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    Post-Death Determination of GST Liability and Estate-Limited Recovery from Legal Heirs
    Non-Confirmation of Seizure under Section 37A of FEMA and the Requirement of Recorded Reasons to Bel...
    Case Laws Companies Law
    Oppression and Mismanagement Proceedings under Sections 241 and 242: Corporate Authority During Pend...
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    Dependent Agent Permanent Establishment under Article 5(5) of the India-Switzerland DTAA: Authority,...
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Case Laws GST
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Estate-limited GST recovery permits post-death assessment of legal representatives while protecting heirs' independent assets after business discontinuance.
Section 93 permits post-death GST determination against a legal representative where a liable person dies. If the business is discontinued, tax, interest and penalty may be recovered only from the deceased's inherited estate and only within its capacity; the heir's independent assets remain outside that limit. Proceedings may be initiated without a pre-death notice, but must be addressed to the legal representative in that capacity, follow the applicable adjudication process, and provide hearing and a reasoned order.
Case Laws FEMA
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Recorded reasons to believe govern foreign-asset seizure; non-confirmation requires appellate resolution before contradictory adjudication proceeds.
Section 37A permits seizure of equivalent domestic assets only where the authorised officer records written reasons to believe that foreign assets are held in contravention of FEMA. The competent authority must examine the material after hearing both sides and either confirm or set aside seizure. A reasoned non-confirmation based on an absent statutory threshold is substantive on seizure, though it does not finally decide the underlying contravention. Pending appeal, the adjudicating authority cannot displace that finding or adopt a contrary premise; Section 37A(4) applies only to confirmed seizure.
Case Laws Companies Law
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Unstayed tribunal dismissal leaves former directors without corporate authority while banks follow valid company instructions amid management disputes.
Where an oppression and mismanagement petition has been dismissed, a pending appeal without an appellate stay does not itself restore a former director's authority or suspend the dismissal's operative effect. Sections 241 and 242 require statutory prejudice and prescribed Tribunal findings; procedural irregularities in director removal may be relevant but do not alone establish oppression. Banks should ordinarily follow formally authorised company instructions rather than decide unresolved management disputes, unless a binding judicial or statutory restraint applies.
Case Laws Benami Property
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Benami property claims cannot be recast through wills or employment-based trust when pleadings assert beneficial ownership.
Benami-property claims based on a claimant's payment for property titled in another person's name may fall within the statutory definition when the property is alleged to be held for that claimant's benefit. A Will, succession claim, or other later instrument does not provide an independent basis of title where the pleaded foundation is restoration of beneficial ownership. The statutory scheme prohibits benami arrangements, bars enforcement of claimed beneficial ownership, and treats prohibited re-transfers as invalid; self-acquired title in the named holder's name does not displace the pleaded funding arrangement.
Case Laws Income Tax
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Reason to believe in reassessment requires tangible material, a live nexus, and recorded reasons; review of examined issues is barred.
Income-tax reassessment under Sections 147 and 148 is permissible only where recorded reasons, assessed at the time of notice, disclose a bona fide reason to believe that chargeable income escaped assessment. Final proof is unnecessary at that stage, but relevant tangible material must have a rational, live link to escapement. Reopening cannot be used to review an issue consciously examined and decided in the original scrutiny; nor can later or extraneous material supplement the recorded reasons. The taxpayer may seek the reasons, file focused objections, and receive a speaking order before reassessment continues.
Case Laws Income Tax
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Political-donation deduction disallowance does not itself establish misreporting; enhanced penalty requires proof of a specific statutory default.
Disallowance of a political-contribution deduction under Section 80GGC and imposition of penalty under Section 270A are separate statutory inquiries. An adverse finding on genuineness or eligibility may raise assessed or reassessed income, but cannot alone establish misreporting. Enhanced penalty requires proof that the taxpayer's conduct falls within a specific Section 270A(9) category, supported by a precise notice and reasoned factual findings.
Case Laws Income Tax
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Conditional charitable registration cannot suspend tax benefits pending litigation outside the statutory grant and cancellation framework.
Section 12AB permits the authority, after inquiry into objects, genuine activities and material legal compliance, to grant registration for the statutory period or reject the application. It does not create a contingent form of registration whose tax consequences await future litigation. Post-registration violations must be addressed through the separate cancellation process, requiring inquiry and hearing. Conditions in prescribed forms or administrative guidance may operationalise statutory duties but cannot create extra-statutory eligibility thresholds, future-conduct obligations or anticipatory cancellation consequences. Binding jurisdictional rulings remain applicable unless stayed, modified or reversed.
Case Laws Customs
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Transaction value reassessment requires disclosed comparable evidence, while protest-qualified consent preserves appellate rights against enhanced customs valuation.
Transaction value under Section 14 and Rule 3 is the primary basis for valuing imported goods. Rule 12 permits rejection only where an objectively sustainable reasonable doubt persists after considering further information; on request, the grounds must be disclosed in writing and a hearing afforded. Redetermination must follow Rules 4 to 9 sequentially and rely on demonstrably comparable import data. Written acceptance of reassessment may dispense with a speaking order under Section 17(5), but protest-qualified or provisional-clearance correspondence may preserve the statutory right to appeal.
Case Laws GST
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Leasehold rights assignment may fall outside GST when the lessee permanently transfers the entire proprietary estate.
GST treatment of assignment of leasehold rights turns on whether the lessee has made a complete transfer of its existing estate or continues to provide occupation or enjoyment. Where the assignor transfers the whole residual term, possession, building and associated rights, retains no reversionary or controlling interest, and the assignee succeeds directly to obligations towards the original lessor, the transaction may be characterised as transfer of benefits arising out of land rather than a supply of services. Labels such as premium, salami or transfer fee are not conclusive.
Case Laws Income Tax
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Leave encashment exemption: Non-government employees may claim the enhanced notified ceiling subject to statutory computation conditions.
Retirement leave encashment received by employees other than Central or State Government employees falls under Section 10(10AA)(ii). Exemption depends on retirement, the ten-month earned-leave limit, average salary for the preceding ten months, earned-leave entitlement restrictions, aggregate limits, and prior exempt receipts. The enhanced notified ceiling of Rs. 25,00,000, deemed to operate from 1 April 2023, is treated in the Tribunal approach discussed as a beneficial rationalisation available to eligible pending claims for earlier assessment years, without displacing the statutory computation conditions.
Case Laws Income Tax
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Dependent agent permanent establishment requires proven habitual contractual authority; liaison, administrative support, and customer contact alone remain insufficient.
Dependent agent permanent establishment under Article 5(5) requires proof that an Indian person has authority to negotiate and enter contracts for the foreign enterprise and habitually exercises that authority. Customer liaison, account management, administrative support, communication of pre-approved terms, document routing, and assistance with online standard-form contracting fall short unless Indian personnel substantively determine essential terms or routinely bring negotiations to a binding commercial conclusion. Formal offshore execution is not decisive where local personnel effectively control material negotiations. Corporate association, economic dependence, and independent-agent considerations cannot replace proof of the positive authority and habitual-exercise requirements.
Case Laws Customs
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Proper-officer jurisdiction permits assigned customs officers to issue recovery notices without having performed the original assessment.
Customs show-cause jurisdiction requires both appointment as an officer of customs and function-specific assignment as the proper officer. Assessment under Section 17 and recovery under Section 28 are distinct functions; the original assessing officer need not alone issue a recovery notice. Retrospective validation of qualifying officers' proper-officer status applies independently of the preserved historical recovery regime. Confiscation and penalty proceedings require written grounds, prescribed prior approval, representation, and hearing. Where jurisdiction exists, disputed facts, evidence, limitation, and procedural compliance ordinarily require determination through adjudication.
Case Laws Money Laundering
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Equivalent-value attachment permits securing untainted pre-offence assets only when unavailable criminal proceeds, valuation, and statutory risk are established.
Pre-offence property is ordinarily not directly derived from later scheduled-offence activity, but may be provisionally attached as equivalent value where actual proceeds are unavailable. Such attachment requires identification and reasoned valuation of the alleged proceeds, material showing their unavailability, and recorded reasons to believe that non-attachment risks concealment, transfer, or other frustration of confiscation. A later use of illicit funds to repay loans, construction borrowing, or secured obligations may separately establish a direct or indirect nexus. Section 24 presumptions do not replace the foundational requirements for attachment.
Case Laws IBC
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Cross-assignment disciplinary suspension requires proportionate, assignment-specific hearing while creditor committees retain statutory control over replacement decisions.
Where disciplinary misconduct concerns one CIRP, cross-assignment suspension requires a proportionate link to the pleaded charge, supporting material and hearing afforded. Section 220(2) permits disciplinary sanctions after hearing, while Regulation 13(7) requires intimation to Committees of Creditors and the Adjudicating Authority. On the prima facie construction applied, intimation informs each Committee's decision on continuation or replacement rather than automatically removing the professional from unrelated ongoing assignments. The Board's regulatory role and the Committee's replacement power remain distinct but connected.
Case Laws GST
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Electronic authentication of GST notices requires prescribed signatures; portal uploads, reference numbers, and DRC summaries cannot independently validate proceedings.
Rule 26(3) makes electronic issuance and authentication by digital signature, e-signature, or a notified verification mode cumulative conditions for GST notices and orders. A portal upload concerns service, while a system-generated reference number, DRC summary, or DIN performs tracking or procedural functions; none independently establishes the authorised officer's authentication. Section 169 governs service rather than validity, and Section 160 does not ordinarily cure a defect preventing attribution of the instrument to the competent officer. DRC-01 cannot replace the statutory notice, and DRC-07 supports recovery only upon a valid order.
Case Laws GST
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GST bail classification requires precise Section 132 charging clauses, with investigation status, cooperation and proportionality governing custodial necessity.
GST-evasion bail adjudication requires a case-specific assessment of custodial necessity rather than an automatic consequence of the alleged tax magnitude, Magistrate-triability, or a maximum five-year sentence. Section 132 classification depends on the precise offence clause and punishment bracket, not merely on the alleged quantum of evasion. Relevant considerations include the stage of investigation, cooperation with summons, security of evidence, individual role, risks of absconding or interference, proportionality, and personal liberty under Article 21.
Case Laws Customs
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Certificate-specific origin verification prevents preferential-duty denial based solely on unrelated suspect certificates or supplier doubts.
Preferential customs-duty treatment requires compliance with applicable rules of origin and reliable proof that imported goods qualify as originating. A country-of-origin certificate is important evidence but does not remove the importer's duty to possess supporting origin information and exercise reasonable care. Challenges to preferential treatment must be certificate-specific and consignment-specific: an adverse finding concerning identified certificates cannot, without direct evidence, invalidate separate certificates. Customs verification should identify the particular proof of origin, alleged defect and material linking it to the import, while fraud, suppression or misrepresentation independently established may support substantive action.
Case Laws GST
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Packing-material input tax credit may support inverted-duty refunds when higher-rated inputs cause accumulation for taxable packaged supplies.
Refund of accumulated input tax credit under Section 54(3)(ii) may arise where packing materials used to make taxable packaged outward supplies bear a higher tax rate than the outward supply and generate the accumulation. The inquiry extends to all qualifying inputs and is not limited to a principal raw material. Parity between the rate on bulk tea and packaged tea does not itself preclude refund if higher-taxed packing materials used for the packaged supply are the cause of unutilised credit.
Case Laws GST
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Mandatory detention timelines require timely notice, hearing and penalty order, preventing prolonged restraint of goods in transit.
Section 129(3) establishes a mandatory two-stage timeline: issuance of the penalty notice within seven days of formal detention or seizure, followed by a penalty order within seven days of legally effective service. The periods are independent, and compliance at one stage cannot cure delay at the other. Service, portal timestamps and the electronic records required under Rule 142 are material to chronology. Penalty requires a hearing, while payment under protest may still require a reasoned order to preserve appellate access. Later confiscation action cannot ordinarily cure a defective detention adjudication.
Case Laws Income Tax
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Subsisting judicial restraint on leave travel concession withholding prevents employer default while preserving employees' underlying tax liability.
A subsisting judicial restraint expressly prohibiting deduction from leave travel concession reimbursements governs the employer's withholding conduct for the covered period. Non-deduction in compliance with that restraint cannot constitute failure to discharge an enforceable duty under Sections 192 and 201, even if the underlying exemption claim is later found substantively unavailable. The restraint does not eliminate employee-level tax liability. For unprotected periods, foreign-leg or circuitous travel claims remain outside the domestic-travel condition, and payer protection may depend on proving employee return filing, income inclusion and tax payment through Form 26A.

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Royalty or Not? Decoding the Taxability of Marketing and Reservation Contributions under India-USA DTAA

14 August, 2024

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Royalty characterization: marketing and reservation contributions treated as non-royalty under DTAA when tied to agreed-use obligations.
Whether marketing and reservation contributions from Indian hotels to a US company qualify as Royalty or Fees for Included Services under the India-USA ... Summary

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Acts Income Tax