovery, no opportunity was given to them, such an action is bad in law and liable to be set aside - Central Administrative Tribunal has set aside the recovery and hence, the present petition before this Court by the UOI - Counsel for UOI has argued that respondents gave an undertaking at the time of grant of HRA.

Held : It is correct that the undertaking binds them, not to object the recovery if excess amount found to be paid without entitlement - Once the Tribunal has held that the respondents were entitled to get HRA @ 20% and the amount cannot be recovered then undertaking has no effect - Bench does not find any reason to entertain this writ petition -Writ Petition stands dismissed in limine : High Court [para 8]

- Petition dismissed: MADHYA PRADESH HIGH COURT

2022-TIOL-62-SC-ST

Total Environment Building Systems Pvt Ltd Vs DCCT

ST - The issue involved is, "whether, service tax could be levied on Composite Works Contracts prior to the introduction of the Finance Act, 2007, by which the Finance Act, 1994 came to be amended to introduce Section 65(105)(zzzza) pertaining to Works Contracts?"

Held:

Per: M R Shah, J:

+ It is required to be noted that the very issue had been considered by this Court in the case of   Commissioner, Central Excise and Customs, Kerala Vs. Larsen and Toubro Limited = 2015-TIOL-187-SC-ST . In the aforesaid decision, after considering the entire scheme of levy of service tax pre-2007 and post-2007, this Court has specifically observed and held that on indivisible works contracts, for the period prior to introduction of Finance Act, 2007, service tax was not leviable under Finance Act, 1994. Prayer for re-considering the decision in the case of Larsen and Toubro Limited (supra) and referring the matter to the Larger Bench ++ The decision of this Court in the case of Larsen and Toubro Limited (supra) has been delivered/passed in the year 2015, in which, it is specifically observed and held that on indivisible works contracts for the period pre-Finance Act, 2007, the service tax was not leviable;

++ That after the decision of this Court in the case of Larsen and Toubro Limited (supra) rendered in the year 2015, the said decision has been consistently followed by various High Courts and the Tribunals; ++ The decisions of the various High Courts and the Tribunals, which were passed after following the decision of this Court in the case of Larsen and Toubro Limited (supra) have attained finality and in many cases, the Revenue has not challenged the said decisions;

++ No efforts were made by the Revenue to file any review application to review and/or recall the judgment and order passed by this Court in the case of Larsen and Toubro Limited (supra). If the Revenue was so serious in their view that decision of this Court in the case of Larsen and Toubro Limited (supra) requires re-consideration, Revenue ought to have filed the review application at that stage and/or even thereafter. No such review application has been filed even as on today.

++ Merely because in the subsequent cases, the amount of tax involved may be higher, cannot be a ground to pray for reconsideration of the earlier binding decision, which has been consistently followed by various High Courts and the Tribunals in the entire country.

+ Doctrines of precedents and stare decisis are the core values of our legal system. They form the tools which further the goal of certainty, stability and continuity in our legal system. Arguably, Judges owe a duty to the concept of certainty of law, therefore they often justify their holdings by relying upon the established tenets of law.

+ When a decision is rendered by this Court, it acquires a reliance interest and the society organises itself based on the present legal order. When substantial judicial time and resources are spent on references, the same should not be made in a casual or cavalier manner. It is only when a proposition is contradicted by a subsequent judgment of the same Bench, or it is shown that the proposition laid down has become unworkable or contrary to a well-established principle, that a reference will be made to a larger Bench.

+ The judgment of this Court in the case of Larsen and Toubro Limited (supra) has stood the test of time and has never been doubted earlier; the said decision has been followed consistently by this Court as well as by various High Courts and the Tribunals. Therefore, if the prayer made on behalf of the Revenue to reconsider and/or review the judgment of this Court in the case of Larsen and Toubro Limited (supra) is accepted, in that case, it will affect so many other assesses in whose favour the decisions have already been taken relying upon and/or following the decision of this Court in the case of Larsen and Toubro Limited (supra) and it may unsettle the law, which has been consistently followed since 2015 onwards.

+ Therefore, on the principle of stare decisis, Bench is of the firm view that the judgment of this Court in the case of Larsen and Toubro Limited (supra), neither needs to be revisited, nor referred to a Larger Bench of this Court as prayed, i.e., after a period of almost seven years and as observed hereinabove when no efforts were made to file any review application requesting to review the judgment on the grounds, which are now canvassed before this Court.

++ Civil Appeal No. 6523 of 2014 filed by M/s. G.D. Builders has to be allowed and the judgment and order passed by the Delhi High Court has to be quashed and set aside. ++ Civil Appeal No. 6525 of 2014, Civil Appeal No. 6526 of 2014 and Civil Appeal No. 2666 of 2022 are also to be allowed.

++ Civil Appeal Nos. 8673-8684 of 2013 -In view of the binding decision of this Court in the case of Larsen and Toubro Limited (supra), the assessee is not liable to pay the service tax till the date of amendment of the provision on the indivisible/composite works contracts and therefore, the said appeals also deserve to be allowed and the assessment orders levying the service tax are to be set aside.

++ Civil Appeal Nos. 4547-4548 of 2014, Civil Appeal No. 2667 of 2022 and Civil Appeal No. 2668 of 2022 are also to be allowed. ++ Civil Appeal No. 6792 of 2010 preferred by the Revenue -In view of the binding decision of this Court in the case of Larsen and Toubro Limited (supra), the same deserves to be dismissed.

++ Civil Appeal Nos. 8673-8684 of 2013, Civil Appeal No. 6525 of 2014, Civil Appeal No. 6523 of 2014, Civil Appeal No. 6526 of 2014, Civil Appeal No. 2666 of 2022, Civil Appeal Nos. 4547-4548 of 2014, Civil Appeal No. 2667 of 2022 and Civil Appeal No. 2668 of 2022 are hereby allowed and impugned judgments and orders passed by the respective High Courts/Tribunals taking the view that for the period pre-Finance Act, 2007, the respective assesses are/were liable to pay the service tax on indivisible/composite works contracts are hereby quashed and set aside.

Per: B V Nagarathna, J:

+ Works Contract Services were brought under the service tax net as per an amendment to of the Finance Act, 1994 by introduction of Clause (zzzza) to Section 65(105). The said introduction was made pursuant to the Finance Act, 2007, which expressly made the service component in such works contract liable to service tax w.e.f. 1st June, 2007. The amendment was made to the said section of the Finance Act, 1994 by which works contract which were indivisible and composite could be split so that only the labour and service element of such contracts would be taxed as service tax.  

+ The Central Government also introduced, w.e.f. 01st June, 2007 the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 (hereinafter referred to as 'the 2007 Rules'). Under this scheme, an option of composition was offered @ 2% of the gross amount charged on the works contract. Prior to the composition, the effective tax rate under the other category of services would work out to be approximately 3.96% of the gross amount.  

+ Recognising this aspect of the matter in Larsen and Toubro Ltd. (supra), this Court held that Service Tax on works contract was not leviable, meaning thereby, that such tax on the service component of works contract as defined above did not attract Service Tax prior to the amendment.  

+ Contention of ASG to the effect that even prior to the aforesaid amendment being made to the Finance Act, 1994 service tax on works contract was leviable is not correct. It was being levied on purely service contract and not on service element of works contract as there was no definition of a works contract till then. Hence, the amendment made to the Finance Act, 1994 by insertion of the definition of works contract as under clause (zzzza) is not clarificatory in nature. Having found that the Service Tax was not at all leviable on service element of a works contract, Parliament felt the need for the amendment and was so incorporated by the Finance Act, 2007.  

+ Thus, the judgment in Larsen and Toubro Ltd. (supra) has been correctly decided and does not call for a reconsideration insofar as the period prior to 1st June, 2007 is concerned.

+ All Civil Appeals under consideration are allowed except Civil Appeal no. 6792 of 2010 which is dismissed.

- Assessee Appeals allowed/Revenue appeal dismissed: SUPREME COURT OF INDIA