Half-Yearly Digest Of Tax Cases: January-June, 2023

Indirect Taxes Supreme Court No Service Tax Applicable on User Development Fee collected From Passengers by Delhi, Mumbai and Hyderabad International Airports: Supreme Court Case Title: Central GST Delhi – III vs Delhi International Airport Ltd Citation : 2023 LiveLaw (SC) 457 The Supreme Court has ruled that the “user development fee” (UDF) levied and collected by the airport operation, maintenance, and development entities from passengers departing the concerned airports, is a statutory levy, and thus, it is not subjected to levy of service tax under the provisions of the Finance Act, 1994. Credit Note Issued By Automobile Manufacturer To Dealer, In Consideration Of Replacement Of Defective Part, Attracts Sales Tax: Supreme Court Case Title: M/S. Tata Motors Ltd. vs The Deputy Commissioner Of Commercial Taxes (SPL) & Anr. Citation : 2023 LiveLaw (SC) 443 The Supreme Court has ruled that a credit note issued by an automobile manufacturer to a dealer of automobiles, in consideration of the replacement of a defective part done by the dealer pursuant to a warranty agreement, is exigible for sales tax. In 'Works Contract', Assessee Liable To Pay Service Tax On Service Element & Sales Tax On Goods Transferred : Supreme Court Case Title: CC and CE and ST, Noida vs M/s Interarch Building Products Pvt Ltd Citation : 2023 LiveLaw (SC) 393 The Supreme Court has ruled that the value of the service portion in the execution of the works contract has to be determined as per Rule 2A of Service Tax (Determination of Value) Rules, 2006, or as per the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 (Composition Scheme), if adopted by the assessee, and that the assessee has to pay service tax on the service element and can claim CENVAT Credit only on the said amount. Mere Broad-Basing Of Entries Under Central Excise Tariff Act, Cannot Justify Re-Classification, Without Change In Nature, Character Or Use Of The Product: Supreme Court Case Title: Commissioner of Customs, Central Excise and Service Tax, Hyderabad vs Ashwani Homeo Pharmacy Citation : 2023 LiveLaw (SC) 397 The Supreme Court has ruled that the classification of a product under the Central Excise Tariff Act, 1985, cannot be changed merely on the ground of change of tax structure or tariff entries, without showing a change in the nature and character of a product or a change in the use of the product(Commissioner of Customs, Central Excise and Service Tax, Hyderabad vs Ashwani Homeo Pharmacy). Prickly Heat Powder Is Not A ‘Medicine’ For The Purpose Of Sales Tax In Kerala & Tamil Nadu: Supreme Court Case Title: Heinz India Limited v The State of Kerala Citation: 2023 LiveLaw (SC) 411 The Supreme Court Bench has held that prickly heat powders fall under the category of ‘medicated talcum powder’ and not ‘medicine’ for the purpose of sales tax under Kerala General Sales Tax Act, 1963 (“KGST Act”). Whereas, under the Tamil Nadu General Sales Tax Act, 1959 (“TNGST Act”), prickly heat powder would be taxed as a cosmetic. Can Tax Exemption Be Claimed Based On Doctrine Of Legitimate Expectation? Supreme Court Delivers Split Verdict Case Title: M/s K.B. Tea Product Pvt Ltd & Anr vs Commercial Tax Officer, Siliguri & Ors Citation : 2023 LiveLaw (SC) 428 The Supreme Court bench comprising Justices M.R. Shah and Krishna Murari has rendered a split verdict on the issue concerning the applicability of the doctrine of legitimate expectation where a tax holiday/ sales tax exemption granted to the appellant- manufacturer was stopped pursuant to the amendments made to the West Bengal Sales Tax Act, 1994. Supreme Court Upholds Withdrawal Of Customs Notification Granting Concession On Import Of Printing Machinery, On The Ground Of Indigenous Angle Case Title: Union of India & Ors. vs A. B. P. Pvt Ltd & Anr. Citation : 2023 LiveLaw (SC) 430 The Supreme Court has upheld the withdrawal of a customs notification which granted customs duty concession to “Rotary Printing Machine” of ‘single width two plate variety’, on the ground of indigenous angle, i.e., availability of the equipment in India. The top court remarked that the same cannot be characterized as an irrelevant factor for withdrawing tax concession. Income Tax Act - Carrier of Goods Not An ‘Owner’; Bitumen Not A ‘Valuable Article’ Under S. 69A :Supreme Court Case Title: M/s. D.N. Singh vs Commissioner of Income Tax, Central, Patna & Anr. Citation : 2023 LiveLaw (SC) 451 The Supreme Court has ruled that bitumen cannot be treated as a ‘valuable article’ under Section 69A of the Income Tax Act, 1961. The bench comprising Justices K.M. Joseph and Hrishikesh Roy made the observation while dealing with an appeal filed against the decision of the Patna High Court, who had upheld the additions made by the Assessing Officer (AO) towards the...

Half-Yearly Digest Of Tax Cases: January-June, 2023

Mariya Paliwala

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