I-T - Re-assessment based solely on a Tax Evasion Petition involving assessee, unsustainable, more so where no independent application of mind is involved: HC

I-T - Re-assessment cannot be sustained where reasons recorded by AO reflects non-application of mind as well as suffer from lack of jurisdiction: HC

I-T - Penalty notice issued u/s 274 r/w Section 271(1)(c) of the Act, cannot be upheld where assessee was given less than 24 hours' time to file reply thereto: HC

I-T - Re-assessment order is invalidated where passed in complete disregard to details which were called for by AO & furnished by assessee & thus breaches of rules of natural justice: HC

I-T - Assessment is now faceless, ITRs & supporting documents are e-filed & available to AO; non-service of SCN due to lack of inter-Departmental coordination is not tenable: HC

GST - It is true that in taxing statutes, the principles of equity may have little role to play, but at the same time, any statute in taxation matters should also meet the test of the constitutionality: HC

GST - Owner is developing land not at the behest of buyer but because it is required of him by law (KTCPA, 1961) to develop the land in order to sell plots - Not taxable: AAAR

ST - Suppression of facts should be deliberate & in taxation law, can have only one meaning, namely that correct information was not disclosed deliberately to escape payment of duty: CESTAT

CX - Assessee herein also undergoing insolvency proceedings - matter resolved in assessee's favour under IBC, hence present appeal is infructuous; liberty to revive appeal if no amicable settlement arrived at: CESTAT

Cus - Assessee deposited duty demand raised, albeit under protest; interest on refund of such amount is payable u/s 129EE of Customs Act and @ 12% p.a. as is settled vide precedent judgements: CESTAT

ST - As per CBIC Circular No. 178/10/2022-GST, liquidated damages cannot be deemed to be consideration received for tolerating breach or non performance of contract; service tax not leviable thereon: CESTAT

2023-TIOL-265-HC-AHM-VAT

Rajai Motors Vs State Of Gujarat

Whether a further amount of pre-deposit warrants being collected as pre-condition for hearing appeal, when a considerable amount is already pre-deposited and has been appropriated by the Department - NO: HC

- Writ petition allowed: GUJARAT HIGH COURT

2023-TIOL-264-HC-P&H-GST

SBI Cards And Payment Services Ltd Vs UoI

GST - Refund - s.54, 56 of the Act, 2017 - Petitioner seeks quashing of order dated 22.12.2021 passed by respondent no.2 vide which the claim of interest of Rs.15,68,26,554/- was rejected  on the ground that the interest is not applicable as the refund application was processed within the stipulated period of 60 days from the date of filing of refund application, i.e. 28.10.2021  - Facts are that  during the initial stage, the complete break-up of all notified transactions was not available to the petitioner and in the absence thereof for the period from April 2018 to December 2018, the petitioner paid CGST and SGST of Rs.108 Crores approximately treating the transactions to be intra-State sales - Later on, it transpired that those transactions (for which an amount of Rs.108 crores approximately had been paid based on intra-State sales) were inter-State transactions - Accordingly, the petitioner on this plea applied for a refund which was rejected by the  Authorities vide order dated 19.2.2021 - Accordingly, CWP No.8108 of 2021 was filed and was allowed vide order dated 8.10.2021 [ 2021-TIOL-2141-HC-P&H-GST ], vide which the respondents were directed to refund the amount of Rs.108 crores approximately which was deposited by the petitioner towards CGST and SGST along with applicable interest within a period of one month - Vide the impugned order, the claim was rejected and hence the present petition. Held: Court had specifically observed that the said money had been lying with the respondents for 2 1/2 years and consequently, a direction was issued to the respondents for a refund of Rs.108 crores approximately along with applicable interest - A ctual question is whether, in compliance with the judgement dated 8.10.2021, the order passed by respondent No.2 dated 22.12.2021, is contrary to and violative of directions issued by this Court about payment of interest - Arguments raised by the petitioner are supported by the judgment of the Hon'ble Supreme Court in Ranbaxy's case - 2011-TIOL-105-SC-CX - Respondents, in any case, does not suffer any loss as money lay with the respondents for the continuous period of two and a half years, in fact even before the date of filing of the application for a refund under Section 56 of the Act and the time taken for a refund of the money in terms of the judgment dated 8/10/2021 is unreasonable - The petitioner was entitled to a refund as well as interest amount vide judgment dated 8.10.2021 - 2021-TIOL-2141-HC-P&H-GST , wherein a specific direction was issued for a refund of Rs.108 crores approximately which was deposited by the petitioner towards CGST+SGST along with applicable interest within one month - Unfortunately, this has not been done and the respondents have no justification for withholding the interest amount, which is a negligent act on the part of the respondents - The Government cannot deprive the petitioner from entitlement of the interest - Therefore, this inaction is wholly unjustified and has deprived the petitioner where the petitioner could have earned interest during this period but because of the withholding, this could not be done - Position of law is well settled and the provisions relating to interest on delayed payment of refund have been consistently held as beneficial and non-discriminatory - It is true that in the taxing statute, the principles of equity may have little role to play, but at the same time, any statute in taxation matters should also meet the test of the constitutionality and the respondents were not able to explain in any manner the issue of delay in their reply as raised by the petitioner - Respondents are liable to pay applicable interest from the date of filing of the original application, i.e. 5.4.2019 - Respondents are further directed to calculate the requisite amount towards the interest and the same shall be paid to the petitioner within a period of two months: High Court   [para 8, 10, 11, 13, 14]

- Petition allowed: PUNJAB AND HARYANA HIGH COURT

2023-TIOL-07-AAAR-GST

MS Rabia Khanum

GST - Appeal is filed by Asstt. Commissioner of Central Tax aggrieved by the AAR ruling dated 8 September 2022 - AAR, after taking into consideration CBIC Circular 177 dated 3rd August 2022 held that (i)  GST is not applicable for the consideration received on sale of site; (ii) GST is not applicable for the advance received towards sale of site and (iii)  GST is not applicable on sale of plots/sites even when they are sold after completion of works related to basic necessities. Held:  When interpreting a taxing statute and to determine whether an activity is subject to tax, one cannot rely on advertisement and marketing strategy of the owner to hold that a service has been rendered - The owner of the land is developing the land not at the behest of the buyer and not because the purchaser has requested for any service from him but because it is required of him by law (KTCPA, 1961) to develop the land in order to sell the plots - The development of land undertaken by the owner is an activity incidental to the sale of land - The transaction between the purchaser and the owner of the land is a transaction purely for the sale of land - Any consideration received by the owner, whether during the course of the development or after the completion of the development works and release of sites by the Planning Authority, is received only for the sale of the land and as such there is no service provided by the owner/developer - If the owner of the land engages the services of a third party to carry out the development activity, that transaction between the owner and the third party will undoubtedly be taxable to GST as a service - In the case of plotted development, the law mandates that a certain level of development activity is undertaken - The sites will not be released for sale unless the development activity is completed - There can be no transfer in the title of a plot of land to the purchaser unless and until the same is released by the Planning Authority - This release of sites for transfer of title by registration happens only when the development work is complete and a completion certificate is obtained from the concerned Authority/Agency/Department - Therefore, any sale of a plot which is carved out of a large parcel of land can take place only after the development of the land - It is a well settled law that Circulars are binding on the Department and the Department cannot go against what is already clarified in the Circulars - Held, therefore, that the consideration received from prospective buyers whether as advance or full consideration are only towards obtaining a transfer in the title of the plot of land and hence not taxable under GST in terms of entry 5 of Schedule III of the CGST Act - Authority makes it clear that any service received by the owner from third parties for undertaking the development work is taxable under GST at rates applicable for such service - If the owner is found to be providing any development work over and above what is mandated by the KTCPA and the local authorities, the same will be considered as a service rendered to the buyer and tax on the same will apply - Sale of land developed by the Respondent is covered within the scope of the term 'sale of land' as mentioned in entry 5 of Schedule III - AAR order upheld and Appeal  rejected: AAAR

- Appeal rejected: AAAR

2023-TIOL-155-CESTAT-DEL

Satyanarayan Bhalot Vs CCE

ST - The appellant, as an individual person, is engaged in supplying labour - On the basis of an audit objection that the appellant had short paid service tax in respect of 'man power supply' and 'rent a cab service', a show cause notice dated 14.07.2010 was issued to the appellant by invoking the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act, 1994 the Finance Act - The appellant filed a reply contesting the demand raised both on merits as well as on limitation but the adjudicating authority by order dated 08.10.2012 confirmed the demand raised in the show cause notice dated 14.07.2010 for the period 2005-2006 and 2008-2009 - The appeal filed by the appellant before the Commissioner (Appeals) was dismissed by order dated 21.11.2013. Held - It is clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty - In view of the aforesaid decisions of the Supreme Court, the confirmation of demand for the period beyond the normal period of limitation by invoking the proviso to section 73(1) of the Finance Act cannot be sustained: CESTAT + It would be seen from the aforesaid two orders that even though the Additional Commissioner had not dealt with the issue relating to the invocation of the extended period of limitation, the Commissioner (Appeals) observed that the Additional Commissioner had correctly invoked the extended period of limitation. It was absolutely necessary for the Additional Commissioner to form an opinion that the appellant had deliberately suppressed material information with an intention to evade payment of service tax. Unless the Additional Commissioner had come to a conclusion that the extended period of limitation was rightly invoked in the show cause notice, it could not have confirmed the demand for any period beyond the normal period of limitation. Likewise, it was also necessary for the Commissioner (Appeals) to form an opinion that the appellant had deliberately suppressed material facts with an intention to evade payment of service tax. [Para 11]

- Appeal allowed: DELHI CESTAT

2023-TIOL-154-CESTAT-DEL

Rajcomp Info Services Ltd Vs Pr.CCGST & CE

ST - The main issues being agitated by appellant are demand of service tax on gross amount/consideration being received by appellant for execution of IT projects for Government of Rajasthan - Earlier two SCNs issued to appellant on identical issue stand decided by Tribunal wherein previous demands made have been set aside - The impugned O-I-O has demanded service tax on two issues - Audit of record of appellant reveal that they were providing taxable service to various Government departments in which supply, installation of various hardware and/or software or provision of service was involved - Appellant was found paying service tax only on service charges so received from concerned Department, instead of paying service tax on gross value of amount so received - Next issue to decide is, whether appellant is liable to pay service tax on amount deducted from payment of various service providers/vendors in name of liquidated damages for violating terms of agreement entered into - CBIC Circular No. 178/10/2022-GST has clarified that liquidated damages cannot be said to consideration received for tolerating the breach or non performance of contract - They are rather payments for not tolerating breach of contract - Service tax levied on amount received from Departments of State Government and which has been paid to vendors cannot sustain - Demand of service tax on amount received as liquidated damages also does not sustain: CESTAT

- Appeal allowed: DELHI CESTAT

2023-TIOL-153-CESTAT-DEL

R S Enterprises Vs CC

Cus - Issue involved is as to whether appellant is entitled to interest on refund of differential duty deposited for the purpose of clearance, being successful in appeal - Appellant had deposited differential duty as ordered by revenue, but have immediately filed the appeal and thus, payment of differential duty was under protest, ipso facto - Such claim of appellant of payment under protest was accepted by Commissioner (A) who remanded the matter for re-adjudication under Section 17(5) of the Act, by order dated 26.11.2013 - Appellant is entitled to grant of interest on refund amount under Section 129EE of Customs Act, 1962 - Further, in view of ruling of Supreme Court in case of Sandvik Asia Ltd 2006-TIOL-07-SC-IT , which have been followed by Division Bench of Tribunal in Parle Agro Ltd. , grant of interest @ 12% P.A. has been upheld by Punjab & Haryana High Court in case of Riba Textiles Ltd. 2022-TIOL-382-HC-P&H-CX , wherein interest was granted @ 12% P.A. - Accordingly, Adjudicating Authority is directed to grant of interest from the date of deposit till date of refund @ 12% P.A. under Section 129EE of the Act: CESTAT

- Appeal allowed: DELHI CESTAT

2023-TIOL-152-CESTAT-AHM

CCE & ST Vs Arcelormittal Nippon Steel India Ltd

CX - Assessee is seeking disposal of appeals in light of NCLT order whereby, resolution plan has been approved in their favour - It is submitted that as per NCLT order, all the government dues shall stand extinguished and no government dues including the dues involved in present appeals is recoverable - Following the order in ALOK INDUSTRIES 2022-TIOL-1082-CESTAT-AHM , Tribunal views that since the IBC proceedings have been concluded in favour of M/s. Arcelormittal Nippon Steel India Ltd., these appeals shall stand infructuous - Both the sides have liberty, in case of any amicable resolution is not arrived at between assessee and revenue to approach to Tribunal to revive the present appeals and same shall be decided on merit, if required: CESTAT

- Appeals dismissed: AHMEDABAD CESTAT