TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal grants waiver in related party transaction case, citing doctrine of merger</h1> The Tribunal granted total waiver of the duty, interest, and penalty amounting to Rs. 78,92,155 in the case involving related party transactions. The ... Doctrine of merger – Waiver of Pre-deposit – Held that:- Following P & B PHARMACEUTICALS LTD. Versus UNION OF INDIA [2011 (5) TMI 694 - GUJARAT HIGH COURT] - the Revenue cannot rely upon the earlier decision of the Tribunal as the same has been set aside by the Hon'ble Supreme Court in toto - The doctrine of merger would squarely attract and as such it is not permissible for the department to arise the contention that part of the order is still survive and can now rely upon - the applicants have made out a case for total waiver of the dues - The pre-deposit of the dues waived and recovery stayed till the disposal – stay granted. Issues:1. Application for waiver of pre-deposit of duty, interest, and penalty.2. Related party transactions leading to duty demand.3. Interpretation of earlier Tribunal and High Court decisions.4. Doctrine of merger and its applicability.5. Revenue's reliance on earlier Tribunal decision.6. Validity of demand based on Supreme Court decision.Analysis:The case involved an application for waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 78,92,155. The dispute arose from related party transactions where the goods manufactured by the applicants were sold by another entity, leading to a duty demand based on the selling price in the market. The adjudicating authority relied on an earlier Tribunal decision to establish the relationship between the applicants and the selling entity.The applicants contested the demand by highlighting a Supreme Court decision that set aside the earlier Tribunal's order in a similar case. Additionally, the Gujarat High Court ruled in the applicant's favor, emphasizing that the doctrine of merger applied, preventing the department from relying on the overturned Tribunal decision. Consequently, the applicants argued that the demand was not sustainable based on these legal precedents.On the other hand, the Revenue justified the demand by asserting that the Supreme Court decision only addressed the issue of limitation, not the related party aspect upheld by the Tribunal. They argued that the demand was valid as the Supreme Court did not overturn the Tribunal's findings regarding the relationship between the parties.In its decision, the Tribunal considered the conflicting interpretations of the earlier Tribunal decision and the subsequent Supreme Court and High Court rulings. It noted that the Gujarat High Court explicitly stated that the doctrine of merger applied, preventing the department from relying on the annulled Tribunal decision. Consequently, the Tribunal granted total waiver of the dues, citing the High Court's decision as the basis for allowing the appeal and staying the recovery of the amount in question.Ultimately, the Tribunal allowed the stay petition, emphasizing the legal principles established by the Gujarat High Court and the implications of the doctrine of merger in the present case. The decision highlighted the importance of legal precedent and the impact of higher court rulings on the interpretation and application of earlier decisions in tax matters.
TaxTMI 
TaxTMI 
