TaxTMI Updates e-Newsletter
Feb 19,2013

Reopening of assessment beyond four years under section 147: requirement of failure to disclose material facts - notice under section 148 of the Income tax Act, 1961 - assessment completed under section 143(3) of the Income tax Act, 1961

Reopening of assessment beyond four years under section 147: requirement of failure to disclose material facts - notice under section 148 of the Income tax Act, 1961 - Validity of the notice dated 27.03.2012 and the order dated 31.05.2012 reopening the assessment for AY 2005-06 - HELD THAT: - The Court held that where an assessment has been completed under section 143(3) and the assessing officer seeks to reopen it after the four year period, the statutory precondition is that there must be a demonstrable failure by the assessee to disclose all material facts necessary for assessment. The purported reasons supplied with the notice and the order rejecting objections did not identify any particular fact which the assessee had failed to disclose; they asserted under assessment without pointing to a nondisclosure of material facts. Since the precondition in the proviso to section 147 was not satisfied and no specific failure to disclose was shown, the notice under section 148 and the consequential order could not be sustained. [Paras 6, 7]

Notice dated 27.03.2012 and order dated 31.05.2012 set aside; all proceedings pursuant to the notice quashed and the writ petition allowed.

Final Conclusion: The reopening of assessment for AY 2005-06 was quashed because the assessing officer failed to demonstrate the statutory precondition of a failure to disclose material facts necessary for assessment; consequent proceedings were set aside and the writ petition allowed.

Ascertained liability - provision for payment of bonus - computation under Section 115J - Payment of Bonus Act, 1965 - book profit adjustments under Section 115-J(1A) Explanation (c)

Provision for payment of bonus - ascertained liability - Payment of Bonus Act, 1965 - Whether the provision for payment of bonus was an ascertained liability for the purpose of computation under Section 115J and therefore not liable to be added back to book profits. - HELD THAT: - The Court noted authority recognising that a provision for bonus computed in accordance with the Payment of Bonus Act, 1965 constitutes an ascertained liability and need not be added back while computing book profits under Section 115J. The Tribunal's order suggested the provision in this case might be merely an estimation. Because the factual basis for determining whether the provision was computed in accordance with the Payment of Bonus Act was not clear on the record, the Court directed that the assessing officer ascertain that factual question. If the AO finds the provision was calculated under the Payment of Bonus Act, it will be an ascertained liability; if it was only an estimation not conforming to the Act, the original assessment holding would stand. [Paras 3]

Remanded to the assessing officer to determine whether the bonus provision was computed in accordance with the Payment of Bonus Act, 1965; if so, treat it as an ascertained liability, otherwise leave the assessment undisturbed.

Book profit adjustments under Section 115-J(1A) Explanation (c) - ascertained liability - Whether the specific reserves and provisions for bad and doubtful debts relied upon by the revenue were unascertained liabilities and hence rightly added back to book profits under Section 115-J(1A) read with Explanation (c). - HELD THAT: - The Court accepted the appellant's reliance on the Supreme Court decision in Commissioner of Income Tax vs. HCL Comnet Systems and Services Ltd. and held that, for the assessment year 1989-90, the additions made by treating the contested items as unascertained liabilities were not sustainable. Applying the governing precedent, the Court found in favour of the assessee on this question and against the revenue, thereby negating the Tribunal's conclusion that those items were unascertained liabilities requiring addition to book profits. [Paras 4]

The contested additions in respect of the specified reserves and provisions for bad and doubtful debts are disallowed; question decided for the assessee.

Final Conclusion: Appeal allowed in part: question concerning bonus provision remanded to the assessing officer for determination whether it was computed under the Payment of Bonus Act, 1965 (and thus an ascertained liability); additions in respect of the contested reserves/provisions held in favour of the assessee for AY 1989-90.

Interpretation of Explanation (baa) to Section 80HHC - 90% deduction under Explanation (baa) - ejusdem generis - finality of High Court decision - remand for fresh consideration

Finality of High Court decision - Whether the Tribunal's reliance on this Court's decision in CIT v. Varinder Agro Chemicals Ltd. (309 ITR 272) is open to challenge in the present appeals. - HELD THAT: - The Court observed that the question of law sought to be re-agitated by the revenue had already been decided against the revenue by this Court in 309 ITR 272. The pendency of the revenue's appeal to the Supreme Court does not reopen the issue before this Court; insofar as this Court's decision has attained finality for purposes of the present proceedings, the point does not arise for reconsideration. Consequently, the argument based on the pendency of a further appeal was rejected.

The Tribunal's reliance on this Court's decision stands; no substantial question of law arises in respect of that matter.

Interpretation of Explanation (baa) to Section 80HHC - 90% deduction under Explanation (baa) - ejusdem generis - Whether sales tax subsidy and discounts from customers are of the same or a similar nature as brokerage, commission, interest, rent or charges so as to attract the 90% reduction under Explanation (baa) to Section 80HHC. - HELD THAT: - The Court analysed the language of Explanation (baa) and held that the phrase 'any other receipt of a similar nature' must be read ejusdem generis with brokerage, commission, interest, rent or charges. Sales tax subsidy is not akin to brokerage, commission, interest, rent or charges and therefore cannot be treated as a receipt of similar nature for the purpose of permitting a 90% reduction. Likewise, discounts (including early payment discounts) are not of the same genus as the listed receipts. The Court distinguished the Supreme Court's decision in K. Ravindranathan Nair (295 ITR 228), which concerned processing charges that fall within 'charges' and therefore attracted the 90% reduction; that decision was held inapplicable to sales tax subsidy and the discounts in the present case.

Sales tax subsidy and the discounts received are not eligible for the 90% deduction under Explanation (baa) to Section 80HHC; the Ravindranathan Nair precedent does not apply.

Remand for fresh consideration - Whether the Tribunal erred in remanding the issue of prior period expenses to the Assessing Officer. - HELD THAT: - The Tribunal had remanded the matter to the Assessing Officer to decide the issue afresh in accordance with directions and guidelines issued in the assessee's own case for assessment years 2002-03 and 2003-04. Because the matter was remitted for fresh consideration, there is no final adjudication by the Tribunal on the merits that would raise a substantial question of law for the High Court to decide. The Court therefore found that the remand precludes entertaining a substantial question of law on that point.

The remand stands; no substantial question of law arises from the remitted issue.

Final Conclusion: No substantial question of law arises in the present appeals; the appeals are dismissed and the remand to the Assessing Officer remains effective for fresh consideration.

Valuation of work-in-progress - Accounting Standard No.7 (AS-7) - permissibility of change in method of accounting - bona fide change of accounting method - application of British Paints ratio - notification of accounting standards under Section 145(2)

Valuation of work-in-progress - Accounting Standard No.7 (AS-7) - bona fide change of accounting method - application of British Paints ratio - Appropriateness of rejecting the appellant's AS-7 based method of valuing work-in-progress and whether the change of accounting method was bona fide. - HELD THAT: - The Commissioner of Income Tax (Appeals) had accepted the appellant's change to the AS-7 method of valuing work-in-progress and recorded that the change was bona fide. The Tribunal set aside the Commissioner (A)'s order relying on the Supreme Court decision in British Paints India Ltd., but did not make any independent finding negativing the bona fides recorded by the Commissioner (A). The High Court held that the ITAT erred in displacing the Commissioner (A)'s finding because (a) the ITAT avoided deciding the question of bona fides and therefore could not be treated as having negatived that finding, (b) the appellant consistently adopted AS-7 in subsequent years and the assessment authorities accepted that treatment, and (c) subsequently the Central Government directed builders and developers to follow AS-7, all of which supported the bona fide nature of the change. Further, the court held that the ratio in British Paints was not strictly applicable because that case dealt with trading/manufacturing costs omitted from stock valuation, whereas the present case concerned allocation of indirect costs (financial, marketing and administrative) among multiple projects under AS-7. For these reasons the Tribunal's order restoring the Assessing Officer's addition was set aside and the Commissioner (A)'s order was confirmed. [Paras 11, 12]

The Tribunal's rejection of the AS-7 valuation and its reliance on British Paints was erroneous; the change of accounting method was bona fide and the Commissioner (Income Tax) (Appeals)'s order is confirmed.

Final Conclusion: Appeal allowed; ITAT order set aside and the Commissioner of Income Tax (Appeals)'s order confirming the AS-7 method and bona fide change of accounting treatment is restored.

Claim of expenditure deduction - onus of proof on assessee - corroborative documentary evidence - disallowance of expenditure for lack of proof - appellate factual findings not perverse

Claim of expenditure deduction - onus of proof on assessee - corroborative documentary evidence - disallowance of expenditure for lack of proof - Entitlement of the assessee to deduct Rs.3,50,000 from the sale consideration as expenditure incurred for settlement of a dispute relating to the sold property. - HELD THAT: - The Tribunal's concurrent finding was that the assessee failed to substantiate the claimed expenditure of Rs.3,50,000 by adducing receipts, bills or other credible evidence, and that the amount was not disclosed in the books of account produced at the appellate stage. The onus to establish the nature and source of the claimed expenditure lay on the assessee. The Tribunal noted that an affidavit or unsupported statement could not reliably substitute corroborative documentary proof in the absence of other material; reliance on earlier judicial ratios was considered but the facts led to the conclusion that the claim was unproved. The High Court examined the pleadings and material and found no misreading or non-consideration of evidence by the Tribunal and held that the findings were not erroneous or perverse. [Paras 5, 6, 7]

The claim of deduction of Rs.3,50,000 was disallowed for want of proof and the appeal is dismissed.

Final Conclusion: The High Court dismissed the assessee's appeal, upholding the Tribunal's disallowance of the claimed settlement expenditure due to absence of corroborative documentary evidence and failure by the assessee to discharge the onus of proof.

Power of rectification under section 254(2) of the Income-tax Act - scope of rectification versus review by a statutory authority - error apparent on the face of the record - finality of Tribunal orders - principle actus curiae neminem gravabit

Power of rectification under section 254(2) of the Income-tax Act - scope of rectification versus review by a statutory authority - finality of Tribunal orders - Legality of the Tribunal recalling its earlier order dated 14.8.1998 by allowing a second application under section 254(2) after an earlier application under the same provision had been rejected. - HELD THAT: - The Court held that a statutory authority, including the Income Tax Appellate Tribunal, cannot exercise a power of review unless such power is expressly conferred; the limited scope of section 254(2) is to correct errors apparent on the face of the record and not to rehear or reverse a decision on merits. Reliance was placed on the Division Bench decision in M/s Pearl Woolen Mills, Ludhiana which explains that inherent or incidental powers and the principle that an act of court should not prejudice a litigant do not permit a tribunal to convert rectification into a rehearing on merits. Where an earlier rectification/recall application was dismissed, permitting a subsequent application to recall the order and order a de novo hearing amounted to impermissible review and disturbed the finality of the Tribunal's order. Applying these principles, the Court found the Tribunal's order dated 13.3.2000 unlawful and set it aside. [Paras 6, 7, 8]

Order of the Tribunal dated 13.3.2000 allowing recall of its earlier order was set aside as an impermissible exercise of review/rectification beyond the scope of section 254(2).

Re-reference/remand for fresh consideration - effect of setting aside rectification order on pending reference application - Disposition of the reference application (RA No.593/Del/98) which the Tribunal had dismissed as infructuous after accepting rectification. - HELD THAT: - The Tribunal, upon accepting the assessee's rectification application by its order dated 13.3.2000, had treated the pending reference application as infructuous and dismissed it. Since the Court has set aside the Tribunal's rectification order, that consequential dismissal of the reference could not stand. In the interests of justice the Court directed that the observation and dismissal of the reference made by the Tribunal be set aside and that the Tribunal re-decide the reference afresh in accordance with law. [Paras 9]

Tribunal's treatment of RA No.593/Del/98 as infructuous is set aside and the Tribunal is directed to re-decide the reference afresh.

Final Conclusion: The appeal succeeds: the Tribunal's order dated 13.3.2000 recalling its earlier order is set aside for being beyond the scope of section 254(2); consequential dismissal of the reference application is also set aside and the Tribunal is directed to re-decide the reference afresh. Appeal disposed of.

Power of Settlement Commission to rectify orders under Section 154 - finality of settlement orders - distinction between assessment under Chapter XIV and settlement under Chapter XIX-A - rectification versus review/recall - compulsory nature of interest under section 234B - absence of power to waive interest under sections 234A and 234B

Power of Settlement Commission to rectify orders under Section 154 - finality of settlement orders - distinction between assessment under Chapter XIV and settlement under Chapter XIX-A - absence of power to waive interest under sections 234A and 234B - rectification versus review/recall - Whether the Settlement Commission could reopen its concluded settlement proceedings by invoking Section 154 to levy or reinstate interest under sections 234A and 234B. - HELD THAT: - The Court held that proceedings before the Settlement Commission constitute a distinct code under Chapter XIX-A directed to settlement of liability and are not proceedings in the regular assessment code contained in Chapter XIV where section 154 operates. The statutory scheme (including sections 245C(1B), 245C(1C) and the proviso to section 245C(1)) contemplates specific modes of computation and finality of the settlement order; no power to invoke section 154 for rectification of settled matters is provided. The order of the Settlement Commission is made final and conclusive by section 245-I except in cases of fraud or misrepresentation where review/recall is permissible. Unlike the Tribunal, which is expressly empowered under section 254(2) to rectify, the Settlement Commission has no analogous statutory rectification power and therefore cannot reopen its concluded proceedings under section 154. Further, the Court noted that the law, as settled by the Supreme Court, treats interest under section 234B as compensatory and mandatory; where the Commission had previously waived or reduced such interest during a period of legal uncertainty, that does not permit subsequent invocation of section 154 to reopen the settled order once the law was clarified.

Settlement Commission had no jurisdiction to reopen its concluded settlement order by invoking Section 154 to levy or reinstate interest under sections 234A/234B; the rectification was impermissible and the impugned rectifying order was set aside.

Final Conclusion: Writ petition allowed; the Settlement Commission's rectification order reopening the earlier settlement to levy interest under sections 234A and 234B was held impermissible and the impugned order dated 21.3.2003 is set aside.

Section 273A discretion to waive interest and penalty - waiver of interest under Sections 139(8) and 217 - receipt of enhanced compensation as triggering date for taxable disclosure - voluntary filing prior to notice and good faith disclosure

Section 273A discretion to waive interest and penalty - waiver of interest under Sections 139(8) and 217 - voluntary filing prior to notice and good faith disclosure - Whether the Commissioner erred in partly allowing the petition under Section 273A by restricting waiver of interest under Sections 139(8) and 217 to 30.11.1988 instead of waiving interest until the date when enhanced compensation was received - HELD THAT: - The Court applied the principles in Parkash Devi (construing conditions for waiver under provisions pari materia to Section 273A) and the scope of discretion under Section 273A as explained in Shanti Sarup Sharma. The conditions for relief under Section 273A include voluntary filing prior to issuance of notice, good faith, full and true disclosure and cooperation, and payment or satisfactory arrangements for tax/interest. Where enhanced compensation and interest thereon were received only between July and November 1989, the assessees could not, before receipt, precisely disclose the taxable amount; hence the Commissioner's restriction of waiver only up to 30.11.1988 was incorrect. On these facts the Court held that the assessees were entitled to waiver of interest up to the date of receipt of enhanced compensation and that the Commissioner's conclusion to the contrary was not justified. The Court therefore set aside the impugned order to that extent and remanded the matter for fresh consideration in accordance with the observations made. [Paras 5, 6, 8, 9]

Impugned order set aside to the extent it refused waiver after 30.11.1988; assessees entitled to waiver of interest until receipt of enhanced compensation; matter remanded to respondent No.1 for fresh decision in accordance with law.

Final Conclusion: Writ petitions partly allowed: the Commissioner's order is set aside insofar as it denied waiver of interest after 30.11.1988; assessees are entitled to waiver of interest until the dates on which enhanced compensation was received (July-November 1989); the matter is remanded for fresh disposal in accordance with the Court's observations.

Statutory interest on delayed refund - commencement of interest three months from date of receipt of refund application - precedential effect of Ranbaxy Laboratories (Supreme Court) - entitlement to consequential relief on set-aside

Statutory interest on delayed refund - commencement of interest three months from date of receipt of refund application - precedential effect of Ranbaxy Laboratories (Supreme Court) - Assessee entitled to interest on the delayed refund and interest is payable from three months after the date of filing the refund application until sanction of the refund. - HELD THAT: - The Tribunal set aside the first appellate order rejecting interest on the refund. The present bench observed that an identical issue in respect of the same assessee had already been decided in favour of the assessee by Final Order No. A/1159/WZB/AHD/2012 dated 03.08.2012. The earlier reasoning applied the Apex Court's decision in Ranbaxy Laboratories, which holds that liability to pay interest commences from the expiry of three months from the date of receipt of the refund application and not from the date on which the refund order is made. The Tribunal found that the refund claim had been filed on 14.09.2005 and that final adjudication in favour of the assessee was by the Tribunal's order dated 20.08.2010; applying the Ranbaxy principle, interest is therefore payable from three months after filing the refund application until sanction. The bench declined to follow the High Court decision relied on by Revenue and proceeded on the binding precedent of the Supreme Court as applied in the earlier identical decision for the same assessee.

Impugned order set aside; appeal allowed and appellant granted interest on the delayed refund from three months after the date of filing the refund application until sanction, with consequential relief.

Final Conclusion: Appeal allowed; order rejecting interest on the sanctioned refund is set aside and interest is awarded from three months after the refund application date until the refund was sanctioned, with consequential relief.

Continuing obligation under exemption notification - substantial compliance with conditional exemption - evidentiary evaluation of compliance by adjudicating authority - scope and applicability of Notification No. 64/88-Cus - confiscation and penalty under Customs law

Substantial compliance with conditional exemption - continuing obligation under exemption notification - evidentiary evaluation of compliance by adjudicating authority - Whether the hospital had complied with the conditions attached to Notification No. 64/88-Cus so as to justify dropping the demand, confiscation and penalties imposed by the Department - HELD THAT: - The adjudicating authority found that the hospital produced records and statements demonstrating that it had planned and endeavoured to provide the prescribed free outdoor treatment and reserved beds for poor indoor patients, and also considered evidence of free treatment given at a 'free medical campus'. The Department did not challenge those specific factual findings or the evidentiary basis for them before this Tribunal. Having examined the submissions and the impugned orders, the Tribunal held that in the absence of any substantive challenge to the Commissioner's assessment of the evidence, the finding of substantial compliance could not be upset. The Tribunal declined to override the factual evaluation by the Commissioner where no material was shown to be wrongly appreciated or omitted, and where prior remand directions had been followed in de novo adjudication.

The Commissioner's finding of substantial compliance with the notification was sustained and the demands, confiscation and penalties were not reopened.

Final Conclusion: The departmental appeals are dismissed; the Commissioner's orders dropping the demand and allied proposals after finding substantial compliance with Notification No. 64/88-Cus are upheld.

Acquiescence and laches as a bar to judicial review - continuing wrong doctrine - preclusive effect of participation in elections - post decisional hearing to cure lack of pre decision hearing - repugnancy of articles to the Companies Act - competent authority's duty to decide validity of amendments under Sections 255 and 256 - power to withdraw approval if found contrary to statute

Acquiescence and laches as a bar to judicial review - continuing wrong doctrine - preclusive effect of participation in elections - Delay, laches and participation in elections did not preclude petitioners from challenging the impugned approval. - HELD THAT: - The Court found that although petitioners participated in elections and there was a delay of about ten months in approaching the Court, those facts did not bar judicial review. Applying the principle that Section 9 of the Companies Act renders inconsistent memorandum or articles ineffective, the Court held that acquiescence, delay and laches would not necessarily defeat a legitimate challenge to alterations alleged to be repugnant to statutory provisions. Consequently the respondents' plea of delay, laches and acquiescence was rejected. [Paras 10]

Delay, laches and participation in elections do not preclude the petitioners from challenging the amended articles.

Post decisional hearing to cure lack of pre decision hearing - competent authority's duty to decide validity of amendments under Sections 255 and 256 - repugnancy of articles to the Companies Act - power to withdraw approval if found contrary to statute - The petitioners' representation was not considered prior to grant of approval and the Competent Authority must provide a post decisional hearing and decide whether the amendments are repugnant to Sections 255 and 256 and whether reliance on Sections 263A and 265 justified the approval. - HELD THAT: - Records and official notings disclosed that the Representation filed by petitioners was not considered before the impugned approval was granted. The Court emphasised that the question is whether failure to afford pre decision hearing results in failure of justice and, having regard to authorities permitting post decisional hearing to cure procedural deficiency, directed the Regional Director (second respondent) to afford a post decisional personal hearing within six to eight weeks and to pass a reasoned (speaking) order addressing whether the alterations contravene Sections 255 and 256 and whether the third respondent's reliance on Sections 263A and 265 supports the impugned approval. The Court refrained from adjudicating the substantive validity of the amendments and left it to the Competent Authority, retaining that if the Authority finds the approval unlawful it may withdraw it after hearing the third respondent. [Paras 12, 13, 14, 15]

Second respondent to grant post decisional hearing on the Representation, decide with reasons on repugnancy to Sections 255 and 256 and on reliance upon Sections 263A and 265, and communicate the decision; if approval is found unlawful it may be withdrawn after hearing the third respondent.

Final Conclusion: Writ petition disposed of by directing the Competent Authority to grant a post decisional hearing on the petitioners' representation and to pass a speaking order addressing whether the amended Articles are repugnant to the Companies Act; petitioners' delay and participation in elections do not bar the challenge; the writ court left the substantive question open for the Authority to decide and permitted withdrawal of approval if found unlawful after hearing the third respondent.

Delay in pronouncement of adjudicatory order not vitiating proceedings absent demonstrated prejudice - voluntariness of statements and admissibility of retracted statements - concurrent findings of fact on documentary and circumstantial evidence - right to cross-examination and principle of fair hearing in adjudication - penalty proportionality and appellate discretion to reduce penalty - adjudication under Section 51 of the Foreign Exchange Regulation Act

Delay in pronouncement of adjudicatory order not vitiating proceedings absent demonstrated prejudice - adjudication under Section 51 of the Foreign Exchange Regulation Act - Whether delayed pronouncement of the adjudication order rendered the order ex parte or vitiated the proceedings - HELD THAT: - The Court held that mere delay in pronouncement by the Adjudicating Authority, even if lamentable, does not by itself invalidate an otherwise legally sound order. The hearing had been concluded in accordance with Section 51 and the Adjudication Rules; appellants did not seek permission to place the additional documents before the Authority earlier and failed to show real prejudice caused by the delay. Earlier authority on reasonable time for pronouncement was noted, but delay alone did not justify setting aside the order. [Paras 7]

Delay in pronouncement did not render the adjudication ex parte or vitiate the order; this ground of challenge was rejected.

Voluntariness of statements and admissibility of retracted statements - retracted statements as evidence - Whether inculpatory statements subsequently retracted by the appellants could be relied upon by the Adjudicating Authority and the Tribunal - HELD THAT: - The Adjudicating Authority and the Tribunal examined the circumstances and found the statements to be voluntary, recorded in the appellants' own handwriting and corroborated by other material. The Court applied established principles that retraction does not automatically render a statement involuntary; authorities must consider retraction and record reasons if they accept the original inculpatory statement. In the present case cogent reasons were given for rejecting the retractions and treating the statements as voluntary and admissible for adjudicatory purposes. [Paras 9, 10, 11]

The retracted statements were properly treated as voluntary and could be relied upon; this challenge failed.

Concurrent findings of fact on documentary and circumstantial evidence - Whether findings that M/s Bountiful Ltd. was a paper company controlled and operated by the appellants from India were unsustainable - HELD THAT: - The question was essentially one of fact. The Adjudicating Authority and Tribunal relied on the appellants' statements, documents seized from business and residential premises, invoices directing payments to Bountiful's Geneva account, and other incriminating transfers and instructions. The Court found adequate material supporting the concurrent factual findings and declined to reappraise or overturn those conclusions of fact. [Paras 12, 13, 14, 15]

Concurrent findings that Bountiful Ltd. was a paper company controlled by the appellants were supported by evidence and were upheld.

Right to cross-examination and principle of fair hearing in adjudication - Whether refusal to permit cross-examination of witnesses who produced documents (and reliance on a communication from the High Commission) vitiated the adjudication for breach of natural justice - HELD THAT: - Although strict provisions of the Evidence Act do not govern FERA adjudications, cross-examination may be necessary in appropriate cases to test veracity. Here the documents produced by third parties were disclosed to the appellants and they were permitted inspection; production in the nature of Section 139 of the Evidence Act was treated as permissible. The Court found that the refusal to allow cross-examination did not cause demonstrable prejudice in the facts of this case and that the appellants' own statements and seized documents formed the principal basis of the findings. [Paras 18, 19, 20]

Failure to permit cross-examination of those witnesses did not vitiate the proceedings in the circumstances; this ground was rejected.

Penalty proportionality and appellate discretion to reduce penalty - Whether the quantum of penalty imposed was disproportionate and called for interference by this Court - HELD THAT: - The Tribunal had already reduced the Adjudicating Authority's higher penalty by 50% upon reappraisal. Having regard to the nature of the violations and the means adopted by the appellants, the Court found no compelling reason to grant further relief or to interfere with the penalty as reduced by the Tribunal. [Paras 21]

No interference with the penalty imposed by the Tribunal; appellants' plea on proportionality rejected.

Final Conclusion: Concurrent findings of contravention of FERA by the Adjudicating Authority and the Tribunal - including voluntariness of statements, the factual finding that M/s Bountiful Ltd. was a paper company controlled by the appellants, and reliance on disclosed documentary material without cross-examination - were upheld; delay in pronouncement did not vitiate the proceedings in the absence of demonstrated prejudice; the Tribunal's reduction of penalty by 50% was maintained. Appeals dismissed with costs.

Immunity from penalty on payment under Section 73(3) - Obligation not to issue notice after payment under Section 73(3) - Payment of service tax and interest before issue of show-cause notice - Interpretation of Explanation 2 to Section 73(3) - bar on imposition of penalty - Penalty under Section 76 of the Finance Act, 1994

Immunity from penalty on payment under Section 73(3) - Payment of service tax and interest before issue of show-cause notice - Interpretation of Explanation 2 to Section 73(3) - bar on imposition of penalty - Penalty under Section 76 of the Finance Act, 1994 - Whether penalty under Section 76 could be imposed where the assessee had paid the service tax and interest before issuance of notice under Section 73(1). - HELD THAT: - The Tribunal found that the facts admitted that the appellant paid the service tax and interest for the quarter October to December 2009 before service of any notice under Section 73(1). The decision of the jurisdictional High Court in CCE & ST, LTU, Bangalore v. Adecco Flexione Workforce Solutions Ltd. holds that once service tax and interest are paid and the authorities are informed, no notice under Section 73(1) can be served in respect of the amount so paid, and consequently proceedings for recovery of penalty under Section 76 cannot be initiated. Further, Parliament's insertion of Explanation 2 to Section 73(3) by the Finance Act 2010 expressly declares that no penalty shall be imposed in respect of payment of service tax under that sub-section and interest thereon. Applying these principles to the admitted facts, the Tribunal concluded that the adjudicating authorities had no jurisdiction to impose the penalty under Section 76 in respect of the amounts paid prior to issuance of notice.

Impugned order imposing penalty under Section 76 is set aside and the appeal is allowed.

Final Conclusion: The appeal is allowed; the order imposing penalty under Section 76 is set aside in view of payment of service tax and interest before service of notice and the bar on imposing penalty under Section 73(3) as clarified by the High Court decision and Explanation 2. The stay application is disposed of.

Classification of retreading of tyres as manufacture - Applicability of Notification No.12/2003 to retreading services where VAT on inputs has been paid - Stay of recovery subject to pre-deposit

Classification of retreading of tyres as manufacture - Retreading activity does not, prima facie, amount to manufacture - HELD THAT: - The Tribunal considered the submission that retreading of used tyres with warranty constitutes manufacture because retreaded tyres are mentioned as an exisable commodity in the eight digit Central Excise Tariff. After hearing parties, the Bench expressed disagreement with the contention that the retreading activity amounts to manufacture. This conclusion was reached at the prima facie stage while considering the stay application and rejecting the appellant's primary contention that the activity should be treated as manufacture for taxation purposes. [Paras 5]

The plea that retreading constitutes manufacture is not accepted on a prima facie basis.

Applicability of Notification No.12/2003 to retreading services where VAT on inputs has been paid - Reliance on Tribunal precedent extending benefit to retreading - Benefit of Notification No.12/2003 may be available to the appellant in view of the Tribunal's earlier decision - HELD THAT: - The appellant relied on payment of VAT on materials used in retreading and on a Tribunal decision in Chakita Ranjini Udyam extending the benefit of Notification No.12/2003 to retreading of tyres. The respondent maintained that mere payment of VAT does not automatically confer the benefit. The Bench, on a prima facie appraisal at the stay stage, indicated that the benefit of Notification No.12/2003 could be available in view of the cited Tribunal decision, thereby treating the appellant's contention as having sufficient prima facie merit to warrant interim relief. [Paras 5]

On a prima facie view and having regard to the cited Tribunal precedent, the benefit of Notification No.12/2003 may be available to the appellant.

Stay of recovery subject to pre-deposit - Interim stay of recovery granted subject to specified pre-deposit and reporting directions - HELD THAT: - Weighing the appellant's prima facie case, the payment already made, and the plea of financial hardship, the Tribunal directed a conditional order for interim relief. The appellant was directed to make a specified pre-deposit within a stipulated period and report compliance; upon such pre-deposit the Tribunal waived further pre-deposit and stayed recovery of the balance dues pending disposal of the appeal. These directions were issued as the operative interim relief while the appeal remains pending. [Paras 5, 6]

Applicant directed to deposit the specified sum within the time ordered; subject to that pre-deposit, the balance pre-deposit requirement is waived and recovery is stayed until disposal of the appeal.

Final Conclusion: The Tribunal, while rejecting the contention that retreading amounts to manufacture on a prima facie basis, indicated that the appellant may be entitled to the benefit of Notification No.12/2003 in view of earlier Tribunal precedent; accordingly, the Tribunal granted interim relief by ordering a specified pre-deposit and stayed recovery of the remaining dues pending disposal of the appeal.

Inclusion of TDS in taxable value - value of taxable service received from outside India under Rule 7 - liability of service recipient under Section 66A w.e.f. 18-4-2006 - limitation and bar under Section 73(1)

Inclusion of TDS in taxable value - value of taxable service received from outside India under Rule 7 - TDS deducted at source by the Indian recipient is not includible in the taxable value for service tax purposes in the facts of this case. - HELD THAT: - The adjudicating authority applied Rule 7(1) of the Service Tax (Determination of Value) Rules, 2006, which fixes the value of taxable service received under Section 66A as the actual consideration charged for the services. The agreement between the parties expressly stipulated a net payment to the foreign service provider (fixed instalment amounts), demonstrating that the supplier's charge did not include any withholding borne by the recipient. The appellant had not deducted TDS from the supplier's gross invoice amount paid abroad; instead the contractual obligation ensured the foreign provider received the agreed sum irrespective of any Indian withholding. On these facts the gross amount charged by the foreign provider (the instalment amounts) constituted the actual consideration and the additional TDS borne by the recipient need not be added to value. The conclusion rests on application of Rule 7(1) to the contractual and payment facts before the authority. [Paras 5]

TDS amount is not includible in the taxable value; taxable value is the actual consideration charged by the foreign service provider as per Rule 7(1).

Liability of service recipient under Section 66A w.e.f. 18-4-2006 - The appellant became liable as service recipient to pay service tax on consulting engineer services received from abroad only from 18-4-2006 onwards. - HELD THAT: - The authority followed High Court precedents (Indian National Shipowners Association and related decisions) and the Supreme Court's treatment of those conclusions, holding that Section 66A's insertion (effective 18-4-2006) conferred statutory authority to tax recipients in India for services received from non-residents. Prior to that insertion there was no charging provision to levy service tax on an Indian recipient for services received outside India. Applying that principle to the facts, only the instalments paid in April 2006 and September 2006 fall within the period of potential liability arising under Section 66A. [Paras 5, 6]

Liability of the appellant as service recipient to pay service tax arises w.e.f. 18-4-2006; only the April 2006 and September 2006 payments could have been taxable on that ground.

Limitation and bar under Section 73(1) - The demand in the Show Cause Notice (issued 2-6-2008) is time-barred under Section 73(1) even in respect of the payments of April 2006 and September 2006. - HELD THAT: - Having held that (a) TDS is not includible in value and (b) liability as recipient arose only from 18-4-2006, the authority considered limitation. The Show Cause Notice sought recovery for July 2005 to March 2008 but, as only two instalments fell within the period of liability, the notice issued on 2-6-2008 was beyond the limitation period prescribed by Section 73(1) for raising demand in respect of those payments. In addition, because the TDS was not part of taxable value there was no suppression of facts warranting extension of limitation. Consequently the entire demand was held barred by limitation. [Paras 6, 7]

Demand framed by the Show Cause Notice is barred by limitation under Section 73(1); the impugned order is set aside.

Final Conclusion: The appeal is allowed: TDS is not includible in the taxable value; the appellant's liability as service recipient arose only from 18-4-2006 (affecting April and September 2006 payments); and the demand in the Show Cause Notice dated 2-6-2008 is time-barred under Section 73(1), leading to setting aside of the impugned order.

Pure Agent - Service Tax (Determination of Value) Rules, 2006 - Rule 5(2) - Renting of Immovable Property Service - taxable value - Operation & Maintenance charges - taxability - Management, Maintenance and Repair Service - leviability - Extended period under Section 73(1) - time-bar

Pure Agent - Service Tax (Determination of Value) Rules, 2006 - Rule 5(2) - Renting of Immovable Property Service - taxable value - Electricity charges and air conditioning charges collected from the lessee are not includible in the taxable value of Renting of Immovable Property Service where collected as incidental reimbursable expenses and remitted to the electricity authority as a pure agent. - HELD THAT: - The appellant produced individual metering and collected electricity and AC energy charges based on actual consumption at tariff fixed by the State; amounts were remitted to the Electricity Board and no excess was collected. The activity of collecting and remitting such amounts in the circumstances constituted incidental reimbursable expenses incurred while providing Renting of Immovable Property Service and fall within the concept of a Pure Agent under Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006. Consequently those amounts need not be included in the taxable value of the principal service; the tax already paid by the appellant on the relevant receipts was held to be in order. [Paras 6]

Electricity and AC charges held not includible in taxable value; treated as reimbursable expenses of a Pure Agent and not subject to Service tax in the appellant's hands.

Operation & Maintenance charges - taxability - Management, Maintenance and Repair Service - leviability - Extended period under Section 73(1) - time-bar - Demand of Service tax on Operation & Maintenance charges under Management, Maintenance & Repair Service for the period 16-6-2005 to 31-5-2007 is untenable and time barred. - HELD THAT: - The principal service Renting of Immovable Property became taxable only from 1-6-2007 and the appellant began discharging Service tax on Operation & Maintenance charges from that date. The Department's demand for the earlier period (16-6-2005 to 31-5-2007) is irrational in relation to the principal service's taxability and the show cause notice invoking that period is barred as none of the statutory ingredients to invoke the extended five year period under Section 73(1) are present. Therefore the demand for the specified earlier period cannot be sustained. [Paras 6]

Demand for Service tax on Operation & Maintenance charges for 16-6-2005 to 31-5-2007 rejected as irrational and time barred under the extended period provision.

Final Conclusion: The impugned Order in Original is set aside and the appeal is allowed: electricity and AC charges collected as reimbursable amounts by the appellant are not includible in the taxable value of Renting of Immovable Property Service under Rule 5(2), and the demand for Operation & Maintenance charges for 16-6-2005 to 31-5-2007 is rejected as time barred.

Utilisation of CENVAT credit to discharge excise duty on DTA clearances - interest under Section 28AB of the Customs Act, 1962 for belated cash payment - nature of duty on DTA clearances by a 100% EOU as excise duty measured by customs duty - precedential application of Tribunal decision in Matrix Laboratories Ltd.

Utilisation of CENVAT credit to discharge excise duty on DTA clearances - interest under Section 28AB of the Customs Act, 1962 for belated cash payment - nature of duty on DTA clearances by a 100% EOU as excise duty measured by customs duty - Whether interest under Section 28AB of the Customs Act is payable where a 100% EOU discharged duty liability on DTA clearances by debiting CENVAT credit and later made cash payment on departmental direction. - HELD THAT: - The Tribunal found no dispute that the appellant, on clearing inputs from the EOU to DTA, prepared invoices and debited duty against the CENVAT account in discharge of the liability computed under Section 3(1) of the Central Excise Act. The bench applied the Tribunal's earlier decision in Matrix Laboratories Ltd., which holds that the amount paid by a 100% EOU on DTA clearances is duty of excise measured by the aggregate of customs duties that would have been leviable on import; thus customs duties serve only as the measure of excise duty for such clearances. In that legal matrix, amounts debited from CENVAT to discharge the excise liability on DTA clearances cannot attract interest under Section 28AB of the Customs Act when subsequently paid by cash on departmental direction. Relying on this binding precedent and the settled legal position, the Tribunal concluded that interest confirmed by the adjudicating authorities was not tenable. [Paras 6, 7]

Impugned order confirming interest under Section 28AB is unsustainable and is set aside; appeal allowed.

Final Conclusion: The appeal is allowed; the order confirming interest under Section 28AB of the Customs Act is set aside because discharge of duty by debiting CENVAT on DTA clearances by the 100% EOU (measured by customs duty) precludes imposition of the said interest as held by the Tribunal in Matrix Laboratories Ltd.

Availability of Cenvat credit on inputs used for repairs and maintenance - limitation for recovery of Cenvat credit - waiver of pre-deposit - remand for reconsideration following principles of natural justice

Waiver of pre-deposit - Application for waiver of pre-deposit allowed - HELD THAT: - On hearing the parties the Tribunal allowed the stay petition and granted the application for waiver of pre-deposit, and proceeded to consider the appeal on merits to the extent necessary to dispose of the stay application.

Waiver of pre-deposit granted and stay petition disposed of.

Availability of Cenvat credit on inputs used for repairs and maintenance - limitation for recovery of Cenvat credit - remand for reconsideration following principles of natural justice - Impugned order set aside and matter remanded to first appellate authority for reconsideration, keeping merits open - HELD THAT: - The Tribunal noted that the appellant had availed Cenvat credit on duty paid on welding electrodes claimed to have been used for repairs and maintenance during January 2006 to March 2010 and that a show cause notice was issued in December 2010. The appellant consistently raised the point of limitation and contended there was no intention to evade duty; however, the lower authorities did not record any finding on limitation in the appellate order. In view of absence of any finding on limitation and without expressing any opinion on the merits of entitlement to credit, the Tribunal found that the question of limitation requires consideration afresh by the first appellate authority. The remand was directed with a mandate to reconsider the matter after affording the parties opportunity under the principles of natural justice, keeping all other issues open. [Paras 4, 5]

Impugned order set aside and matter remitted to the first appellate authority for reconsideration on limitation and related issues, after following principles of natural justice.

Final Conclusion: The pre-deposit was waived, the impugned order was set aside, and the appeal remitted to the first appellate authority for fresh consideration of limitation and related questions (on facts and merits) after affording parties opportunity under the principles of natural justice; all other issues left open.

Clandestine removal - evasion of excise duty - extended period of limitation under Section 11A - penalty for duty evasion - onus on assessee to prove lawful procurement and accounting

Clandestine removal - evasion of excise duty - onus on assessee to prove lawful procurement and accounting - Findings of clandestine removal and demand confirmed against the appellant who failed to produce evidence of procurement or proper accounting. - HELD THAT: - The Tribunal upheld the factual finding that goods cleared to buyers were not supported by excise invoices and that the appellant failed to produce purchase invoices or other evidence to substantiate its claim that goods were procured from SSI units. The appellate authority accepted documentary material (work orders) showing that excise invoices were to be sent but were not produced, and held that the transactions were not properly accounted for. On this basis the Department's conclusion of clandestine removal with intent to evade duty was sustained and the demand confirmed. [Paras 6]

The finding of clandestine removal and the demand confirmed by the lower authorities is upheld.

Extended period of limitation under Section 11A - evasion of excise duty - Invocation of the extended five-year period under Section 11A was held to be valid on the finding of suppression with intent to evade duty by fraud and collusion. - HELD THAT: - The appellate authority found sufficient material to conclude suppression with intent to evade duty and rejected the appellants' limitation plea. It held that where suppression by fraud and collusion is established, the extended period cannot be denied merely because the fact came to the Department's notice at a later date. The Tribunal, after considering that the appellants had not produced evidence to rebut the Department's case, found no reason to interfere with this conclusion. [Paras 6]

Invocation of the extended period under Section 11A is sustained and the limitation plea is rejected.

Penalty for duty evasion - Penalty confirmed against the manufacturing appellant who failed to discharge liability; penalty waived in favour of the other appellant who merely placed work orders. - HELD THAT: - The appellate authority distinguished the two appellants: it found that Appellant No.1 (the manufacturer who failed to pay duty) was liable to penalty because it did not comply with duty liability, whereas Appellant No.2, which had placed work orders and did not contravene provisions, was entitled to relief. On that basis the Commissioner (Appeal) allowed the appeal of Appellant No.2 by waiving the penalty and rejected the appeal of Appellant No.1, upholding the penalty imposed on it. The Tribunal found no ground to interfere with this outcome. [Paras 6]

Penalty imposed on the manufacturing appellant is upheld; penalty on the other appellant is waived.

Final Conclusion: The Tribunal dismissed the appeal of the manufacturer, upheld the finding of clandestine removal and the demand (including invocation of the extended period under Section 11A), and affirmed the penalty decision against that appellant while sustaining the waiver of penalty in favour of the co-appellant who had placed work orders.

Remand for fresh consideration - pre-deposit requirement - interpretation of notification - BIS certification compliance - natural justice

Pre-deposit requirement - remand for fresh consideration - interpretation of notification - BIS certification compliance - natural justice - Whether the appeals dismissed by the first appellate authority for non-compliance of pre-deposit should be set aside and remanded for decision on merits without insisting on further deposit. - HELD THAT: - The Tribunal observed that the first appellate authority dismissed the appeals solely for non-compliance with the pre-deposit direction and did not decide the substantive question of whether the product qualified for the benefit of the notification. The appellant had deposited Rs.2.50 lakhs during pendency and later produced a BIS certificate; the adjudicating authority had rejected the claim primarily for lack of a BIS certificate. The Revenue relied on a Board circular tightening BIS compliance after a specified date, but the Tribunal declined to address the merits or interpret the notification in the first instance because the appeal had not been decided on merits below. Given that the central controversy involves interpretation of the notification and conformity to BIS specifications, the Tribunal held that the deposit already made by the appellant was adequate for purposes of entertaining the appeal and that the matter should be remitted for fresh consideration on merits. The remand directs the first appellate authority to reconsider the appeal without seeking further deposit and to decide the substantive issues after affording the parties the opportunity under the principles of natural justice. [Paras 2, 4, 5, 6]

Impugned order set aside; appeals remanded to the first appellate authority to decide on merits without insisting on further deposit and after following principles of natural justice.

Final Conclusion: The Tribunal set aside the dismissal for non-compliance, held the deposit of Rs.2.50 lakhs sufficient to entertain the appeals, and remanded the matters to the first appellate authority to determine the entitlement to the notification (including issues of BIS conformity) on merits after observing natural justice, without demanding further pre-deposit.

Pre-deposit under Section 35F of the Central Excise Act, 1944 - sufficiency of deposit to entertain appeal - remand for fresh adjudication - principles of natural justice

Pre-deposit under Section 35F of the Central Excise Act, 1944 - sufficiency of deposit to entertain appeal - Whether the first appellate authority was justified in dismissing the appeal for non-compliance of pre-deposit when the appellant had already made a substantial deposit during lower proceedings. - HELD THAT: - The Tribunal found that the first appellate authority did not decide the appeal on merits but dismissed it solely for non-compliance with the pre-deposit requirement imposed by it. The record showed that the appellant had deposited an amount of Rs.30 lakhs during proceedings before the lower authorities. Having regard to an identical decision of this Bench in Amrut Ceramics (Final Order No.A/1453-1455/WZB/AHD/2012, dt.25.09.2012) where a similar deposit was treated as sufficient, the Tribunal held that the deposit already made by the appellant exceeded the amount required to be pre-deposited to enable the appeal to be heard. On that basis the Tribunal concluded that further insistence on pre-deposit was not justified and the appeal could not be dismissed merely for non-compliance when the deposit was adequate. [Paras 3, 4]

The dismissal for non-compliance of the pre-deposit was not justified in view of the deposit already made; the deposit was to be treated as sufficient to entertain the appeal.

Remand for fresh adjudication - principles of natural justice - The appropriate course of action after finding the pre-deposit requirement satisfied. - HELD THAT: - The Tribunal set aside the impugned order of dismissal and remitted the matter to the first appellate authority for fresh consideration on merits. The remand was directed on the basis that the appeal had not been heard on merits and that the first appellate authority should not insist on any further pre-deposit from the appellant. The Tribunal expressly required the first appellate authority to observe the principles of natural justice while reconsidering the appeal. [Paras 5]

The impugned order is set aside and the matter is remanded to the first appellate authority to reconsider the appeal afresh without insisting on any further pre-deposit and after complying with principles of natural justice.

Final Conclusion: Impugned order of dismissal for non-compliance with the pre-deposit requirement set aside; appeal remitted to the first appellate authority to be heard on merits without further pre-deposit, observing principles of natural justice.

Quashing of orders - reconsideration after taking objections into account - opportunity of hearing - service of order - allowing filing of revised returns - assessment proceedings under KVAT Act

Quashing of orders - reconsideration after taking objections into account - opportunity of hearing - service of order - Validity of Exts.P11 to P14 passed on Exts.P1 to P4 without considering Exts.P9 and P10 objections and without affording the petitioner an opportunity of hearing. - HELD THAT: - The Court found that Exts.P11 to P14 orders were passed on Exts.P1 to P4 without taking into account the objections evidenced by Exts.P9 and P10. Although the respondent contended that the objections were filed after the orders were passed, the petitioner was unaware of those orders because the orders were served later; no communication rejecting the petitioner's earlier request for time (Ext.P6) was given. In these circumstances the Court held that the respondent ought to re-consider the matters after affording the petitioner an opportunity of hearing and after taking on record the objections already submitted. [Paras 4, 5]

Exts.P11 to P14 quashed; respondent directed to pass fresh orders on Exts.P1 to P4 after considering Exts.P9 and P10 and after affording the petitioner an opportunity of hearing within four months of production of this judgment.

Final Conclusion: Writ petition allowed in part: Exts.P11 to P14 quashed and matter remitted to the respondent for fresh consideration of Exts.P1 to P4, taking into account the objections filed and after affording the petitioner a hearing, to be completed within four months.

Scope of powers of State Information Commissioner under section 19(8) - procedure for third party under section 11 of the RTI Act - right to information - public authority - principles of natural justice - use of powers under other statutes to secure compliance with RTI - overriding effect of the RTI Act

Scope of powers of State Information Commissioner under section 19(8) - use of powers under other statutes to secure compliance with RTI - public authority - overriding effect of the RTI Act - Validity of the direction by the State Information Commissioner directing the Education Officer to use powers under the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977 to procure information from a private unaided school - HELD THAT: - The court examined the scope of S.19(8)(a) and held that the main clause confers a wide, general power to require steps necessary to secure compliance with the RTI Act, with the sub-clauses (i)-(vi) being illustrative and not limiting that general power. In furtherance of effective implementation and in view of the overriding object of the RTI Act (including its overriding effect), steps necessary to compel production of information may include directing a public authority to invoke powers available to it under other statutes to obtain information from third parties. The Education Officer (Secondary), being a public authority with statutory powers under the 1977 Act and related rules, can be directed to use those powers to access school records and supply information. Consequently, the appellate direction to the Education Officer to procure information under the 1977 Act was not beyond jurisdiction or impermissibly indirect. [Paras 8]

Direction of the State Information Commissioner to the Education Officer to use powers under the 1977 Act to procure information from the private unaided school is within the scope of S.19(8) and not ultra vires.

Principles of natural justice - procedure for third party under section 11 of the RTI Act - right to information - Whether the impugned appellate order was passed after affording the petitioners an opportunity of hearing and whether further consideration is required as to availability of the requested documents - HELD THAT: - The impugned order records that the Head Mistress appeared on 20th September 2011 but also records a hearing on 16th October 2011 when only the respondent seeking information was present; there is no indication that notice was given to the petitioners for that hearing. The court found that the appellate authority did not consider petitioners' contentions that available documents had already been supplied and that certain material was not in their possession. Given this absence of opportunity of hearing and the unresolved question whether specific documents were held by the petitioners or by the approving authority, the appellate order insofar as issued without hearing the petitioners is unsustainable. The matter was set aside and restored for fresh hearing so that the commissioner may examine availability of documents and, if necessary, follow the third party procedure under section 11. [Paras 11, 13]

Impugned order passed without hearing the petitioners quashed; appeal restored for fresh hearing and consideration with parties directed to appear before the State Information Commissioner.

Final Conclusion: The High Court upheld that S.19(8) empowers the Information Commissioner to direct a public authority to use statutory powers under other laws to procure information for compliance with the RTI Act, but quashed the impugned order insofar as it was passed without affording the petitioners an opportunity of hearing and remanded the appeal to the State Information Commissioner for fresh hearing and determination.