Budget 2024 Updates

FM hikes exemption limit for long-term capital gain to Rs 1.25 lakh + hikes tax rate to 12.5% on specified financial assetsCGST - Finance Bill proposes to amend Sec 9 to take ENA out of purview of GST + inserts Sec 11A to regularise non-levy of tax on general practice in tradeCGST - Sub-sections to be inserted in Act to relax time-limit to avail ITC u/s 16(4) + New Sec 74A proposed to provide for common time limit for demand notices in fraud casesCGST - Proviso to be inserted in Sec 30(2) to provide for enabling conditions for revocation of registration + Amendment in Sec 39 to mandate return filing by TDS deductors even if there is no deduction in a particular monthIGST - Amendment proposed to prohibit refund of unutilised ITC on zero-rated supplyCustoms - Finance Bill proposes to amend Sec 28DA for acceptance of different types of proof of origin under FTAsFM hikes standard deduction to Rs 75K for new ITR regime + revises tax rates for all income slabs + Rs 7000 Cr revenue foregoneBudget withdraws 2% equalisation levyFM reduces corporate tax rate for foreign companies to 35%FM proposes vivad se vishwas scheme + hikes monetary limits for filing appealsFM proposes 20% capital gains tax on short-term assets + listed financial assets held for more than one year to be classified as long-termGovt scraps TDS on Mutual Funds + decriminalises delay in depositing TDS + rationalisation of compounding of offences + revamps reassessment periodBudget proposes comprehensive review of I-T Act, 1961 + simplifies provisions for charities and TDSFM reduces customs duty on gold and silver to 6% + Nil BCD on nickel cathodeBudget proposes to reduce BCD on mobile phone and chargers to 15% + exempts 25 minerals from customs dutyFM exempts cancer medicines from Customs duty + amends BCD for various machinesFM proposes Rs 48 lakh expenditure outlay; 4.9% fiscal deficitFM announces Rs 1 lakh crore fund for developing space economyPromotion of Tourism - Vishnupad temple and Bodh Gaya temple corridors to be supportedFM announces over Rs 11 lakh crore capital expenditure in current fiscalGovt to invest in small Nuclear energy plants in partnership with private playersCentre to ask States to lower stamp duty for women purchasers of housesIBC - More Benches of NCLT to be set up to speed up recoveryFM spikes limit of Mudra loan to Rs 20 lakhsBudget offers financial aid to labour-intensive MSMEs in manufacturing sectorGovt announces 3 crore additional houses under PM SchemeGovt to secure Rs 15K loan for AP from multilateral agenciesGovt to frame new policy for all-round development of Bihar, Jharkhand and OdishaGovt to give one-month salary to all new recruits in formal sector through EPFOGovt to promote vegetable clusters closer to urban settlementsGovt to focus on productivity of agriculture with climate-resilient seedsFM allocates Rs 2 lakh outlay for PM's five schemes for job creation and farmersFM Nirmala Sitharaman presents 7th Union Budget in ParliamentBudget 2024: FM arrives at Parliament; Speech to begin at 11AMEconomic Survey 2023-24 - from GST PerspectiveUkrainian FM goes on tour to ChinaI-T- Additions framed u/s 69A are untenable where affidavits submitted by assessee's parents to explain source of cash deposits, were discarded by AO without consideration : ITATSurvey acknowledges productivity loss due to mental health disordersI-T- Short term capital gains returned by the assessee in terms of provisions of section 50 of the Act on assets held for a period of more than 36 months be treated as long term capital gains: ITATExpenditure on social services up from 6.7% to 7.8% of GDP: SurveyI-T-Additions framed u/s 68 are upheld where assessee is unable to prove genuineness of transaction involving purchase and sale of penny stock: ITATTrade deficit contracts to USD 78 bn from USD 126 bn in 2023I-T-Re-assessment is invalidated when there is no failure on part of assessee to make full and true disclosure of facts necessary for assessment: ITATCorporate profitability has peaked to 15-yr-old high between 2020-2023: SurveyI-T- When cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked: ITATBudget 2024: More relief for senior citizens & individual taxpayers on card; tweaking of capital gains tax likely; steady capital expenditure to stayI-T- If any amount invested is purely a strategic investment & for purpose of commercial expediency, then AO cannot hold such investments to be for non-business purpose: ITATGoogle backpedals on plan to scrap cookies from ChromeCus - For a HNWI individual, an expensive watch of 'Rolex' make would be his personal effect but same may not be the case if the person is of mere means - Pendant studded with diamonds not liable for confiscation: HCGovt amends Recruitment Rules for Debts Recovery TribunalGST - Even if no date, time or place of hearing is indicated in the notice issued, it was the duty of assessee to file his reply to SCN, which was admittedly received - Plea regarding violation of principles of natural justice cannot be countenanced: HCAbhinav Bindra conferred with Olympic OrderGST - Mismatch between value of e-way bills generated on portal and returns filed in Form GSTR-3B - Petitioner did not provide a comprehensive explanation - To remit sum of Rs.3.50 crores within six weeks - Matter remanded: HCHackers mercilessly hack Bangladesh PM’s website along with police portalsGST - Rule 30 of Rules, 2017 - Assessing officer ought to have issued summons and obtained clarification rather than estimating the outward supply value at 110% of purchase value - Order set aside and matter remanded subject to remit of 10% disputed tax demand: HCUS law-makers call for resignation of Secret Service chief in Trump assassination caseGST - Net ITC shown incorrectly - An inadvertent error was committed and such error was rectified, albeit irregularly, however, sum recovered from petitioner's bank account - Order set aside and matter remanded: HCKarnataka IT Industries piling pressure on govt to extend working hoursGST - Since notification is declared unconstitutional, Amount of IGST paid pursuant to Entry No. 10 of Notification No. 10 of 2017 is to be refunded along with statutory interest: HCStudy says earth’s water depleting fastFDI inflows slide to USD 26.5 bn in 2024 from USD 42 bn in 2023: Economic Survey
Amusing Adjournments

JUNE 12, 2024

By Vijay Kumar

BY Finance Act, 2004, Section 33A was inserted in the Central Excise Act, 1944, prescribing limit on number of Adjournments of personal hearings. The provisions read:

(1) The adjudicating authority shall, in any proceeding under this chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires.

(2) The adjudicating authority may, if sufficient cause is shown, at any stage of proceeding referred to in sub-section (1), grant time, from time to time, to the parties or any of them and adjourn the hearing for reasons to be recorded in writing.

Provided that no such adjournment shall be granted more than three times to a party during the proceeding.

There is a similar provision in the GST Act.

After the insertion of this Section, it became a common practice for many adjudicating authorities to give three dates in a single personal hearing letter, often the three hearing dates separated by not more than a day. In fact, the Section prescribes a limit on number of adjournments as three. That means, effectively there should be four dates of hearing, but not three.

That is pure law. Now look at the applied law:

An adjudication order dated 23.3.2023 was passed by the Assistant Commissioner, Central Goods and Services Tax demanding tax of Rs. 15,64,083/- and various penalties.

This order is challenged in the Allahabad High Court. (Neutral Citation No. - 2024:AHC:90282-DB)

According to the petitioner, the order was served on him in March 2024. But the counsel for the revenue states that the notice in the adjudication proceedings were dispatched to the petitioner through e-mail as also through speed post at the permanent address that is known to the revenue authorities.

It may be noted, the petitioner was not registered under Central Excise or Service Tax.

In paragraph-24 of the impugned order, it has been observed:

24. The Noticee was given opportunities of personal hearing through virtual mode on 13.02.2023, 17.02.2023 and 20.02.2023 before the undersigned but they did not attend the hearing on the said dates nor they sought for any adjournment in this regard.

It is worthwhile to note here that the letters meant for personal hearing were sent to the Noticee through Speed post/ e-mail. The Noticee neither responded in any manner nor attended the personal hearing on the scheduled date and time.

The petitioner submitted:

(1) it never became open to the respondent-authority to fix three successive dates of hearing, by a single notice, that too within a span of seven days, solely with the object of defeating the purpose and intent of Section 33A of the Act.

(2) In any case no order was passed on any of the three dates either granting or refusing adjournment.

(3) Without fixing any other date in the proceeding and without issuing any further notice in that regard, the impugned order was passed on 23.03.2023.

(4) Thus, the rules of natural justice are completely violated.

On the other hand, the counsel for the revenue would contend that the petitioner failed to appear before the adjudicating authority despite notice dated 27.01.2023 served on him through e-mail.

In Regent Overseas P. Ltd. (2017-TIOL-600-HC-AHM-CX), by a single consolidated notice dated 9.9.2015, the hearing was fixed on three dates, namely, 22.9.2015 or 29.9.2015 or 6.10.2015. The Gujarat High Court observed:

On a plain reading of sub-section (2) of section 33A of the Act and the proviso thereto, what the same envisages is fixing a date of hearing and in case if a party asks for time and makes out sufficient cause, then to adjourn the hearing. Since the number of such adjournments is limited to three, the hearing would be required to be fixed on each such occasion, and on every occasion when time is sought and sufficient cause is made out, the case would be adjourned to another day. However, the adjudicating authority is required to give one date at a time and record his reasons for granting adjournment on each occasion. It is not permissible for the adjudicating authority to issue one consolidated notice fixing three dates of hearing, whether or not the party asks for time, as has been done in the present case. Thus, the notice itself suffers from a legal infirmity inasmuch as it fixes three dates of hearing at a time, which is not in consonance with the proviso to section 33A of the Act.

By the notice for personal hearing three dates have been fixed and absence of the petitioners on those three dates appears to have been considered as grant of three adjournments as contemplated under the proviso to sub-section (2) of section 33A of the Act. In this regard it may be noted that sub-section (2) of section 33A of the Act provides for grant of not more than three adjournments, which would envisage four dates of personal hearing and not three dates, as mentioned in the notice for personal hearing. Therefore, even if by virtue of the dates stated in the notice for personal hearing it were assumed that adjournments were granted, it would amount to grant of two adjournments and not three adjournments, as grant of three adjournments would mean, in all four dates of personal hearing.

The Allahabad High Court, in agreement with the view taken by the Gujarat High Court, observed:

1. Once the legislature contemplates the limits the total adjournments to three dates, it does not contemplate denial of opportunity of hearing.

2. Rather, it seeks to regulate and thereby restrict the number of total adjournments with the apparent intent to allow the adjudication proceedings to conclude in a time bound manner.

3. In the course of adjudication proceedings, number of dates may be fixed. There is no prescription of law to restrict the total number of dates fixed in an adjudication proceeding to any number.

4. It is possible that in the course of adjudication proceedings, adjournment may or may not be sought at any particular date fixed.

5. That event would remain case/circumstance specific.

6. Fixing three successive dates within a period of one week was not a desirable course to be adopted as it does indicate a pre-conceived notion with the adjudicating authority qua the opportunity of adjournment that may be allowed.

7. In any case the adjudicating authority had to pass specific orders to grant adjournment on each date fixed in the proceeding, if such adjournment was sought. It is at that stage that another date may have been fixed.

8. Here, it is not the case of the revenue that the assessing authority fixed the three dates either upon adjournment sought or the preceding date or interspaced in time as may have allowed the petitioner a reasonable opportunity to be acquainted with the fact of the adjournment granted on the earlier date.

9. In any case the adjudicating authority did not communicate to the petitioner the order allowing the adjournment sought/deemed to have been sought and allowed on any particular date.

10. What is more glaring is, the adjudicating authority did not pass any order on the third date i.e. 22.02.2023.

11. At the same time, he fixed the proceeding for another date i.e. 23.03.2023. For that date, no notice is shown to have been issued to the petitioner inasmuch as 23.03.2023 would be the fourth date in the adjudication proceedings. The petitioner had a right to be informed of the same.

And the High Court ordered:

1. In view of the above, no useful purpose may be served in relegating the petitioner to the forum of the alternative remedy as his right of hearing has been seriously impaired.

2. At the same time, in face of original show cause notice dated 19.10.2021 having been served on the petitioner and there being no denial as to that, the petitioner must be put to terms for the relief being claimed by him.

3. Accordingly, subject to the petitioner depositing a sum of Rs. 5,00,000/- within a period of one month from today, the adjudication order dated 23.03.2023 shall stand set aside.

4. Further, the petitioner may treat the adjudication order dated 23.03.2023 to be the part of show cause notice. He may submit his reply thereto within the same time.

5. Subject to such compliance, the adjudicating authority may fix a short date for hearing with fifteen days notice to the petitioner at his address as disclosed in the writ petition and the e-mail at which earlier communications may have been sent.

6. The petitioner undertakes to appear in the proceeding on the date fixed such that the same may be concluded as expeditiously as possible preferably within a period of three months from today.

Personal Hearing at 12.53 hrs - Shubh Muhurt?

There was a Commissioner who knew the value of time - every minute is precious. He fixed a personal hearing at 12.53 hrs! And his Superintendent who sent the PH Intimation states that no adjournment will be granted and if the assessee fails to appear at the time fixed (mind you 12.53 by the minute - not a second before not a second later), the matter will be decided ex-parte.

Normally we find such precise time being fixed for occasions like wedding, but it is perhaps a good omen that the Revenue officers also follow these auspicious timings. Maybe the assessee should be given an option to choose the time so as to exclude durmuhurt and rahu kalam!

Ingenious are the ways of intelligent babus to invalidate the will of the Legislature.

Until next week


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