This weekly round-up analytically summarizes the key stories related to the Supreme Court reported at Taxscan.in during the previous week from March 1st to March 12th, 2022.
The Supreme Court of India ruled that, TDS is not applicable under Section 194A of the Income Tax Act on Interest Payments to Agra Development Authority.
A two-judge bench of the Supreme Court comprising of Justice D.Y Chandrachud and Justice Surya Kanth has observed that, the issue which is raised in the present appeals is covered by the judgment of a two-Judge Bench of this Court in Commissioner of Income Tax (TDS) Kanpur and Another vs Canara Bank 1. In that case, the issue pertained to the applicability of the notification dated 22 October 1970 in relation to payments made by Canara Bank to the New Okhla Industrial Development Authority, an authority constituted under Section 3 of the Uttar Pradesh Industrial Area Development Act 1976. The Bank had not deducted tax at source under Section 194-A which led to notices being issued, resulting inconsequential action.
The Supreme Court has held that the benefit of the first proviso to Section 129E of the Customs Act, 1962 before substitution, whereby the Appellate Tribunal was vested with the power to dispense with the deposit of the penalty amount to be made during the pendency of the appeal, could not be extended to the appellants who had filed an appeal after the provision was substituted by the new Section 129E that came into effect on 06.08.2014.
A two-judge bench comprising Justice KM Joseph and Justice Hrishikesh Roy, while dismissing an appeal filed against the order of the Calcutta High Court held that the substitution of a provision results in the repeal of the older provision and replacement by the new provision. According to the bench, the benefit of the proviso in the old provision could not be extended to the appellant who had filed the appeal after the new regime came into effect. Moreover, the amount asked to be deposited was 7.5% of the entire penalty imposed, which goes on to show that the intention was to treat the appellant’s case under the new Section 129E as opposed to the older version which required depositing the entire amount.
A two-judge bench of the Supreme Court has upheld the decision of the CESTAT wherein Hyderabad Bench quashed the Service Tax Demand under Business Support Services for revenue sharing by theatres. While dismissing the appeal, a coram of Justice M R Shah and Justice B V Naga Ratna held that “No case is made out to interfere with the impugned Order passed by the Customs, Excise and Service Tax Appellate Tribunal (for short, `CESTAT’). The CESTAT has taken an absolutely correct view, to which we agree. Hence, the Civil Appeal stands dismissed.”
The Supreme Court observed that States have power to levy excise duty only in respect of the alcoholic liquor for human consumption. Alcoholic liquors other than for human consumption have been left to the Central Legislature for levy of duty of excise.
A two-judge bench comprising Justices L Nageswara Rao and B R Gavai observed that “It could thus be seen that the Constitution Bench has held that the Constitution makers distributed the term ‘alcohol liquor’ into two heads, viz., (a) for human consumption; and (b) other than for human consumption. It has been held that the alcoholic liquors, which are for human consumption, are put in Entry 51 List II authorizing the State Legislature to levy tax on them, whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of excise. It has been held that what has been excluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation. The Constitution Bench clearly held that the State Legislature had no authority to levy duty or tax on alcohol, which is not for human consumption as that could be levied only by the Centre.”, the bench observed.
The Supreme Court of India has ruled that, Tata Steel has Locus Standi to Challenge denial of Input Tax Credit under Jharkhand Value Added Tax Act ( JVAT ) to its unit. A two-judge bench comprising of Justice Sanjiv Khanna and Justice Bela M. Trivedi, remanded a matter back to Jharkhand High Court for a fresh decision on Tata Steel’s writ petition against the denial of input tax credit to its Naomundi unit.
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