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Tax Cases Weekly Round-Up: 8 May To 14 May, 2022

Mariya Paliwala
16 May 2022 3:00 AM GMT
Tax Cases Weekly Round-Up: 8 May To 14 May, 2022
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Delhi High Court Bail Amount Can Be Paid By Cash Ledger, Debit Ledger Of ITC:Delhi High Court Refuses To Cancel Bail Of A Person Accused of FraudulentlyAvailing ITC Case Title: Amit Gupta Vs Directorate General of GST Intelligence Headquarters Citation: 2022 LiveLaw (Del) 426 The Delhi High Court bench of Justice Mukta Gupta has ruled that the bail amount can be paid by...

Delhi High Court

Bail Amount Can Be Paid By Cash Ledger, Debit Ledger Of ITC:Delhi High Court Refuses To Cancel Bail Of A Person Accused of FraudulentlyAvailing ITC

Case Title: Amit Gupta Vs Directorate General of GST Intelligence Headquarters

Citation: 2022 LiveLaw (Del) 426

The Delhi High Court bench of Justice Mukta Gupta has ruled that the bail amount can be paid by cash ledger and debit ledger of the Input Tax Credit (ITC).

Sufficiency Of The Correctness Of Material Is Not To Be Considered While Issuing Reassessment Notice: Delhi High Court

Case Title: Kedar Nath Babbar Versus Assistant Commissioner of Income Tax

Citation: 2022 LiveLaw (Del) 434

The Delhi High Court held that the court was only required to see whether there was prima facie some material on the basis of which the department could reopen the assessment. The sufficiency of the correctness of the material cannot be considered while issuing the reassessment notice.

Bombay High Court

Credit Worthiness Of The Creditor And Genuineness Of Transaction Explained By The Assessee: Bombay High Court Quashes Re-assessment Notice

Case Title: Vapi Infrastructure and Industrial Township LLP Versus Income Tax Officer Ward

The Bombay High Court has quashed the reassessment notice. The assessee explained the credit worthiness of the creditor and the genuineness of the transaction.

The division bench of Justice K.R. Shriram and Justice N.R. Borkar observed that the re-opening proposed was purely based on a change of opinion. The assessing officer was also satisfied with the credit worthiness and details provided by third party lenders.

Karnataka High Court

No Conflict Between Power To Levy GST And Power Of Municipal Corporation To Levy Advertisement Fee Or Advertisement Tax: Karnataka HighCourt

Case Title: Hubballi Dharwad Advertisers Association (R) Vs State of Karnataka

The Karnataka High Court bench of Justice Suraj Govindraj held that there is no conflict between the power to levy GST under the GST Act and the power of a municipal corporation to levy an advertisement fee or advertisement tax under Section 134 of the Karnataka Municipal Corporations Act.

Kerala High Court

KVAT Registration Once Cancelled Has To Be Published In Two Leading Daily Newspapers: Kerala High Court

Case Title: The State of Kerala Versus Raseena K.K.

Citation: 2022 LiveLaw (Ker) 215

The Kerala High Court ruled that once a Kerala Value Added Tax (KVAT) registration is cancelled, it must be published in at least two major daily newspapers, and the dealer must be notified in accordance with Form No.5 B.Then only will the cancellation of registration be effective.

Allahabad High Court

Allahabad High Court Stays GST Demand On Payment Of Royalty To Conduct Mining Activity

Case Title: M/s Jitendra Singh Versus Union of India

The Allahabad High Court bench of Justice Saumitra Dayal Singh has stayed the GST demand on payment of royalty to conduct mining activity.

Madras High Court

Transition Of ITC cannot Be Denied Merely For Technical Difficulties: Madras High Court

Case Title: M/s.Vetrivel Explosives Pvt. Ltd. Versus Union of India

Citation: 2022 LiveLaw (Mad) 208

The Madras High Court held that in case the department is unable to permit the filing of TRAN-1 belatedly, they have to credit the corresponding amount in the electronic cash register provided that the credit remained unutilized on the cut-off date.

Calcutta High Court

Genuine Transactions With Suppliers Whose GST Registration Cancelled: Calcutta High Court Allows GST ITC To Assessee

Case Title: Sanchita Kundu & Anr. Vs. The Assistant Commissioner of State Tax, Bureau of Investigation, South Bengal & Ors.

The Calcutta High Court bench of Justice Md. Nizamuddin has held that the Input Tax Credit (ITC) cannot be denied on genuine transactions with suppliers whose GST registration was cancelled after the transaction.

Gujarat High Court

Bonafide Mistake In Selection Of Wrong ODC Vehicle Type While Generating E-Way Bill: Gujarat High Court Quashes Detention Order

Case Title: Dhabriya Polywood Limited Vs Union of India

The Gujarat High Court has quashed the detention order as there was a bonafide mistake in the selection of the wrong ODC vehicle type while generating the e-way bill.

The division bench of Justice J.B. Pardiwala (as then was) and Justice Nisha M. Thakore observed that the goods were in transit with all the necessary documents, including the E-way bill generated from the GST portal. The goods were moved by a truck whose registration number was also correct. The only mistake in this case was the selection of the wrong ODC vehicle type while generating the e-Way Bill.

ITAT

Subscription Money Received In Advance By DTH Operators Is Taxable Only When Services Are Provided To The Subscribers: Chennai ITAT

Case Title: ACIT versus M/s Sun Direct TV Pvt Ltd

The Chennai Bench of ITAT has ruled that subscription money received in advance by the DTH operators is not taxable. The Bench, consisting of members V. Durga Rao (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member), held that the subscription money received by DTH operators is taxable only when the said amount is accrued to them, i.e., when the services are rendered by the DTH operators to the subscribers.

Consideration Paid For Purchase Of Advertisement Space Does Not Amount To 'Royalty' Under Income TaxAct: ITAT Chennai

Case Title: M/s. ESPN Digital Media (India) Pvt Ltd versus DCIT

The Chennai Bench of ITAT has ruled that consideration paid for purchase of advertisement space does not amount to 'royalty' under the Income Tax Act, 1961.

The Bench, consisting of members Mahavir Singh (Vice President) and Dr. M. L. Meena (Accountant Member), held that the Finance Act, 2016 recognizes providing advertising space as a 'specified service', which is subject to Equalisation Levy. The ITAT added that the contention that sale of advertising space was 'royalty' under the Income Tax Act would be contrary to the legislative intent, objects and purpose of the provisions of Equalisation Levy, as well as result in absurdity and double taxation.

CESTAT

Foreign Origin Gold Bar With Unexplained Source Is Liable For Absolute Confiscation As It amounts To Importation Of Prohibited Goods: CESTAT

Case Title: The Commissioner of Customs Versus M.S. Alaudeen

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of P.Dinesha (Judicial Member), while remanding the matter back, held that the gold bar with a foreign marking, the source of which is not explained, is liable for absolute confiscation since the same would amount to the importation of a prohibited good.

Liquidated Damages Does Not Attract Service Tax: CESTAT Hyderabad

Case Title: M/s. Krishnapatnam Port Company Limited versus Commissioner of Central Excise & Service Tax, Guntur

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that receipt of liquidated damages by the service provider for breach of conditions under an agreement to provide services would not attract Service Tax.

Compensation Paid By Employee To Employer For Resigning From Service Without Giving Requisite Notice Is Not A Taxable Service: CESTAT

Case Title: M/s. XL Health Corporation India Pvt. Ltd. Versus Commissioner of Central Tax, Bengaluru South Commissionerate

The Bangalore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of S.K. Mohanty (Judicial Member) and P.Anjani Kumar (Technical Member) has held that any compensation paid by the employee to the employer for resigning from the service without giving the requisite notice, would not be termed as consideration for the contract of employment and would not fall within the preview of taxable service.

CESTAT Allows Refund Of CENVAT Credits On Service Tax Paid During GST Regime Under Reverse Charge Mechanism On Import Of Services

Case Title: M/s Brose India Automotive Systems Pvt. Ltd. Versus Commissioner of CGST

The Chennai Bench of ITAT has ruled that subscription money received in advance by the DTH operators is not taxable.

The Bench, consisting of members V. Durga Rao (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member), held that the subscription money received by DTH operators is taxable only when the said amount is accrued to them, i.e., when the services are rendered by the DTH operators to the subscribers.

AAR

Bus Body Building On Chassis Owned By GST Registered Customer Attracts 18% GST: Gujarat AAR

Applicant's Name: Vasant Fabricators Pvt. Ltd.

The Gujarat Authority of Advance Ruling (AAR) consisting of members Arun Richard and Atul Mehta ruled that 18% GST is payable on bus body building on chassis owned by GST registered customers and unregistered customers.


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