On 26th April 2023, the Directorate General of Foreign Trade (DGFT) notified the appendices and Aayat Niryat Forms of Foreign Trade Policy, 2023. The updation is available on the DGFT (https://www.dgft.gov.in/) website from now. A country’s government develops a system of rules and regulations known as its Foreign Trade Policy (FTP) to oversee its international…
This weekly summary analyses the major Income Tax Appellate Tribunal (ITAT) stories that were covered by Taxscan.in the week before, from April 23rd to April 29th, 2023. Ex-Gratia Payment Received on Voluntary Retirement Not Taxable as “Profit in Lieu of Salary”: ITAT Deletes Addition Mahadev Vasant Dhangekar vs The Asstt. CIT CITATION: 2023 TAXSCAN (ITAT)…
Recently, a functionality of “Automated Drop Proceedings” of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is available for the taxpayers who have filed their pending returns i.e. 6 monthly or 2 Quarterly returns.
Note: This functionality is applicable to the taxpayers whose GSTINs have been suspended after 1st December, 2022.
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Being frequently involved with high value transactions can put you under the radar of the Income Tax Department and unsurprisingly, you may also be served with a show cause notice as to why you should not be taxed, or to why the same was not reflected in the Income Tax Returns of the relevant year….
(JAN. 08 – 14, 2023) This weekend summary provides an analytical synopsis of the most major stories about the Goods and Service Tax Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR), that were authored at Taxscan.in during the one week from January 8 to 14, 2023. 18% GST applicable on Manpower…
The Rajasthan High Court has seeked response from centre and state, regarding the treatment of manpower supply while it was challenged in a petition.
The petitioner, Skylark Infra Engineering Private Limited, on the supply of the aforesaid manpower service, deposited 18% Integrated Goods and Services Tax (IGST) treating the aforesaid supply of manpower to be inter-state services, inasmuch as it had its office at Delhi/Gurgaon and the manpower was supplied at Jaipur in Rajasthan.
The petitioner was served with a show cause notice to show cause as to why a demand of CGST+RGST under Section 74 of the Goods and Services Tax Act, 2017 along with interest and penalty may not be raised against it.
The assessing officer and the first appellate authority had rejected the claims of the petitioner, holding against the contentions raised. Aggrieved petitioner approached the Rajasthan High Court by a civil writ petition in the absence of the Goods and Services Tax Tribunal.
The validity of Section 19(1) of the IGST Act, Section 77(1) of the CGST Act/RGST Act and Rule 89(1A) of the CGST Rules were challenged for being unconstitutional by the petitioner.
The Rajasthan High Court Bench of Justice Shubha Mehta and Justice Pankaj Mithal observed that “the petitioner cannot be compelled to pay tax on the services rendered by it twice”, granting interim relief to the petitioner. However, the petitioner was directed to deposit 65% of the demanded Goods and Services Tax (CGST and RGST) in preferring application for refund. It was also directed that the petitioner’s accounts that were attached to be released on the instance of receiving the application for refund.
Since the legal issues in dispute contained challenges to provisions in the Central and State Goods and Services Tax Acts, responses were seeked from the centre and state by the Rajasthan High Court Division Bench,
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The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that an intermediary in the sale of space/ time for media agency on commission basis is not liable to pay service tax under the head “Advertising Agency” under the provisions of Finance Act, 1994. The appellants, Drishty Communication Private Limited were engaged…
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the software activation services cannot be termed as “Business Auxiliary Services” and therefore, not subject to service tax as the assessee already discharged VAT liability in respect of the same.
The appellant, M/s Black Box Ltd was dealing in Electronic and Telecom equipment. Software are embedded in such telecom equipment systems of EPABX. On scrutiny of Balance Sheet of the Appellant it was revealed that Appellant has shown certain amount as “Software Activation” income in Schedule 14. Appellant had collected these charges from their customers in connection with after sales of goods i.e equipment/ software.
The department demanded service tax from the appellants under the category of “ Business Auxiliary Services” under Section 65 of the Finance Act, 1994 under Section 73(1) of the Act along with interest.
On appeal, the first appellate authority held that the Appellant are not only selling the goods of foreign vendor but are also providing after sales services, such as providing right to use certain software by activating such software so that their customers who had already purchased equipments from them could use certain additional features by getting them activated. Thus said activity is covered under business auxiliary service.
The Appellant contended that they had raised invoices for activation as additional charges for RTU features of software. As per the provision of Section 2(23)(d) of the Gujarat Value Added Tax Act and Section 2(g)(iv) of the Central Sales Tax Act 1956 the right to use (RTU) are covered in definition of sale of goods for the purpose of payment of VAT/CST. Hence, Appellant were paying VAT/CST and therefore, the service tax liability on the said services cannot be raised.
Mr. Ramesh Nair, Member (Judicial) and Mr. Raju, Member (Technical) relied on various decisions wherein it was held that the sale of the software program the incorporeal right to the software is not transferred since the copyright of the incorporeal right to software remains with the originator and what is sold is a copy of the software. It was further held that the original copyright version is not the one which operates the computer of the customer but the physical copy of that software which has been transferred to the buyer.
“The law as to whether the software is goods or not is no longer res integra in view of the above dictum of the Apex Court. Hence, in the impugned matter on software activation charges Appellant is not liable to pay service tax,” the CESTAT said.
Allowing relief to the assessee, the CESTAT held that “the amount collected by the Appellant from their customers against as “activation charges” of equipment/ software features are covered under the activity of sales of goods and not covered under the provisions of “Service” as defined in the Act. Therefore, we don’t find any merits in impugned order.”
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The Assessing Officer as well as the CIT(A) who are quasi-judicial authorities employed for execution of the provisions of the Income Tax Act.”
The Pune Bench of the Income Tax Appellate Tribunal (ITAT), slammed ‘suspicious transactions’ made by assessee, Abhishek Ashok Lohade, and ruled that Assessing Officer (AO) and Commissioner of Income Tax (Appeals) (CIT(A)) are quasi-judicial authorities employed for execution of Income Tax Act, 1961.
The appellant is an individual deriving income from the execution of contracts etc. The AO denied the claim for exemption of capital gains under Section 10(38) of the Income Tax Act amounting to Rs.50 lakhs by holding that the transactions of purchase of shares of SRK Industries Ltd. and subsequent sale is nothing but a bogus transaction by relying upon the investigation report by the Investigation Wing of the Department and the Securities & Exchange Board of India (SEBI).
The appellant was also provided the copy of statements recorded by the Investigation Wing of the Department, alleged to be involved in providing accommodation entries bogus long term capital as set out in the assessment order.
During the course of assessment proceedings, the appellant had failed to substantiate that the transactions of purchase and sales of shares is genuine one. In the circumstances, the Assessing Officer brought to tax the sale proceeds of the shares as unexplained cash credit and completed the assessment.
Being aggrieved by the order of assessment, an appeal was filed before the CIT(A) contending that the assessee had proved the genuineness of the transactions of purchase and sales of shares. However, the CIT(A) had confirmed the action of the Assessing Officer invoking the doctrine of test of human probability.
Human Probability test is one of the important test laid down the highest court of India in order to check genuineness of the transactions entered into the books of account of the assesses.
During the course of assessment proceedings, the Assessing Officer noticed that the appellant had indulged in suspicious “suspicious transaction relating to long term capital gains on sale of shares” and relating to claim of appellant for exemption of Rs.51 lakhs under Section 10(38) of the Income Tax Act and sale of shares of M/s SRK Industries Limited.
A Bench comprising Inturi Rama Rao, Accountant Member and SS Viswanethra Ravi, Judicial Member lashed against the assessee and commented that “The principle of fraud can be squarely applied to the facts of the present case and principles of natural justice have no application. Applying the said doctrine, the transaction of purchase and sale of shares of SRK is void ab-initio, this is nothing but sham, make believe and colourful device adopted with excellent paper work with intention bringing the undisclosed income into books of account.”
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In a writ petition filed against the Revisionary Authority, the Division Bench of the Bombay High Court (HC) Justice Nitin Jamdar and Justice Gauri Godse made the determination that the petitioner’s goods, including any circuit breakers or switchgears, are entitled for drawback at rates of 4% and 3.6%. Additionally, the court ordered the Commissioner of…
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that the sale of an Entire business amounts to a slump sale and is taxable under capital gain. Lifestyle International Pvt. Ltd, the Assessee is a private limited company engaged in the business of retail trade of apparel and accessories, toys, baby basics,…
A Division Bench of the Bombay High Court comprising Justice K R Shriram & Justice A S Doctor directed the Central Board of Indirect Taxes and Customs (CBIC) to issue guidelines in regard to pre-deposit through Form Goods & Services Tax (GST) DRC-03 for Service Tax/Excise matters for the lack of provision in law in Sodexo India Services Pvt. Ltd vs The Union of India and Ors [2022 TAXSCAN (HC) 791].
In a significant ruling in to provide relief to the taxpayers, a division bench of the Bombay High Court has held that a GST order passed by tax authorities, which granted only seven days to file a reply to a show-cause notice is “patently illegal” and the High Court also asked the tax authorities to donate Rs10,000 to the PM CARES Fund.
In Asia (Chennai) Engineering Vs Assistant Commissioner (ST) (FAC) [2022 TAXSCAN (HC) 773], the Madras High Court has held that the filing of a reply to the show-cause notice in form GST-DRC-06 is not mandatory under Section 73(9), 74(9) and 76(3) of GST Act and the reply so filed through post shall also be treated as valid.
In A.H. Marble Crafts vs The Commissioner Tax [2022 TAXSCAN (HC) 755], the Rajasthan High Court has held that the GST department cannot deny the benefit of linking of GSTIN on death of proprietor merely on the technical ground that the application for cancellation of GST registration was made using a wrong form.
The Delhi High Court in a significant case, allowed to grant the refund of IGST claimed by the petitioner on exported goods after deducting differential duty drawback in KISHAN LAL KURIA MAL INTERNATIONAL vs UNION OF INDIA [2022 TAXSCAN (HC) 735].
In CURIL TRADEX PVT. LTD vs COMMISSIONER [2022 TAXSCAN (HC) 733], the High Court of Delhi held that Physical verification for GST registration carried out in the absence of the assessee’s authorised representative is not valid and quashed the cancellation order of the Commissioner, Delhi Goods and Service Tax.
In a significant ruling in GHODAWAT PACKERS LLP vs UNION OF INDIA [2022 TAXSCAN (HC) 725], the Karnataka high court ruled that the Union government is entitled to levy Central GST (CGST) as well as excise duty on tobacco and tobacco-derived products.
In Oasis Realty vs Union of India [2022 TAXSCAN (HC) 715], A division bench of the Bombay High Court has held that the amount remaining in the Electronic Credit Ledger can be utilised to pay pre-deposit as per section 107(6) of the Maharashtra GST Act, 2017.
A division bench of the Delhi High Court has held that GST is not leviable on the portion of rent received by a Proprietor of a registered proprietorship firm when such renting is sone in his /her own personal capacity for use as his/her own residence as well as not for use in the course or furtherance of business of his/her proprietorship firm in SEEMA GUPTA vs UNION OF INDIA & ORS [2022 TAXSCAN (HC) 714].
A division bench of the Andhra Pradesh High Court, while overruling the orders passed by the Appellate Authority for Advance Ruling (AAAR) imposing GST in respect of ‘mango pulp’ @ 18%, has held that the same is incorrect since the item Mango pulp attracts 12% GST. [2022 TAXSCAN (HC) 700].
The Madras High Court has held that an application filed before the Authority for Advance Rulings (AAR) under the Tamil Nadu VAT Act does not survive after the enactment of Tamil Nadu GST Act, 2018 in M/s. Renaatus Procon Private Ltd vs Authority for Clarification and Advance Ruling [2022 TAXSCAN (HC) 693].
While considering a petition challenging an endorsement by the GST department rejecting the already sanctioned GST refund not released due to technical glitches on the GST portal, the Andhra Pradesh High Court has directed the department to re-consider the claim and pay interest if the assessee is eligible in RK Infracorp Pvt Ltd Vs [2022 TAXSCAN (HC) 683].
The Madras high court has, while considering a series of writ petitions with regard to the common question of release of goods under section 129 of the GST Act, held that a transporter can seek release of conveyance alone, and not goods under the GST Act. The court said that the entitlement to seek release under the section has been carefully and consciously sculpted to only the owner of the goods or to his agent, and not to a transporter inTCI Freight vs The Assistant Commissioner [2022 TAXSCAN (HC) 680].
The Calcutta High Court held that Teak Sawn timber is “Natural Produce” and quashed the detention order due to a discrepancy in mentioning “Nature of Goods” in the E-Way Bill in Md. Yusuf vs. State Tax Officer, Bureau of Investigation [2022 TAXSCAN (HC) 1109].
The Jammu & Kashmir High Court has held that the GST registration cannot be granted or renewed considering the fact that the said premise is under dispute between the co-owners in Parveez Ahmad Baba vs Union Territory of J&K [2022 TAXSCAN (HC) 681]
In M/s RAJEEV TRADERS vs UNION OF INDIA [2022 TAXSCAN (HC) 676] relating to confiscation under the Central GST Act, the Karnataka High Court has held that the power of confiscation under the Act can be invoked in extraordinary circumstances.
Relying on the recent GST circular dated 6th July 2022, where the Central Board of Indirect Taxes and Customs (CBIC) has clarified the refund under inverted duty structure where supplier is supplying goods under concessional notification, the Telangana High Court has directed the GST department to consider a refund claim by the assessee in Micro Systems and Services Sole vs Union of India [2022 TAXSCAN (HC) 664].
The Madras High Court, while quashing a detention order by the State Tax Officer (Intelligence) has held that the power to issue such order is vested upon the jurisdictional tax officer under the GST regime in Macmet Engineering Limited vs Commissioner of Commercial Taxes [2022 TAXSCAN (HC) 658].
The Telangana High Court has held that the investigation initiated post-filing of the application would not debar the application seeking Advance Ruling in M/s. Srico Projects Pvt. Ltd vs Telangana State Authority For Advance Ruling [2022 TAXSCAN (HC) 651]
The High Court of Madhya Pradesh has held that the delay of a few hours of expiry of tenure of E- way bill was not to evade tax in DAYA SHANKER SINGH vs STATE OF MADHYA PRADESH [2022 TAXSCAN (HC) 650]
The Division Bench of Madras High Court held that cut or sized shade trees is agricultural produce, not taxable under Tamil Nadu Goods and Services Act (TNGST), 1959 in M/s. United Nilgiri Tea Estates Company Ltd vs Tamil Nadu Sales Tax Appellate Tribunal [2022 TAXSCAN (HC) 647]
In Drs Wood Products vs State Of U.P. [2022 TAXSCAN (HC) 645], the Allahabad High Court has imposed a cost of Rs. 50,000 on the GST department finding that the registration of the assessee was arbitrarily cancelled. Noting that this kind of actions not only affects the assessee, but the same is also causing adverse effects on the revenue as it is not in consonance with the ease of doing business.
The Kerala High Court has held that the amendment to the Kerala Value Added Act in the year 2018 after the introduction of the GST Act is invalid due to legislative incompetence in BAIJU.A.A vs STATE TAX OFFICER [2022 TAXSCAN (HC) 639].
The Rajasthan High Court has held that the benefit of amnesty scheme under the Sabka Vikas Legacy Dispute Resolution Scheme, 2019 cannot be denied merely on ground that the enquiry notice under section 125 of GST Act is issued to the assessee in Sonjoli Construction Co. vs Union Of India [2022 TAXSCAN (HC) 636].
The division bench of the Delhi High Court has admitted the petition by the Sales Tax Bar Association against GST system glitches and asks for a response from the government, Infosys, and Tech Mahindra in SALES TAX BAR ASSOCIATION vs UNION OF INDIA & ORS [2022 TAXSCAN (HC) 623].
The Calcutta High Court, remanding a matter back to the files of the GST authorities, held that the one-line order dismissing an appeal on ground of delay in filing without discussing the merits of the case shall be deemed as invalid for the Goods and Services Act, 2017. Usha Gupta, Proprietor of UR Enterprises vs The Assistant Commissioner of State Tax [2022 TAXSCAN (HC) 617].
In a significant ruling, the Kerala High Court has held that the assessee has the right to appeal even after the voluntary payment of the penalty made under the Central Goods and Service Tax (CGST) Act in HINDUSTAN STEEL AND CEMENT vs ASSISTANT STATE TAX OFFICER [2022 TAXSCAN (HC) 609]
The Gujarat High Court has Gujarat HC directed the Government to refund the Integrated Goods and Services Tax (IGST) paid on ocean freight pursuant to unconstitutional Notification in M/S LOUIS DREYFUS COMPANY INDIA PRIVATE LIMITED vs UNION OF INDIA [2022 TAXSCAN (HC) 607]
In RAILSYS ENGINEERS PRIVATE LIMITED & ANR vs THE ADDITIONAL COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX [2022 TAXSCAN (HC) 602], the Delhi High Court has held that an unsigned order cancelling GST registration is invalid and therefore, quashed the same as the same is against the provisions of the Central GST act, 1961.
In an assessee-friendly ruling, the Delhi High Court has directed the GST department to lift the attachment as the same cannot be valid after the period prescribed under Section 83 of the Central GST Act, 2017 in SH. NITIN SINGHANIA vs COMMISSIONER OF CENTRAL TAX GST [2022 TAXSCAN (HC) 602].
In M/S Shyam Hardware Store vs The State of Jharkhand [2022 TAXSCAN (HC) 575], a division bench of the Jharkhand High Court, while quashing an order, held that the investigation report by the officials cannot be treated as a proper show cause notice for the purpose of the Central GST Act, 2017.
In a major relief to Vodafone Idea, a division bench of the Bombay High Court comprising Justices K. R. Shriram & Milind N. Jadhav has held that roaming services and international long-distance services provided by Vodafone Idea to the Foreign Telecom Operators is an Export Of Service for the purpose of the Integrated GST Act, 2017 in Vodafone Idea Limited vs The Union of India [2022 TAXSCAN (HC) 556].
The Himachal Pradesh High Court has recently set aside the order of the Additional Commissioner (Appeals), Central Goods and Services Tax which had categorically rejected the appeal for restoration of the GST registration the assessee for delay of one day in Sunil Kumar Vij vs Union of India and others [2022 TAXSCAN (HC) 1059].
The Delhi High Court Division Bench in SUNNY JAIN vs UNION OF INDIA AND ORS [2022 TAXSCAN (HC) 1025], directed the department (respondents) to unblock the Input Tax Credit (ITC) of petitioner available in his Electronic Credit Ledger (ECL). Additionally, solely because the supplier has not been paid, it is not possible to restrict the ITC.
A Division Bench of the Gujarat High Court has recently allowed a writ petition for Goods and Services Tax (GST) refund to be issued, observing that “the Assessee of those consultants and others could communicate with the GSTN on portal if a feature like “MAY I HELP YOU” is created by the authority on due deliberation or through the “Grievance Redressal Mechanism” in AARTOS INTERNATIONAL LLP (FORMERLY AZUVI INTERNATIONAL LLP) vs DEPUTY COMMISSIONER (CUSTOMS), [2022 TAXSCAN (HC) 1010].
In a significant ruling, the Kerala High Court, while allowing a petition by M/s Manappuram Finance Ltd, has held that the circular issued by the Central Board of Indirect Taxes and Customs (CBIC) clarifying that GST not applicable to the notice pay received from an employee, has retrospective effect and has directed the GST department to refund the amount recovered from the petitioner (employee) in M/S MANAPPURAM FINANCE LTD vs ASSISTANT COMMISSIONER [2022 TAXSCAN (HC) 1004].
In MAURIA UDYOG LTD vs UNION OF INDIA & ORS [2022 TAXSCAN (HC) 995], a Delhi High Court Division Bench warned the department of imposing exemplary costs and interest for non-disbursal of Goods and Services (GST) Transactional Credit amidst many complaints regarding the issues with the Income Tax and GST Portals.
In SHREE GOVIND ALLOYS PVT. LTD. vs STATE OF GUJARAT [2022 TAXSCAN (HC) 997], the Gujarat High Court has recently set aside the detention order of trucks of Shree Ram Road Carriers, as the demand and detention was based merely on assumption of tax evasion from expiry of E-Way Bill.
The Rajasthan High Court, on Friday, asked the Joint Commissioner, Circle Nimbahera of GST to show-cause why cost should not be imposed upon him for nonperformance of duties enjoined upon him by law after Court found that the officer acted in a reckless illegal manner leading to unwarranted litigation in Hindustan Construction Company Ltd. vs The Union of India & Ors. [2022 TAXSCAN (HC) 982].
In a significant ruling which may lead to a debate, the Chhattisgarh High Court has stated that the revisal of TRAN-1/2 forms are allowed under the Central GST Act and the recent circular issued by the Central Board of Indirect Taxes and Customs (CBIC) denying the further revisal is legally not permitted. The decision was pronounced in M/s Jagdalpur Motors vs Union of India [2022 TAXSCAN (HC) 953].
A division bench of the Jharkhand High Court has held that the electronic cash ledger (ECL) is merely an “e-wallet” and therefore, the liability to pay interest arises on delayed filing of GSTR-3B return and debit of tax due from the Electronic Cash Ledger are independent in RSB Transmissions (India) Limited vs Union of India [2022 TAXSCAN (HC) 907].
The Andhra Pradesh High Court while recently considering a writ petition in M/s.Esveeaar Distilleries Private Limited vs Assistant Commissioner [2022 TAXSCAN (HC) 889], held that the services by way of job work in relation to manufacture of alcoholic liquor for human consumption should pay 18% GST under the Central GST Act, 2017.
In Genpact India Pvt. Ltd. Vs Union of India and others [2022 TAXSCAN (HC) 874], the Punjab and Haryana High Court has held that the Genpact India cannot be treated as an “intermediary” and therefore allowed a refund of Rs.26,34,61,625/- in favour of the Company.
The Jammu and Kashmir & Ladakh High Court recently held that a Goods and Services Tax (GST) registration issued to the assessee and then cancelled upon request cannot be revoked merely based on the property disputes with the brother of the applicant in Parveez Ahmad Baba Vs Union Territory of JK and others [2022 TAXSCAN (HC) 862].
The Chhattisgarh High Court has held that the amendment to section 50 of the Central GST Act, 2017 regarding the imposition of the interest on late payment of tax has a retrospective effect in Abis Export India Private Limited vs State of Chhattisgarh [2022 TAXSCAN (HC) 832].
In a significant ruling in M/S CHROMOTOLAB AND BIOTECH SOLUTIONS vs UNION OF INDIA [2022 TAXSCAN (HC) 817], a division bench of the Gujarat High Court has held that the date of filing of the application as reflected on GST portal would be liable to be treated as date of filing claim for refund to the satisfaction of the requirement of Section 54 of the Central GST Act and Rule 89 of the Central GST Rules.
A division bench of the Bombay High Court has held that a certificate under Rule 145(2) of the Central GST Rules, 2017 is sufficient to condone delay in filing of appeal due to non-establishment of the GST Tribunal in V.C. Infra Vs The Commissioner of State Tax [2022 TAXSCAN (HC) 814].
In a significant decision for taxpayers under the GST regime in Chep India Private Limited vs Union of India & Ors. [2022 TAXSCAN (HC) 512], a division bench of the Bombay High Court comprising K. R. Shriram & Milind N. Jadhav has directed the Department to allow the transitional credit through GSTR-3B.
The Gujarat High Court has held that the Electronic Credit Ledger can be blocked for 1 year and it would automatically get unblocked beyond 1 year.
The Karnataka High Court held that the Toyota is an output service provider and can utilise cenvat credit on output services in THE COMMISSIONER OF CENTRAL TAX, GST WEST COMMISSIONERATE, TTMC BUILDING, BANASHANKARI, BANGALORE vs M/s TOYOTA KIRLOSKAR MOTORS [2022 TAXSCAN (HC) 177].
The Gujarat High Court has held that taxpayers entitled to claim Input Tax Credit (ITC) and a technical glitch in GST Portal should not deprive him of such a claim.
The Rajasthan High Court has referred the issue of interest on compensation for motor accident claims exigible to tax and whether the insurance companies are required to deduct TDS to Larger Bench.
The Madras High court has directed the assessee to pay GST for a period subsequent to the cancellation of registration by declaring the correct value of supplies.
The Karnataka High Court has held that owners of buildings can claim GST Exemption if residential premises leased out are used as hostels to house students, and working professionals.
The Rajasthan High court has directed the Goods and Service Tax Authority (GST) department not to Force Taxpayers to deposit GST or take Coercive Measures without adhering to the procedure provided under Section 74 of the CGST Act.
The Rajasthan High court has upheld the provision related to claiming of GST refund of unutilised ITC in M/s Triveni Electrodes, F-78, Brij Industrial Area, Bharatpur VS Union Of India [2022 TAXSCAN (HC) 163].
The Uttarakhand High Court has stayed the condition in the GST Circular relating to filing of refunds in chronological order.
The Jharkhand High Court has stayed levy of GST under Reverse Charge Mechanism on the amount of Royalty and District Mineral Fund Contribution paid in respect of minor mineral lease.
A two-judge bench of the Gujarat High Court consisting Justice J.B.Pardiwala and Justice Nisha M.Thakore has held that the input or output ratios to be considered for determining the quantum of refund of unutilized Input Tax Credit (ITC).
In a significant ruling, the Delhi High Court has refused to quash the summons against a person accused of creating numerous fake firms and availing Input Tax Credit (ITC) fraudulently holding that there should be reasonable apprehension of coercion by the GST Department for ‘summons proceedings’ to be conducted through CCTV Cameras.
The division bench of Justice R D Dhanuka and Justice S M Modak of the Bombay High Court has expressed its concern over the allegations made by several assessees in various petitions about the repeated summons issued by the GST authorities for the purpose of harassment, coercion and recovery of substantial amounts during the stage of investigation itself without issuance of a show cause notice.
The Gujarat High Court bench consisting Justices J B Pardiwala and Nisha M Thakore while quashing an order of provisional attachment, held that the GST officials cannot provisionally attach personal properties of a partner of a partnership firm without final determination about the liability of the firm, which is accused of wrongly availing input tax credit (ITC).
A division bench of the Gujarat High Court comprising Justice Nisha Thakore and Justice J. B. Pardiwala has asked the Government to take care of the technical glitches in the GSTN at the earliest and slammed the Government that the High Court is flooded with the litigations due to such glitches.
The Madhya Pradesh High Court has disallowed refund of accumulated credit of compensation cess in the absence of ITC of cess in Credit Ledger for relevant period.
The Madras High Court has recently ordered the GST department to release the detained vehicle since the “proper officer” has failed to issue a notice during the proceedings.
A division bench of the Delhi High Court has held that the GST department cannot issue a fresh notice during the pendency of the proceedings under section 73 and 74 of the Goods and Services Tax Act, 2017.
A division bench of the Bombay High Court comprising Justice S.V. Gangapurwala & Justice M.G.Sewlikar has allowed a refund claim quashing the orders of the GST authorities by holding that GST is not applicable to services rendered outside India and the authorities could not establish that the incident of tax has been passed on to the recipient ASCL located in London.
The Calcutta High Court has directed the Goods and Service Tax Network (GSTN) to allow amendment in GSTR-1 in order to rectify a mistake in mentioning the GSTIN.
While upholding an order granting GST refund, the Calcutta High Court has held that the goods attracting nil rate of cess shall be treated as ‘exempted’ for the purpose of adjusted total turnover under Rule 89(4) of the Central GST Rules.
In a significant ruling, the Madras High Court has upheld the legality of the show cause notice based on mismatch in returns filed by the supplier and the dealer by holding that the same amount to a mere technical breach.
In a significant ruling, the Madras High Court has allowed a refund claim of the exporter and held that the strict application of GST rules to deny legitimate export incentives to the exporters would defeat the legislative intent of export incentives.
The Orissa High Court, in a recent ruling, held that claim of ITC by an input service distributor (ISD) only in the case of an inward supply, and an ITC transfer from one state to another is not an inward supply.
A division bench of the Karnataka High Court has upheld the AAR ruling finding 18% GST is payable on ‘pattadar pass book cum title deed’.
The Calcutta High Court has held that the GST department shall not seize the vehicle in the absence of a second e-way bill since the first e-way bill was valid during the period of interception.
The Calcutta High Court has held that the input tax credit cannot be denied in case of genuine transactions with suppliers whose GST registration is cancelled.
The Delhi High Court has set aside the order of cancellation of GST registration due to No notice served prior to inspection of premises.
A Division Bench of the Calcutta High Court (HC) ruled that Input Tax Credit (ITC) cannot be Denied due to Cancellation of GST Registration with retrospective effect.
A division bench of the Gujarat High Court comprising Mr. Justice J.B.Pardiwala and Ms. Justice Nisha M. Thakore has read down paragraph 2 of Notification No. 11/2017 mandating 1/3rd deduction of Land as ultra vires.
The Karnataka High Court has declared that there is no conflict between the power to levy GST under GST Act and power of Municipal Corporation to levy advertisement fee or advertisement tax under Section 134 of the Karnataka Municipal Corporations Act.
The Kerala High Court has held that the bonafide errors in the e-way bill formats would attract minor penalties under the GST law.
A division bench of the Gujarat High Court has held that the provisional attachment under the Central GST Act, 2017 shall not be enforced in such a way as to hamper the normal business of the assessee.
The Gauhati High Court has recently allowed a taxpayer to pay the GST dues in 48 equal instalments considering their financial conditions.
The Allahabad High Court has held that the GST registration cannot be cancelled merely for the reason that a firm is described as “bogus” under the provisions of the Central Goods and Services Tax Act, 2017.
A two-judge bench of the Gujarat High Court, while criticising the methods adopted by tax officials to meet revenue targets given by the higher-ups, asked the state tax officials not to take coercive steps to recover tax amounts, particularly when appeals and applications for stay filed by taxpayers are pending in the tribunal.
The Andhra Pradesh High Court has observed that, Issuing Notice for Hearing is a Statutory Requirement under Section 75(4) Of GST Act before Imposition of Tax or Penalty.
A division bench of the High Court while considering a petition filed due to non-availability of Form GST ITC-02A on the GST Portal, directed the department to allow the assessee-petitioner Input Tax Credit of Rs.2,58,03,590/- through the next GSTR-3B return.
The Calcutta High Court has directed the GST department to cancel the blockage of Credit Ledger as the order for the same expired after one year.
A division bench of the Gujarat High Court has directed the GST department to withdraw the negative block of the electronic credit ledger at the earliest.
The Madras High Court has held that the Goods and Service Tax (GST) department can continue service of the physical copy of the notice through registered post, speed post, or courier with acknowledgment to the assessee at their last known place of business or residence and upload the notice on the web portal.
A division bench of the Allahabad High Court has held that the refund application under the Goods and Service Tax (GST) cannot be rejected merely on the ground of delay.
A division bench of the Karnataka High Court has ordered the GST department to grant a refund of Rs. 27 crores illegally collected from Swiggy.
The Calcutta High Court, while considering a writ petition by an individual, held that the Integrated GST is applicable on the interest component of the Equated Monthly Instalments (EMIs) of a loan advanced by a bank on a credit card as the same does not come within the purview of exempted services.
The Madras High Court, while quashing an assessment order, held that DRC-1 Notice is mandatory before concluding Assessment under the GST regime.
The Kerala High Court has held that the Taxpayer cannot invoke writ jurisdiction and approach the High Court to avoid the mandatory pre-deposit since the matter is already pending before the Statutory appellate authority under the Central Goods and Services Tax Act, 2017.
A two-judge bench of the Calcutta High Court has held that the transaction cannot be suspected merely on ground that the GST registration of the other-end dealer was cancelled with retrospective effect.
The Delhi High Court has recently directed the GST department to release a refund of Rs. 1.8 crores along with an interest of 6% for the reason that the department has not complied with the CBIC circular prohibiting payment during search proceedings and prescribing guidelines for receipt of voluntary payment by the assessee.
In the absence of any module provided by the GST department, regarding the online filing of GST appeal against the audit order, the Rajasthan High Court has allowed the assessee to file the appeal manually.
The Gujarat High Court has held that the cash credit account of assessee cannot be provisionally attached in exercise of powers under GST.
The Bench of the Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan at Jharkhand High Court has recently directed the petitioner, M/s Shivam HiTech Steels Pvt. Ltd to seek available alternative remedies.
A division bench of the Madhya Pradesh High Court comprising Chief Justice Ravi Malimath, & Justice Vishal Mishra has dismissed a petition challenging section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 and the rules and notification connected thereto, in view of the dismissal of the SLP by the Supreme Court and affirming the validity of the Act in a similar case.
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The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench ruled that Factory gate being place of removal and cost of transportation collected in addition to price of goods is to be excluded from assessable value. The appeal has been filed by M/s. Gujarat Polysol Chemicals Pvt Ltd, the appellant against demand of excise…
This weekly round-up analytically summarizes the key stories related to the Income Tax Appellate Tribunal (ITAT) reported at Taxscan.in during the previous week from December 17 to December 23,2022 Assignment Agreement not Registered, Can’t ignore Actual flow towards Property Acquisition while Computing Capital Gain In RaviKumar Tirupati Parthasarathy vs The Deputy Commissioner of Income Tax…
This weekly round-up analytically summarises the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from December 19 to December 24, 2022.
Notice issued to dissolved Firm not due Notice: Kerala HC quashes Income Tax Demand for violation on Natural Justice Principles, P.A. LOGISTICS Vs NILA P.A., EX-MANAGING PARTNER, 2022 TAXSCAN (HC) 1062
A Single Bench of Kerala High Court has recently set aside the income tax demand notice issued to the assessee – P A Logistics for violation of natural justice principles of due notice and fair hearing. The decision of the Constitutional Bench in Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District I, Calcutta and Anr was relied upon by the Bench in allowing the appeal for statistical purposes. The matter was consequently restored to the NFAC for fresh assessment by the Single Bench of Justice Gopinath P.
Allahabad HC grants Bail to Siddique Kappan in PMLA case, almost two years spent behind bars
Siddique Kappan was granted bail in the Prevention of Money Laundering Act (PMLA) case today by Allahabad High Court, after the plea was finally heard two months into filing. He had spent two years behind bars in the alleged conspiracy case in the Hathras rape and murder case of a Dalit Girl, for being booked for incitement of riots. The Supreme Court of India had granted bail to him in the conspiracy case charged under multiple provisions of the Unlawful Activities Prevention Act (UAPA), Indian Penal Code and the Information Technology Act.
Non-passing of Service Tax Refund Orders within the Time Limit under Central Excise Act: Karnataka HC grant relief to Altisource, AL TISOURCE BUSINESS SOLUTIONS PVT.LTD., Vs DEPUTY COMMISSIONER OF CENTRAL TAX ,2022 TAXSCAN (HC) 1061
In a Writ Petition filed before the Karnataka High Court (HC) under Article 226 of the Constitution of India, entertained by Justice S.R. Krishna Kumar granted relief under Section 11BB of the Central Excise Act, 1944 to pay interest at the rate of 6% per annum for committing delay in issuing service tax refund order. The court made an observation regarding the respondent’s argument that the respondent completely misdirected itself in determining that the three-month period would begin from the date of the petitioner’s final submission, not from the date of submission of the refund claim, and that this is in contravention of Sections 11-B and 11-BB of the Central Excise Act, 1944. The bench set aside the impugned order passed by the respondent and ordered to pay the interest of 6% per annum after expiry of three months from the date of submission of the refund request by the petitioner as expeditiously as possible and at any rate within a period of three months from the date of receipt of a copy of this order.
IT Deduction for Affordable Houses cannot be Denied to Builder on ground of Subsequent Changes in Building on Completion of Statutory Conditions: Bombay HC, Principal Commissioner of Income Tax vs Vardhan Builders ,2022 TAXSCAN (HC) 1055
A Division Bench of the Bombay High Court has recently set aside the denial of income tax deduction under Section 80-IB(10) of the Income Tax Act, 1961 merely on ground of subsequent changes in building after compliance of statutory provisions. The dispute in the present appeal centers around whether the assessee was entitled to the benefit of deduction in terms of Section 80IB(10) of the Income Tax Act.
Dismissal of GST Appeal for Delay of 1 Day is ‘Hyper Technical’: Himachal Pradesh HC grants Relief to Assessee, Sunil Kumar Vij vs Union of India and others ,2022 TAXSCAN (HC) 1059
The Himachal Pradesh High Court has recently set aside the order of the Additional Commissioner (Appeals), Central Goods and Services Tax which had categorically rejected the appeal for restoration of the GST registration the assessee for delay of one day. Observing that the petitioner would not be able to continue business in the absence of the Goods and Services Tax (GST) registration, the deprivation of right to life enshrined as per Article 21 of the Constitution of India was noted by the Division Bench of Justices Tarlok Singh Chauhan and Virender Singh.
Chhattisgarh High Court allows petitioner to seek Reimbursement of Additional GST Liability on Contract/Work Order, M/s Gordhandas Gobindram vs State of Chhattisgarh ,2022 TAXSCAN (HC) 1060
The Chhattisgarh High Court has recently allowed the petitioner-Gordhandas Gobindram to seek reimbursement of the additional levy on implementation of Goods and Services Tax for contracts and work orders that had been executed during the extant regime. The petitioner on account of the introduction of the new Goods and Services Tax law was required to pay a certain additional tax liability and by way of this writ petition, the petitioner has seeked the refund of the same.
Notice not Issued to Legal Heirs: Kerala HC quashes VAT Recovery Proceedings, SREERAM.B vs SALES TAX OFFICER ,2022 TAXSCAN (HC) 1052
Kerala High Court (HC) chaired by Justice Gopinath P. quashed the proceedings of the Value Added Tax (VAT) recovery on the ground the legal heirs were not given notice. The court observed that the principles of natural justice of ‘opportunity to be heard’ was violated. The bench quashed the order of the STO and directed to pass fresh orders in terms of order of Deputy Commissioner (Appeals) after affording an opportunity of hearing to the writ petitioner. The HC further instructed that the evaluation be finished after giving the petitioner an opportunity to be heard and a chance to provide any documents he might want to rely on.
Transaction cannot be Suspected because Cancellation GST Registration of Other End Dealer with Retrospective Effect: Calcutta HC, M/s. Shraddha Overseas Private Limited & Anr. vs The Assistant Commissioner of State Tax ,2022 TAXSCAN (HC) 1056
A two-judge bench of the Calcutta High Court has held that the transaction cannot be suspected merely on ground that the GST registration of the other-end dealer was cancelled with retrospective effect. Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya were considering a petition by M/s Shraddha Overseas wherein the petitioner challenged the action of the GST appellate authority wherein substantial portion of the transaction have been found by the appellate authority to have been done with valid documentation. However, a doubt had arisen in the mind of the appellate authority with regard to the genuineness of the transaction going by the pay load of the vehicles, which was used for transporting the goods in question
Motor Vehicle Tax difference is not a ground to deny ‘BH’ series Registration to Vehicle: Karnataka HC, MR RANJITH K P vs PRINCIPAL SECRETARY TO GOVERNMENT ,2022 TAXSCAN (HC) 1053
The Karnataka High Court has recently allowed the writ petitions seeking to direct the registration of the vehicles of the Petitioners under BH-Series by virtue of the Notification dated 26.08.2021 issued by the Commissioner of Transport and Road Safety, Bangalore. The Petitioners, after purchase of the vehicles sought for registration of their vehicles as per the BH-Series. However, they were informed by the dealer that the on-line portal is not accepting BH-Series registration for private individuals. They also submitted that, in respect of similarly placed persons, the jurisdictional authorities of the State have registered the vehicle under BH-Series.
No Access to Portal due to Cancellation of GST Registration: Telangana HC directs Re-Adjudication M/s.Suvarna Traders vs Assistant Commissioner of State Tax ,2022 TAXSCAN (HC) 1058
In a recent decision, the Telangana High Court, chaired by Chief Justice Ujjal Bhuyan and Justice C.V. Bhaskar Reddy, set aside the contested order of the Assistant Commissioner (ST) and issued re-adjudication. In this case, due to the petitioner’s inability to use the portal as a consequence of the department’s cancellation of the GST registration, the petitioner in this matter didn’t receive the department’s show reason notice or reminder notice
Re-Assessment cannot be based on Mere ‘Change of Opinion’: Telangana HC Principal Commissioner of Income Tax vs Lanco Hills Technol Park Pvt Ltd, 2022 TAXSCAN (HC) 1057
The Telangana High Court (HC), bench of Chief Justice Ujjal Bhuyan and Justice Baskar Reddy in its recent ruling held that the reopening of assessment cannot be made by mere change of opinion. The HC highlighted that the tribunal relied on the decision of the Bombay High Court on a landmark decision in Hindustan Lever Limited Vs. R.B. Wadekar (2014) 268 ITR 332 (Bom) that an Assessing Officer’s reopening reasons have to be read on standalone basis; as it is, without any scope of further improvement at a later stage by way of addition, deletion or substitution therein. The bench also observed that in compliance to 147(1) first provision of the Act, It is evident that respondent had disclosed fully and truly all material facts to the AO during the assessment proceeding on the basis of which assessment order issued initially was passed under Section 143(3) of the Income Tax Act
Relief to Xiaomi India: Karnataka HC sets aside Provisional Attachment of Rs. 3700 Crore by Income Tax Dept XIAOMI TECHNOLOGY INDIA PRIVATE LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX , 2022 TAXSCAN (HC) 1054
A Single Bench of Karnataka High Court has recently set aside the provisional attachment of the fixed deposits of tech giant Xiaomi India to the tune of Rs. 3700 Crore, in a major relief to Xiaomi Technology India Pvt Ltd. The Court observed that, “mere apprehension that huge tax demands are likely to be raised on completion of assessment is not sufficient for the purpose of passing a provisional attachment order and the exercise of the same must necessarily be preceded by the formation of an opinion that it was necessary to do so for the purpose of protecting the interest of Government revenue”.
Anushka Sharma reprimanded by Bombay HC for Tax Petition filed through Taxation Consultant Anushka Sharma vs The State of Maharashtra and Ors. ,2022 TAXSCAN (HC) 1051
The Bombay High Court has recently reprimanded Actor Anushka Sharma for filing a Writ Petition in relation to the additions by the Assessing Officer in terms of copyrights allegedly acquired by endorsing products and anchoring. The petition was filed through Shrikant Arun Velekar, the tax consultant appointed by the Actor. The Division Bench of Justice Nitin Jamdar and Justice Gauri Godse observed that, “These Petitions are filed through Taxation Consultant of the Petitioner.” “There is no reason shown as to why the Petitioner cannot file these Petitions on solemn affirmation”, the High Court of Bombay stated
VAT Dues of Company cannot be recovered from Individual Directors: Orissa HC Shri Atul Kumar Saxsena vs Commissioner of Sales Tax , 2022 TAXSCAN (HC) 1049
A division bench of Orissa High Court headed by the Chief Justice held that the dues under the Orissa VAT Act cannot be recovered from the individual directors of the Company. Allowing the petition, the High Court held that “For the aforementioned reasons, this Court is unable to sustain the impugned order dated 16th April 2019 of the Commissioner of Sales Tax, Odisha in so far as the said order confirms the attachment of the Petitioner’s individual Bank account notwithstanding his having ceased to be a Director of AEPL whose tax dues were sought to be recovered.”
Levy of TC Tax on possession and registration of Vehicles through Instruction is Ultra-vires to OMVT Act: Orissa HC M/s. Sushree Automotives vs State of Odisha and others , 2022 TAXSCAN (HC) 1050
In a major decision, the Orissa High Court Division Bench of Chief Justice S Muralidhar and Justice M S Raman has quashed the instruction of the Transport Commissioner-cum-Chariman, State Transport Authority dated 29.03.2016 that directed the Road Transport Officers (RTOs) to collect tax from the manufacturers/dealers of motor vehicles on the total number of vehicles possessed and registered during the year. The appeal was filed against the judgment dated 18th May 2017 passed by the learned Single Judge in a batch of writ petitions rejecting the challenge made therein to the validity of the circular
Filing Appeal against Penalty order Instead of Assessment Order: Calcutta HC dismisses Writ Petition M/s. Poddar Real Estates Pvt. Ltd vs Income Tax Officer ,2022 TAXSCAN (HC) 1045
A Single Bench of the Calcutta High Court dismissed writ petition as appeal was filed against the penalty order instead of assessment order. By the writ petition the petitioner, M/s. Poddar Real Estates Pvt Ltd has made prayer for cancellation of the order dated 2nd December, 2016 passed under Section 144 read with Section 147 of the Income Tax Act, 1961 and subsequent penalty notice issued under Section 271(i) (C) of the Income Tax Act, 1961 and the penalty order dated 23rd June, 2017 relating to the assessment year 2009-2010.
No Reduction of Disallowance u/s 14A of Income Tax Act on Ad-hoc basis: Delhi HC against ITAT’s decision PRINCIPAL COMMISSIONER OF INCOME vs SIMON INDIA LTD , 2022 TAXSCAN (HC) 1044
The Delhi High Court (HC), in its recent judgment chaired by Justice Vibhu Bakhru and Justice Purushaindra Kumar Kaurav viewed against the decision of the Income Tax Appellate Tribunal (ITAT) that the reduction of disallowance under section 14A of the Income Tax Act, 1961 on Ad-hoc basis. The bench viewed that once the Revenue Authorities have found no reason to doubt the Assessee’s claim that the investments have been managed by a group of companies without levy of charge, it may not be open for the tribunal to disallow expenditure on the basis that some deployment of manpower for managing the investment cannot be “ruled out”
Form 26AS can be taken for computing TDS Credit instead of Form 16A: Calcutta HC upholds order of ITAT PRINCIPAL COMMISSIONER OF INCOME TAX, SILIGURI Vs NIRMALI BHADRA ,2022 TAXSCAN (HC) 1048
A Division Bench of Calcutta High Court has recently upheld the observation of the Income Tax Appellate Tribunal (ITAT) that Form 26AS can be used for the computation of Tax Deducted at Source (TDS) credit instead of Form 16A-TDS Certificate. The Department, aggrieved by the order of the Income Tax Appellate Tribunal (ITAT), approached the Calcutta High Court, invoking the Special Income Tax Jurisdiction under Section 260A of the Income Tax Act, 1961.
Payment during Search is Illegal: Delhi HC directs GST Department to Refund Rs. 1.8 Crore with Interest on ground of Non-Compliance with CBIC Circular VALLABH TEXTILES vs SENIOR INTELLIGENCE OFFICER AND ORS ,2022 TAXSCAN (HC) 1047
The Delhi High Court has recently directed the GST department to release a refund of Rs. 1.8 crores along with an interest of 6% for the reason that the department has not complied with the CBIC circular prohibiting payment during search proceedings and prescribing guidelines for receipt of voluntary payment by the assessee. Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that if the person chargeable with tax takes recourse to such a route, the proper officer is restrained from serving any notice qua tax or penalty under the provisions of the 2017 Act or the 2017 Rules framed thereunder, 2 unless the amount which is self-ascertained by the person chargeable with tax falls short of the amount payable as per law
No Module for Filing Appeal Online Provided by GST Dept: Rajasthan HC Allows Manual Filing of Appeal Against Audit Order M/s Singla Trading Company vs Union Of India ,2022 TAXSCAN (HC) 1046
In the absence of any module provided by the GST department, regarding the online filing of GST appeal against the audit order, the Rajasthan High Court has allowed the assessee to file the appeal manually. The petitioner, M/s Singhla Trading Company has approached the High Court requesting to quash the order passed by the respondent appellate authority Commercial Taxes, Bikaner whereby the appeal submitted by the appellant against the order GST-ADT -02 was returned on the solitary ground that the appeal memo had not been filed online
VAT Refund Claim of Registered dealers under C Form not be denied as being ‘Unverified’: Delhi HC MANGALAM TRADERS vs VALUE ADDED TAX OFFICER AND ORS. ,2022 TAXSCAN (HC) 1042
The Delhi High Court bench comprising of Justice Vibhu Bakhru and Justice Purushaindra Kumar Kaurav, in a Writ Petition, directed the Value Added Tax Officers (VATO) to process the refund claim under C Form of Value Added Tax (VAT) to the registered dealer and cannot be denied as being unverified. Also set aside the impugned order of the Assistant Value Added Tax Officer AVATO. The petition was filed by M/s Mangalam Traders against the impugned orders passed by the AVATO under Section 32 of the Delhi Value Added Tax Act, 2004 (DVAT) for the fourth quarter of the A.Y. 2016-2017 and the first quarter of the A.Y. 2017-2018, as being violative of Article 14, 19 and 265 of the Constitution of India.
Loss on Forex fluctuations on Forward Contracts are Deductible u/s 37(1) of Income Tax Act: Delhi HC PRINCIPAL COMMISSIONER OF INCOME vs SIMON INDIA LTD ,2022 TAXSCAN (HC) 1044
In a recent ruling of Delhi High Court (HC) of Justice Vibhu Bakhru and Justice Purushaindra Kumar Kaurav held that the loss on Foreign Exchange fluctuations on forward contracts are deductible under section 37(1) of the Income Tax Act, 1961. The Revenue has filed the present appeal under Section 260A of the Income Tax Act, impugned order passed by the Income Tax Appellate Tribunal (ITAT) in an appeal preferred by the Revenue against the order passed by the learned Commissioner of Income Tax (Appeals) [(CIT(A)]. The division bench determined that the AO erred in disallowing the loss resulting from Forward Contracts and that there is no fault with the order of the CIT(A) as well as the Tribunal in finding that the loss cannot be considered to be speculative and has to be deductible under Section 37(1) of the Income Tax Act
Bonafide Discharge of Duties by Joint Commissioner in raising GST Penalty and Interest: Rajasthan HC withdraws SCN issued to JC Hindustan Contruction Company Ltd. vs The Union of India & Ors. ,2022 TAXSCAN (HC) 982
The Rajasthan High Court has recently withdrawn the Show Cause Notice (SCN) issued against the Joint Commissioner after issuing a demand for the penalty and interest to the assessee-Hindustan Construction Company Ltd. The Rajasthan High Court, earlier, had asked the Joint Commissioner, Circle Nimbahera of GST to show-cause why cost should not be imposed upon him for nonperformance of duties enjoined upon him by law after Court observed that the officer acted in a “reckless illegal manner” leading to unwarranted litigation.
No Profits attributable to PE if it records a Global Net Loss: Delhi HC grants relief to Nokia COMMISSIONER OF INCOME TAX vs M/S NOKIA SOLUTIONS AND NETWORKS OY ,2022 TAXSCAN (HC) 1041
In a recent judgment pronounced by Delhi High Court, chaired by Justice Rajiv Shakedhar and Justice Tara Vitasta Ganju, upheld the decision of the Income Tax Appellate Tribunal (ITAT) that the no profits attributable to the Permanent Establishment (PE) if it is a global net loss. This appeal was preferred by the revenue against the order of the ITAT on questioning that ITAT erred in holding that no profits are attributable to the PE of the Assessee.
33% of Income Tax Offices Vacant due to Policy Issues: Constitutional Bench of Supreme Court to Consider Petition by Gujarat Principal CCIT HARIHARAN & ORS. vs HARSH VARDHAN SINGH RAO & ORS ,2022 TAXSCAN (SC) 214
A five-judge bench of the Supreme Court headed by the Chief Justice of India will be considering a petition by the Principal Chief Commissioner of Income Tax as the postings for the vacancy of 33% of income tax officers is vacant. The petition filed by Shri Anurag Chandra, Deputy Commissioner of Income Tax in the Office of the Principal Chief Commissioner of Income Tax, Gujarat stated that as a result of the interim order earlier, the promotion to the cadre of Income Tax Officers from the cadre of Income Tax Inspectors could not take place. As a result, 33.33% of posts in the cadre of Income Tax Officers are vacant as the same cannot be filled in. As noted earlier, the decision in the case of K.Meghachandra applies prospectively i.e. from 19th November 2019
Expenditure incurs for CSR is Allowable for Deduction u/s 37 of Income Tax Act: Delhi HC PR. COMMISSIONER OF INCOME TAX -7 vs PEC LTD, 2022 TAXSCAN (HC) 1040
The Division Bench of Delhi High Court comprising of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju, in a recent ruling, held that the expenditure incurred for Corporate Social Responsibility (CSR) is allowed for deduction under Section 37 of the Income Tax Act, 1961. Thus, the bench dismissed the appeals of the revenue department and upheld the decision of the Income Tax Appellate Tribunal (ITAT). The bench admitted the 3 appeals together as to consider the question of law that whether the ITAT erred in allowing deduction of expenses undertaken under the Corporate Social Responsibility (CSR) endeavour under Section 37 of the Income Tax Act in PR. COMMISSIONER OF INCOME TAX -7 vs PEC LTD, 2022 TAXSCAN (HC) 1040
Age is not a Bar for Prosecution of Non-furnishing of actual income: Delhi HC dismisses plea for quashing Proceedings RAJINDER KUMAR vs STATE & ANR ,2022 TAXSCAN (HC) 1036
The Delhi High Court has recently dismissed a plea for quashing criminal proceedings against the petitioner, Rajinder Singh filed on ground of his age and on the basis of Circular/Instruction No. 5051 dated 07.02.1991. A Complaint Case was filed by the Income Tax Officer alleging opening of an undisclosed account in HSBC Bank, London on 20.08.19 by the petitioner and having the maximum credit balance USD 575,010, equivalent to Rs.2,53,00,440/- at the exchange rate of Rs.44 per USD for the Assessment Year 2006-07. The contention of the department that the petitioner cannot be permitted to take benefit of his age to evade tax by having a huge sum in an undisclosed foreign account was affirmatively agreed to by the Single Bench of Justice Suresh Kumar Kait and the petition was dismissed
Chhattisgarh High Court acquits Cooperative Extension Officer in Corruption Case Radheshyam Mehra vs State Of Chhattisgarh ,2022 TAXSCAN (HC) 1034
In the prosecution’s case is that the accused/appellant was working as Chief Executive Engineer of Janpad Panchayat and was posted at various places between 1.9.2003 to 10.3.2011. The prosecuting agency obtained a search warrant from the competent Court on 8.3.2011 and effected search at four different places at a time on 10.3.2011. According to the prosecution, the check period starts from 1.9.2003 and ends on 10.3.2011. During this period, the appellant acquired properties of Rs.75,43,891/- which is unexplained earnings of the appellant. Resultantly, against the appellant, a charge sheet was filed and accordingly, charges were framed by the trial Court under Section 13(1)(e) read with 13(2) of Prevention of Corruption Act which was denied by him and he pleaded for trial.
Commissioner of Central Excise is not a Court: Calcutta HC allows Appeal in absence Retraction of Statements COMMISSIONER OF CGST AND CENTRAL EXCISE vs M/S. ASHIRWAD FOUNDRIES PRIVATE LIMITED AND ANOTHERS ,2022 TAXSCAN (HC) 1038
A Division Bench of the Calcutta High Court allowed appeal by the Revenue as there was absence retraction of statements and opined that Commissioner of Central Excise is not a Court. The appeal filed by the revenue under Section 35G of the Central Excise Act against the final order passed by the Customs, Excise and Services Tax, Appellate Tribunal (CESTAT) by which the appeal filed by the respondent, M/s. Ashirwad Foundries Pvt Ltd and Anothers challenging the order passed by the Commissioner of Central Tax, (GST & CEX) was allowed setting aside the service tax demanded and deleting the penalty imposed was deleted in its entirety.
Chattisgarh HC grants Relief to Maharashtra Electrosmelt Ltd Maharashtra Electrosmelt Ltd. And Ors.vs The State of Chhattisgarh And Ors, 2022 TAXSCAN (HC) 1039
As a relief to Maharashtra Electrosmelt Ltd, the Chattisgarh High Court (HC) directed the Registry to list cases under ‘Orders on IA. While rejecting the prayer made by Mr Pradhan, to enable the parties to prepare the cases for hearing, Chief Justice Arup Kumar Goswami and Justice Arvind Singh Chandel directed the registry to list these cases under the same heading, namely, ‘Orders on IA’, on06.02.2023 in Maharashtra Electrosmelt Ltd. And Ors.vs The State of Chhattisgarh And Ors, 2022 TAXSCAN (HC) 1039
Tax Evasion Case: Calcutta HC quashes Criminal Case, Pending Civil Proceedings, holding Abuse of Process of Court Shri Sushanta Karati vs The State of West Bengal ,2022 TAXSCAN (HC) 1037
A Single Bench of the Calcutta High Court quashed the criminal case against the appellant on pending civil proceedings by holding that there is an abuse of the process of court in a tax evasion case. The allegation against the petitioner, Sushanta Karati is regarding concealing the sales figures of his business pertaining to the year from 2009-2010 to 2013-2014 and by doing the same evading tax upon sales of his product. A criminal case was initiated being Chatterjeehat Police Station The petitioner has challenged the proceedings thereunder. A proceeding under Section 76 of the West Bengal Sales Tax Act, 1992 has been started against the appellant and the same is pending.
Failure to meet Monetary Limit: Supreme Court disposes the Appeal COMMISSIONER OF INCOME TAX vs SWAPNIL FINANCE PVT. LTD, 2022 TAXSCAN (SC) 213
In a recent ruling of the Supreme Court, a division bench composed of Justice M.R.Shah and Justice Sudhanshu Dhulia disposed of the appeal filed by the appellant on the ground of low tax effect. The counsels of the respective parties reported that the tax effect of both the appeals for the relevant A.Y.- 1995-96 and A.Y. 1996-97 would be less than Rs. 2 Crores. By this exception, adverse judgements pertaining to “classification and refunds issues which are of legal and/or recurring nature”, were to be contested irrespective of the amount involved. This sub clause ‘c’ has withdrawn with effect from the date of the instruction. Consequently, the beach disposed of the appeal; however, the question of law is kept open.
Delhi HC quashes Proceedings against Chartered Accountant for Delay in Filing Complaint PARTHA GHOSH vs REGISTRAR OF COMPANIES ,2022 TAXSCAN (HC) 1030
The Delhi High Court single bench presided by Justice Purushaindra Kumar Kaurav, while entertaining the Criminal Miscellaneous Petition, quashed the proceedings against the Chartered Accountant because the Registrar of Companies (ROC) delayed Filing a complaint within the limitation period of 6 months. The petitioner Partha Gosh, a Chartered Accountant filed the Criminal Miscellaneous Petition before the HC under Section 482 of Criminal Procedure Code, 1973 (Cr.P.C.), directed against the criminal case pending in the court of Additional Chief Metropolitan Magistrate (ACMM) and order of summoning dated 10.07.2014
Prior approval of CCIT/DGIT for Scrutiny Assessment is Mandatory: Orissa HC Nababharat Shiksha Parishad vs Deputy Commissioner of Income Tax ,2022 TAXSCAN (HC) 1033
The Orissa High Court held that Prior approval of Chief Commissioner of Income Tax (CCIT) or Director General of Income Tax (DGIT) for scrutiny assessment is mandatory. The appellant in the present case is Nababharat Shiksha Parishad. A Coram consisting of the Chief Justice M S Raman, observed that “There is no doubt that under the said clause in the guideline obtaining the prior approval of the CCIT for scrutiny assessment was mandatory and in the present case that was not obtained.” “The Court is unable to agree with the approach of the ITAT that the Assessee was required to ‘prove’ lack of jurisdiction of the AO. When the admitted fact is that prior approval of the CCIT was not obtained, nothing more need to be shown to demonstrate that the guideline was not followed” the Court opined
Electronic evidence must be accompanied by Requisite Certificate u/s 36-B(2) of Central Excise Act: Orissa HC Commissioner of Central Excise and Customs vs Shivam Steel Corporation ,2022 TAXSCAN (HC) 1035
The Single Bench of Chief Justice M S Raman of Orissa High Court held that, electronic evidence such as computer printouts shall be accompanied by the requisite documents under Section 36B(2) of the Central Excise Act, 1944. These appeals by the Commissioner of Central Excise & Customs (hereafter ‘Department’) raised a common question of law as to whether electronic evidence such as computer printouts shall be accompanied by the requisite documents under Section 36B(2) of the Central Excise Act, 1944. The Bench observed that, the seizure of a computer print-out of ‘Sunderlal’ ledger account from the residential premises of the accountant of Shivam Steel Corporation (SSC) which according to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) as held in its impugned order dated 29th April, 2016 is inadmissible in evidence for not satisfying the conditions laid down under Section 36-B(2) of the Central Excise Act, 1944.
Failure to consider reply to SCN and Document produced: Bombay HC quashes demand of Service Tax Vainguinim Valley Resort Vs Union of India ,2022 TAXSCAN (HC) 1029
The Bombay High Court at Goa, quashed demand of service tax on failure to consider reply to Show Cause Notice (SCN) and document produced by the petitioner, M/s Vainguinim Valley Resort. A Coram consisting of Justice MS Sonak and Justice Bharat P Deshpande observed that “There is non-application of mind while passing the impugned order. Similarly, it is clear from the reasonings in the impugned order that Respondent failed to take into account reply and the document produced by the Petitioner to the show-cause notice, which now compelled us to quash and set aside the impugned order.” “We quash and set aside the impugned order by remanding it to the said authority to decide it afresh by considering reply filed by the Petitioner to the show-cause notice, documents attached to it and also by giving personal hearing” the Court said
Cancellation of GST registration without Mentioning Reasons: Patna HC Quashes Cryptic Order M/s Best Bricks vs The Union of India ,2022 TAXSCAN (HC) 1032
The Patna High Court Division bench of Chief Justice Sanjay Karol and Justice Partha Sarathy while entertaining a Writ Petition through Video conferencing, quashed the order of Joint Commissioner of State Taxes (JCST) and restored the Goods and Services Tax (GST) Registration of the petitioner. The court stated that the principles of natural justice were violated and the order needs to be quashed as it entails penal and pecuniary consequences. Furthermore, it was stated that the petitioner consistently filed its return on time. And as per the submissions made by the counsels of the petitioner, the information of the returns for a certain period was not being uploaded was due to the Covid Pandemic which is not in the hands of the petitioner
Madhya Pradesh HC dismisses Plea Challenging GST Provision for Levy of Cess on Intra-State Supplies RANVIR KUMAR KARAN vs UNION OF INDIA ,2022 TAXSCAN (HC) 1031
A division bench of the Madhya Pradesh High Court comprising Chief Justice Ravi Malimath, & Justice Vishal Mishra has dismissed a petition challenging section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 and the rules and notification connected thereto, in view of the dismissal of the SLP by the Supreme Court and affirming the validity of the Act in a similar case. Dismissing the petition, the division bench has held that “In terms of the order dated 3.10.2018, the very question with regard to the validity of the Goods and Services Tax (Compensation to States) Act, 2017 was under challenge. In view of dismissal of the aforesaid SLP and affirming the validity of the Act, the said judgment would stand applicable to the case in hand.”
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The Delhi High Court, Coram of Justice Rajiv Shakdher, and Justice Tara Vitasta Ganju granted interim relief to the assessee that no precipitate action be taken against the petitioner at the stage of import.
The assessee filed a writ petition against the notification dated 19.10.2022 [i.e.,Sl.No. 2(ii)] and the communication dated 21.11.2022 issued by the second respondent.
Sujit Ghosh, who showed up on behalf of the petitioner, posited that perusing the communication dated 21.11.2022, which allegedly retrospectively amended the Project Import Regulations, 1986, would exemplify that the petitioner had indeed been denied the benefit of the concessional rate of customs duty available for importing equipment for the purpose of its solar power project.
The counsel for the petitioner further contented that upon receipt of the communication, a right was vested in favor of the petitioner to import registered items for the execution of the solar power project to import items at a concessional rate of duty, which, according to the respondents, stands withdrawn with the issuance of the impugned notification dated 19.10.2022.
Sujit Ghosh emphasized that the registration of the solar power project, which occurred prior to the said date, will continue to have the benefit of the concessional rate of customs duty.
Satish Kumar, who appeared on behalf of respondents No.1 and 2, submitted that the petitioner has not fulfilled the stipulated eligibility criteria for being accorded the concessional rate of duty.
Further submitted that, at this stage, no interim order can be passed in favor of the petitioner, even if the matter, otherwise, would require consideration.
The bench observed that the petitioner has set up a prima facie case. In case no interim protection is granted, the entire process of import is likely to get derailed. It was highlighted that the petitioner has submitted a continuity bond for a large sum of money, along with a bank guarantee.
In addition, it was mandated that the petitioner pay duty at the tariff rate rather than the concessional rate if it loses the current writ petition for the sake of convenience.
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Relief to Universal Bituminous Industries, the Kolkata Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that penalty under section 11A (4) of the Central Excise Act,1944 is not permissible in the absence of tax evasion. M/s. Universal Bituminous Industries Pvt. Ltd, the appellant engaged in the manufacturing of Bitumen Emulsion…
The Income Tax Appellate Tribunal (ITAT), Mumbai bench has held that the delay in the filing of TDS returns due to lack of professional assistance is a mere “technical breach” for which penalty under section 272A(2)(k) of the Income Tax Act, 1961 cannot be imposed.
The Assessing Officer levied the penalty of Rs. 85,200 under section 272A(2)(k) of the Act on the assessee, Hi Techno Control System Pvt. Ltd on the ground that there is a delay in filing of TDS returns.
Section 272A(2)(k) of the IT Act provides a penalty for failure to deliver or cause to deliver a copy of the statement within the time specified in sub-section (3) of s. 200 or the proviso to sub-section 3 of s. 206(c) of the Act.
The assessee submitted that the same was due to the lack of knowledge and at the same time non availability of Professional person in the Rural Area i.e. at Sonar Pada village Dombivli East, Thane Rural.
Shri Prashant Maharishi, Accountant Member and Shri Sandeep Singh Karhail, Judicial Member observed that Sec. 273B of the Act provides that no penalty shall be imposed on the person or the assessee as the case may be for any failure referred to in the said provision if the assessee proves that there was a reasonable cause for the said failure. It is an admitted fact that the assessee deducted tax on time and deposited with the Revenue Department on time.
“There was only a technical breach of the provisions contained above, requiring the assessee to submit the quarterly return statements of tax deducted at source within the time provided under the Law. It is not a case of the Revenue that the assessee did not file the required statements with the Revenue Department. The requisite statement/returns have been filed belatedly, for which, a penalty have been imposed. In the present case, the assessee explained that the delay in filing the TDS return is due to negligence on the part of the assessee and nonawareness of the importance of filing the TDS return,” the Tribunal said.
After analysing the facts deeply, the ITAT held that the assessee had no assistance from any professional person to guide them regarding the compliance of statutory provisions.
Concluding the order in favour of the assessee, the Tribunal held that “These facts clearly show that the assessee had a reasonable cause for failure to comply with the provisions of law. On filing the belated returns/statements, Revenue has not suffered any loss because the tax deducted was already deposited on time with the Revenue Department. It was, therefore, a technical breach of the provisions contained in the Act for submitting the return statement of tax deducted at source. The above reasons are sufficient to hold that the penalty need not be levied in the facts and circumstances of the case to guide them regarding the compliance of statutory provisions. These facts clearly show that the assessee had a reasonable cause for failure to comply with the provisions of law. On filing the belated returns/statements, Revenue has not suffered any loss because the tax deducted was already deposited on time with the Revenue Department. It was, therefore, a technical breach of the provisions contained in the Act for submitting the return statement of tax deducted at source. The above reasons are sufficient to hold that the penalty need not be levied in the facts and circumstances of the case.”
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The Central Board of Indirect Taxes and Customs (CBIC), on Thursday has notified the Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022.
The rules are applicable to the goods that do not have originating status under clause (a) of rule 3 and are not covered under Annexure-B, a good shall be considered originating if all non-originating materials have undergone at least a change in tariff sub-heading (CTSH) level of the Harmonized System, and the QVC of the good is not less than thirty-five per cent. of the FOB value as per build-up formula or forty-five per cent. of the FOB value calculated as per build-down formula under rule 7, provided that the final production process of the manufacture of the good is performed within the territory of the exporting Party.
As per the rules, packaging materials and containers in which a good is packaged for retail sale, if classified with the good, shall be disregarded in determining whether the non-originating materials used in the production of the good have satisfied the applicable process or change in tariff classification requirement set out in Annexure- B, or whether the good is wholly obtained or produced.
The Certificate of Origin shall be issued by an issuing body or authority, as appropriate, of an exporting Party, upon an application by an exporter, producer, or their authorised representative.
The Certificate of Origin shall be forwarded by the exporter or producer to the importer. The customs administration may require the original copy.
The rules further imposes penalty for non-compliance of goods with Rules of Origin. If the verification under rule 26 establishes non-compliance of the goods with the rules of origin, duties shall be levied in accordance with the laws and regulations of the importing Party.
“Each Party shall also adopt or maintain measures that provide for the imposition of civil, administrative, and, where appropriate, criminal sanctions for violations of its customs laws and regulations, including those governing rules of origin, and the entitlement to preferential tariff treatment under these rules,” the rules said.
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The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has upheld that income addition under section 69 of the Income Tax Act,1961 in the absence of evidence to prove the nature and source of property. M/s. Shivram Consultants India Pvt. Ltd, the assessee company filed its return of income for the A.Y. 2011-12 under…
Cryptocurrency is one of the most talked-about and hotly debated topics in the business world today. It has been making waves since its inception and has become the go-to investment option for many entrepreneurs. Yet, to truly understand cryptocurrency as a business, it’s essential to understand what makes it different from other investment opportunities. This article is meant to help provide some understanding of the basics of cryptocurrency and how it can be used as a viable business opportunity.
The Blockchain
First, cryptocurrency relies on an innovative technology known as the blockchain. This technology is based on a decentralized ledger, meaning that all transactions are stored on multiple computers worldwide. This makes it difficult for hackers to access the data because they would have to break into various computers simultaneously. Furthermore, the blockchain is also a security system because it uses an encryption technique to protect all transactions. The blockchain provides a secure, reliable platform for cryptocurrency transactions to take place.
Faster Transactions
Another critical benefit of cryptocurrency is the speed and efficiency of transactions. Since cryptocurrency operates on a decentralized platform, it eliminates the need for third-party intermediaries. This means that transactions can take place almost instantaneously and without the need for banking or other financial institutions. Your money can be sent anywhere in the world without having to wait for weeks or months.
Low Costs
The third advantage of cryptocurrency is its low-cost nature. Since all transactions are done on a decentralized platform, they avoid hefty fees charged by banks and other financial institutions. This makes it possible for small businesses to accept payments from customers worldwide without worrying about the high transaction costs. Of course, you need to understand when and how to convert them back into American currency, for instance. So, try to convert eth to usd at OKX and then maybe try a few other currencies. This will help you reap the most benefit.
High Liquidity
Cryptocurrency also offers an outstanding level of liquidity and flexibility. When compared to traditional investments, cryptocurrency can be liquidated quickly and easily with minimal fees or delays. This makes it an excellent option for entrepreneurs who need to access their funds quickly or need to produce significant business decisions quickly. The liquidity of cryptocurrency makes it attractive to investors who are looking for quick profits.
The Decentralization Factor
Also, the decentralization of cryptocurrency is perhaps its greatest asset. As a business, you don’t have to worry about government regulations or other rules that may limit your ability to conduct transactions. This opens up a whole new world of opportunity for entrepreneurs and businesses alike who are looking for more freedom in their operations. Whilst some people may be worried about the security of cryptocurrency, it’s important to remember that all transactions are stored on multiple computers worldwide and require encryption techniques to ensure their safety.
Volatility
Finally, it’s essential to understand that cryptocurrency is a volatile asset and can change rapidly in value. This means that there is some risk associated with investing in cryptocurrency, but it also provides an exciting opportunity to gain substantial profits. You should be aware of the risks associated with cryptocurrency before investing, as it can be an unpredictable asset. Not only is it essential to have a clear understanding of the technology and its potential, but also how to time your trades correctly.
