Tax Cases Monthly Round Up: April 2023

Indirect Taxes Supreme Court Same Activity Can Be Taxed As ‘Goods’ & ‘Services’ : Supreme Court Upholds Levy Of Service Tax On “Engineering Design & Drawings” Case Title: Commissioner of Customs, Central Excise & Service Tax v M/S Suzlon Energy Citation : 202LiveLaw(SC) 298 The Supreme Court has held that the import of “Engineering Design & Drawings” falls under the category of “design services” under section 65(35b) read with Section 65(105) (zzzzd) of the Finance Act, 1994, and are subject to levy of service tax. On the sole ground that “Engineering Design & Drawings” prepared and supplied by sister company were shown as ‘goods’ under the Customs Act and in the bill of entry, such services cannot be excluded from the definition of “design services” under the Finance Act, 1994. Issuance Of Corporate Guarantee On Behalf Of Group Companies Without Consideration Is Not A Taxable Service: Supreme Court Case Title: Commissioner Of CGST And Central Excise Versus M/S Edelweiss Financial Services Ltd. Citation: 2023 LiveLaw (SC) 281 The Supreme Court has held that the issuance of a corporate guarantee on behalf of group companies without consideration is not a taxable service. The division bench of Justice Hrishikesh Roy and Justice Manoj Misra has observed that, as there is no consideration involved, no service tax would be assessed on the corporate guarantees given by a parent company to its subsidiaries. Mortein Spray, Harpic & Lizol Cleaner- Not Classifiable as ‘Insecticide’ Under KVAT; Dettol A 'Medicament': Supreme Court Case Title: M/s Reckitt Benckiser (India) Ltd. vs. Commissioner Commercial Taxes & Ors. Citation : 2023 LiveLaw (SC) 306 The Supreme Court bench comprising Justices M. R. Shah and Krishna Murari has ruled that Mosquito Mats, Coils and Vaporizers, Mortein Insect Killers, Harpic Toilet Cleaner and Lizol Floor Cleaners, are not be classifiable under Entry 44(5) of the 3rd Schedule to the Kerala VAT Act (KVAT), 2003 as ‘insecticides’. Delhi High Court No Justification For Not Adjudicating The Notice For More Than 13 Years After Its Issuance: Delhi High Court Case Title: Nanu Ram Goyal Versus Commissioner Of CGST And Central Excise, Delhi Citation: 2023 LiveLaw (Del) 332 The Delhi High Court has held that there is no justification for not adjudicating the notice for more than thirteen years after its issuance. The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the larger public interest requires that the Revenue Department and its officials adjudicate the show cause notice expeditiously and within a reasonable time. Refund Claim Embedded In Return, No Need To File Fresh Claim: Delhi High Court Directs Dept. To Pay 6% Interest Case Title: Commissioner Of Trade And Taxes Versus Corsan Corviam Construction S.A.-Sadbhav Engineering Ltd. The Delhi High Court has held that since the claim for a refund made by the assessee was embedded in its return and the assessee was not required to file a fresh claim. The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has directed the Department to pay interest within 4 weeks. Attachment Of Bank Accounts Is A Draconian Step, Attachment Is Subject To The Condition Mentioned U/s 83 Of GST Act: Delhi High Court Case Title: Sakshi Bahl Versus The Principal Additional Director General The Delhi High Court has held that attachment of bank accounts is a draconian step and the action can only be taken in case conditions specified in Section 83 of the GST Act, are fully satisfied. Services Provided By EY India To Overseas EY Entities Not “Intermediary Services”: Delhi High Court Directs IGST Refund To EY India Case Title: M/s Ernst and Young Ltd vs. Additional Commissioner, CGST Appeals & Anr. The Delhi High Court has ruled that the services provided by M/s Ernst and Young Limited (India), the Indian Branch Office of UK based company, M/s Ernst & Young Limited (E&Y Ltd), to overseas EY Entities, is not an “intermediary service”. Delhi High Court Quashes Service Tax Demand of Rs. 56.61 Crores Against MTNL Case Title: Mahanagar Telephone Nigam Ltd. Versus Union Of India The Delhi High Court has quashed the service tax demand of Rs. 56.61 crores against Mahanagar Telephone Nigam Limited (MTNL). The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that MTNL had received the compensation during the financial year 2015-16, which was prior to May 14, 2016, i.e., the date on which the Finance Act, 2016, came into force and Clause (j) was introduced in Section 66E of the Act. Thus, the surrender of any right to use the spectrum by MTNL prior to the said date would not be chargeable to service tax. Bombay High Court Constitutionality Of Taxing Intermediary Services Under GST: Bombay High Court Upholds Validity Of ...

Tax Cases Monthly Round Up: April 2023

Mariya Paliwala

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