2022-TIOL-1088-ITAT-MUM

ACIT Vs Murarilal Mittal

Whether in case of unabated assessment, no addition can be made in absence of any incriminating material or documents found during course of search - YES : ITAT

- Revenue's appeal dismissed: MUMBAI ITAT

2022-TIOL-1087-ITAT-MUM

C Bhavani Developers Pvt Ltd Vs ACIT

Whether as per section 45(3), particular of land recorded in books is to be considered as received of full value of consideration - YES : ITAT

- Matter remanded: MUMBAI ITAT

2022-TIOL-1086-ITAT-BANG

Sri C Aswathanarayana Vs ACIT

Whether since AY falls out of block period therefore necessary criteria to levy penalty u/s 271AAA is not applicable - YES : ITAT

- Assessee's appeal allowed: BANGALORE ITAT

2022-TIOL-1214-HC-AHM-GST

Pancham Plasto Chem Vs State of Gujarat

GST - Rule 86A of CGST Rules, 2017 - Grievance in this petition is with regard to the action on part of the authorities in blocking the benefit of Input Tax Credit to the tune of Rs. 44,74,080/- in the electronic credit ledger of the petitioner - It was contended that it was without giving opportunity of hearing to the petitioner and that it was a negative blocking in the nature of futuristic action - Petitioner further submitted that while the Input Tax Credit of Rs. 43,71,672/- has been unblocked, the remainder Rs. 1,02,468/- remains still blocked for no good reasons; that while not lifting the blocking of the Input Tax Credit on the part-amount, no reasons are indicated nor any opportunity of hearing was afforded to the petitioner.

Held: It appears that respondent No. 2 has issued communication dated 24.8.2022 whereby the earlier stand is reiterated, however, the respondents have expressed inclination to consider the documents submitted by the petitioner in support of the genuineness of its purchases and duty paid - The process of hearing of the petitioner and consideration the case of the petitioner and documents produced by the petitioner, is underway before the authorities - Counsel for revenue submits that appropriate decision shall be taken on or before 30th September, 2022 - Petition disposed of: High Court [para 5, 6]

- Petition disposed of: GUJARAT HIGH COURT

2022-TIOL-1213-HC-DEL-GST

Pratibha-Mosinzhstroi Consortium Vs CCGST

GST - Petitioner seeks quashing and setting aside the order of cancellation of RC dated 06.08.2021 and the order of rejection of revocation application dated 08.12.2021; and impugned order dated 22.02.2022 passed by the Jt. Commissioner.

Held: SCN dated 08.07.2021 gave no clue whatsoever, as to what was the infraction committed by the petitioner-consortium, and hence the case/allegation it had to meet - Secondly, although inspection of PIL's premises was carried out on 05.07.2021, it did not find mention in the SCN dated 08.07.2021 - Order dated 22.02.2022 passed by the Joint Commissioner is bereft of reasons and it does not deal with the information given by the petitioner as regards its re-location - Entire proceedings, right up to the stage of passing of the order-in-appeal was legally flawed, hence the impugned order is set aside - Liberty granted to Revenue to issue a fresh SCN, if deemed necessary - Registration of petitioner to be restored - Four weeks are granted to the petitioner-consortium to file the returns, for the relevant period - No interest or penalty will be levied on account of delay in filing the pending returns - Petition disposed of: High Court [para 7, 7.1, 10]

- Petition disposed of: DELHI HIGH COURT

2022-TIOL-115-AAR-GST

KMV Projects Ltd

GST - Applicant is involved in construction activity of government works (buildings) -  Construction of Airport Terminal Building, allied buildings/facilities and associated works at Sogane Village in Shivamogga taluk and District, Karnataka; Development of Greenfield Airport at Vijaypur in Karnataka State; Construction of High Security Prison in the premises of Central Prison, Parappana Agrahara, Bangalore; Construction of Basava International Center and Museum at Kudalasangam of Hunagunda Taluka in Bagalkot District and Construction of Residential school complex in chittapur taluq, Kalburgi District are all Works Contract Services and the applicant is liable to pay tax @18% as per Entry no. 3(xii) of notification 11/2017-CTR: AAR

- Application disposed of: AAR

2022-TIOL-1212-HC-AHM-CUS

Realstrips Ltd Vs UoI

Cus - Countervailing duty on Imports from China PR - Petitioner No. 1, a Public Limited Company, is engaged in the business of manufacturing Cold Rolled Stainless Steel Strips/Coils - Notification dated 07.09.2017 came to be issued by respondent No. 1 imposing definitive countervailing duty on the imports of the aforesaid product from China PR - Petitioner stated that the domestic industry had not felt any need to discontinue the countervailing duty, but rather favoured the extension and continuation - It is stated that nevertheless, to the shock and surprise, respondent No. 1 first suspended the countervailing duty as per the Notification dated 01.02.2021 followed by its extension in subsequent notification dated 30.09.2021 till 31.01.2022 - Respondent No. 1 thereafter permanently withdrew the duty as per the impugned Notification dated 01.02.2022 - It is the case of the petitioners that respondent No. 1 could not have acted in absence of and without waiting for the recommendations of the quasi-judicial authority-respondent No. 2 to act unilaterally, when the respondent No. 2 was already engaged in the investigation and inquiry to ascertain the aspects of continued subsidy and injury to the domestic industry which was to be decisive for either extension or rescinding of the countervailing duty - Aggrieved by this decision, Petitioners are before the High Court.

Questions of law arising for consideration -

(i) Whether in the midst of Sunset review investigation in respect of continuance of countervailing duty, already initiated and kept undecided, during the currency of the period of original Notification imposing such duty, was it open to the Central Government to straightway issue the Notification rescinding the countervailing duty;

(ii) Was it on part of the Central Government to issue such Notification in absence of any recommendatory exercise or recommendation by the designated authority, and without waiting for such recommendation;

(iii) Whether it was obligatory on part of the Central Government to act and issue Notification rescinding the countervailing duty only after the recommendatory procedure laid down and the exercise contemplated in Sub section (6) of Section 9 of the Customs Tariff Act, 1975 read with Rule 24 of Customs Tariff (Identification, Assessment and Collection of countervailing duty on Subsidized Articles and for Determination of Injury) Rules, 1995, are followed;

(iv) What is the import and purport of the words 'unless revoked earlier' occurring in sub-section (5) of section 9 of the Act.

(v) Whether the ingredients 'continuation or recurrence of subsidization' and 'injury' are required to be determined and established apriori in review as per the First Proviso to sub-section (5) of section 9 of the Act and establishing such aspects is a condition precedent for issuance of the Notification of rescinding the countervailing duty by the Central Government?

Held: [para 9, 11, 11.1, 11.2, 11.3, 13, 14]

(i) The issuance of Notification dated 01.02.2022 by the Central Government rescinding the countervailing duty imposed by the Notification dated 07.09.2017 was an irregular and illegal exercise - The Notification rescinding the countervailing duty could not have been issued when the exercise in law required to be undertaken pursuant to the commencement of the process of Sunset review not completed - The process of Sunset review investigation could not have been disregarded and it must be taken to its logical end in accordance with the procedure prescribed - Any Notification either for continuance, withdrawal or rescindment of the duty could have been issued by the Central government only thereafter.

(ii) It was not permissible for the Central Government to issue the Notification rescinding the countervailing duty in absence of any recommendatory exercise and without waiting for such recommendations of the designated authority in accordance with prescribed procedure. The Central Government has no power to issue Notification in the manner issued, in absence of any without waiting for the recommendation by the designated authority.

(iii) It is obligatory on part of the Central Government to act and issue Notification only after the procedure laid down and the exercise contemplated in sub-section(6) of Section 9 of the Customs Tariff Act, 1975 read with Rule 24 of the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995.

(iv) The procedure and exercise contemplated in Section 9(6) and 9(7) of the Customs Tariff Act read with the relevant Rules could not be treated directory. Treating the exercise as per the provision to be directory would amount to negating the whole scheme of the countervailing duty laws and would mean negation thereof. The Central Government cannot treat the procedure in the Act and the Rules as optional on the specious grounds.

++ Notification dated 1.2.2022 of respondent No. 1 rescinding the countervailing duty stands illegal having been issued dehors the scheme of the provisions of Customs Tariff Act, 1975 and the applicable rules without undertaking the exercise in mandatory provisions of law and it is unilateral decision impressible in law as taken without waiting for recommendation of designated authority and thereby violating the jurisdictional requirements. It is, therefore, liable to be set aside.

(v) The determination that 'cessation of such duty is likely to lead to continuation or recurrence of subsidisation and injury' is sine qua non in the scheme of the provisions before notification to rescind the duty could be issued. The establishing the ingredient 'continuance or recurrence of subsidization' by the exporting counter, and 'injury to the domestic industry' are the founding facts, in the nature of jurisdictional facts.

++ Sequitur would be that it would revive the effect of original notification dated 7.9.2017. The countervailing duty would become leviable. It is trite that any order of the court does not extend in vacuum or without bringing for the subjects it would govern, necessary consequences. As Notification dated 01.02.2022 is being set aside, whereby the countervailing duty was rescinded,it would result into revival of the original Notification dated 07.09.2017, which has operational period till 06.09.2022, for five years. Notifications dated 01.02.2021 and 30.09.2021 whereby the countervailing duty was extended temporarily, have worked out for their period, therefore, no orders with regard to those notifications are required to be passed. Such part of the prayer qua these notifications stand infructuous.

Directions:

(i) The Notification No. 1/2022-Customs (CVD) dated 01.02.2022 issued by respondent No. 1 rescinding the countervailing duty is hereby quashed and set aside.

(ii) Respondent No. 2 shall immediately proceed in respect of Sunset review process in relation to the continuance or otherwise of the countervailing duty already commenced as per Notification dated 08.10.2021.

(iii) The exercise of inquiry and investigation pursuant to Notification dated 08.10.2021, shall be completed in accordance with the statutory provisions and rules for determining about continuation or recurrence of subsidy and injury to domestic industry in respect of the product in question.

(iv) Respondent No. 2 shall thereupon make necessary recommendations to respondent No. 1. Thereafter it would be open for the respondent No. 1 Central Government to take appropriate action and/or decision in accordance with law at its end.

(v) As the Notification dated 01.02.2022 is set aside, the original Notification dated 07.09.2017 shall revive and countervailing duty shall become leviable on the product in question.

(vi) The Sunset review initiated by Notification dated 08.10.2021 shall be completed in accordance with law.

(vii) Since the review process pursuant to Notification dated 08.10.2021 is underway, and is required to be completed by Respondent No. 1- designated authority as per the directions No. (ii), (iii) and (vi) herein, in the interregnum, that is from the date of the Notification dated 01.02.2022, till the respondent No. 1 takes appropriate decision in review, the levy of countervailing duty shall continue.

++ Court is not inclined to accede to the request of (the Counsel for Revenue) staying the judgment for a period of eight weeks.

- Petition allowed: GUJARAT HIGH COURT