Tax Weekly Roundup: November 18 - November 24, 2024

SUPREME COURT Mobile Towers & Pre-Fabricated Buildings Moveable Properties, Qualify As 'Capital Goods' For CENVAT Credit : Supreme Court Case title: M/S BHARTI AIRTEL LTD. v. THE COMMISSIONER OF CENTRAL EXCISE, PUNE Case no.: CIVIL APPEAL NOS. 10409-10410 OF 2014 The Supreme Court in a recent decision held that mobile service providers (MSPs) could avail the benefit of Central Value Added Tax/CENVAT Credit over excise duties paid on items such as mobile towers and prefabricated buildings. The bench of Justice BV Nagarathna and Justice N Kotiswar Singh observed that since mobile towers and PFBs could be detached and relocated, they qualified as movable properties and accessories in enhancing the functionality of the mobile service antenna attached on top of the tower. Thus, the items qualified as 'capital goods' or 'inputs' which were indispensable to provide effective mobile services (output) and MSPs can get a credit set-off on these items. HIGH COURTS Allahabad HC Allahabad HC Decines Plea Claiming Road Tax Exemption Should Be Allowed For Registration And Not Purchase Of Electric Vehicles In UP Case title: M/S Batra Henlay Cables v. State Of U.P. and 2 Others Case no.: WRIT TAX No. - 1927 of 2024 The Allahabad High Court has dismissed a writ petition claiming exemption from payment of road tax on an electric vehicle purchased from Jammu. The Court also found substance in State's argument that part of revenue is lost when vehicle is purchased from outside the State and therefore, it held, “instead of making it open-ended exemption, the State is well within its power to impose the condition of purchase of vehicle within the State.” Bombay HC Exporter Can't Be Denied Interest On Refund U/S 56 Of CGST Act For Period Of Delay Attributable To Revenue Dept: Bombay High Court Case Title: Anita Agarwal vs. Union of India Case no.: Writ Petition No. 1474 of 2023 The Bombay High Court recently clarified that an exporter (Petitioner) is entitled to interest u/s 56 of the CGST Act for the period starting from the expiry of 60 days from the date of filing the shipping bill up to the date of grant of refund, although during the interregnum, the exporter's name was red flagged on the Customs' portal. The High Court held so while considering the prayer for interest on delayed payment of refund of tax as per Section 56 of the CGST Act, 2017. Writ Courts Shall Not Act As Court Of Appeal Against Decision Of Lower Court Or Tribunals To Correct Errors Of Fact: Bombay High Court Case Title: Apollo Tyres vs. Union of India Case no.: Writ Petition No. 15498 of 2024 The Bombay High Court recently clarified that writ courts shall not trench upon an alternate remedy provided by statute (Income tax Act) for granting any relief, by assuming jurisdiction under Article 226 of the Constitution. Similarly, writ courts shall not act as a court of appeal against the decision of the lower court or Tribunals, to correct errors of fact, observed the Division Bench of Justice M. S. Sonak and Justice Jitendra Jain. Customs Act | Interest U/S 28AA Is Automatic When There Is A Default Or Delay In Payment Of Duty: Bombay High Court Case Title: B.V. Jewels vs. Union of India Case Number: Writ Petition No. 2423 of 2024 The Bombay High Court ruled that the demand for interest u/s 28AA of the Customs Act raised for non-payment of demand, within three months of raising the demand, is properly tenable on the part of the Customs Authority. Interest u/s 28AA is automatic, when there is a default or delay in payment of duty, added the Court. Taxpayers Can't Seek Writ Remedy By Bypassing Statutory Requirements Of Pre-Deposit: Bombay High Court Case Title: Oberoi Constructions vs. Union of India Case Number: Writ Petition (L) No. 33260 of 2023 The Bombay High Court held that circumstances in which the appeals require some percentage of the demanded tax to be pre-deposited, do not render the appellate remedies any less efficacious. The High Court held so while considering an issue as to whether the demands are covered under the exemption notification or the notification providing for nil rate of taxes. The Division Bench of Justice M S Sonak and Justice Jitendra Jain observed that the practice of instituting petitions bypassing the statutory remedies only to avoid a pre-deposit cannot be encouraged. Appeal Can't Be Dismissed Due To Non-Payment Of Pre-Deposit If Department's Portal Acknowledges Compliance: Bombay High Court Case Title: Delphi World Money vs. Union of India Case Number: Writ Petition No. 28914 of 2024 Observing that provisional acknowledgement automatically generated on Department portal shows that the requisite pre-deposit has been made, the Bombay High Court held that the Assessee had duly complied with the necessary pre-deposit required u/s 107(6) of the CGST Act. The...

Tax Weekly Roundup: November 18 - November 24, 2024

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