Tax Cases Weekly Round-Up: 9 October To 15 October, 2022

Supreme court Supreme Court Directs Andhra Pradesh To Transfer To Jharkhand CST Collected From Tata Motors In Respect To Sale To APSRTC Case Title: Tata Motors Limited Versus Central Sales Tax Appellate Authority & Others Citation: 2022 LiveLaw (SC) 847 The Supreme Court has directed the state of Andhra Pradesh to transfer to Jharkhand the amount of central sales tax deposited by Tata Motors with respect to the sale of buses to the Andhra Pradesh State Road Transport Corporation (APSRTC). The division bench of Justice M.R. Shah and Justice Krishna Murari has observed that after due verification, the amount of central sales tax paid by Tata Motors with respect to the transaction be transferred to Jharkhand immediately on verification. The State of Jharkhand was directed to adjust it towards the central sales tax liability of Tata Motors on sales effected through RSO, Vijayawada with respect to vehicles/buses sold to APSRTC, which were found to be in the nature of inter-state sales. Delhi High Court Travel Agent's Booking Function Is Not Substantial Business Activity And Not Taxable: Delhi High Court Case Title: CIT Versus Travelport L.P. USA Citation: 2022 LiveLaw (Del) 946 The Delhi High Court has held that the travel agents in India were merely connected to the extent that they could perform a booking function but were not capable of processing the data of all the airlines together in one place. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has held that a booking function is not covered under substantial business activity and, therefore, not taxable. Delhi High Court Directs IGST Refund After Deducting Differential Amount Of Duty Drawback Case Title: Kishan Lal Kuria Mal International versus Union of India Citation: 2022 LiveLaw (Del) 949 The Delhi High Court has directed the department to grant IGST refund paid on the goods exported after deducting the differential amount of duty drawback. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that the Jurisdictional Commissionerates shall be entitled to verify the extent of duty drawback availed by the petitioners and also whether they have availed duty drawback/CENVAT Credit of Central Excise & Service Tax component in respect of the exports made by them. If any adjustment is to be made, it shall be made by the jurisdictional commissionerate. Department Failed To Pass Re-Assessment Order Within Prescribed Time Limit: Delhi High Court Case Title: Nagesh Trading Co. Versus Income Tax Officer The Delhi High Court has quashed the show-cause notice and the reassessment order as the department failed to pass the reassessment order within the prescribed time limit. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the department could not have issued another notice to the petitioner/assessee under Section 148A(b) dated June 2, 2022, after having issued and served the notice on March 31, 2021, under Section 148 of the unamended Act. Preventing Docket Explosion - Pre-SCN Consultation Should Be Held : Delhi High Court Case Title: M/s Victory Electric Vehicles International Pvt. Ltd. Versus Union of India Citation: 2022 LiveLaw (Del) 950 The Delhi High Court has held that it is obligatory on the part of the concerned officer to ensure that prior to the issuance of the show-cause notice (SCN), a pre-notice consultation is held with the person chargeable with customs duty or interest. The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has observed that the person chargeable with duty or interest was required to be given fifteen days to make his submission, in writing, concerning the grounds communicated to him in the pre-consultation notice, which is required to be served prior to the issuance of the SCN. Income Tax On Interest Income From FD, Ownership Need To Be Determined By Arbitral Tribunal: Delhi High Court Case Title: PCIT Versus M/s Rajdarbar Heritage Venture Limited The Delhi High Court has held that income tax cannot be levied on the interest income from fixed deposits till the ownership is determined by the arbitral tribunal. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has agreed with the finding of the two Appellate Authorities below that till the final award was passed by the Arbitral Tribunal determining the ownership of the fixed deposits and interest, it could not be said that the interest income had crystallised in the assessee's hands and that it could not be held to be the income of the assessee under Section 5(1) of the Income Tax Act, 1961. Madras High Court Detention Order not Passed based on Statutory Timelines: Madras High Court Directs Release of Vehicle Case Title: A. Irudayaraju Versus The State Tax Officer, Adjudication...

Tax Cases Weekly Round-Up: 9 October To 15 October, 2022

Mariya Paliwala

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