TaxTMI 
TaxTMI 
2026 (9) TMI 628
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....al, which remanded the matter for fresh consideration. Thereafter, the Director of Income Tax (Exemption), Ahmedabad granted registration to the petitioner No. 1 under section 12AA of the Act w.e.f. 21.12.2005. Registration under section 25 of the Companies Act, 1956 was also granted. 3. It appears that an issue arose with regard to the status of the petitioner being questioned to the extent as to whether it carries its activities for charitable purposes defined under section 2(15) of the Act, which ultimately resulted into the proceedings before the Commissioner of Income Tax (Appeals), allowing the appeals in favor of the petitioner granting exemptions to the petitioner No. 1, which were further subject matter of challenge before the Income Tax Appellate Tribunal (for short "the Tribunal"). The Tribunal rejected the appeals filed by the Department, which ultimately culminated into the tax appeals being Tax Appeal No.627 of 2015 and allied matters before this Court. By the judgment and order dated 29.07.2019, this Court held that the petitioner No. 1 is engaged in charitable activity by way of preservation of environment. The issue thus, got concluded so far as the activities o....
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....rt in Tax Appeal No. 627 of 2015 and allied matters, wherein the Court, after detailed examination, has held that the activities of the petitioners fall within the expression "preservation of environment" by providing "pollution control treatment for disposal of liquid and solid industrial waste", and it is also registered under the provision of section 12AA of the Act. It is submitted that the respondents have entirely ignored the judgment of this Court, though it was pointed out by the petitioners in their representation. 7. It is submitted by learned advocate Mr. Sheth that the Notification No. 12/2017 dated 28.06.2017 does not stipulate any rate of GST under Chapter 99 relating to the services by an entity registered under section 12AA of the Act, which undertake charitable activities as defined under the provision of clause(iv) of Notification No. 12/2017 dated 28.06.2017. It is submitted that petitioner No. 2 has only given honorary service to the petitioner No. 1, which itself is not a profit company, and the provision of section 74 of the GST Act does not get attracted in the case of the petitioners, as petitioner No. 2 did not have any mala fide intention of deviation, ....
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....which the invocation of provision of section 74 of the GST Act is legally sustainable. Thus, it is urged that the present petition may not be entertained. ANALYSIS AND OBSERVATIONS 11. We have heard the learned advocates appearing for the respective parties and also perused the documents, as pointed out by them. 12. The facts which are established from the records and pleadings are as under: (a) The petitioner No. 1 is registered under the provision of section 12AA of the Act. (b) The issue with regard to its charitable activities was deliberated upon by this Court in the Tax Appeal No.627 of 2015 and allied matters filed by the Commissioner of Income Tax. Issue No. 1, which is incorporated in paragraph No. 18 therein dismissing the appeals filed by the Revenue is as under: "[1] Whether on the facts and in the circumstances, the Income Tax Appellate Tribunal was justified in affirming the view of the Commissioner (Appeals) that the activities of the assessee fall within the ambit of Preservation of Environment as envisaged under section 2(15) of the Income Tax Act, 1961?" (c) After threadbare examination of the order passed by the Income....
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....bjects of the assessee are charitable as the dominant object is not only preservation of environment, but one of general public utility and, therefore, the assessee is entitled to seek exemption under Section 11 of the Act. The Tribunal is the last fact finding body. As a principle, this Court should not disturb the findings of fact in an appeal under Section 260A of the Act unless the findings of fact are perverse." (d) Thus, the issue with regard to the activities undertaken by the petitioners relating to charitable activities was answered by the this Court in favor of the petitioners and it was held that the petitioner entity is entitled to seek exemption under section 11 of the Act. (e) As recorded previously, the civil appeals were disposed of in view of low tax effect by the Apex Court vide order dated 30.01.2025. 13. Reading the observations of this Court in juxtaposition to the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 will clarify that the activities of the petitioners would fall within the clause 2(r)(iv), under chapter 99. The relevant extract of the said Notification reads as under: "Notification No. 12/2017-Central Tax (Rate) ....
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....16. By resorting to this Chapter Heading 9994, the respondents have issued the show-cause notice under the provision of section 74 of the GST Act dated 05.09.2023 in Form GST DRC-01 alleging that the petitioners though were aware of the facts of their services for treatment and disposal of the affluent as taxable under the GST Acts, did not pay tax deliberately which is in contravention of the provisions of the GST Acts by resorting to mis-declaration and willful suppression of facts with a deliberate intent to evade payment of GST, which is a taxable services falling under SAC 9994, as mentioned hereinabove and such acts of omission and commission constitute an offense of the nature and type as defined under section 132(1)(e) and (i) of the CGST Act and hence, are liable to be proceeded further under the provisions of section 74 of the GST Acts. 17. We may at the outset, now deal with the invocation of the provision of section 74 of the GST Act upon the petitioners. The provision of section 74(1) of the GST Act are relevant for declaring the validity of the impugned show-cause notice. The same reads as under: "Section 74. Determination of tax (1) Where it appe....
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....Pushpam Pharmaceutical Co. V/s. Collector of Central Excise, Bombay [1995 Suppl. (3) SCC 462], we find that "suppression of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is settled law that mere failure to declare does not amount to willful suppression. There must be some positive act from the side of the assessee to find willful suppression. Therefore, in view of our findings made herein above that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11A of the Act". 16 In Collector of Central Excise V/s. H.M.M. Ltd., 1995 Supp (3) SCC 322, this Court held that mere nondisclosure of certain items assessable to duty does not tantamount to the mala fides elucidated in the proviso to Section 11A(1) of the Central Excise Act, 1944. It enunciated ....