2023 - Case Laws

❯

❯❯

0 / 200

Expand Note

Add to Folder

No Folders have been created

Are you sure you want to delete "My most important" ?

NOTE:

Open Link

Case Laws

All › 2023

Showing Results for :

Reset Filters

Results Found:

Page of 948

Press 'Enter' after typing page number.

1181 to 1200 of 18959 Results

Show AI Text Quick Glance by AI Headnote

2023 (11) TMI 1245 - SC Order Indian Laws

AI TextQuick Glance (AI)Headnote

Supreme Court Dismisses Appeal; Petitioner's Right to Object Before Arbitral Tribunal Upheld; No Impact on IBC Proceedings.
The SCI dismissed the SLP, determining no need for intervention under Art. 136 of the Constitution. The petitioner retains the right to present objections before the Arbitral Tribunal. The contested order will not affect proceedings under the IBC, 2016. All pending applications are thereby disposed of.

No case for interference - judicial review under Article 136 of the Constitution - arbitral tribunal remedy - effect of judicial order on insolvency proceedings under the Insolvency and Bankruptcy Code, 2016No case for interference - judicial review under Article 136 of the Constitution - The Special Leave Petition under Article 136 is dismissed as there is no case for interference. - HELD THAT: - The Court, after hearing counsel, concluded that the matter did not warrant interference under Article 136. The order records that the petition does not meet the threshold for this extraordinary jurisdiction and therefore no relief can be granted in the Special Leave Petition.Special Leave Petition dismissed for lack of merit.Arbitral tribunal remedy - Petitioner is permitted to raise all permissible objections and contentions before the Arbitral Tribunal in accordance with law. - HELD THAT: - While the Court declined to entertain the SLP, it expressly left open the remedy before the Arbitral Tribunal, indicating that the petitioner may pursue all available objections and contentions in the arbitration process in accordance with applicable law.Petitioner may raise grievances before the Arbitral Tribunal; court's dismissal does not preclude arbitral remedies.Effect of judicial order on insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 - The impugned order and its confirmation will not affect the pending proceedings under the Insolvency and Bankruptcy Code, 2016. - HELD THAT: - The Court clarified that its dismissal and the impugned order (and confirmation thereof) are not to have any bearing on ongoing proceedings under the IBC, 2016. This protective clarification preserves the status of insolvency proceedings independently of the present decision.Impugned order/confirmation will not affect pending IBC proceedings.Final Conclusion: The Special Leave Petition is dismissed for want of merit; the petitioner remains free to press all permissible objections before the Arbitral Tribunal; and the impugned order and its confirmation shall have no effect on pending proceedings under the Insolvency and Bankruptcy Code, 2016.

2023 (11) TMI 1241 - ITAT JAIPUR Income Tax

AI TextQuick Glance (AI)Headnote

ITAT allows section 80G approval despite 2.5-month delay in Form 10AB filing for permanent registration
ITAT Jaipur allowed the appeal regarding denial of approval under section 80G despite a 2.5-month delay in filing Form 10AB application for permanent registration. The tribunal held that the assessee had provisional registration until A.Y. 2024-25 and complied with section 80G(5). Emphasizing that procedural provisions should aid justice rather than hinder it, and citing SC precedent that technicalities should not obstruct substantial justice, the tribunal directed CIT(A) to decide registration from the application filing date, allowing the appeal for statistical purposes.

Application for approval under section 80G(5) - time limit for filing proviso - Power of the tax authority to condone delay in filing statutory application - Effect of delay - rejection of application versus grant of approval from date of late application - Procedural provisions construed to subserve substantial justiceApplication for approval under section 80G(5) - time limit for filing proviso - Power of the tax authority to condone delay in filing statutory application - Whether the application for permanent registration under clause (iii) of the first proviso to sub section (5) of section 80G is non maintainable solely because it was filed after the prescribed time and whether the Commissioner (Exemptions) had power to condone the delay. - HELD THAT: - The Tribunal noted that the proviso prescribes the time for filing the application after provisional approval or commencement of activities, but that the assessee continued to hold provisional registration. The Bench accepted the proposition that procedural provisions should be construed to subserve substantial justice and that technicalities should not frustrate substantive rights. It distinguished the reliance placed on decisions concerning section 10(23C)(vi) as being factually and legally inapposite to section 80G(5). The Tribunal held that a mere delay of 2.5 months (from the extended filing date) did not automatically render the application liable to absolute rejection; where application is filed late, approval may properly be considered from the date of the application rather than rejecting it in toto. On this basis the Tribunal found that the Commissioner's blanket conclusion that no power existed to condone delay and therefore the application was non maintainable was not justified in the facts of the case.Delay in filing the Form 10AB did not mandate outright rejection; the Commissioner's conclusion that he lacked power to entertain the late application was not sustained on the facts.Effect of delay - rejection of application versus grant of approval from date of late application - Procedural provisions construed to subserve substantial justice - What relief is appropriate where an application for permanent registration under section 80G(5) is filed after the prescribed period but the institution satisfies substantive conditions and holds provisional registration. - HELD THAT: - The Tribunal observed that the assessee satisfied the substantive conditions of section 80G(5) and held provisional approval until AY 2024 25. Applying principles that procedural lapses should not defeat substantive justice, and having regard to precedents (as interpreted by the Tribunal) that late applications may be considered from the year of filing, the Bench directed that the claim for registration be reconsidered by the appellate authority. The Tribunal therefore did not itself grant permanent 80G approval, but directed reconsideration so that any approval, if merited, be effective from the date on which the application was filed.Directed the concerned authority to decide the application for registration under section 80G in accordance with law, at least from the date the assessee filed the application for permanent registration.Final Conclusion: The Tribunal allowed the appeal for statistical purposes, setting aside the rejection of the Form 10AB insofar as the Commissioner treated the late filing as an absolute bar, and directed the appellate authority to reconsider the application for registration under section 80G with effect from the date the application was filed.

2023 (11) TMI 1228 - JHARKHAND HIGH COURT Money Laundering

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether non-furnishing of the written grounds of arrest in terms of Section 19 of the Prevention of Money Laundering Act, 2002 vitiated the arrest and supported grant of bail; (ii) Whether, on the material collected, the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were satisfied and the allegations disclosed a prima facie case of money-laundering.

Issue (i): Whether non-furnishing of the written grounds of arrest in terms of Section 19 of the Prevention of Money Laundering Act, 2002 vitiated the arrest and supported grant of bail.

Analysis: Section 19 requires recording of reasons to believe in writing and informing the arrested person of the grounds of arrest. The Court applied the principle that mere reading over of the grounds is not enough and relied on the binding effect of the requirement that a written copy of the grounds be furnished to the arrested person. On that basis, non-compliance with the statutory safeguard was treated as a serious infirmity affecting the arrest.

Conclusion: The arrest was held to be vitiated for want of compliance with Section 19, which favoured the petitioner.

Issue (ii): Whether, on the material collected, the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 were satisfied and the allegations disclosed a prima facie case of money-laundering.

Analysis: The Court held that, at the bail stage, only a prima facie assessment is required. The materials were found insufficient to show that the petitioner had participated in forgery, manipulation of title deeds, or generation and laundering of proceeds of crime. The Court distinguished suspicion from reason to believe, noted the absence of material linking the petitioner to the scheduled offence or to any proceeds of crime, and held that the allegations did not satisfy the essential ingredients of money-laundering. It further considered the custody period, the stage of trial, and the absence of criminal antecedents while assessing the likelihood of reoffending.

Conclusion: The twin conditions under Section 45 were held to be satisfied in favour of the petitioner, and bail was granted.

Final Conclusion: The application for bail was allowed, with release ordered on conditions, because the arrest suffered from statutory non-compliance and the available material did not disclose a sufficient prima facie case of money-laundering against the petitioner.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, written furnishing of the grounds of arrest is a mandatory safeguard, and at the bail stage the court must assess only whether the available material discloses a prima facie case and reasonable grounds for believing that the accused is not guilty and will not reoffend.

Mandatory written grounds of arrest under PMLA and a prima facie bail test led to release on conditions.
Written furnishing of the grounds of arrest under Section 19 of the Prevention of Money Laundering Act, 2002 was treated as a mandatory safeguard, and mere oral communication was held insufficient; the non-compliance was found to vitiate the arrest. At the bail stage, the Court applied the Section 45 twin conditions on a prima facie basis and found the material inadequate to link the accused with forgery, title manipulation, proceeds of crime, or the scheduled offence. In the absence of material showing essential ingredients of money-laundering, and considering custody and other relevant factors, bail was granted on conditions.

Informing grounds of arrest and furnishing written copy - reason to believe and requirement of tangible material - prima facie satisfaction for grant of bail under Section 45(1)(ii) of PMLA - mens rea as an essential ingredient of offence under PMLA - proceeds of crime as prerequisite for offence of money laundering - prospective versus retrospective effect of judicial directionsInforming grounds of arrest and furnishing written copy - prospective versus retrospective effect of judicial directions - Compliance with Section 19(1) of PMLA - whether the Enforcement Directorate furnished the arrested person a written copy of the grounds of arrest and consequence of non compliance. - HELD THAT: - The court examined Section 19(1) and the ratio in Pankaj Bansal, holding that the statutory and constitutional purpose of informing an arrested person is not satisfied by merely reading out grounds; a written copy must be furnished. The use of the word "henceforth" in Pankaj Bansal was held not to restrict the ratio to future cases; the ratio that no arrest can be made without serving a copy applies to the present case as well. The court found non compliance by the Enforcement Directorate with the mandate to furnish a written copy of the grounds of arrest and concluded that this defect vitiates the arrest for the purposes of bail consideration. [Paras 13, 14]Arrest was vitiated by non compliance with Section 19(1); on this ground the petitioner is entitled to bail.Reason to believe and requirement of tangible material - prima facie satisfaction for grant of bail under Section 45(1)(ii) of PMLA - mens rea as an essential ingredient of offence under PMLA - proceeds of crime as prerequisite for offence of money laundering - Whether, on the materials before the court, the petitioner satisfies the twin limbs of Section 45(1)(ii) (reasonable grounds for believing he is not guilty and is not likely to commit an offence while on bail), and whether prima facie a case under Section 3 punishable under Section 4 of PMLA is made out. - HELD THAT: - The court applied the "tangible material" test for formation of "reason to believe" and noted that the prosecution complaint contains allegations that amount to suspicion rather than reasoned belief supported by live link material. Specific deficiencies identified included absence of material implicating the petitioner in forging title deeds, no allegation of procuring certified copies from the Registrar of Assurances by the petitioner, no material showing the petitioner participated in obtaining holding numbers by forging documents, and that the payment of a part sum was from the company's audited receipts. The court emphasised that mens rea is an essential element under PMLA and that without proceeds of crime there can be no money laundering; on the available record the allegations fall short of the essential ingredients of Section 3. Applying the principles governing Section 45 (as explained in Vijay Madanlal Choudhary and allied decisions), the court held that it need only form a prima facie view on broad probabilities and found that the petitioner has satisfied both limbs for grant of bail at this stage. [Paras 15, 16, 18, 19]On the prima facie material, no case under Section 3/4 PMLA is made out against the petitioner and the petitioner satisfies the conditions of Section 45(1)(ii); bail is therefore warranted subject to conditions.Final Conclusion: The petition is allowed: the petitioner is released on bail subject to conditions imposed by the Special Judge, CBI cum PMLA, Ranchi; the findings are tentative and will not prejudice trial court proceedings.

2023 (11) TMI 1423 - MADRAS HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether the criminal complaint alleging offence under Section 276C(1) of the Income-tax Act, 1961 was liable to be quashed on the ground that the seized amount pertained to a different assessment year and that the issue required factual determination at trial; (ii) Whether the Principal Director of Income-tax was competent to authorise initiation of prosecution and the complaint could be maintained by the respondent.

Issue (i): Whether the criminal complaint alleging offence under Section 276C(1) of the Income-tax Act, 1961 was liable to be quashed on the ground that the seized amount pertained to a different assessment year and that the issue required factual determination at trial.

Analysis: The complaint alleged seizure of cash during a search and the failure of the petitioner to disclose the amount in the return for the relevant assessment year. The contention that the amount related to another assessment year involved appreciation of facts, including the connection between the seized income, the return filed, and the assessment year in question. The existence and attribution of the income, including the effect of the settlement proceedings, were matters that could not be conclusively determined in quashing jurisdiction and required adjudication by the trial court.

Conclusion: The complaint was not liable to be quashed on this ground and the issue was left to be decided in trial.

Issue (ii): Whether the Principal Director of Income-tax was competent to authorise initiation of prosecution and the complaint could be maintained by the respondent.

Analysis: The definition of "Commissioner" in Section 2(16) of the Income-tax Act, 1961 was held to include a Principal Director of Income-tax. On that basis, the Principal Director was competent to authorise prosecution, and the challenge to the respondent's competence to lodge the complaint was rejected.

Conclusion: The Principal Director of Income-tax was competent to authorise prosecution and the complaint was maintainable.

Final Conclusion: No ground was made out for interference with the criminal proceedings, and the petition for quashing was rejected, leaving the trial court to decide the case on merits in accordance with law.

Ratio Decidendi: A quashing petition will not be entertained where the challenge turns on disputed factual questions requiring trial, and the statutory definition of Commissioner includes the Principal Director of Income-tax for purposes of authorising prosecution.

Quashing of tax prosecution refused where disputed assessment-year facts required trial and prosecution was validly authorised.
A quashing petition challenging a prosecution under Section 276C(1) of the Income-tax Act was declined because the plea that the seized cash related to another assessment year turned on disputed factual questions, including the link between the seizure, the return filed and the relevant year, which had to be tested at trial. The court also held that the statutory definition of "Commissioner" includes a Principal Director of Income-tax, so that officer was competent to authorise prosecution and the complaint was maintainable. No ground for interference with the criminal proceedings was made out.

Cognizance for the offence u/s 276C(1) - authorized officer to sanction prosecution for the offence u/s 276C(1) - criminal proceedings for failure to disclose income - cash found in search which petitioner deposed as unaccounted income earned through various activities like mediating for contracts, working as commissions agent for various transactions with government during the financial year 2016-17 - assessee filed nil income for the assessment year 2017-18. As per petitioner contention the said income was not pertaining to the assessment year 2017-18 and it was pertaining to the assessment year 2016-17. In fact, settlement application has been filed before the Settlement Commissioner and the same was duly accepted by the Settlement Commissioner HELD THAT:- The complaint has been filed for non showing the income for the assessment year 2017-18. If the complaint has been filed for the assessment year 2016-17, then the petitioner easily would have taken a stand that the seized money was the income from the assessment year 2017-18. It is also evident from the settlement application submitted by the petitioner. The complaint was filed in the month of June, 2018. Whereas the petitioner filed settlement application before the Settlement Commissioner only on 07.12.2018. Therefore, the petitioner conveniently had taken stand that the seized amount was pertaining to the income for the assessment year 2016-17. As rightly pointed out by the learned Special Public Prosecutor, even assuming that the seized money was the income for the assessment year 2016-17, it has to be proved before the trial Court during the trial. Insofar as the competency is concerned, as per Section 2(16) of the Income Tax Act, the word “Commissioner” has been defined to include a person appointed as Principal Director of Income-tax. Therefore, the Principal Director of Income Tax is a competent to authorize the respondent to initiate prosecution. Thus, this Court finds no grounds to quash the proceeding pending on the file of the learned Additional Chief Metropolitan Magistrate.

2023 (12) TMI 1136 - KARNATAKA HIGH COURT GST

AI TextQuick Glance (AI)Headnote

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

1. Whether the petitioner's failure to include GSTIN on invoices justifies the denial of tax exemption under Notification No. 12/2017 dated 28.06.2017.

2. Whether the petitioner's services qualify as intra-state or inter-state supplies under the IGST Act, considering the absence of GSTIN and PAN on invoices.

3. Whether the petitioner is entitled to a refund of the pre-deposit made during the appellate proceedings.

ISSUE-WISE DETAILED ANALYSIS

1. Denial of Tax Exemption Due to Absence of GSTIN

Relevant Legal Framework and Precedents:

The legal framework involves Notification No. 12/2017, which provides tax exemptions for services where the expenditure is borne by the Central or State Government. The CGST/KGST Act, 2017, and the IGST Act, 2017, govern the requirements for tax invoices, including the necessity of GSTIN.

Court's Interpretation and Reasoning:

The Court noted that the absence of GSTIN on invoices was a significant factor in denying the exemption. However, the Court emphasized that the exemption's applicability should also consider the nature of the services and the funding source.

Key Evidence and Findings:

The petitioner provided training services to defense establishments, which were funded by government entities. The invoices lacked GSTIN, leading to the denial of exemption.

Application of Law to Facts:

The Court opined that the failure to include GSTIN should not automatically result in exemption denial, especially if the petitioner can later demonstrate compliance with exemption conditions.

Treatment of Competing Arguments:

The petitioner argued that the absence of GSTIN should not negate the exemption if other conditions are met. The respondents contended that GSTIN is essential for determining the place of supply and eligibility for exemption.

Conclusions:

The Court concluded that the third respondent must reconsider the exemption eligibility, considering the petitioner's ability to provide GSTIN and demonstrate government funding.

2. Determination of Intra-state vs. Inter-state Supply

Relevant Legal Framework and Precedents:

Section 12(5) of the IGST Act determines the place of supply based on the recipient's location. The absence of GSTIN and PAN influences whether a supply is classified as intra-state or inter-state.

Court's Interpretation and Reasoning:

The Court highlighted that the absence of GSTIN led to the classification of services as intra-state, impacting the tax liability under KGST/CGST instead of IGST.

Key Evidence and Findings:

The petitioner provided services to establishments in various states, but the lack of GSTIN on invoices resulted in the classification of supplies as intra-state.

Application of Law to Facts:

The Court considered whether the petitioner's services should be deemed inter-state, given the defense establishments' locations and the services' nature.

Treatment of Competing Arguments:

The petitioner argued for inter-state classification, while the respondents maintained that the absence of GSTIN necessitated intra-state classification.

Conclusions:

The Court determined that the classification should be re-evaluated, considering the petitioner's ability to provide GSTIN and the services' nature.

3. Entitlement to Refund of Pre-deposit

Relevant Legal Framework and Precedents:

The CGST/KGST Act outlines the conditions for refunds, including pre-deposits made during appeals.

Court's Interpretation and Reasoning:

The Court did not explicitly address the refund entitlement but implied that the reconsideration of tax liability could impact the pre-deposit status.

Key Evidence and Findings:

The petitioner made a pre-deposit of 10% of the disputed amount during the appeal process.

Application of Law to Facts:

The Court's decision to remand the case for reconsideration suggests potential adjustments to the pre-deposit based on the final tax liability determination.

Treatment of Competing Arguments:

The petitioner sought a refund, while the respondents focused on the procedural correctness of the initial tax assessments.

Conclusions:

The entitlement to a refund will depend on the outcome of the reconsideration by the third respondent.

SIGNIFICANT HOLDINGS

The Court held:

"The petition is allowed-in-part and the impugned order-in-appeal dated 30.09.2023 is quashed and the proceedings are restored to the third respondent to reconsider the merits of the petitioner's response in the light of this Court's observation."

Core Principles Established:

The necessity of GSTIN on invoices should not automatically negate tax exemptions if other exemption conditions are met and can be demonstrated subsequently.

Final Determinations on Each Issue:

The Court quashed the impugned orders and remanded the case for reconsideration, emphasizing the need to evaluate the petitioner's eligibility for exemptions and the classification of services based on the newly provided GSTIN information.

GST exemption for defense training services restored after authorities failed to justify denial despite missing GSTIN details
The Karnataka HC partially allowed a petition challenging a GST recovery notice for training services provided to defense establishments. The petitioner imported bulk simulator training services for helicopter pilots from Indian Air Force, Army, Navy and other defense establishments across Delhi, Jharkhand and Uttar Pradesh. Tax authorities denied exemption benefits due to absence of GSTIN and PAN details in invoices, despite the services being exempt. The HC found that authorities failed to adequately consider whether missing GSTIN details justified denial of exemption, given the peculiar circumstances and exempt nature of training services. The recovery notice dated 17.10.2023 was quashed and proceedings restored for reconsideration.

Denial of exemption for failure to mention GSTIN on tax invoice - place of supply under Section 12(5) of the IGST Act - exemption for services to Central/State Government under Notification No.12/2017 dated 28.06.2017 - mandatory particulars on tax invoice / bill of supply - reopening and reconsideration of assessment on furnishing of GSTIN post noticeDenial of exemption for failure to mention GSTIN on tax invoice - mandatory particulars on tax invoice / bill of supply - Quashing of the order-in-appeal and recovery notice insofar as they sustained demand without examining whether failure to mention the recipient's GSTIN justified denial of exemption - HELD THAT: - The High Court found that the appellate authority concluded that absence of GSTIN on invoices rendered them non-compliant with GST invoicing requirements and, on that basis, denied exemption. The Court held that, given the peculiar facts that the recipients were government/defence establishments outside Karnataka and the supplies (training services) were undisputedly exempt under the Notification No.12/2017, the appellate authority ought to have examined whether non-mention of GSTIN alone could lawfully justify denial of the exemption. The Court emphasised that the question of denial could not be sustained without considering whether the necessary details and the nature of sponsorship by the Central/State Government established entitlement to the exemption, and that the authorities had not carried out that inquiry before upholding the demand. For these reasons the appellate order and consequential recovery notice were quashed to the extent they rested on the observed omission without the requisite adjudication of entitlement to exemption.Impugned order-in-appeal dated 30.09.2023 and recovery notice dated 17.10.2023 quashed in part; appellate order set aside for failure to examine whether omission of GSTIN justified denial of exemption.Place of supply under Section 12(5) of the IGST Act - reopening and reconsideration of assessment on furnishing of GSTIN post notice - exemption for services to Central/State Government under Notification No.12/2017 dated 28.06.2017 - Remand to the appellate authority to reconsider on merits whether exemption applies where GSTIN was not initially furnished but may be demonstrable subsequently and whether services were fully funded by Central/State Government - HELD THAT: - The Court directed that on restoration of the proceedings the appellate authority must reassess the claim by considering the actual place of supply in light of Section 12(5) of the IGST Act and by verifying any GSTIN details or other documentary evidence subsequently furnished by the petitioner. The authority is required to decide whether the supplies to defence and government establishments-if shown to be sponsored and borne entirely by the Central or State Government-fall within the exemption under Notification No.12/2017 and whether post-facto production of GSTIN or PAN/TAN affects the entitlement. The Court remanded the matter for fresh consideration of these factual and legal aspects rather than deciding them itself.Proceedings restored to the third respondent for fresh adjudication of entitlement to exemption and determination of place of supply after considering any GSTIN or supporting material now furnished.Final Conclusion: Petition allowed in part: the High Court quashed the impugned appellate order and the recovery notice to the extent they were sustained without examining whether omission of GSTIN justified denial of exemption, and restored the matter to the appellate authority for fresh consideration of the petitioner's entitlement to exemption (including any GSTIN furnished and whether the services were borne by Central/State Government) for the tax periods 2018-19 to 2021-22.

2023 (12) TMI 983 - MADRAS HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Reassessment notice set aside as petitioner admitted receiving land sale proceeds in 2015, not 2017-18
Madras HC set aside reassessment notice and assessment order for AY 2017-18 regarding capital gains from land sale. Petitioner executed power of attorney and claimed entire sale consideration was received on 16.12.2015, before the relevant assessment year. Court accepted petitioner's admission that sale proceeds were received in 2015, making AY 2017-18 assessment invalid. However, court clarified that if petitioner changes stance, revenue authorities can initiate fresh proceedings. Matter remains pending before appellate authority for AY 2016-17 to determine actual receipt date of sale consideration.

Reopening of assessment under Section 148 - chargeability of capital gains based on date of receipt - operation of Section 50C in computation of capital gains - protective assessment - principles of natural justiceReopening of assessment under Section 148 - chargeability of capital gains based on date of receipt - principles of natural justice - Validity of the notice dated 31.03.2022 under Section 148 and the consequent assessment order dated 29.03.2022 for AY 2017-18 - HELD THAT: - The Court held that the re-opening and assessment for AY 2017-18 were unsustainable because the petitioner admitted that the entire sale consideration was received on 16.12.2015. Receipt of the sale consideration on that date renders the income chargeable to AY 2016-17 and not AY 2017-18; merely executing a sale deed later by the power of attorney holder does not create a fresh liability for AY 2017-18. Having accepted the petitioner's stand (both orally and by affidavit), the Court found the impugned notice and assessment liable to be set aside. The Court also noted the contention regarding issuance of a show-cause/draft assessment and natural justice, and disposed the proceedings by setting aside the impugned notice and order. [Paras 7, 8, 9]Impugned notice dated 31.03.2022 and assessment order dated 29.03.2022 for AY 2017-18 set aside.Operation of Section 50C in computation of capital gains - protective assessment - chargeability of capital gains based on date of receipt - Proceedings in respect of AY 2016-17 to be examined by the appellate authority with regard to date of receipt and computation of capital gains - HELD THAT: - The Court observed that the Revenue contested valuation and invoked market value under Section 50C while asserting a larger capital gain, and that assessment/appeal for AY 2016-17 is pending. Given the petitioner's admission that consideration was received on 16.12.2015, the Court left open the question of taxability for AY 2016-17 and directed that the appellate authority consider the issue of receipt of sale consideration and compute capital gains for AY 2016-17 accordingly. The Court recognised that assessments for both years had been framed, in part, to protect revenue interest, but refused to sustain the reassessment for AY 2017-18 where the petitioner had admitted receipt earlier. [Paras 9]Appellate authority shall decide the pending appeal for AY 2016-17 taking into account the receipt of sale consideration; respondents remain free to initiate proceedings if the petitioner later takes a different stand.Final Conclusion: Writ petition allowed; notice dated 31.03.2022 and assessment order dated 29.03.2022 for AY 2017-18 set aside. The appellate authority is directed to consider the question of receipt of sale consideration and computation of capital gains in the pending appeal for AY 2016-17; respondents may act if the petitioner alters her stand in future.

2023 (12) TMI 551 - KERALA HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Court Dismisses Petition Challenging TDS Late Fee Due to 10-Year Delay; Upholds Section 234E of Income Tax Act.
The HC dismissed the writ petition challenging late fee intimations for not filing TDS statements on time, citing an inordinate delay of over ten years in filing the petition. The court upheld the applicability of Section 234E of the Income Tax Act, 1961, which imposes a late fee for such delays, as it was the law in effect when the notices were issued. The court rejected arguments based on subsequent amendments, affirming that the law at the time of notice issuance governs the case.

Late fee under Section 234E - failure to deliver statement under Section 200(3) - retrospective effect of statutory amendment - laches and inordinate delay in writ petitionsLaches and inordinate delay in writ petitions - Writ petition dismissed for inordinate delay and laches in challenging intimations issued in 2013 and 2016. - HELD THAT: - The Court found that the petitioner approached the High Court more than ten years after the intimations in Exhibits P-1 to P-5 were issued (in 2013 and 2016). The delay and laches in bringing the challenge were held to be a sufficient ground for dismissal. The Court treated the prolonged unexplained delay as fatal to the petition's maintainability and concluded that the writ petition was liable to be dismissed on this ground. [Paras 1, 4]The writ petition is dismissed on the ground of gross delay and laches.Late fee under Section 234E - failure to deliver statement under Section 200(3) - retrospective effect of statutory amendment - Validity of intimations for late fee under Section 234E and rejection of the petitioner's contention based on a subsequent amendment to Section 200A. - HELD THAT: - The Court examined the legal position prevailing on the dates when the intimations were issued and held that Section 234E, inserted by the Finance Act, 2012 with effect from 01.07.2012, governed levy of late fee for failure to deliver the statement within the time prescribed by Section 200(3). The petitioner's submission that an amendment to Section 200A effective from 01.06.2015 rendered the intimations incorrect was rejected because subsequent amendments without retrospective effect cannot be applied to notices issued earlier. The determinative legal standard was the law existing on the date of issuance of the intimations, namely Section 234E. [Paras 2, 3, 4]The intimations charging late fee under Section 234E were valid as per the law in force when issued; the contention based on the later amendment to Section 200A is rejected.Final Conclusion: The writ petition challenging intimations for late fee relating to Assessment Year 2012-13 is dismissed both for inordinate delay and on merits: the late fee under Section 234E was leviable as per the law in force when the notices were issued, and a subsequent non retrospective amendment does not affect those intimations.

2023 (12) TMI 528 - MADRAS HIGH COURT Money Laundering

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether prosecution under the Prevention of Money Laundering Act, 2002 could proceed when the alleged predicate offence had been notified as a scheduled offence only later. (ii) Whether prosecution for possession of disproportionate assets under the Prevention of Corruption Act, 1988 and prosecution for money-laundering under the Prevention of Money Laundering Act, 2002 amounted to double jeopardy or subsumption of one offence within the other. (iii) Whether the Special Court was required to conduct an inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 before issuing summons on a complaint under the Prevention of Money Laundering Act, 2002. (iv) Whether a certificate for appeal to the Supreme Court was warranted.

Issue (i): Whether prosecution under the Prevention of Money Laundering Act, 2002 could proceed when the alleged predicate offence had been notified as a scheduled offence only later.

Analysis: The offence of money-laundering is an independent offence concerned with the process or activity connected with proceeds of crime. The relevant date is the date on which the person indulges in or continues to indulge in dealing with such proceeds, and not the date on which the scheduled offence was committed. The question whether the accused dealt with the proceeds of crime is a factual matter for trial.

Conclusion: The prosecution was maintainable and the issue was not fit for discharge at the threshold.

Issue (ii): Whether prosecution for possession of disproportionate assets under the Prevention of Corruption Act, 1988 and prosecution for money-laundering under the Prevention of Money Laundering Act, 2002 amounted to double jeopardy or subsumption of one offence within the other.

Analysis: The ingredients of the two offences are distinct. Possession of disproportionate assets may be complete even if the illegal money has been spent, whereas money-laundering is made out when a person directly or indirectly attempts to indulge in, assists in, or is actually involved in a process or activity connected with proceeds of crime and projects it as untainted property. The two enactments operate in different fields and one is not subsumed in the other.

Conclusion: The plea of double jeopardy was rejected and the two prosecutions were held to be distinct.

Issue (iii): Whether the Special Court was required to conduct an inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 before issuing summons on a complaint under the Prevention of Money Laundering Act, 2002.

Analysis: The Special Court under the Prevention of Money Laundering Act, 2002 is empowered to take cognizance directly on a complaint by the authorised authority. Since cognizance is not taken by a Magistrate and there is no committal process, the procedure under Section 202(2) of the Code of Criminal Procedure, 1973 does not apply. The authorities relied on by the petitioner were held to be in a different context.

Conclusion: No mandatory inquiry under Section 202(2) of the Code of Criminal Procedure, 1973 was required before issuance of summons.

Issue (iv): Whether a certificate for appeal to the Supreme Court was warranted.

Analysis: The questions raised were already covered by binding Supreme Court authority, and the cited decision on benami property was found factually inapplicable. No unanswered substantial question of law arose for certification.

Conclusion: The request for a certificate for appeal was declined.

Final Conclusion: The revision and original petition were held to be without merit, and the connected miscellaneous petitions were closed.

Ratio Decidendi: Money-laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence based on dealing with proceeds of crime, and a Special Court under that Act may take cognizance directly without the Section 202(2) inquiry applicable to committal-based proceedings before a Magistrate.

Money-laundering is an independent offence; later scheduling of the predicate offence and Section 202 inquiry do not bar prosecution.
Money-laundering under the Prevention of Money Laundering Act, 2002 is an independent and continuing offence concerned with dealing in proceeds of crime, so prosecution may proceed even if the predicate offence was notified as a scheduled offence later, and the relevant date is when the accused dealt with the proceeds. Possession of disproportionate assets under the Prevention of Corruption Act, 1988 and money-laundering under the PMLA have distinct ingredients and operate in different fields, so a double jeopardy objection does not arise. A Special Court under the PMLA may take cognizance directly on a complaint by the authorised authority, and Section 202(2) CrPC inquiry is not mandatory before issuing summons.

Offence of money-laundering as independent offence - Proceeds of crime - Continuing offence - Double jeopardy not attracted between PC Act and PMLA offences - Special Court may take cognizance without committal - Section 44 PMLA overrides CrPC cognizance/committal procedure - Section 202(2) Cr.P.C. inapplicable to PMLA complaintsOffence of money-laundering as independent offence - Proceeds of crime - Continuing offence - Petitioner liable to be prosecuted under Section 3 of PMLA notwithstanding that the predicate offence was committed earlier, subject to factual determination whether he dealt with proceeds of crime after notification as a scheduled offence. - HELD THAT: - The Court applied the principle that the offence under Section 3 of the PMLA is an independent offence concerned with processes or activities connected with the proceeds of crime (concealment, possession, acquisition, use, or projecting as untainted property). The relevant date is when the respondent indulges in the process or activity connected with proceeds of crime; consequently even if the predicate criminal activity occurred earlier, continuing possession or dealing with proceeds after the relevant notification may attract PMLA liability. Whether the petitioner in the present facts has indulged in such dealing is a question of fact for trial. [Paras 8]PMLA prosecution under Section 3 is not barred merely because the predicate offence pre-dates its scheduling; factual inquiry at trial is required to determine dealing with proceeds.Double jeopardy not attracted between PC Act and PMLA offences - Prosecution under Section 3 of PMLA in addition to prosecution under Section 13(1)(e) of the PC Act does not amount to double jeopardy. - HELD THAT: - The Court held that the ingredients of the offence under Section 13(1)(e) of the PC Act (possession of disproportionate assets and inability to account) are different from the ingredients of Section 3 of the PMLA (process or activity connected with proceeds of crime). A public servant may be guilty under the PC Act even if illegally spent money is exhausted, whereas PMLA targets dealing with proceeds of crime and continuing possession or concealment. Given the distinct statutory elements, prosecuting under both statutes is not prohibited as double jeopardy. [Paras 9]The plea of double jeopardy is untenable; the two offences are distinct and separate.Certificate for appeal under Article 134A refused - Request for a certificate to appeal to the Supreme Court under Article 134A(b) was refused. - HELD THAT: - The Court refused to grant a certificate for appeal because the legal question relied upon by the petitioner is already covered by the Supreme Court's decision in Vijay Madan Lal Choudhary and a pending review petition does not justify issuance of a certificate. The purported conflict with the decision in Ganpati Dealcom was held not to be a comparable or conflicting precedent in the facts of this case. [Paras 10]No certificate for appeal under Article 134A(b) issued; petition does not raise an unanswered substantial question of law.Special Court may take cognizance without committal - Section 44 PMLA overrides CrPC cognizance/committal procedure - Section 202(2) Cr.P.C. inapplicable to PMLA complaints - Summons and proceedings by the Special Court under PMLA do not require a prior inquiry under Section 202(2) Cr.P.C.; Section 44 of PMLA permits Special Courts to take cognizance without committal. - HELD THAT: - The Court examined Section 44 of the PMLA and concluded it is an exception to the general cognizance/committal scheme under the Cr.P.C. A Special Court constituted under the PMLA may take cognizance of an offence under Section 3 on complaint by an authorized authority without committal, and shall try offences in accordance with Cr.P.C. as applied to a Sessions Court. Therefore the proviso to Section 202(2) Cr.P.C., which contemplates Magistrate-stage inquiry and production/examination of witnesses when cognizance is by a Magistrate for a Sessions-triable offence, has no application where the Special Court itself takes cognizance under the PMLA scheme. [Paras 13, 14, 18]No obligation to conduct a Section 202(2) Cr.P.C. inquiry before issuing summons in a complaint taken cognizance of by a PMLA Special Court; the Criminal Original Petition challenging summons is dismissed.Final Conclusion: Both the Criminal Revision Case and Criminal Original Petition are dismissed: (i) prosecution under Section 3 PMLA is maintainable subject to trial-level factual determination of dealing with proceeds; (ii) double jeopardy does not bar concurrent proceedings under the PC Act and PMLA; (iii) no certificate for appeal to the Supreme Court is granted; and (iv) Section 202(2) Cr.P.C. inquiry is inapplicable to complaints cognizable by a PMLA Special Court under Section 44, hence summons are sustained.

2023 (12) TMI 222 - MADRAS HIGH COURT Income Tax

AI TextQuick Glance (AI)Headnote

Issues Involved:
The issues involved in this case pertain to challenging a Notice dated 16.03.2022 and subsequent orders dated 31.03.2022 and 28.03.2023 issued by the respondents. The main contentions revolve around the petitioner's request for the statement and documents relied upon by the respondents, as well as the opportunity to cross-examine a key individual, Naresh Jain.

Request for Statement and Documents:
The petitioner's counsel argued that the proceedings against the petitioner were solely based on the statement of Naresh Jain, yet the relevant documents were not provided to the petitioner. The petitioner sought a direction from the Court to compel the respondents to furnish the said statement and documents for review.

Opportunity for Cross-Examination:
Furthermore, the petitioner requested an opportunity to cross-examine Naresh Jain, emphasizing that the proceedings were initiated based on his statement. The petitioner contended that without such an opportunity, the fairness of the proceedings would be compromised.

Legal Considerations and Response:
The Senior Standing Counsel for the respondent argued that the reliance on documents obtained from various sources based on Naresh Jain's statement rendered cross-examination unnecessary, citing legal precedent from Telestar Travel Pvt Ltd vs. Special Director of Enforcement (2013) 9 SCC 549. The respondent assured that the relevant documents would be provided to the petitioner.

Court's Analysis and Decision:
After considering the submissions from both parties and examining the materials on record, the Court noted that the respondent primarily relied on documents sourced from Naresh Jain's statement. The Court concluded that the petitioner was entitled to receive copies of these documents to prepare a detailed reply.

Final Order:
The Court set aside the impugned order dated 28.03.2023 and remitted the matter back to the respondent for re-consideration. The respondent was directed to provide the relied-upon documents to the petitioner within 30 days, after which the petitioner was instructed to file a reply. Subsequently, the respondent was to pass an appropriate order after a personal hearing for the petitioner. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed accordingly.

Petitioner entitled to receive all documents obtained from witness statement despite respondent's claim of non-reliance on oral testimony
The HC held that the petitioner was entitled to receive copies of documents obtained based on a witness statement, even though the respondent claimed not to rely on the oral statement itself but only on documents derived from it. In proceedings concerning bogus LTCG through penny stock transactions, the court found that since the respondent relied on documents obtained from various sources based on the witness statement, the petitioner must be provided these documents to enable filing a detailed reply. The respondent's counsel acknowledged that some relied-upon documents had not been provided and agreed to furnish them promptly.

Right to receive documents relied upon - cross-examination unnecessary where oral statement not relied upon - remand for reconsideration after disclosure and hearing - opportunity of personal hearingRight to receive documents relied upon - Petitioner entitled to copies of documents obtained from various sources based on the statement of Naresh Jain which were relied upon in the assessment proceedings. - HELD THAT: - The Court found that the respondents had relied upon documents collected from various sources on the basis of the oral statement of Naresh Jain and that some of those documents were not furnished to the petitioner. Furnishing those documents is necessary to enable the petitioner to file a detailed reply. The learned Senior Standing counsel for the respondent conceded that certain relied-upon documents were not provided and undertook to supply them. In these circumstances the Court concluded that the petitioner must be supplied the documents obtained based on Naresh Jain's statement so that she may meaningfully respond before any final order is passed. [Paras 12, 13]Respondent directed to provide the documents obtained from various sources based on the statement of Naresh Jain to the petitioner within 30 days.Cross-examination unnecessary where oral statement not relied upon - Cross-examination of Naresh Jain was not necessary where the authorities did not rely upon his oral statement but on documents obtained as a consequence of that statement. - HELD THAT: - The Court recorded the parties' submissions and referred to the principle in Telestar Travel Pvt. Ltd. v. Special Director of Enforcement that where an oral statement is not utilized as evidence, cross-examination of the declarant is not required. The respondents asserted that they relied upon documentary material corroborating the information derived from the statement and did not depend on the oral statement itself. The petitioner accepted that if only documents are relied upon, cross-examination is not required, but sought disclosure of those documents. The Court accepted that cross-examination of Naresh Jain was not necessary in the circumstances. [Paras 9, 10, 11]Court held that cross-examination of Naresh Jain was not required where the oral statement was not relied upon as evidence.Remand for reconsideration after disclosure and hearing - opportunity of personal hearing - Impugned assessment order dated 28.03.2023 set aside and remitted for fresh consideration after furnishing of documents and opportunity for the petitioner to reply and for personal hearing. - HELD THAT: - Having directed disclosure of the relied-upon documents, the Court remitted the matter to the respondent to reconsider the impugned order. The petitioner was required to file a detailed reply within 30 days of receiving the documents, failing which consequences against her would follow. Thereafter the respondent was directed to pass an appropriate order in accordance with law after providing the petitioner a personal hearing. The Court expressly confined its order to setting aside and remitting the impugned assessment order dated 28.03.2023 and declined to express views on other reliefs sought in the petition. [Paras 13]Impugned order dated 28.03.2023 set aside and remitted to the respondent for reconsideration after disclosure, filing of reply by the petitioner, and a personal hearing.Final Conclusion: Impugned assessment order dated 28.03.2023 is set aside and remitted for fresh consideration; respondents to furnish relied-upon documents obtained from sources based on Naresh Jain's statement within 30 days; petitioner to file reply within 30 days thereafter; respondent to pass appropriate order after providing personal hearing.

2023 (12) TMI 159 - MADRAS HIGH COURT GST

AI TextQuick Glance (AI)Headnote

Tax Appeal Granted: Partial Bank Account Unfreeze Allows Petitioner to Challenge Demand and File Statutory Appeal Within 4 Weeks
HC allowed petitioner's appeal against tax demand, granting liberty to file statutory appeal before Deputy Commissioner within 4 weeks. Court directed partial bank account unfreeze, permitting 10% withdrawal to facilitate appeal filing. Interim relief provided without imposing costs, addressing ITC recovery demand and related penalty concerns under TNGST Act.

Recovery of input tax credit and penalty under Section 73 of the TNGST Act - statutory appeal - entertain appeal and decide on merits - freezing of bank account - interim withdrawal for filing appealStatutory appeal - entertain appeal and decide on merits - Petition disposed of with liberty to the petitioner to file the statutory appeal and direction to the Deputy Commissioner to entertain and decide the appeal on merits. - HELD THAT: - The writ petition challenging the order confirming demand of recovery of input tax credit, interest and penalty was not adjudicated on merits by this Court because the petitioner has an available statutory remedy. The petition is therefore disposed of by granting the petitioner four weeks' time to file the statutory appeal before the Deputy Commissioner, Tirunelveli. Upon filing within the stipulated period the Deputy Commissioner is directed to admit and adjudicate the appeal on its merits without being influenced by the pendency of this writ petition.Writ petition disposed; petitioner permitted to file statutory appeal within four weeks and Deputy Commissioner directed to entertain and decide the appeal on merits.Freezing of bank account - interim withdrawal for filing appeal - The question of freezing of the petitioner's bank account is to be decided by the Deputy Commissioner, with an interim direction permitting limited withdrawal for filing the appeal. - HELD THAT: - The Court declined to decide the legality or propriety of the bank account freeze and remitted that issue to the Deputy Commissioner for determination in the course of the statutory appeal or separate proceedings before him. As an interim, facilitative measure to enable the petitioner to prosecute the statutory appeal, the Deputy Commissioner is authorised to permit the petitioner to withdraw 10% of the amount required for filing the appeal from the frozen bank account within four weeks. This interim permission is limited to enabling the filing of the appeal and does not constitute an adjudication on the merits of the freezing.Freezing of bank account remitted to the Deputy Commissioner for decision; interim permission to withdraw 10% for filing the appeal within four weeks.Final Conclusion: The writ petition is disposed of by permitting the petitioner to file the statutory appeal within four weeks; the Deputy Commissioner, Tirunelveli, shall entertain and decide the appeal on merits. The issue of the frozen bank account is remitted to the Deputy Commissioner, who may, as an interim measure, permit a 10% withdrawal from the account to enable filing of the appeal. No costs.

2023 (12) TMI 1107 - KARNATAKA HIGH COURT Central Excise

AI TextQuick Glance (AI)Headnote

Adjustment of excess pre-deposit under the Sabka Vishwas Scheme was permitted against another pending legacy demand.
Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, an excess pre-deposit made by the same declarant against one demand could be adjusted against liability under another pending demand relating to the same subject matter, because the Scheme contained no express bar on such adjustment. The Court relied on the departmental circular stating that deposits made during enquiry, investigation, audit, or appellate proceedings may be deducted or adjusted while computing the amount payable. Since the declarant sought adjustment, not refund, the excess deposit was treated as available for set-off against the second demand.

Adjustment of excess pre-deposit - Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDR) - no refund under SVLDR - mutual adjustment across assessment periods - administrative circular clarification - strict construction of fiscal statutesAdjustment of excess pre-deposit - mutual adjustment across assessment periods - Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDR) - Whether excess pre-deposit made by the declarant in relation to one period could be adjusted towards a demand for another period under the SVLDR framework. - HELD THAT: - The Court held that the petitioner, having availed the relief under SVLDR for the earlier period and thereby resulting in an excess pre-deposit, was entitled to have that excess adjusted against a subsequent demand for a different period. Although SVLDR and its rules do not provide for refund of excess deposits, the absence of an express prohibition on consolidating declarations or on adjusting amounts between demands for the same declarant and same subject matter meant that such mutual adjustment could not be disallowed. The court placed weight on the administrative clarification which recognized that amounts paid as deposits or pre-deposits that could not be appropriated earlier may be deducted/adjusted when issuing the statement indicating the amount payable by the declarant. The tribunal and departmental orders confirming demands for different periods did not preclude adjustment of an excess arising under SVLDR in respect of the earlier period towards the later reduced demand. [Paras 8, 9, 10]Excess pre-deposit attributable to the declared SVLDR liability for 2011 - 2015 could be adjusted against the subsequent demand for 16.09.2015 to 30.06.2017; the writ court's direction to adjust and issue a discharge certificate was upheld.No refund under SVLDR - administrative circular clarification - strict construction of fiscal statutes - Whether the fact that SVLDR rules do not provide for refund precludes administrative adjustment of excess deposits across periods. - HELD THAT: - The Court recognized that Rule 130(1)(b) of the SVLDR Rules does not permit refund, and that principle of strict construction of fiscal statutes is a relevant interpretive guideline. However, the Court found that the explicit bar on refund did not automatically forbid administrative adjustment of excess deposits when an assessee did not seek refund but only sought appropriation against another liability. The departmental circular (No. 1074/07/2019-CX dated 12.12.2019) clarified that deposits made after show cause notice but prior to adjudication, which remain unappropriated due to pendency, may be deducted/adjusted when issuing the statement of amount payable. In these circumstances, and given absence of a specific statutory prohibition on mutual adjustment between periods for the same declarant and commodity, the court concluded adjustment was permissible despite no refund provision. [Paras 8, 9, 10]Absence of an express refund mechanism in SVLDR does not preclude administrative adjustment of excess deposits across periods where the declarant seeks appropriation rather than refund; the departmental clarification supports such adjustment.Final Conclusion: Writ appeal dismissed; the High Court's order directing adjustment of the excess amount deposited under SVLDR against the subsequent demand and issuance of a discharge certificate is upheld, and the interim order granted earlier stands vacated.

2023 (11) TMI 1435 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI Customs

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether loading, unloading, handling and transportation charges incurred at the overseas load port and transportation up to the Indian discharge port are includible in the assessable value on clearance from FTWZ to DTA; (ii) Whether loading, unloading, handling charges and transportation costs incurred at the Indian seaport/airport for moving goods from the seaport/airport to the FTWZ are includible in the assessable value on clearance from FTWZ to DTA; (iii) Whether charges incurred at FTWZ (including rent, unloading, loading charges, etc.) are includible in the assessable value on clearance from FTWZ to DTA.

Issue (i): Whether charges incurred at the overseas load port and transportation up to the Indian discharge port are includible in assessable value.

Analysis: Rule 10(2) of the Customs Valuation Rules, 2007 includes transportation, loading, unloading and handling charges associated with delivery of imported goods to the place of importation. The phrase is to be understood in the context of costs incurred for delivery to the place of importation (i.e., costs incurred up to the Indian port of discharge). Circular No.39/2017 and the amendment to the valuation rules clarify that loading/unloading/handling charges incurred for delivery "to" the place of importation (including those at the overseas loading port and transport up to the Indian discharge port) are within the ambit of includible costs.

Conclusion: The overseas load port loading, unloading and handling charges and transportation charges up to the Indian discharge port are includible in the assessable value.

Issue (ii): Whether charges incurred at the Indian seaport/airport and transport to FTWZ are includible in assessable value.

Analysis: The sixth proviso to Rule 10(2) of the Customs Valuation Rules, 2007 excludes costs of insurance, transport, loading, unloading and handling associated with transhipment where goods imported by sea or air are transhipped to another customs station in India. Movement from the Indian port of discharge to an FTWZ unit is transhipment under the SEZ Rules and the Sea Cargo Manifest and Transhipment Regulations. Circular No.39/2017 clarifies that costs related to transhipment within India are excluded from the transaction value.

Conclusion: Loading, unloading, handling charges and transportation costs incurred at the Indian seaport/airport for moving goods from the seaport/airport to the FTWZ are not includible in the assessable value.

Issue (iii): Whether charges incurred at FTWZ (including rent, unloading, loading charges, etc.) are includible in assessable value.

Analysis: The valuation scheme in Rule 10(2) and Circular No.39/2017 confines inclusion to specified costs associated with delivery to the place of importation; costs incurred at or after the place of importation in India are not included. Movement to FTWZ constitutes transhipment between customs stations; costs incurred at the FTWZ are associated with movement within India and are excluded by the sixth proviso. The valuation rules do not provide for inclusion of warehousing rent or similar FTWZ charges.

Conclusion: Charges incurred at FTWZ, including rent and loading/unloading at FTWZ, are not includible in the assessable value.

Final Conclusion: Charges incurred at the overseas load port and transport up to the Indian discharge port are includible; charges incurred at the Indian seaport/airport for movement to FTWZ and charges incurred at FTWZ are not includible, and the ruling is accordingly partly in favour of the applicant.

Ratio Decidendi: Under Rule 10(2) of the Customs Valuation Rules, 2007 only costs and charges incurred for delivery of imported goods to the place of importation are includible in transaction value, while costs associated with transhipment between customs stations within India and costs incurred at or after the place of importation are excluded (as clarified by Circular No.39/2017 and the sixth proviso to Rule 10(2)).

Delivery-to-place-of-importation inclusion: overseas loading and transport included; domestic transhipment and FTWZ charges excluded.
Costs incurred for delivery to the place of importation - specifically loading, unloading, handling and transport up to the Indian port of discharge - are includible in transaction value under the valuation rule framework; by contrast, costs arising from transhipment within India (movement from Indian port to FTWZ) and costs incurred at or after the place of importation (including FTWZ rent, handling and loading/unloading) are excluded from assessable value, consistent with the transhipment exclusion and the delineation of includible delivery-related charges.

Transaction value - import the bulk concentrates in larger quantities - loading, unloading, handling and transportation charges - Charges incurred at the overseas load port and transportation up to the Indian discharge port - assessable value - Scope of the provisions of Rule 10(2) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 2007 ('the CVR, 2007') r/w Circular No. 39/2017 - Costs of transhipment between customs stations in India - excluded from assessable value - valuation of goods cleared from SEZ/FTWZ to DTA. Transaction value includes costs of transport and loading/unloading associated with delivery to the place of importation - HELD THAT:- The Authority applied Section 14 of the Customs Act read with Rule 10(2) of the CVR, 2007 and CBIC Circular No.39/2017, and held that charges incurred for delivery of the imported goods to the place of importation (i.e., costs incurred up to the discharge port in India, including loading, unloading and handling at the overseas load port and transport to the place of importation) are includible in the transaction value for assessment. [Paras 3, 7] Charges incurred at the overseas load port and transport up to the Indian discharge port are includible in assessable value. Costs of transhipment between customs stations in India are excluded from assessable value - HELD THAT:- Relying on the sixth proviso to Rule 10(2) of the CVR, 2007, Regulation 7 of the Sea Cargo Manifest and Transhipment Regulations, SEZ Rules provisions and CBIC Circular No.39/2017, the Authority concluded that the movement from the discharge port to the FTWZ constitutes transhipment between customs stations in India; accordingly, costs associated with such transhipment are excluded from the transaction value. [Paras 3, 7] Charges incurred at the Indian port/airport and transport to FTWZ are excludible from assessable value as transhipment costs. Valuation of goods cleared from SEZ/FTWZ to DTA is governed by the Customs Act and rules thereunder - costs incurred at or after the place of importation are not includible - HELD THAT:- The Authority noted that FTWZs are SEZ units and goods in FTWZ are exempt until removal to DTA; upon removal valuation is governed by the Customs Act and CVR, 2007. Applying Rule 10(2) and Circular No.39/2017 it held that charges incurred at or after the place of importation in India (including warehousing rent and handling at FTWZ) do not fall within the includible costs under Rule 10(2) and are specifically excluded when movement is a transhipment between customs stations. [Paras 3, 7] FTWZ charges, including warehousing rent and local handling, are not includible in the assessable value. Final Conclusion: The Authority ruled that (i) charges incurred overseas to bring goods to the Indian discharge port are includible in the transaction value, whereas (ii) charges incurred in India for movement to FTWZ and (iii) charges incurred at FTWZ (including rent and handling) are excludible; valuation on clearance from FTWZ to DTA is to be determined under the Customs Act and relevant rules.

2023 (11) TMI 1434 - CESTAT KOLKATA Service Tax

AI TextQuick Glance (AI)Headnote

Service tax interest on delayed remittance was set aside where payment followed client disbursement and CISF exemption guidance applied.
Interest on delayed service tax remittance was found unsustainable where the tax was paid after receipt of consideration from the client and one portion had already been paid before the show cause notice. The liability arose because service tax had not been charged initially and payment depended on client disbursement, while the exemption circular applicable to CISF security services was also considered. On these facts, the delay in remittance was not treated as justifying confirmation of interest, and the demand was set aside in favour of the assessee.

2023 (11) TMI 1386 - MADHYA PRADESH HIGH COURT Indian Laws

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether the revisional court could exercise suo motu jurisdiction against the magistrate's order granting interim custody of seized cash and jewellery. (ii) Whether, after issuance of an income tax warrant of authorisation, the magistrate had jurisdiction to release the seized property on supurdginama.

Issue (i): Whether the revisional court could exercise suo motu jurisdiction against the magistrate's order granting interim custody of seized cash and jewellery.

Analysis: The order passed by the Special Railway Magistrate determined the claimed ownership of the seized property by considering supporting documents such as accounts, income tax returns and bank records. An order affecting the right to ownership and interim custody of property is not merely interlocutory. It is an intermediate order within the scope of revisional interference under Section 397 of the Code of Criminal Procedure, 1973.

Conclusion: The revisional court had jurisdiction to take suo motu cognizance, and no jurisdictional error was made out on this ground.

Issue (ii): Whether, after issuance of an income tax warrant of authorisation, the magistrate had jurisdiction to release the seized property on supurdginama.

Analysis: Section 131 and Section 131(1A) of the Income-tax Act, 1961 empower income tax to enquire into concealed income and to investigate the source and tax compliance of cash, jewellery and other valuables even where the property is found in a police investigation. Once a warrant of authorisation under Section 132(1) of the Income-tax Act, 1961 had been issued, the magistrate could not override that process by directing release of the same property on supurdginama. The prior authority of the income tax department excluded the magistrate's power to grant interim release in respect of the seized property.

Conclusion: The magistrate lacked jurisdiction to release the seized cash and jewellery on supurdginama after issuance of the income tax warrant of authorisation.

Final Conclusion: The challenge to the revisional order failed because the seized property was within the income tax investigation regime and the magistrate's release order could not be sustained.

Ratio Decidendi: An order determining interim custody and claimed ownership of seized property is an intermediate order revisable under Section 397 of the Code of Criminal Procedure, 1973, and once a warrant of authorisation is issued under the Income-tax Act, 1961, the magistrate cannot direct release of that property on supurdginama.

Interim custody of seized cash and jewellery is revisable, but magistrate cannot release property after income tax authorisation.
An order determining interim custody and claimed ownership of seized cash and jewellery is an intermediate order, so revisional interference under Section 397 CrPC is available. Once a warrant of authorisation is issued under the Income-tax Act, 1961, the magistrate cannot direct release of the same property on supurdginama, because the income tax investigation regime has prior authority over the seized assets. The magistrate therefore lacked jurisdiction to override the authorised tax process and grant interim release of the seized property.

Jurisdiction of Sessions Court to take suo motu cognizance of impugned order - applicability of provisions of Section 397 (2) of Code of Criminal Procedure - on issuance of warrant of authorization, Railway Magistrate have jurisdiction to deal with the property in question or not. Whether Sessions Judge has rightly exercised power of suo motu revision under Section 397 of Code of Criminal Procedure? - HELD THAT:- Revisional Court can exercise its jurisdiction in case of intermediate orders or such order which touches upon the right of the parties. Special Railway Magistrate has considered the question of ownership of the cash amount and valuables. He has examined the documents filed by the applicant like accounts, income tax returns, bank accounts and other documents filed by the company to show that cash and valuables belong to the petitioner company. Said order touches upon the right of ownership over property, therefore, order is an intermediate order and not an interlocutory order, therefore, Revisional Court has jurisdiction to take suo motu cognizance of the order passed by Special Railway Magistrate and there is no jurisdictional error. Section 131 of Income Tax Act, 1961 mentions powers in respect of discovery, production of evidence etc. Section 131 (1A) lays down that Principal Director General, Join Director, Assistant Director or other Authorised Officer referred to in Section 132 if has reason to suspect that any income has been concealed or likely to be concealed by any person or class of person within his jurisdiction then for the purpose of making any an enquiry or investigation relating thereto it shall be competent for him to exercise powers conferred under Sub-section (1) on Income Tax Authorities - For purpose of Section 131, it is not necessary that an income tax case is pending before authority for exercise of such power, therefore, even if some other law enforcement agencies during investigation of any case comes in possession of valuable of property, cash, jewellery etc. then also income tax authority is having powers to conduct investigation and enquiry regarding said property and valuables or cash for satisfying itself that income tax has been paid on said property or not. Whether after issuance of authorization of warrant, Railway Magistrate have any jurisdiction to release valuables and currency notes on Supurdginama or not? - HELD THAT:- Said issue has already been put to rest by judgement passed by Division Bench in case of Union of India Vs. Police Station Janakganj [1990 (6) TMI 227 - MADHYA PRADESH HIGH COURT]. In case of Union of India Vs. Police Station Janakganj, it has been held that Judicial Magistrate of First Class does not have any authority to release property or valuables on Supurdginama in respect of which warrant of authorization has been issued by Income Tax Department. In present case, property has been seized by GRP, Jabalpur on 01.10.2020 from Thana Ram S/o Gevar Ram. Said person has been issued summons by authorized Officer on 02.10.2020. Assistant Director, Income Tax Department has written a letter to In-charge GRP, Jabalpur on 02.10.2020 to keep Rs. 01,27,20,000/- and silver ornaments weighing 6.150 kg in custody until further orders and warrant of authorization under Sub-section(1) of Section 132(a) of Income Tax Act, 1961 was issued on 08.10.2020. Railway Magistrate has passed the order for release of valuables and currency notes on Supurdginama on 22.10.2020 much after warrant of authorization issued by Income Tax Authority. Railway Magistrate did not have any jurisdiction to consider the application for release of valuables and currency notes on Supurdginama. Revisional Court has taken suo motu cognizance of an order passed by Railway Magistrate. Railway Magistrate has taken into consideration the rights of petitioner over the property in question, therefore, order touches upon the rights of the parties to get the interim custody of the property, therefore, order in question is an intermediate order and criminal revision against said order is maintainable. Petition dismissed.

2023 (11) TMI 1338 - SC Order Indian Laws

AI TextQuick Glance (AI)Headnote

Pre-deposit waiver under the Negotiable Instruments Act may be reconsidered where deposit would unjustly curtail the right of appeal.
Section 148 of the Negotiable Instruments Act ordinarily permits an appellate court to impose a deposit condition, but an exception may be made where insisting on pre-deposit would be unjust or would effectively deprive the appellant of the right of appeal, provided reasons are recorded. Applying that principle, the appellant was allowed to advance arguments on the waiver application that had been rejected earlier. The impugned order was set aside and the Sessions Court was directed to reconsider the waiver application in accordance with law and the observations made.

2023 (11) TMI 1335 - CALCUTTA HIGH COURT GST

AI TextQuick Glance (AI)Headnote

Interim stay against tax demand granted subject to additional deposit before recovery is restrained
Interim protection against recovery of a tax demand may be granted pending disposal of a writ petition, but it can be made conditional rather than unconditional. The Calcutta HC disposed of the appeal by staying recovery of the demand, penalty and interest, subject to deposit of a further 10 per cent of the disputed tax within three weeks.

Interim stay of tax demand pending writ petition - conditional deposit as pre condition for grant of interim relief - stay of recovery proceedings - stay of balance tax, penalty and interest until disposal of writInterim stay of tax demand pending writ petition - conditional deposit as pre condition for grant of interim relief - stay of recovery proceedings - stay of balance tax, penalty and interest until disposal of writ - Grant of interim relief to stay the demand, penalty and interest subject to conditions - HELD THAT: - The Single Bench's refusal to grant any interim order was set aside insofar as interim protection was concerned. The Court observed that, absent an unconditional stay, there was a real likelihood of recovery proceedings which could render the writ petition nugatory. The Court declined to grant a blanket stay but directed that the appellants must make an additional conditional deposit to secure interim protection. Concretely, the appellants were ordered to pay a further 10 per cent of the disputed tax within three weeks of receipt of the order; upon compliance, the demand and the balance tax, penalty and interest shall remain stayed until the writ petition is finally disposed of. The Court thus balanced the risk of prejudice to the Revenue from a blanket stay against the appellants' need for protection by imposing a quantifiable deposit as a pre condition to the stay, thereby preserving the efficacy of the writ process while permitting protection from immediate recovery actions. [Paras 3, 4]The appellants are directed to pay a further 10 per cent of the disputed tax within three weeks; on such payment the demand and the balance tax, penalty and interest shall remain stayed until disposal of the writ petition.Final Conclusion: Appeal disposed by granting conditional interim stay: further deposit of 10 per cent within three weeks to secure stay of the demand, penalty and interest and to prevent recovery proceedings until the writ petition is finally adjudicated.

2023 (11) TMI 1326 - CESTAT AHMEDABAD Customs

AI TextQuick Glance (AI)Headnote

Tribunal Allows Refund Claim, Aligns Assessment Finalization Date with Precedent for Timely Filing.
The Tribunal set aside the impugned orders, allowing the appellant's refund claim under Notification No. 102/2007-Cus. The Tribunal determined that the finalization of provisional assessment should be considered the date of payment for refund claims, aligning with the precedent in M/s. Bharat Ship Breaker Corporation. The claim was deemed within the prescribed time limit, emphasizing the significance of assessment finalization in limitation issues.

Refund under Notification No. 102/2007-Cus - limitation for refund claims - provisional assessment and date of finalization as triggering date for limitation - rejection of refund claim as time barred - application of precedent in limitation disputes involving provisional assessmentProvisional assessment and date of finalization as triggering date for limitation - refund under Notification No. 102/2007-Cus - limitation for refund claims - Whether refund claims filed under Notification No. 102/2007-Cus, as amended, are time barred where filed within one year from the date of finalization of provisional assessments though beyond one year from the date of payment of duty. - HELD THAT: - The Tribunal held that where assessment of bills of entry was provisional and subsequently finalized, the duty paid during provisional assessment cannot be treated as final payment for the purpose of computing the one year limitation prescribed under the Notification as amended. The date of finalization of the provisional assessment is to be reckoned as the operative date for limitation; accordingly a refund application filed within one year from such finalization is not barred by time. The Tribunal applied the reasoning in the earlier decision in M/s. Bharat Ship Breaker Corporation (which in turn relied on Suzuki Motorcycle India P. Ltd ) and distinguished decisions relied upon by the Revenue (CMS Info Systems Limited and Tranasia Bio Medicals Limited ) on the ground that those cases did not involve provisional assessment followed by finalization. In consequence, rejection of the refund claims solely on the ground of limitation was held to be legally unsustainable and the matters were directed to be decided on merits by the original authority, with opportunity of personal hearing.Impugned orders rejecting the refund claims as time barred are set aside; appeals allowed and original authority directed to examine the refund claims on merits (with personal hearing) since the refunds filed within one year of finalization of provisional assessment are not time barred.Final Conclusion: The appeals are allowed; rejection of refund claims under Notification No. 102/2007 Cus solely on limitation grounds is set aside because where assessment was provisional and later finalized the one year period runs from finalization, and the claims must be re examined on merits by the original authority with a personal hearing.

2023 (11) TMI 1323 - ITAT HYDERABAD Income Tax

AI TextQuick Glance (AI)Headnote

Issues:
1. Corporate guarantee fee determination based on comparability analysis.
2. Disallowance of expenditure u/s. 14A of the Income Tax Act.

Corporate Guarantee Fee Determination:
The appeal pertains to the order of the Commissioner of Income Tax (Appeals) invoking proceedings under sections 143(3) r.w.s. 144C(3) r.w.s 144B of the Income Tax Act, 1961 for the A.Y. 2018-19. The Revenue challenged the order of the ld.CIT(A) regarding the corporate guarantee fee determination. The ld.CIT(A) restricted the interest payable on the corporate guarantee to 0.53% instead of 1.8% as determined by the TPO, relying on earlier orders. The Revenue contended that the ld.CIT(A)'s order was contrary to the TPO's order. However, the Tribunal, citing precedent cases, upheld the ld.CIT(A)'s decision, emphasizing that the interest payable on the corporate guarantee should be restricted to 0.5%. The Tribunal noted that the issue was previously decided in the case of M/s. Aurobindo Pharma Limited where a similar approach was adopted. As the ld.CIT(A) based the decision on precedent orders, the Tribunal dismissed the Revenue's appeal on these grounds.

Disallowance of Expenditure u/s. 14A:
The other grounds raised by the Revenue related to Section 14A of the Act. The ld.CIT(A) extensively discussed this issue in the order. The Revenue argued that the amendment to Section 14A by the Finance Act, 2022 was retrospective and applicable to all appeals. Conversely, the assessee relied on a Tribunal decision in the case of NCC Infrastructure Holdings Limited, which held that the amendment was prospective, not retrospective. The Tribunal referred to the decision in the case of Era Infrastructure (India) Ltd., where the Hon'ble Delhi High Court clarified that no disallowance under Section 14A could be made if the assessee had not earned any exempt income during the relevant year. Following this precedent, the Tribunal ruled against the Revenue on grounds 5 to 7, dismissing the appeal. The Tribunal held that in the absence of a decision by the jurisdictional High Court or the Supreme Court, decisions of other High Courts would be binding precedent. Therefore, the Tribunal upheld the ld.CIT(A)'s decision based on the legal provisions and dismissed the Revenue's appeal on these grounds as well.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the ld.CIT(A)'s orders on both the determination of the corporate guarantee fee and the disallowance of expenditure u/s. 14A of the Income Tax Act. The Tribunal based its decisions on precedent cases and legal interpretations, emphasizing the importance of comparability analysis and the applicability of legal amendments in determining tax liabilities.

Revenue's appeal dismissed on transfer pricing adjustment for corporate guarantee interest rate and Section 14A disallowance rejected
ITAT Hyderabad dismissed Revenue's appeal regarding transfer pricing adjustment on corporate guarantee. CIT(A) had restricted interest rate to 0.53% instead of TPO's determination of 1.8%. ITAT upheld CIT(A)'s order based on precedent decisions including Aurobindo Pharma Limited case which applied 0.50% rate. Revenue's appeal lacked merit. Separately, ITAT rejected disallowance under Section 14A, holding that Finance Act 2022 amendment was prospective, not retrospective, following NCC Infrastructure Holdings Limited precedent.

Arm's length price of corporate guarantee commission - Comparability analysis for transfer pricing - Reliance on precedential Tribunal orders in transfer pricing - Applicability and retrospectivity of amendment to Section 14A Arm's length price of corporate guarantee commission - Comparability analysis for transfer pricing - Reliance on precedential Tribunal orders in transfer pricing - Whether the corporate guarantee fee may be restricted to 0.53% instead of 1.8% as determined by the TPO - HELD THAT: - The Tribunal recorded that the CIT(A) treated the corporate guarantee as an international transaction but restricted the corporate guarantee commission to 0.53% relying on this Bench's earlier decisions in the assessee's own matters and on decisions in cases such as M/s. Aurobindo Pharma Limited and other coordinate Tribunal precedents which held that comparable third party charges are not suitable benchmarks and fixed a lower benchmark (around 0.5%). Having considered the rival submissions and the precedents relied upon by the CIT(A), the Tribunal found no merit in the Revenue's contention that the TPO's rate of 1.8% should be applied and upheld the CIT(A)'s restriction to 0.53% as the appropriate arm's length benchmark on the facts and authorities before it. [Paras 10] The addition made by the TPO applying 1.8% is not sustained; the CIT(A)'s restriction of the corporate guarantee commission to 0.53% is upheld and the Revenue's grounds on this issue are dismissed. Applicability and retrospectivity of amendment to Section 14A - Disallowance under Section 14A where no exempt income is earned - Precedential effect of High Court and Tribunal decisions on retrospective operation - Whether the Explanation to Section 14A inserted by the Finance Act, 2022 operates retrospectively so as to justify disallowance for the year under appeal - HELD THAT: - The Tribunal examined the CIT(A)'s reliance on prior Tribunal and High Court decisions, including a coordinate-bench decision in the assessee's group matter, which held that the Finance Act, 2022 amendment to Section 14A cannot be read as retrospective where it alters the law and that no disallowance can be made under Section 14A if the assessee had not earned any exempt income in the relevant year. Following those decisions and the reasoning that an amendment 'for removal of doubt' cannot be presumed retrospective if it changes the legal position, the Tribunal agreed with the CIT(A) and the coordinate-bench conclusion. Consequently, the Tribunal decided the Revenue's grounds under Section 14A against the Revenue. [Paras 13] The CIT(A)'s deletions under Section 14A are upheld; the Tribunal finds the Finance Act, 2022 amendment not to operate retrospectively for the purposes of making disallowance in the year under appeal and dismisses the Revenue's challenge on this point. Final Conclusion: The Revenue's appeal is dismissed in entirety: the CIT(A)'s restriction of corporate guarantee commission to 0.53% is upheld and the deletions under Section 14A are sustained, resulting in dismissal of the appeal for A.Y. 2018-19.

2023 (11) TMI 1318 - PATNA HIGH COURT Companies Law

AI TextQuick Glance (AI)Headnote

Issues: (i) Whether the writ petitions were maintainable despite the availability of statutory appeal and revision under the excise regime; (ii) whether excise duty, bottling fee, licence fee, import fee and VAT could be retained or adjusted against unsold, destroyed or unutilised liquor stocks; (iii) whether the impugned orders rejecting refund claims could stand in the face of the earlier writ judgments and the statutory framework.

Issue (i): Whether the writ petitions were maintainable despite the availability of statutory appeal and revision under the excise regime?

Analysis: The statutory appellate structure was found to be incomplete in practice because the relevant rules did not clearly identify the appellate authority, and the revisional mechanism was also not an effective answer to the grievance. The impugned orders had already been passed after an earlier round of litigation, yet the same reasons were reiterated without fresh justification. In that setting, the existence of an alternate remedy did not bar the exercise of writ jurisdiction, particularly where the impugned action was asserted to be without authority of law and arbitrary.

Conclusion: The writ petitions were maintainable and the objection based on alternate remedy was rejected.

Issue (ii): Whether excise duty, bottling fee, licence fee, import fee and VAT could be retained or adjusted against unsold, destroyed or unutilised liquor stocks?

Analysis: The levy of excise duty was examined in the light of the constitutional power to impose duty on alcoholic liquors for human consumption and the statutory scheme governing excise in Bihar. The Court held that duty cannot be retained on liquor stocks that were not sold, could not be consumed, and had been destroyed or remained unutilised. The same reasoning applied to bottling and licence fees on non-saleable stock, as well as to VAT and surcharge, because the incidence of those levies was linked to sale and taxable turnover. The Court also noted that the impugned orders failed to justify denial of refund of import fee in a reasoned manner.

Conclusion: Retention or adjustment of the disputed levies on the relevant unsold and destroyed stocks was impermissible and the refund claims were held to be maintainable.

Issue (iii): Whether the impugned orders rejecting refund claims could stand in the face of the earlier writ judgments and the statutory framework?

Analysis: The Court held that the earlier judgments had already ruled against the very reasons repeated by the excise authorities, and the authorities could not sit in appeal over or bypass those judicial determinations. The renewed rejection orders suffered from non-application of mind and were inconsistent with the earlier binding directions requiring reconsideration of the claims. The Court therefore set aside the impugned orders and directed verification of records and release of the withheld excise duty.

Conclusion: The impugned orders were quashed and the petitioners were entitled to refund upon verification.

Final Conclusion: The challenge succeeded, the refund-rejection orders were annulled, and the petitioners were entitled to have their withheld excise duty claims processed and paid in accordance with the Court's directions.

Ratio Decidendi: A fiscal levy cannot be retained without authority of law, and administrative authorities cannot reiterate rejected reasons or disregard binding judicial determinations while denying refund of levies on unsold or destroyed stock.

Excise refund claims on unsold liquor stock cannot be denied by repeating earlier rejected reasons and ignoring binding writ directions.
Writ petitions against excise refund-rejection orders were held maintainable despite statutory appeal and revision, because the appellate structure was incomplete in practice and the impugned action was alleged to be without authority of law and arbitrary. The Court held that excise duty, bottling fee, licence fee, import fee and VAT could not be retained on unsold, destroyed or unutilised liquor stocks where the levy was linked to sale or taxable turnover, and refund claims were maintainable. It further held that authorities could not repeat earlier rejected reasons or disregard binding writ directions; the impugned orders were quashed and refund was directed after verification.

Exhaustion of statutory remedies - writ jurisdiction under Article 226 - remand and binding effect of earlier judicial orders - levy of excise duty on unsold or destroyed stock - marketability as the incidence of excise/VAT - refund of statutory levies retained without authority of lawExhaustion of statutory remedies - writ jurisdiction under Article 226 - Maintainability of writ petitions notwithstanding existence of statutory appeal/revision provisions. - HELD THAT: - The Court held that the petitions were maintainable. Although the Act prescribes appeal and revision, the rule of exhaustion is one of discretion; where no efficacious appellate forum is identifiable or where administrative action is arbitrary and contrary to earlier judicial directions, the High Court may exercise writ jurisdiction. The Court found that at the relevant time the Act's rules did not identify an effective appellate authority (Rules, 2021 being framed after the impugned orders and, in any event, not specifying an appellate authority), and that the Excise Commissioner had repeatedly reiterated reasons earlier rejected by this Court, demonstrating prima facie arbitrariness. For these reasons the Court exercised its discretion to entertain the writs without directing exhaustion of statutory remedies. [Paras 72, 76, 77]Writ petitions entertained; exhaustion of appeal/revision not required in the facts of these cases.Levy of excise duty on unsold or destroyed stock - marketability as the incidence of excise/VAT - refund of statutory levies retained without authority of law - Whether excise duty, bottling and license fees and VAT/surcharge could be levied or retained by the State in respect of unutilized, unsold or destroyed stocks for the tax periods 2015-16 and 2016-17. - HELD THAT: - The Court concluded that levy or retention of excise duty and allied levies in respect of stocks that were not saleable and were destroyed (whether at factory, in transit or lying with BSBCL) was without lawful authority. Relying on the statutory scheme and binding precedents, the Court observed that incidence of excise and of VAT/surcharge arises with marketability/sale; the State may not levy excise on goods not destined for human consumption or not marketable. The notification machinery and departmental practice did not disclose a lawful break-up or basis for levying duty at the manufacture/storage/transit stages for the destroyed stocks. The Commissioner had given reasons already negatived by this Court in earlier remand proceedings and had not furnished fresh lawful justification; accordingly retention of the levies was held to be unlawful and arbitrary. [Paras 80, 81, 82, 83, 86]Levy/retention of excise duty, bottling and license fees and VAT/surcharge on the destroyed/unutilized stocks for FY 2015-16 and FY 2016-17 is not sustainable; such amounts are refundable.Remand and binding effect of earlier judicial orders - refund of statutory levies retained without authority of law - Relief to be afforded and consequential directions. - HELD THAT: - Having set aside the impugned orders on the grounds of unlawfulness and arbitrariness and having found no fresh reasons justifying non refund, the Court directed claim procedure and a timetable. The petitioners were directed to file their respective refund claims before the Excise Commissioner; the Commissioner was directed to verify records and disburse the withheld excise duty to each petitioner within four months of receipt of the claim. The Court reiterated that there would be no order as to costs and disposed of pending interlocutory applications. [Paras 88]Impugned orders set aside; claims to be filed and refunds disbursed by the Excise Commissioner within four months.Final Conclusion: Impugned orders of the Excise Commissioner, the Joint Commissioner (Commercial Taxes) and the Assistant Commissioner are set aside; writ petitions allowed. Petitioners to file refund claims and the Excise Commissioner to verify records and refund the withheld excise duty and related levies in accordance with the judgment within four months; no costs.

2023 (11) TMI 1309 - SC Order Indian Laws

AI TextQuick Glance (AI)Headnote

Dismissal of appeal for default, not on merits, when appellant is absent under Order XLI Rule 17 CPC.
Order XLI Rule 17 of the Code of Civil Procedure permits dismissal of an appeal when the appellant is absent, but the Explanation bars dismissal on merits in that situation. The legal position is that absence of the appellant or counsel justifies dismissal for default or non-prosecution, not a merits-based adjudication without hearing. Applying that principle, the merits dismissal was held unsustainable and the matter was remitted for fresh consideration by the High Court after giving the parties an opportunity to be heard.

Page of 948

Press 'Enter' after typing page number.

1181 to 1200 of 18959 Results

Case Laws

All › 2023

All Case Laws

Showing Results for :

Reset Filters

Page of 948

Press 'Enter' after typing page number.

1181 to 1200 of 18959 Results

No Records Found

Case Laws

All Case Laws

Showing Results for : Reset Filters

Topics

Acts Income Tax

➔Previous Next ➔

Contact Us At :

FAQs :

Most Asked Video Tutorials :

Submit Feedback/Suggestion :

Case Laws

Case Laws

Topics