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Tax Cases Monthly Round-Up: June 2022
Parina Katyal
2 July 2022 1:00 PM GMT
Direct Tax: Delhi High Court: Underreporting Of Income Due To Re-Computation Of Disallowance By The AO, Does Not Amount To Misreporting Of Income: Delhi High Court Case Title: Prem Brothers Infrastructure LLP. versus National Faceless Assessment Centre & Anr. Citation: 2022 LiveLaw (Del) 568 The Delhi High Court has ruled that where the underreporting of income...
Direct Tax:
Case Title: Prem Brothers Infrastructure LLP. versus National Faceless Assessment Centre & Anr.
Citation: 2022 LiveLaw (Del) 568
The Delhi High Court has ruled that where the underreporting of income allegedly done by the assessee is due to the re-computation of the disallowance under Section 14A of the Income Tax Act, 1961 by the Assessing Officer, it would not amount to misreporting of income.
The Bench, consisting of Justices Manmohan and Manmeet Pritam Singh Arora, observed that the underreporting of income by the assessee was due to the increase in the disallowance made under Section 14A, which was voluntarily estimated by the assessee and later recalculated by the Assessing Officer on the basis of the same material.
Case Title: Davinder Singh Thapar versus Assistant Commissioner of Income Tax & Anr.
Citation: 2022 LiveLaw (Del) 575
The Delhi High Court has reiterated that a notice issued under Section 148 of the Income Tax Act, 1961, on the ground of escapement of income from assessment, against a deceased assessee is invalid in law.
The Division Bench of Justices Jyoti Singh and Anoop Kumar Mendiratta observed that though the notices were issued by the revenue authorities pursuant to an order of the Supreme Court, however, the said order did not deal with the issue of whether the notices could be issued against the deceased assesses. Therefore, the Court quashed the notices issued by the revenue authorities against the deceased assessee.
Right To File Objection To SCN Can't Be Denied Due To One Day Delay: Delhi High Court
Case Title: Ernst & Young, US LLP Versus ACIT
Citation: 2022 LiveLaw (Del) 586
The Delhi High Court bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora ruled that the right to file an objection to the Show Cause Notice cannot be denied owing to a one-day delay.
Case Title: Shubham Thakral Vs ITO
Citation: 2022 LiveLaw (Del) 593
The Delhi High Court bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has remanded the matter back to the assessing officer as just 3 days' time was granted to respond to the income tax notice.
Whether Income Tax Demand And Penalty Extinguished In CIRP? Delhi High Court Stays Demand Notice
Case Title: Indo Enviro Integrated Solution Limited Versus ACIT
The Delhi High​​ Court bench of Justice Manmohan and Justice Manmeet Pritam Singh stayed an income tax assessment order and consequential demand and notice of penalty, which were assailed on grounds of being in contravention of the order of the National Company Law Tribunal (NCLT).
Case Title: M/s Schneider Electric India Pvt. Ltd. Versus ACIT
Citation: 2022 LiveLaw (Del) 545
The Delhi High Court, consisting of Justice Manmohan and Justice Manmeet Preetam Singh Arora, has remanded the matter to the assessing officer for a fresh decision as the department mailed the show cause notice to the wrong email address.
Case Title: Karida Real Estates Private Limited Versus ACIT
Citation: 2022 LiveLaw (Del) 546
The Delhi High Court, consisting of Justice Manmohan and Justice Manmeet Preetam Singh Arora, has quashed the reassessment order issued without considering the reply filed by the assessee.
Delhi High Court Quashes Assessment Order For Not Giving Opportunity To File Objection To SCN
Case Title: Jindal Exports and Imports Private Limited Vs DCIT
Citation: 2022 LiveLaw (Del) 576
The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has quashed the assessment order as the assessee was not given an opportunity to file an objection to the show cause notice.
Himachal Pradesh High Court:
Case Title: PCIT Vs Smart Value Products And Services Ltd.
Citation: 2022 LiveLaw (HP) 11
The Himachal Pradesh High Court bench of Justice Sabina and Justice Satyen Vaidya has deleted the additions made to the assessee's income on the ground that the Assessing Officer (AO) had failed to consider genuine purchases and sales entered in the books of account.
Madras High Court:
Deliberately Concealing The Income, Assessee Can Be Prosecuted :Madras High Court
Case Title: Dharampal R. Pandia versus Assistant Commissioner of Income Tax
Citation: 2022 LiveLaw (Mad) 269
The Madras High Court has ruled that an assessee can be prosecuted for willfully and deliberately concealing his income by not filing his income tax return within the stipulated time, even after the return belatedly submitted by the assessee is accepted by the revenue authorities on the basis of which an assessment order is passed.
The Single Bench of Justice G. Chandrasekharan observed that the concealment and suppression of income by the assessee came to light only after a survey operation was conducted and that the assessee had filed his return only after a statutory notice was issued to him under Section 148 of the Income Tax Act, 1961. Therefore, the Court held that the assessee had willfully and deliberately concealed his true income by not filing his income tax return within the stipulated time.
Order Of ITAT Is Based On Evidence, Findings Based On Facts, Madras High Court Dismisses Tax Appeal
Case Title: M/s Ankit Ispat Private Limited v. The Assistant Commissioner of Income Tax (OSD)
Citation: 2022 LiveLaw (Mad) 250
The Madras High Court recently dismissed a tax appeal observing that no substantial question of law had arisen for consideration.
The bench of Justice R Mahadevan and Justice Sathya Narayana Prasad were of the opinion that the order passed by the Commissioner of Income Tax (Appeals), which was confirmed by the Income Tax Appellate Tribunal, was based on the evidence adduced before the same. "Such well-considered findings of the appellate authorities do not warrant any interference at the hands of this court", it observed.
Case Title: M/s. Fenner (India) Limited v. The Assistant Commissioner of Income Tax
Citation: 2022 LiveLaw (Mad) 251
The Madras High Court recently upheld the decision of the Income Tax Appellate Tribunal directing the assessing officer to exclude the royalty income from the business profits for the purpose of calculation of deductions under Section 80HHC of the Income Tax Act.
Justice R Mahadevan and Justice Sathya Narayana Prasad observed that the appellant could not produce concrete evidence to assert that the royalty income received from a subsidiary company was related to export business. Thus, the decision of the tribunal did not warrant any interference.
Period Of Limitation Under S.153 Of Income Tax Act Applies To Remand Proceedings : Madras HC
Case Title: The Commissioner of Income Tax and Anr v. M/s. Roca Bathroom Products Private Limited
Citation: 2022 LiveLaw (Mad) 252
The Madras High Court recently observed that the period of limitation under the Sections 153 (2A) or 153 (3) was applicable even for remad proceedings before the Assessing Officer, Transfer Pricing Officer or the Dispute Resolution Panel. The entire proceedings had to be conducted within a period of 9 months as contemplated under Section 144C (12) of the Income Tax Act.
The bench of Justice R Mahadevan and Justice Sathya Narayana Prasad further observed that in matters of transfer pricing, when the matter was remanded to the DRP, the Assessing Officer had to pass a denova draft and complete the entire proceedings within 12 months as otherwise the very purpose of extension would become meaningless.
Meghalaya High Court:
AssesseeTo Be Given Minimum 7 Days Time To Respond To The Reassessment Notice:Meghalaya High Court
Case Title: Highgrowth Commodities Trade Private Limited Versus The Principal Commissioner of Income Tax & Ors.
The Meghalaya High Court bench of Chief Justice Sanjib Banerjee and Justice W. Diengdoh has held that the assessee should be given a minimum of 7 days' time to respond to the reassessment notice.
The assessee had challenged the notice under Section 148 of the Income Tax Act, 1961 on the ground that the notice had been issued without following the mandatory procedure under Section 148A of the Income Tax Act.
Rajasthan High Court :
Case Title: Pooja Gurjar & Anr. v. State Of Rajasthan & Ors.
Citation: 2022 LiveLaw (Raj) 199
While hearing a protection petition filed by a married couple before the Rajasthan High Court, the vacation bench of Justice Sameer Jain observed that if the petitioner's income is more than the taxable income under the Income Tax Act, 1961, the Superintendent of Police after considering the financial aspect may charge appropriate financial charges from them.
Case Title: Smt Kamla v. Hindustan Petroleum Corp. Ltd & Ors.
Citation: 2022 LiveLaw (Raj) 189
The Rajasthan High Court has observed that the condition imposed by the Income Tax Act that a person residing in India for a continuous period of 180 days would be considered to be a resident of India, is for the purpose of bringing such person within the purview of the Income Tax Act.
Uttarakhand High Court:
Case Title: Mussoorie Dehradun Development Authority versus Additional Commissioner of Income Tax & Anr.
Citation: 2022 LiveLaw (Utt) 20
The Uttarakhand High Court has reiterated that even if a Development Authority constituted under an Act of the State Legislature does not carry on any trade or business within the meaning of Article 289(2) of the Constitution of India, it continues to have a distinct legal personality separate from the State and, therefore, its income cannot be considered to be the income of the State so as to be exempt from Union taxation under Article 289(1).
The Bench, consisting of Acting Chief Justice S.K. Mishra and Justice Alok Kumar Verma, observed that the levies collected by the Mussoorie Dehradun Development Authority were taxable in its hand and they were not governed by the doctrine of diversion of income due to an overriding title.
ITAT:
Reassessment Order Can't Be Made Until There Has Been Service Of Notice: ITAT
Case Title: Naveen Tyagi Versus ITO
The Delhi Income Tax Appellate Tribunal (ITAT) consisting of C.N. Prasad (Judicial Member) has observed that reassessment cannot be made until there has been service of notice.
Case Title: Shri Satyawan Versus ITO
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) consisting of C.N. Prasad (Judicial Member) has observed that if the Assessing Officer does not make any addition on the primary ground on the basis of which proceedings under Section 147 of the Income Tax Act were initiated, he cannot make other additions.
Case Title: DCIT Versus M/s. Minerals Managements Services India Pvt. Ltd.
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)has quashed the penalty proceedings as the notice issued to the assessee did not mention a categorical indication of specific violation in respect of furnishing inaccurate particulars or concealment of particular income.
The two-member bench headed by G.S. Pannu (President) and Anubhav Sharma (Judicial Member) have observed that in the assessment order and penalty order there is apparent ambiguity as to what was the basic ground for penalty. It was also established that the notice issued under section 274 of the Income Tax Act was defective as it was not clear as to which limb the penalty was levied.
ITAT Upholds Addition On Account Of Manipulation And Rigging OfShares Via Penny Stock Company
Case Title: Aditya Saraf HUF Versus ITO
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), consisting of Saktijit Dey (Judicial Member), has upheld the addition on the grounds that there was an astronomical increase in the price of the shares due to price manipulation and rigging.
Case Title: Jain Peripherals Pvt. Ltd. Versus DCIT
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the issue of the genuineness of the purchases will be applicable only if the purchases belong to the current year.
The two-member bench of Anubhav Sharma (Judicial Member) and Shamim Yahya (Accountant Member) has observed that if the department is of the opinion that purchases were made in earlier years but now the liability has ceased to exist, disallowance can only be made if cogent evidence is brought on record for cessation of liability.
Income Tax Penalty Can't Be Imposed For Inadvertent And Bonafide Mistake : ITAT
Case Title: M/s. Rane Industries Pvt. Ltd. Versus DCIT
The Pune Bench of the Income Tax Appellate Tribunal (ITAT), headed by R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member), has deleted the penalty on the grounds that the excess claim of deduction was made due to a bona fide and unintentional mistake.
Case Title: RBL Hotels Private Limited versus ACIT
The Chennai Bench of ITAT has ruled that once the business of an assessee is set-up, all the expenditure incurred by it would be allowable as deduction, notwithstanding the fact that no business income was earned by the assessee during the relevant year.
The Bench, consisting of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member), reiterated that there may be an interval between the setting-up of a business and the commencement of a business, however, all the expenses incurred during the said interval would be available as deduction.
Reassessment Proceedings Can't Be Initiated On Same Set Of Facts Available: ITAT
Case Title: Bombay Real Estate Development Co. P. Ltd. Versus ITO
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the reassessment proceedings cannot be initiated by applying a fresh application of mind to the same set of facts available at the time of the original scrutiny assessment proceedings.
The ITAT observed that where the reasons recorded by the Assessing Officer disclose no more than a mere change of opinion, the reassessment proceedings and assessment order pursuant thereto are liable to be quashed.
Case Title: DCIT versus Haldex India Pvt. Ltd.
The Pune Bench of ITAT has ruled that a subsidy granted by the State of Maharashtra, with the objective of encouraging industrial growth in less developed areas of the State, is a capital receipt even though the said subsidy is disbursed in the form of refund of Value Added Tax (VAT) and Central Sales Tax (CST).
The Bench, consisting of S. S. Viswanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member), reiterated that for considering whether a subsidy is a capital receipt or a revenue receipt, the purpose for which the subsidy has been granted has to be considered and not the manner of its disbursal.
Notice For Reopening Of Assessment Against Dead Person IsInvalid: ITAT Quashes Re-Assessment Order
Case Title: Neelam Dhingra, (through husband and legal heir- Vinod Dhingra) Versus DCIT
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the notice for reopening of the assessment against the dead person is invalid.
The two-member bench of Kul Bharat (Judicial Member) and Pradeep Kumar (Accountant Member) had observed that the Assessing Officer had accentuated the legal fallacy by continuing to proceed against the dead person by issuing notice under Section 143 (2) and Section 142(1) of the Income Tax Act. The re-assessment order passed pursuant to invalid notices for the purposes of reopening the assessment and for assumption of jurisdiction for carrying out the assessment is bad in law and has no legal sanctity, the ITAT held.
Depreciation To Be Carried Forward For Set Off In Succeeding Assessment Years: ITAT
Case Title: ACIT Versus Nimit Kumar Aneja
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) headed by G.S. Pannu (President) and C.N. Prasad (Judicial Member) has ruled that in case the depreciation exceeds the business income, then the Assessing Officer should allow the depreciation to be carried forward for set off in succeeding assessment years.
ITAT Deletes Additions AsAssessee Proved Genuineness Of Purchases By Documentary Evidence
Case Title: Garg Acrylics Ltd Versus ACIT
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the additions on the grounds that the assessee proved the genuineness of the purchases through documentary evidence.
The two-member bench of Yogesh Kumar US (Judicial Member) and Pradeep Kumar Khedia (Accountant Member) has excluded the statement of the witness of the department as no opportunity of cross-examination was accorded to the assessee.
Non-Service Of Notice On Assessee: ITAT Quashes Reassessment Order
Case Title: Abhinav Sehgal Versus ITO
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the reassessment order on the grounds that the notice was not served on the assessee.
The bench of Challa Nagendra Prasad (Judicial Member) found that the department failed to prove proper service of the reassessment notice on the assessee.
Appeal Filed By A Struck Off Company Against The Revenue Department Is Maintainable: ITAT Delhi
Case Title: M/s Dwarka Portfolio Pvt. Ltd. versus Assistant Commissioner of Income Tax
The Delhi Bench of ITAT has ruled that an appeal filed by a Company against the order passed by the revenue department does not become infructuous if, thereafter, the Company has been struck off from the Register of Companies.
The Bench, consisting of Yogesh Kumar U.S. (Judicial Member) and B. R. R. Kumar (Accountant Member), held that a Certificate of Incorporation issued to a Company cannot be treated as cancelled for the purpose of realizing the amount due to the Company and for the payment or discharge of its liabilities.
Case Title: Dy. Commissioner of Income Tax, Hyderabad versus M/s. Hyderabad Educational Institutions Pvt Ltd.
The Hyderabad Bench of ITAT has ruled that the tuition fee collected in advance is not taxable in the year of receipt and that the tuition fee is taxable only when a corresponding service is rendered by the educational institution.
The Bench, consisting of K. Narasimha Chary (Judicial Member) and Rama Kanta Panda (Accountant Member), held that examination fee collected from students on behalf of the foreign universities is not taxable as 'Fees for Technical Services'.
DelayIn Filing Audit Reports Due To The Hospitalisation Of Accountant: ITAT DeletesPenalty
Case Title: Swaminath N. Patil Versus The Ward 2(5) Solapur
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the penalty for delay in filing audit reports due to the hospitalisation of the assessee's accountant.
The two-member bench, led by R. S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member), concluded that the assessee had explained the reasonable cause through documentary evidence. The Tribunal set aside the order of the CIT (A) and directed the AO to delete the penalty from the hands of the assessee.
Case Title: Nekkanti Sea Foods Limited Versus PCIT
The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the export entitlements and the duty drawback of the promotion scheme are an income assessable under the head "profits or gains from business or profession" as per clauses (iiib) and (iiid) of section 28 of the Income Tax Act, 1961.
The two-member bench of Duvvuru Rl Reddy (Judicial Member) and S. Balakrishnan (Accountant Member) concluded that the authorities below failed to appreciate the legislative intent underlying the addition of a clause-(iiid) to Section 28 of the Income Tax Act having retroactive effect.
Case Title: Ramesh Verma versus ACIT
The Lucknow Bench of ITAT has ruled that trading in commodity derivatives, that satisfies the requirements of Clause (e) of the first proviso to Section 43 (5) of the ITAT, 1961, is non-speculative in nature, and thus the loss arising from it can be set off against the regular business income.
The Bench, consisting of A.D. Jain (Vice President) and T.S. Kapoor (Accountant Member), held that there is no bar of expertise required for trading in commodity derivatives and that Clause (e) of the first proviso to Section 43(5) does not require any such expertise.
Society Receiving Grant From Foreign Entity Can't Be Denied Section 12A Registration:ITAT
Case Title: M/s. Share India Versus CIT(E)
The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) consisting of K.Narasimha Chary (Judicial Member) and Bhagirath Mal Biyani (Accountant Member) has ruled that the society receiving grant from foreign entity cannot be denied the registration under Section 12A of the Income Tax Act.
Delayed Audit Report Due To the Delay By Statutory Auditors: ITAT Deletes Penalty
Case Title: Kendrapara Credit Co-operative Society Ltd Versus ITO
The Cuttack Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the penalty where the assessee has sufficient and reasonable cause for delay in obtaining the audit report.
The two-member bench of George Mathan (Judicial Member) and Arun Khodpia (Accountant Member) has observed that the delay in submitting the audit report was on account of a delay in obtaining the audit report from the statutory auditors. The statutory auditors are appointed by the Registrar of Cooperative Societies and not by the assessee.
Commission Earned On Distribution Of Indian Mutual Fund Outside India, Not Taxable: ITATMumbai
Case Title: Dy. Commissioner of Income Tax versus Credit Suisse (Singapore) Ltd.
The Mumbai Bench of ITAT has ruled that the commission earned on distribution of Mutual Funds schemes of an Indian fund outside India cannot be taxed in India, if all the operations are carried out by the distributor outside India.
The Bench, consisting of Pramod Kumar (Vice President) and Sandeep Singh Karhail (Judicial Member), held that merely because the Mutual Funds distributed were controlled and regulated by SEBI and RBI in India, the commission earned by the assessee/distributor cannot be taxed in India, since the said income was not 'reasonably attributable' to any operation carried out in India.
Case Title: Prathamika Krushi Pattina Versus Income Tax Officer
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) consisting of B.R. Baskaran (Accountant Member) held that violation of the RBI notification prohibiting deposit of demonetized notes does not attract addition on account of unexplained cash credits
Notice Imposing Penalty For Concealment Of Income Can't Be Issued Without Specifying The Limb: ITAT
Case Title: Manjriben Pravinchandra Raninga Versus ITO
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the notice imposing a penalty for concealment of income cannot be issued without specifying the relevant limb.
The two-member bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) has observed that the Assessing Officer and the CIT (A) have simply imposed a penalty on concealment of income under Section 271(1)(c) of the Income Tax Act without giving any opportunity to the assessee at the appellate stage, that is, before the CIT (A).
Case Title: Mrs. Amritha Raj Versus ACIT
The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) consisting of B.R. Baskaran (Accountant Member) has imposed a cost of Rs.10,000 on the assessee for the failure to give proper reasons for not appearing before the tax authorities.
ITAT Deletes Addition Of Cash Deposited During demonetisation period by Retired ArmyOfficer
Case Title: Col. Ranjan Sharma Versus ITO
The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) consisting of B.R. Baskaran (Accountant Member) deleted the addition of cash deposits during the demonetisation period on the ground that the retired army officer had withdrawn the cash to meet medical emergencies.
Case Title: Kony Inc. Versus ACIT
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Chandra Mohan Garg (Judicial Member) and Shamim Yahya (Accountant Member) has held that consideration for the resale of the computer software through End User Licence Agreement (EULA)/distribution agreements is not the payment of royalty for the use of copyright in the computer software and, therefore, not taxable in India.
Case Title: ITO Versus M/s. Hanumant Ingots Pvt. Ltd.
The Raipur Bench of the Income Tax Appellate Tribunal (ITAT), consisting of Ravish Sood (Judicial Member) and Jamlappa D Battull (Accountant Member), has deleted the additions made on account of unexplained cash credits.
"We are of the considered view, that as the assessee by placing on record the documentary evidence had duly discharged the primary onus that was cast upon it, therefore, the A.O without dislodging the same on the basis of any material and/or evidence could not have held the amounts therein received as unexplained cash credit u/s.68 of the Act," the ITAT held.
Indirect Tax:
Key Highlights Of The Recommendations Made By The GST Council In Its 47th Meeting
The GST Council, in its 47th Meeting held on the 28th and 29th of June, 2022, has made certain recommendations relating to changes in the GST rate. Certain changes were also recommended relating to the GST law and procedure.
GST Council, in its 47th Meeting held on the 28th and 29th of June, 2022, has decided to constitute a Group of Ministers (GoM) to address the concerns raised by the States relating to the constitution of the GST Appellate Tribunal as well as for recommending appropriate amendments to the CGST Act, 2017.
The Supreme Court, in a PIL filed in 2021 by Advocate Amit Sahni, seeking constitution of the GST Appellate Tribunal, had directed the Central Government that an Appellate Tribunal has to be there.
Appointment Committee Approves The Appointment of Nitin Gupta As CBDT Chairman
Notification No. 31/1/2022
The Appointment Committee of the Cabinet has approved the appointment of IRS Officer Nitin Gupta as the chairperson of the Central Board of Direct Taxes (CBDT).
Chip Import Monitoring System Is Applicable For Air/Sea Shipments: DGFT
Policy Circular No. 40/2015-2020
The DGFT has clarified that the importer may include multiple products with one registration number, however, a separate registration number is required for each shipment. The DGFT further clarified that the Chip Import Monitoring System (CHIMS) is applicable for air/sea shipments also, and that the CHIMS registration can also be made on the same day of arrival of import.
Haryana Govt. Issues Instructions To Weed Out Bogus Firms For Passing Fake ITC
The Haryana Government has issued instructions for the processing of registration applications in FORM GST REG 01 in order to weed out bogus firms that pass fake ITC.
"It has come to the notice of the Head Office that few proper officers in the State are insisting on personal appearances or seeking extraneous information from the applicants seeking fresh registration under GST. The matter has been examined," the instruction read.
RelaxationIn Additional Fee On Delay in filing Form 11 By LLPs Till 30 June 2022: MCA
The Ministry of Corporate Affairs (MCA) has notified the relaxation in additional fees on delay in filing Form 11 by LLPs till June 30, 2022.
Andhra Pradesh High Court:
Case Title: S.P.Y. Agro Industries Limited Vs Union of India
The Andhra Pradesh High Court has ruled that the GST penalty cannot be imposed without giving the taxpayer an opportunity of hearing.
The Division Bench of Justice C. Praveen Kumar and Justice V. Sujatha has observed that any rectification under Section 161 of the CGST Act, which adversely affects any person, is possible only after following the principles of natural justice.
Case Title: M/s Angerlehner Structural and Civil Engineering Company Versus Municipal Corporation of Greater Bombay
Citation: 2022 LiveLaw (Bom) 228
The Bombay High Court has held that the service recipient is liable to pay GST to the government on interest under an arbitral award and that it cannot be deducted from the dues payable to the service provider.
The Single Bench of Justice B.P. Colabawalla has observed that service tax is an indirect tax, and it is possible that it may be passed on. Therefore, an assessee can certainly enter into a contract to shift its liability for service tax.
Services Rendered Abroad Amounts to Export Of Services, No GST Applicable: Bombay High Court
Case Title: Jar Productions Private Limited Versus The Union of India & Ors.
Citation: 2022 LiveLaw (Bom) 216
The Bombay High Court has held that GST does not apply to the services rendered abroad as they amount to the export of services.
The Division Bench of Justice S.V. Gangapurwala and Justice M.G. Sewlikar has allowed the GST refund to the petitioner/assessee as the department had failed to establish that the incidence of tax had passed on to the client, amounting to unjust enrichment.
Calcutta High Court:
Case Title: Electrosteel Castings Limited Versus The Assistant Commissioner
Citation: 2022 LiveLaw (Cal) 240
The Calcutta High Court has ruled that cess is not applicable on the coal used as an input for manufacturing finished goods for the domestic supply.
The Single Bench of Justice Md. Nizamuddin has observed that goods which are subject to a nil rate of cess would be construed as exempt supplies for purposes of the formula prescribed in Rule 89 (4) of the CGST Rules. Therefore, it deserves to be excluded from the calculation of adjusted total turnover.
Case Title: Raj Kumar Singh & Anr. versus Assistant Commissioner
Case Citation: 2022 LiveLaw (Cal) 247
The Calcutta High Court bench of Justice Md. Nizamuddin has held that the GST order passed without giving an opportunity of personal hearing is against the principles of natural justice.
Case Title: Nipika Agarwal Proprietress of S.N. Trading Versus Assistant Commissioner of State Tax
Citation: 2022 LiveLaw (Cal) 234
The Calcutta High Court bench has held that assessees should be given the opportunity to produce evidence which has an impact on tax liability. The Division Bench of Justice Debangsu Basak and Justice Bibhas Ranjan De has observed that tax authorities must adjudicate upon the tax liability in accordance with the law.
Similarly, if the assessee is unable to present certain evidence that affects the tax liability, the assessee should be given a reasonable opportunity to bring the evidence to the attention of the tax authorities, the Court held.
Delhi High Court:
Delhi High Court Orders To De-seal Business Premises, Directs Assessee To Produce Documents
Case Title: M/s Shakti Oil And Chemical Co. Versus Commissioner of DGST Delhi
Citation: 2022 LiveLaw (Del) 556
The Delhi High Court bench of Justice Rajiv Shakdher and Justice Poonam S. Bamba has ordered the department to de-seal business premises and directed the assessee to produce documents.
The petitioner had challenged the sealing of business premises by the department on the ground that it violated the fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India.
Gujarat High Court Directs Dept. To Refund IGST On Ocean Freight Along With The Interest
Case Title: ADI Enterprises Versus Union Of India
Citation: 2022 LiveLaw (Guj) 242
The Gujarat High Court bench of Justice A.J. Desai and Justice Bhargav D. Karia has directed the department to refund IGST on ocean freight along with the interest.
Case Title: M/s MBR Flexibles Ltd. Versus Deputy Commissioner Of State Tax
Citation: 2022 LiveLaw (Guj) 212
The Gujarat High Court bench of Justice A.J. Desai and Justice Bhargav D. Karia has quashed the order under GST on the grounds that the notice as well as the order were passed on the same date, denying the opportunity of hearing to the assessee.
Gujarat High Court Quashes Non-Speaking And Vague GST Cancellation Order
Case Title: Sing Traders Versus State of Gujarat
Citation: 2022 LiveLaw (Guj) 200
The Gujarat High Court bench of Justice J.B. Pardiwala, as he then was, and Justice Nisha M. Thakore has quashed the GST cancellation order as it was non-speaking and vague.
Jharkhand High Court:
Case Title: M/s Sri Ram Construction Versus UOI
Citation: 2022 LiveLaw (Jha) 58
The Jharkhand High Court bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan has held that upon deposit of 10% of the disputed tax amount during the pendency of appeals, recovery of any remaining balance is deemed to have been stayed in view of Section 107 Sub-section (6) and (7) of the CGST Act, 2017.
Karnataka High Court:
Case Title: The Vice Chairman Settlement Commission & Anr. versus M/s Zyeta Interiors Pvt. Ltd & Anr.
Citation: 2022 LiveLaw (Kar) 189
The Karnataka High Court has ruled that merely because the ratio in which service tax was required to be paid by the service recipient and the service provider was not strictly adhered to, the assessee cannot be made liable to pay double tax by denying him the CENVAT Credit. The Bench, consisting of Justices S. Sujatha and Shivashankar Amarannavar, held that the reverse charge mechanism should not lead to double taxation.
Case Title: M/s.Progressive Stone Works Versus The Joint Commissioner (ST)
Citation: 2022 LiveLaw (Mad) 271
The Madras High Court has reiterated that a writ petition is not maintainable if an alternative statutory remedy was available to the taxpayer.
"The petitioner has an alternate remedy by way of an appeal before the Appellate Commissioner under Section 107 of the CGST Act, 2007. Therefore, this writ petition cannot be entertained ignoring the statutory dispensation", the Single Bench of Justice C. Saravanan observed.
Case Title: Tvt. LAF Enterprises Versus Commissioner of Commercial Tax
Citation: 2022 LiveLaw (Mad) 256
The Madras High Court bench of Justice Anitha Sumanth has held that Section 129 of the CGST Act provides for the detention and seizure of the vehicle upon condition that an order of detention/seizure shall be passed at the time of detention/seizure and duly served upon the person transporting the goods.
Case Title: Sanjay Trading Company Versus State Of Madhya Pradesh
Citation: 2022 LiveLaw (MP) 162
The Madhya Pradesh High Court has refused to direct the re-measuring of the stock of coal lying in the premises as the search team had obtained the signatures of the persons present while carrying out the Panchanama.
The Division Bench of Justice Sheel Nagu and Justice Maninder S. Bhatti perused the panchanama and observed that on the date of search itself, the amount of tax and a penalty were deposited by the petitioner as discrepancies were found in the stock, and thus there was no question of any kind of seizure.
Advance Ruling Can't Be Sought After The Receipt Of The Notice:Madhya Pradesh High Court
Case Title: M/s Saisanket Enterprise Versus Authority of Advance Ruling
The Madhya Pradesh High Court has ruled that the application under section 97 of the CGST Act for obtaining the advance ruling cannot be made before the Authority of Advance Ruling (AAR) during the pendency of the issue before the authority and after the receipt of the notice.
The Division Bench of Justice Vivek Rusia and Justice Amar Nath has observed that the petitioner approached the authority to obtain the advance ruling only after a search was conducted in which the evasion of SGST was found, which had resulted in the issuance of a show-cause notice. By the notice, the petitioner had been called upon to pay the remaining amount of GST/SGST liability and submit the reply, the Court observed. Hence, the Court held that since the petitioner had not paid GST at 18%, the issue must be treated as pending before the authorities.
Case Title: Prism Johnson Limited Versus UOI
Citation: 2022 LiveLaw (MP) 160
The Madhya Pradesh High Court observed that the claim for refund of the assessee had been declined by assigning reasons which may be cryptic on bare perusal, but they were sufficient to enable the assessee to know the exact cause for the rejection of the claim for refund.
The division bench of Justice Sheel Nagu and Justice Maninder S. Bhatti held that the reasons assigned for declining the refund claim cannot categorise the orders as being non-speaking. The order does not dissuade the assessee from knowing the mind of the adjudicating authority or dissuade him from filing an appeal, the Court ruled.
Orissa High Court:
Commissioner Can't Allow Deposit Of Interest Payment In Instalments: Orissa High Court
Case Title: M/s. P.K. Ores Pvt. Ltd. @ M/S. PK Minings Pvt. Ltd. Versus Commissioner of Sales Tax
Citation: 2022 LiveLaw (Ori) 102
The Orissa High Court bench of Justices Jawant Singh and Murahari Sri Raman has held that the Commissioner of CT & GST is not empowered to allow the deposit of interest payments in instalments
Punjab and Haryana High Court:
No Reason To Believe That Input Tax Credit Is Fraudulently Availed: Punjab &Haryana High Court
Case Title: Rajnandini Metal Ltd. Versus Union Of India
Citation: 2022 LiveLaw (PH) 140
The Punjab and Haryana High Court bench of Justices Tejinder Singh Dhindsa and Pankaj Jain has held that there should be reason to believe that the input tax credit available in the Electronic Credit Ledger was obtained fraudulently or that the assesses are ineligible. The relevant officer must record the reasons, and a speaking order must be issued.
AAAR:
Turmeric In Whole Form Is 'Agricultural Produce', Attracts 5% GST: AAAR
Appellant's Name: N. B. Patil
The Maharashtra Appellate Authority of Advance Ruling (AAAR) has ruled that 5% GST is payable on turmeric in its whole form, falling under the definition of "Agricultural Produce".
The two-member bench of Rajeev Kumar Mital and Ashok Kumar Mehta has observed that the first supply of turmeric in whole form by farmers, being supplied by a non-taxable person in the Agricultural Produce and Marketing Committee, is not liable to GST by virtue of the provisions of section 23 (1) (b) and 2 (107) of the CGST Act, 2017.
Occupation Health Check-Up Service By The Hospital Are Health Care Services, No GSTPayable: AAAR
Appellant's Name: Baroda Medicare Private Limited, Sunshine Global Hospital
The Gujarat Appellate Authority of Advance Ruling (AAAR) consisting of Seema Arora and Milind Torawane has ruled that no GST is payable on the occupational health check-up service by the hospital as it is covered under health care services.
AAR :
Supply Of Printed Leaflet Product As Per Content Supplied By Recipient Is A"Composite Supply": AAR
Applicant's Name: Coronation Arts Crafts
The Tamil Nadu Authority of Advance Ruling (AAR) comprising of T.G. Venkatesh and K. Latha has held that the supply of printed leaflet products as per content supplied by the recipient is a composite supply as defined under Section 2(30) of the CGST/TNGST Act 2017, with "Supply of service of printing" as the principal supply.
Supply Of U-Bolt And Front Spring Bolt Made Up Of Steel Attracts 18% GST: AAR
Applicant's Name: Ultra Tech Suspension Private Limited
The Uttarakhand Authority of Advance Ruling (AAR) consisting of members Anurag Mishra and Rameshwar Meena has ruled that 18% GST is payable on the supply of UBolt and Front Spring Bolt made up of steel.
The AAR observed that the applicant's spring pins were made of various types of steel and had the appearance of springs. Hence, the AAR ruled that they were covered under the subheading "Other," by the CTH 7320, which aptly covers iron or steel springs and leaves for springs.
No GST Payable For Movement Of Goods Between Two Units WorkingUnder Same GSTIN: Rajasthan AAR
Applicant's Name: M/s Mody Education Foundation
The Rajasthan Bench of Authority of Advance Ruling, consisting of Vikas Kumar Jeph and M.S. Kavia has ruled that GST is not payable on the movement of goods between two units working under the same GSTIN.
No GST Payable On Work Of' Shaheed Dwar' At Banjarawala, Dehradun: Uttarakhand AAR
Applicant's Name: M/s Garhwal Mandal Vikas Nigam Limited
The Uttarakhand Authority of Advance Ruling (AAR) consisting of Anurag Mishra and Rameshvar Meena has ruled that no GST is payable on the work of 'Shaheed Dwar' at Banjarawala, Dehradun.
GST Not Payable On RCM Basis On Commission Paid To The OverseasCommission Agent: AAR
Applicant's Name: M/s. Dry Blend Foods Pvt Ltd
The Uttarakhand Authority of Advance Ruling (AAR) consisting of Anurag Mishra and Rameshvar Meena has ruled that GST is not payable on the basis of the Reverse Charge Mechanism (RCM) on the commission paid to the Overseas Commission Agent.
18% GST payable On PV DCCables: Maharashtra AAR
Applicant's Name: Leoni Cable Solutions (India) Pvt. Ltd.
The Maharashtra Authority of Advance Ruling (AAR), consisting of Rajiv Magoo and T.R. Ramnani, has ruled that 18% GST is payable on PV DC cables.
No GST Payable On Reimbursement Of Stipend Paid To Trainees: AAR
Applicant's Name: Patle Eduskills Foundation
The Maharashtra Authority of Advance ruling (AAR) has ruled that GST is not payable on the reimbursement of stipend paid to trainees by industry partners.
GST Payable On Medical Health Insurance Premium For Employees: AAR
Applicant's Name: M/s. Hyderabad Metropolitan Water Supply And Sewerage Board
The Telangana Authority of Advance Ruling (AAR) consisting of B. Raghu Kiran and S.V. Kasi Visweswara Rao has observed that GST is payable on medical health insurance premiums for employees.
GST Not Payable On Monthly Collection Not Exceeding Rs.7500 Per Member Of RWA: AAR
Applicant's Name: M/s. Jayabheri orange county owners association
The Telangana Authority of Advance Ruling (AAR) consisting of B. Raghu Kiran and S.V. Kasi Visweswara Rao has ruled that GST is not payable on monthly collection not exceeding Rs. 7500 per member of the Resident Welfare Association (RWA).
GST Payable On Receipt Of Gratuitous Payment From Outgoing Member: AAR
Applicant's Name: Monalisa Co-Operative Housing Society Limited
The Maharashtra Authority of Advance Ruling (AAR) consisting of T.R. Ramnani and Rajiv Magoo has ruled that GST is payable on receipt of gratuitous payment from outgoing members.
ITC Admissible On GST Paid On GTA Service Despite Vehicles Travelling Empty inReturn Journey: AAR
Applicant's Name: M/s. Vadilal Enterprises Ltd.
The Gujarat Authority of Advance Ruling (AAR) has ruled that the Input Tax Credit (ITC) is admissible on GST paid on goods transport agency (GTA) service supplied to it, despite refrigerated vehicles travelling empty during the return journey.
Supply Of Works Contract Services To Nagar Nigam Attracts 12% GST: AAR
Applicant's Name: M/s. Amnex Infotechnologies Pvt. Ltd
The Gujarat Authority of Advance Ruling (AAR) consisting of Arun Richard and Atul Mehta has ruled that 12% GST is payable on the supply of work contract services to Nagar Nigam.
Sale Of Car By Company After Using It For Business Purpose Attracts 18% GST: AAR
Applicant's Name: M/s. Dishman Carbogen Amcis Limited
The Gujarat Authority of Advance Ruling (AAR) consisting of Arun Richard and Atul Mehta has ruled that 18% GST is payable on the sale of a car by a company after using it for business purposes.
Schools Not Entitled To Pay GST On Canteen And Transportation Services: AAR
Applicant's Name: Rahul Ramchandran
The Maharashtra Authority of Advance Ruling (AAR) consisting of Rajiv Magoo and T.R. Ramnani has ruled that the schools are not liable to pay GST on the canteen and the transportation services that are furnished by schools.
Short Payment Of Excise Duty Is Not Sufficient To Invoke The Extended Period: CESTAT
Case Title: M/s. MIRC Electronics Ltd. Versus Commissioner of GST & Central Excise, Mumbai
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Ajay Sharma (Judicial Member) has held that a short payment of excise duty is not sufficient in order to invoke the extended period.
Case Title: M/s. Unimech Industries Private Limited Versus The Commissioner of Central Excise Citation: Excise Appeal No. 42787 of 2014
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the scrap generated after the process of manufacture is not includible in the assessable value of the goods cleared by the job worker to the principal manufacturer.
Case Title: Yashraj Containeurs Ltd. versus C.C.E. & S.T.-Daman
The Ahmedabad Bench of CESTAT has ruled that the amount of TCS collected under the Income Tax Act, 1961 on the sale of goods cannot be considered as an additional consideration flowing to the assessee from the buyer of the goods and, therefore, the TCS collected by the assessee cannot be included in the assessable value for charging Excise Duty.
The Bench, consisting of Mr. Ramesh Nair (Judicial Member) and Mr. Raju (Technical Member), held that since the TCS was collected by the assessee as a tax and not as an additional consideration, and since the said TCS was deposited to the income tax department, therefore, it could not be said that the amount of TCS collected by the assessee belonged to it.
Case Title: M/s Seher versus Commissioner of Service Tax, Delhi – II
The Delhi Bench of CESTAT has reiterated that service tax cannot be levied on reimbursement of expenses incurred by the service provider.
The Bench, consisting of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member), held that since Rule 5 of the Service Tax (Determination of Value) Rules, 2006 has been held to be ultra vires by the Supreme Court in the case of Union of India versus Intercontinental Consultants and Technocrats Pvt. Ltd. (2018), the nature of services does not make any difference and that no service tax can be levied on reimbursements.
Case Title: M/s. International Seaport Dredging Pvt. Ltd. Versus Commissioner of GST & Central Excise
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the assessee is entitled to a refund of education cess and Krishi Kalyan Cess lying unutilized in the CENVAT account.
Case Title: Tega Industries Limited versus C.C.E. & S.T.-Vadodara
The Ahmedabad Bench of CESTAT has held that if a unit of an enterprise is located in the Special Economic Zone (SEZ), the said SEZ Unit shall be treated as having a distinct identity from the other units of the said enterprise which are located outside the SEZ.
Therefore, the Single Bench of Judicial Member Ramesh Nair held that a claim for refund of the service tax paid by a SEZ Unit on the services received by it from its units located in a Domestic Tariff Area (DTA) could not be denied, even if the SEZ Unit was not a separate legal entity.
Case Title: M/s. Aadhar Stumbh Township Pvt.Ltd. Versus Commissioner of Central Excise & Central Goods & Service Tax Commissionerate
The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Anil Choudhary (Judicial Member) has ruled that the limitation applicable for refund amount lies with the department having the nature of revenue deposit.
Service Tax Not Payable On Liquidated Damages Collected From Contractor: CESTAT
Case Title: M.P. Audyogik Kendra Vikas Nigam (Indore) Limited Versus Commissioner, Central Goods, Service Tax and Central Excise
The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Anil Choudhary (Judicial Member) ruled that service tax is not payable on liquidated damages collected from the contractor.
CENVAT Credit Cannot Be Claimed On Expenses Incurred On CSR: Delhi CESTAT
Case Title: M/s. Power Finance Corporation Ltd. versus Commissioner (Appeal), Central Excise & Service Tax, LTU, New Delhi
The Delhi Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that expenses incurred by a person on activities related to its Corporate Social Responsibility (CSR) cannot be termed as input services and thus, CENVAT Credit cannot be claimed on it.
The Bench, consisting of members Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member), ruled that the fact that the CSR is a legal responsibility does not make it an output service.
Case Title: DKNV Engineering Pvt Ltd Versus Commissioner of Central Excise & ST, Daman
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Ramesh Nair (Judicial Member) has held that the availment of credit on the strength of photocopies of the invoices is just a procedural lapse and cannot be made the basis to disallow the cenvat credit.
Supply Of Bed Rolls Kits Amounts To Supplying Services To IRCTC, Chargeable To ServiceTax: CESTAT
Case Title: Hakamichand D & Sons Versus C.S.T.-Service Tax - Ahmedabad
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the supply of bedroll kits to passengers of air-conditioned classes and other classes on behalf of IRCTC attracts service tax.
The two-member bench of Ramesh Nair (Judicial Member) and P.Anjani Kumar (Technical Member) observed that the supply of bedroll kits to passengers for and on behalf of IRCTC is in the nature of a "customer care service". Therefore, the services are appropriately classifiable under business auxiliary services.
IT Service Provided By Assessee To Associate Company In USA Amounts To Export OfService: CESTAT
Case Title: Celtic Systems Private Limited Versus C.C.E. & S.T.-VADODARA-I
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Ramesh Nair (Judicial Member) and Raju (Technical Member) has ruled that IT services provided by the assessee to the associate company in the USA amount to an export of services.
Case Title: M/s. Indian Overseas Bank Versus The Commissioner of Central Excise & Service Tax
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Sulekha Beevi C.S. (Judicial Member) and P. Anjani Kumar (Technical Member) has held that the credit availed by the Indian Overseas Bank on the Service Tax paid on the basis of the premium paid to the Deposit Insurance and Credit Guarantee Corporation (DICGC) for insuring deposits is eligible for CENVAT Credit.
Case Title: Spray King Agro Equipment Pvt Ltd Versus C.C.E. & S.T.-Rajkot
The Ahmedabad Customs, Excise and Service Tax Appellate Tribunal (CESTAT), consisting of Ramesh Nair (Judicial Member) and P. Anjani Kumar (Technical Member), has ruled that intermediate goods captively consumed for the manufacture of exempted final products do not attract excise duty.
