Kerala HC orders Release of Goods and Vehicles on Simple Bond [Read Order]

The Kerala High Court has ordered the release of goods and vehicles on the basis of a simple bond.

In the case of Umiya Enterprise vs. State Tax Officer, the court did not pronounce the final judgment rather it said that it is the strong case from the side of the petitioner wherein the court was persuaded to accept that the goods and vehicle detained in accordance with the Order Ext.P7 can be released on the basis of a simple bond and there is no need for the petitioner to furnish the bank guarantee for the amount demanded in Order Ext.P7.

The petitioner namely Umiya Enterprise was engaged in dealing with plywood, particleboards and allied items registered under Central Goods and Service Tax (CGST) & KGST Act. M/s. Rukomoni Boards Pvt. Ltd. was the main supplier of the petitioner and the goods supplied were properly covered within a valid invoice and e-way bill. The authority seized the goods and vehicles on the grounds that the petitioner has not paid the tax under Integrated Goods and Service Tax (IGST).

It was contended by the petitioner that in the invoice the element of tax was wrongly shown as CGST and SGST @9%, however, this was just the mistake committed by the new accountant. At the same time, it was declared that the e-way bill contains proper details.

The Single bench of the High Court of Kerala comprising of Justice Alexander Thomas held that it is the strong case from the side of the petitioner wherein the court was persuaded to accept that the goods and vehicle detained in accordance with the Order Ext.P7 can be released on the basis of a simple bond and there is no need for the petitioner to furnish the bank guarantee for the amount demanded in Order Ext.P7.

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Banking Services are Related to Collection of Export Proceeds: CESTAT allows Refund Claim [Read Order]

The Customs Excise and Service Tax Appellate Tribunal, New Delhi held that banking services are related to the collection of export proceeds and allowed refund claims.

The appellant is engaged in manufacture and export and thus, had filed a refund claim of Service Tax for Rs.8,58,102/- along with supporting documents for the period from October 2016 to December 2016 under Notification.

The said Notification was amended vide Notification so as to inter alia, allow refund of Service Tax on services used beyond the factory or any other place or premises of production or manufacture of the said goods, for export of the said goods.

Department on examination of the refund claim found that the claim has been filed in respect of services used in the export of goods, namely, cargo handling service, port service, banking, and other financial services and GTA services, which are the specified services under the said Notification.

The department observed that the invoices pertaining to refund claim of Rs.8,320/- is filed with the invoices, which have no mention of address or on the basis of a draft invoice. It was also found that the refund claim of Rs.17,430/- is in respect of banking services, which do not appear to be used in the export of services.

 Alleging the said claim to, therefore, be inadmissible that a show-cause notice was served upon the appellants proposing the rejection of the said refund claim of Rs.27,931/- out of the total claim of Rs.8,58,102/- along with interest and the penalties.

The said proposal was initially confirmed vide Order-in-Original refund claim of Rs.8,30,171/- was accepted and that of Rs.27,931/- (8320+17430) was rejected. The appeal thereof was rejected by vide Order-inAppeal.

Being aggrieved, the appellant is before this Tribunal.

The Coram comprising of Judicial Member, Rachna Gupta pronounced the order based on an appeal filed by M/s. Baba Super Minerals Pvt. Ltd.

The Tribunal said that the appellant that refund cannot deny on two grounds that the Invoices be inadmissible, as they lack the material particulars and the Banking and Financial Services are not for the export as it is sustainable as all the relevant details as are required under Rule 4 A (1) of Service Tax Rules, 1994 are duly available on the said invoices, irrespective that the invoices were draft invoice.

Judicial Member observed that the C.A. Certificate was furnished certifying all the relevant details to be correct. As far as Banking and Financial Services are concerned, it is submitted that original invoices for those services were produced by the appellant.

While relying upon the decision in the case of CCE, Raipur vs. Satyam Balaji Rice Industries Ltd. alleging that the refund claim has wrongly been rejected and appeal were allowed.

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Difference in Address Shown in Invoice and E-way Bill is not a Serious Mistake: Kerala HC [Read Order]

The Kerala High Court observed that the difference in the address shown in Invoice and E-way bill is just a clerical mistake and not a serious mistake.

In the case of M.R. Traders vs. State of Kerala, it was observed that the respondent must take into consideration the contention of the petitioner that the error pointed out by the respondent pertaining to the difference in the address shown in invoice and e-way bill is only a clerical mistake and not the serious mistake which should justify the detention and penalty proceedings.

The petitioner namely M.R. Traders is engaged in the business of the timber and timber products. The petitioner in the due course of business generated a tax invoice pertaining to the supply of timber from Karnataka to Kerala. In order to transport the goods from one state to another, the petitioner generated the e-way bill keeping in mind the process of law.

However, the petitioner opened a new branch, which was in the process to be updated, and the site was showing that it was ‘processing’. While the e-way bill has generated the petitioner was under the assumption that the address would automatically appear in the e-way bill, and on the basis of assumption, the bill was handed to the driver of the vehicle.

As a consequence when the authority noted that there was a difference in the address shown in the Invoice and E-way bill, they seized the vehicle.

The issue raised in this case was whether the difference in the address shown in the invoice and the e-way bill is only a clerical mistake or the serious mistake?

The Single Bench of High Court of Kerala comprising of Justice Alexander Thomas held that the difference in the address shown in Invoice and E-way bill is just a clerical mistake and not a serious mistake.

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Govt amends Export Policy of APIs and Formulations made from these APIs

The Government has made amendments in the export policy and restricted export of specified APIs (Active Pharmaceutical Ingredients) and formulations made from these APIs.

A notification issued by Directorate General of Foreign Trade, M/o Commerce and Industry says that the restrictions will come into immediate effect and until further orders.  The notification covers the following APIs and formulations made from these APIs:

  1. Paracetamol
  2. Tinidazole
  3. Metronidazole
  4. Acyclovir
  5. Vitamin B1
  6. Vitamin B6
  7. Vitamin B12
  8. Progesterone
  9. Chloramphenicol
  10. Erythromycin Salts
  11. Neomycin
  12. Clindamycin Salts
  13. Ornidazole

CA / LLb openings in LIC

The Life Insurance Corporation of India (LIC) has invited online applications from eligible Indian Citizens for appointment to the post of Assistant Administrative Officer (AAO) Specialist. Candidates should apply through On-line mode only. No other means or mode of application will be accepted.

POSTSCSTOBCEWSURTOTALPwBD
LDVIHIID/MD
AAO (CA)631141640111
AAO (Legal)7310416401112

Details of vacancies and reservation for Scheduled Castes, Scheduled Tribes, Other Backward Classes and Persons with Benchmark Disabilities shall be as under:

The important dates in relation to the application the vacancies are :

ActivityDates

 

The start date for Online Registration of Applications and Online Payment of Application Fee/ Intimation Charges25.02.2020

 

Last date for Online Registration & Online Payment of Application Fee/Intimation Charges15.03.2020

 

A download of Call Letter for Online Preliminary ExaminationFrom 27.03.2020 to 04.04.2020
Dates of Online Examination – Preliminary (tentative)4th April 2020
Dates of Online Examination – MainWill be informed later

For More Information Click here.

Supreme Court lifts Restriction Imposed by RBI on Cryptocurrency, Allows Trading [Read Judgment]

The Supreme Court has set aside Reserve bank of India’s (RBI) 2018 Circular which had restricted banks from dealing with cryptocurrency such as bitcoins. The petition against the RBI curbs was filed by the Internet and Mobile Association of India (IAMAI) questioning the powers of the RBI to impose such a ban since the cryptocurrency wasn’t a “currency” in the legal sense. IAMAI had insisted that cryptocurrencies were more like a commodity.

The RBI issued a circular in April last year banning regulated financial institutions from providing services to crypto businesses. The ban went into effect three months later and banks subsequently closed the accounts of crypto exchanges.

The case was heard by a three-judge bench comprising Justices R F Nariman, Aniruddha Bose, and V Ramasubramanian and they held that the RBI’s circular preventing bans from dealing in transactions involving cryptocurrency was disproportionate. The Court held that, “.  . . . . we cannot lose sight of three important aspects namely,

(i) that RBI has not so far found, in the past 5 years or more, the activities of VC exchanges to have actually impacted adversely, the way the entities regulated by RBI function

(ii) that the consistent stand was taken by RBI up to and including in their reply dated 04-09-2019 is that RBI has not prohibited VCs in the country and

(iii) that even the Inter-Ministerial Committee constituted on 02-11-2017, which initially recommended a specific legal framework including the introduction of a new law namely, Crypto-token Regulation Bill 2018, was of the opinion that a ban might be an extreme tool and that the same objectives can be achieved through regulatory measures.”

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VACANCY for CA/CMA at NALCO

The National Aluminium Company Limited (NALCO) is looking for committed, promising and result in oriented candidates in Finance Disciplines for the positions Management Trainee and Assistant Manager for finance. 

NALCO is a Navratna Company having the largest integrated Alumina – Aluminium Complex of Asia, having State of the Art technology, with its present turnover of more than Rs.11386Crores. The company is going for further growth and expansion within India & across the globe. The Company also enjoys Premier Trading House status in the field of export and has won many prestigious awards for its excellent performance with significant value addition to its shareholders. The plants and offices are multi-locational with its Corporate Office at Bhubaneswar, Odisha.

The qualifications, selection criteria and other relevant information regarding the vacant posts are:

Upper Age Limit:

30 Years (As on dt.19/02/2020)

The candidates will be selected based on the Marks secured by them in all the papers both in Inter & Final examinations of Chartered Accountant/Cost Accountant and the performance in the personal interview. The candidates will be called for personal interview on a ratio of 1:10 to the number of vacancies based on the percentage of marks secured by them in all the papers both in Inter & Final examinations of Chartered Accountant/Cost Accountant. For the purpose, the candidates are required to send the certified copies of all the Mark Sheets and Pass Certificates both Inter & Final along with the hard copy of the application.

Degree in any discipline with Chartered Accountant(CA) from ICAI or Cost Accountant(CMA) from ICAl.The candidates should have the required number of years of relevant experience as an Executive/Officer in Govt, or PSUs or reputed/leading organizations as mentioned at Table-II. Candidates having exposure in sales accounting, treasury, fund management & investment proposal, negotiation/discount of bills, costing, project accounting, MIS, budget control, a compilation of annual accounts and audit thereof, direct & indirect taxation, tender procedures, computerized accounts, risk management, etc. is desirable. Work experience in an ERP environment will be preferred.

The candidates should have relevant work experience in the immediate lower level/grade and should be in the pay scale/CTC as mentioned below.

SectorsRequired Pay Scale/CTC as on 19.02.2020Executive Grade Exp. (as on19.02.2020)Upper Age Limit (as on19.02.2020)
(D)(2)(03)(04)
Central PSUsRs.24900-3%-50500/- (Pre-revised) Rs.60000-3%-180000/- (Revised)4 years44 years
Central Govt./ State Govt.Rs.15600-39100/- GP:Rs.5400/- (Pre-revised) Level-10: Pay Matrix- Rs.56100-73200/-(Revised)4 years44 years
Private Sectors including those who are not in the pay scales as at Col-(2)Annual CTC: Rs.14 Lakhs4 years44 years

The Last date for application is 18th March 2020. It is to be noted that where there is no reservation, the candidates belong to that category will be treated at par with UR Candidates. Out of above 12 posts, one post is horizontally reserved for PWD candidates]

For More details Click here.

CCTV charged at the Rate of 15% BCD: CESTAT [Read Order]

The Central Excise and Service Tax Appellate Tribunal (CESTAT), Chennai has ruled that the Closed Circuit Television (CCTV) Cameras’ assessed at the rate of 15% Basic Customs Duty (BCD) and falls under other.

The appellant filed a Bill-of-Entry for the clearance of ‘Closed Circuit Television (CCTV) Cameras’ and since the goods were of Korean origin, the appellant, under the self-assessment scheme, assessed the same at ‘Nil’ rate of Basic Customs Duty (BCD) in terms of Notification.

The Assistant Commissioner of Customs/Adjudicating Authority did not accept the nil rate of BCD and hence, charged BCD at the rate of 15% vide Speaking Order issued dated against which the appellant preferred an appeal before the Commissioner of Customs (Appeals), Chennai and who vide impugned Order-in- Appeal having rejected the appeal.

The Coram comprising of Judicial Member, P. Dinesha and Technical Member, C. J. Mathew pronounced the order based on an appeal filed by M/s. Compuage Infocom Limited.

The descriptions of the goods given under Bill-of- Entries in 6280158 and 6450438  and also record the Bills-of-Entry of the other importer  M/s. Honeywell International India Pvt. Ltd. which was placed by the appellant in Appeal Memorandum were examined.

The Tribunal observed that the Bills-of-Entry reveals that there are differences as regards the descriptions of the imported goods are concerned and finds that there is no entry specifically for CCTV cameras.

The Tribunal also said that the contention of the appellant cannot be accepted that ‘neither digital cameras nor video camera recorders, would fall under the category of television cameras itself’ under these reasons, they cannot be classified under television camera, but rightly under “Others”.

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Meghalaya HC directs Special drive to Inspect / Check all Teer Centers to Curb GST Evasion [Read Order]

The Meghalaya High Court has directed a special drive to inspect all Teer centers to curb Goods and Services Tax Evasion.

A Public Interest Litigation has been filed by Shri Sajan Ch. Marak, inter alia, with the prayer that the respondents be directed by the issuance of a writ of mandamus to close down all running illegally teer-centers in the State and to provide age limit.

Restrictions for entering into the betting of teer and to ensure that the distance in terms of Section 6 of the Meghalaya Regulation of the Game of Arrow Shooting and the Sale of Teer Tickets Act, 2018 between ticket counters/teer-counters is maintained by the owner.

And further to direct the respondents to implement the Meghalaya Goods and Service Tax Act in terms of service code tariff 999692 (gambling and betting services including similar online services) for the ongoing business of betting in the form of teer in the State of Meghalaya.

The division bench comprising of Chief Justice Mohammad Rafiq and Justice W. Diengdoh, pronounced the order based on Public Interest Litigation.

The bench observed that the licenses were earlier issued to various owners of different teer-counters under the Act of 1982. Now with the repeal of that Act and enactment of the Act of 2018, licensees of that time are required to obtain a fresh license under the Act of 2018. It goes without saying that no such teer-counter can be allowed to run without a valid license.

The Court also said that compliance of Section 6 of the Act of 2018 has to be scrupulously ensured which mandates the teer-counters and bookmakers are required to be located not less than 1000 feet or 300 meters away from the nearest place of worship or educational institution.

The Court further added that it is the mandatory duty of the respondent-authorities, especially the Commissioner of Taxes and Superintendent of Taxes located in different districts in the State, particularly Tura Circles I and II, to ensure periodical checking of all such sites where licensees of the earlier Act of 1982 used to run the teer-counters.

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MCA issues Standard Operating Procedure for initiating Prosecution against Directors / KMP / Independent Directors

The Ministry of Corporate Affairs (MCA) has issued a Standard Operating Procedure regarding prosecution filed or internal adjudication proceedings initiated against Independent Directors, non-promoters and non-KMP, non-executive directors. These clarifications include:

a) Independent Directors nominated by the Government on the public sector undertakings;

b) Directors nominated by Public Sector Financial Institutions, Financial Institutions or Banks having participation in the equity of a company, or otherwise;

c) Directors appointed in pursuance to any statutory or regulatory requirement such as Independent directors appointed by the NCLT.

Ordinarily, a whole-time director [WTD] and key managerial personnel [KMP] are associated with the day-to-day functioning of the company and accordingly such WTDs and KMPs would be liable for defaults committed by a company. In absence of a KMP, such director or directors who have expressly given their consent for incurring liability in terms of the e-form GNL-3 filed with the Registrar would be liable. Where the consent for incurring liability for any of the provisions dealing with maintenance, filing or distribution of accounts or records is submitted in e-form GNL-3 by a person under the immediate authority of the Board or any KMP, the liability of such person will arise. However, in certain cases, the penal provisions in the Act hold a specific director, or officer, or any other person accountable for the default, in such cases, action should be initiated only against such director, or officer, or person, as the case may be, such as disclosure of interest by directors under section 184 of the Act.

All Registrars are directed to immediately and scrupulously follow the above mentioned Standard Operating Procedure with respect to all ongoing cases. Further, with respect to cases where prosecution may have been already filed but the criteria of the above-mentioned case are not satisfied, the same may be submitted to this Ministry for necessary examination and further direction thereon.

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Finance Commission to hold meeting with Finance Ministers of all States

The Finance Commission will hold a consultation meeting with the Finance Ministers of all States on 13th March 2020 in New Delhi.  This is to discuss issues related to the final report of the Finance Commission for 2021-26 which the Commission is likely to submit in October 2020.

This meeting is part of the Commission’s continued engagement with the States.  In particular, the Commission would like to seek views of the Finance Ministers on how the State FRBMs can be aligned with the Central FRBM legislation and also determine the priority of the state-specific grant proposals that have been submitted by the State Governments.  The Commission would also welcome any additional inputs which can inform its approach to the complex issues related to fiscal federalism. Considering the significantly enhanced response of both disaster management and Urban Local Bodies and Rural Local Bodies,  an exchange on optimum utilization of funds will also be part of the discussion of the Commission with the States.  The issue of timely constitution of  State Finance Commissions as well as the action is taken post their recommendations  – are likely to be discussed.  The Commission also plans to discuss the projections of the State Governments regarding the State Domestic Product (SDP)  and the tax buoyancy projected by them for the period of the award of the Commission – this being very significant as it impacts the quantum of resource for the revenue deficit grants.

The Fifteenth Finance Commission’s terms of reference were amended by the President of India in November 2019 to extend the term of the Commission till October 2020.  While extending the term, the Commission has also been asked to submit two reports, one for the year 2020-21 and a second report for the period from 2021-22 to 2025-26.

The Finance Commission’s report for the financial year 2020-21 was substantially accepted by the Union Government and presented in the Lok Sabha along with the Union Budget for 2020-21.  The Commission is now working earnestly to complete the task of recommending fiscal transfers for the extended award period.

Wrong Assumption of Facts or Incorrect Application of Law would make the order liable for Revision: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) held that the wrong assumption of facts or incorrect application of the law would make the order liable for revision under section 263 of Income Tax Act, 1961.

As per the provisions of Section 263 of Income Tax Act, 1961, specific revenue authorities namely Pr. Commissioner of Income Tax / Commissioner of Income Tax is vested with the supervisory powers of suo-moto revision of any order passed by the Assessing Officer.

For the said purpose, the appropriate authority may call for and examine the record of any proceedings under the Act and may proceed to revise the same provided two conditions are satisfied that the order of the assessing officer sought to be revised is erroneous and it is prejudicial to the interest of the revenue.

If one of the condition is absent i.e. if the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but it is prejudicial to the revenue – recourse cannot be had to Section 263 of the Act as the phrase ‘prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer.

Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue.

For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law.

If the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but it is prejudicial to the revenue – recourse cannot be had to Section 263 of the Act.

The Assessing Officer noticed that all the investments above were in group companies/concerns and had been made in the interest of the business activity of the assessee. Further, the majority of the investments above were opening balances and there were no fresh investments during the year.

The Tribunal comprising of Judicial Member, C N Prasad, and Accountant Member, Manoj Kumar Aggarwal pronounced the order based on an appeal filed by M/s. Sleek International.

The ITAT observed that the wrong assumption of facts or incorrect application of the law would certainly make order liable for revision u/s 263.

Further observed that all the issues connected with the transfer of business were under due consideration of AO during regular assessment proceedings. Another aspect to be noted is that as per the provisions of Sec. 271E, no satisfaction is required to be recorded in the quantum assessment order before levying penalty u/s 271E. Therefore, we are unable to accept the validity of revisional jurisdiction.

While allowing the appeal the tribunal stated this issue was raised by the revisional authority without conducting any minimal inquiry that the said expenditure was not admissible under law. The conclusion was drawn on the mere allegation that the said expenditure was an inadmissible expenditure. It is a settled legal position that the revision jurisdiction could not be exercised to make fishing or roving inquiry without establishing the fact that the order was erroneous as well as prejudicial to the interest of the revenue.

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SEBI set rules to amend the Infrastructure Investment Trusts and Real Estate Investment Trusts Regulations 2020

The Securities and Exchange Board of India (SEBI) set certain regulations to amend the Infrastructure Investment Trusts Regulations, 2014 and Real Estate Investment Trusts Regulations, 2014.

In exercise of the powers conferred under section 30 read with sections 11 and 12 of the Securities and Exchange Board of India Act, 1992, the Board makes certain regulations to amend the Infrastructure Investment Trusts Regulations, 2014 and Real Estate Investment Trusts Regulations, 2014.

The Infrastructure Investment Trusts Regulations, 2014 may be called the Securities and Exchange Board of India-SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2020.  This amendment shall come into force on the date of their publication in the Official Gazette.

In the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, In regulation 4 shall be substituted with the following sub-clause, “the investment manager has not less than five years of experience in fund management or advisory services or development in the infrastructure sector or the combined experience of the directors/partners/employees of the investment manager in fund management or advisory services or development in the infrastructure sector is not less than 30 years.

Provided that for computing the combined experience, only the experience of the directors/partners/employees with more than 5 years of experience in fund management or advisory services or development in the infrastructure sector shall be considered.”

In regulation 14 the following new proviso shall be inserted after the first proviso that “Provided further that the InvIT shall not be required to file a draft offer document with the Board in case of a fast track rights issue, subject to the fulfilment of the conditions as specified by the Board from time to time.”

The Real Estate Investment Trust Regulations, 2014, maybe called the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2020. This amendment shall come into force on the date of their publication in the Official Gazette.

In the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014,- I. In regulation 14 the following new proviso shall be inserted after the first proviso, namely,- “Provided further that the REIT shall not be required to file draft offer document with the Board in case of a fast track rights issue, subject to the fulfilment of the conditions as specified by the Board from time to time.”

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ICAI Member can only File Appeal before Appellate Authority: AA [Read Order]

The Appellate Authority ( AA) has ruled that only ICAI Member can file an appeal before the Appellate Authority.

The appellate authority also said that only ICAI authority has power on disciplinary proceedings against the chartered accountant.

The appeal has been preferred by Neville Nadir Mistry to challenge the legality and correctness of Order of the Board of Discipline of the Institute of Chartered Accountants of India whereby the complaint filed by him was dismissed.

The notice of the appeal was issued to the Respondents. The Institute was directed to file its response to the appeal as well as the allegations leveled by the complainant. The Institute, however, did not file any response.

The Appellant alleged that he was not given any opportunity of being heard as the complaint filed by him was dismissed ex-parte under Rule 12. The Minutes of the Meeting dated 28th June 2018 was provided to him on 26th June 2019 and were backdated.

The appellant had sent an e-mail seeking the status of the complaint filed by him. A prompt reply was stating “the complaint is under consideration of the appropriate committee1′. Again when he enquired about the status of the complaint, the reply of the Institute was “under consideration of the appropriate authority”. His e-mails went unanswered.

The coram constituting of Chairman, Justice S.P. Garg and Members, Praveen Garg, Anand Mohan Bajaj, Pankaj Tyagee on an appeal filed by Neville Nadir Mistry.

While relying upon the observations of the High Court of Delhi in Wholesale Trading Services Private Limited vs The Institute of Chartered Accountants of India and Others the appellate tribunal came into conclusion that the It is also relevant to note that the proceedings before the Disciplinary Committee/Board of Discipline are in nature of Disciplinary proceedings to ensure that members of ICAI maintain professional standards.

The authority said that the disciplinary proceeding is principally between ICAI and its members. A complainant merely acts as a relater party that provides information relating to any misconduct on the part of a Chartered Accountant although a complainant has a right to participate in the proceedings.

The authority further said that the disciplinary proceedings cannot be viewed as a private dispute between the complainant and the Chartered Accountant even if the complainant may also have suffered on account of professional or other misconduct on the part of a Chartered Accountant,’ however that does not change the nature of the disciplinary proceedings.

While dismissing the appeal authority said that the conduct of ICAI’s member a Chartered Accountant, is to be evaluated by the concerned authorities of ICAI. The object is to ensure that its members measure up to the standards as set by ICAI for continuing as its members.

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No Requirement to issue two Separate Notices in the Name of Amalgamated Companies for Reopening of Assessment Proceedings: Delhi HC [Read Judgment]

The Delhi high court held that there is no requirement to issue two separate notices in the name of amalgamated Companies for the Reopening Assessment proceedings.

The writ petitions under Article 226 /227 of the Constitution of India are directed against the notice issued by respondent No.1 under Section 148 of the Income Tax Act for the assessment year (AY) 2012-13 and the orders disposing of the objections filed by the respective petitioners and also the proceedings emanating therefrom.

The Petitioner is a private limited company engaged in the business of construction-development projects. Pursuant to a scheme of amalgamation approved by this Court vide order dated 20.12.2012, M/s. Experion Developers International Pvt. Ltd amalgamated with M/s. Experion Developers Pvt. Ltd

During the financial year relevant to the assessment year under consideration i.e. AY 2012-13, (FY 2011-12) the Petitioner and the erstwhile-assessee, EDIPL, were separate/independently assessable assessees.

For the assessment year under consideration, i.e., AY 2012-13, as Petitioner (EDPL) was the only surviving entity, it alone filed return of income declaring loss of Rs.7,82,95,075/-. The return of income was selected for scrutiny and after making certain disallowances, the total income was assessed at Rs. 90,15,239/- and assessment order dated 19.03.2015 was passed under Section 143(3) of the Act.

The said order is presently a subject matter of a pending appeal.

The division bench comprising of Justice Vipin Sanghi and Justice Sanjeev Narula pronounced the judgment based on a writ petition filed by Experion Developers Private Limited.

In the light of the decision in BDR Builders & Developers (P) Ltd. V Assistant Commissioner of Income Tax [2017] bench said that for reopening Assessment proceedings in respect of EDIPL, now merged with EDPL, a notices can only be issued in the name of the merged entity. There is no requirement to issue two separate notices in the name of the amalgamated company.

While dismissing the petition the bench further said that the successor-in-interest of the amalgamating company and in its individual capacity, as the amalgamated company (EDPL) has taken over the liabilities of the amalgamating company (EDIPL) and the notice mentions the liabilities of EDIPL as it accrued pre-amalgamation in its individual capacity.

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Benefit under MEIS can’t be denied on Ground of Inadvertent Omission: Madras HC [Read Order]

The Madras High Court held that benefit under the Merchandise Exports from India Scheme (MEIS) notified under the Foreign Trade Policy cannot be denied on an inadvertent omission to select ‘Yes’.

The petitioner, engaged in the export of leather shoes, had filed a shipping bill claiming duty drawback. The export transaction, the petitioner states, was also entitled to benefit under the Merchandise Exports from India Scheme (MEIS) notified under the Foreign Trade Policy.

However, at the time of filling of the shipping bill, the petitioner had inadvertently omitted to select ‘YES’ as an option for availing the MEIS benefit, on the online platform.

The entitlement to MEIS or otherwise is a matter to be examined by the Director-General of Foreign Trade (DGFT) on an application made in this behalf by the petitioner. The DGFT, when approached, advised the petitioner to have the shipping bills amended by the Customs Authorities.

An application had thus come to be filed by the petitioner setting out the sequence of events as above and seeking amendment of the Bill containing the error. Upon consideration of the request made, the second respondent rejected the same by order dated 18.11.2019, as against which the present Writ Petition is filed.

The single bench of Justice Anita Samanth delivered the order based on a writ petition filed by M/s. Davinci Leather Pvt. Ltd.

 The court said that the error in not stating ‘YES’ to availing of the Scheme, such error, admittedly being inadvertent and Mr.Rajinish Pathiyil fairly does not dispute this, should not stand in the way of the consideration of entitlement on merits.

While allowing the writ petition said that entitlement itself is concerned, the court has already observed that the benefit of the Scheme would be available to the petitioner conditional upon verification and acceptance of such claim by the DGFT.

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Repair Services and Man Power Recruitment in Jammu & Kashmir are ‘Exempted Services’: CESTAT [Read Order]

The Custom, Excise, and Service Tax Appellate Tribunal (CESTAT), Hyderabad held that the repair services and Man Power recruitment in the State of Jammu and Kashmir are ‘exempted services’ so the original authority to re-determine the Cenvat Credit.

In the case of ECIL Rapiscan Ltd. vs. Commissioner of Central Excise, Custom and Service tax, the CESTAT found out that the service pertaining to maintenance, management, repair services and man-power recruitment which is rendered by the appellant in the State of Jammu and Kashmir are covered under the ambit of ‘exempted services’ and these services must be treated as ‘exempted services’

while computing the reversible or ineligible CENVAT Credit.

The appellant namely ECIL Rapiscan Ltd. is engaged in the supplying X-ray Baggage Inspection System (EBIS) and also provides an Annual Maintenance Contract (AMCs). And for this purpose, the appellant is registered with the service tax department for the purpose of providing maintenance, management, repair services, and manpower recruitment and the appellant is regularly paying the service tax. However, in the scrutiny, it was alleged that the appellant has availed the CENVAT Credit for which he was ineligible. For this matter, the service tax department issued the show cause notice.

The issue raised in this case was whether the appellant was ineligible for the CENVAT Credit or not?

The Custom, Excise and Service Tax Appellate Tribunal (CESTAT) comprising of a Technical Member, Mr. P.V. Subba Rao, and a Judicial Member, Ms. Rachna Gupta held that the repair services and manpower recruitment in the State of Jammu and Kashmir are ‘exempted services’ so the original authority to re-determine the Cenvat Credit.

The tribunal also observed that the value of services rendered in Jammu and Kashmir on which no service tax is leviable under the Finance Act, 1994 are ‘exempted services’ in terms of Rule 2(e) of CCR, 2004 as it stood during the relevant period and these services should be reckoned as such while deciding the amount of CENVAT Credit to be reversed.

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Income Tax Department conducts Search on a group of individuals, Hawala dealers and Businessmen in Raipur

On 27.02.2020, Income Tax Department conducted a search on a group of individuals, hawala dealers, and businessmen in Raipur.

The search action was mounted on the basis of credible inputs, intelligence and evidence of the generation of huge unaccounted cash from liquor and mining business and transfer of the same to public servants, huge cash deposits during the demonetization period, accommodation entries from shell companies, undisclosed investment in properties, etc. Subsequently, based on evidence found during the search, a few other premises were also covered inconsequential actions.

Incriminating documents and electronic data seized during the search show that a substantial amount of illegal gratification was being paid to public servants and others every month. Further, daily details of unaccounted sales, bank accounts opened in the names of employees having transactions worth crores and an unaccounted bank account have been found.

Details of Benami vehicles, hawala transfers, transfer to Kolkata-based companies and creation of shell companies with the huge land banks have also been found and seized. Search has also resulted in the seizure of a substantial amount of cash. The total unaccounted transactions unearthed to date are over Rs. 150 crores and the figure is likely to substantially increase after the seized evidence and leads found during the search are further scrutinized and investigated. The search action and investigations are continuing and a number of Prohibitory Orders have been placed, including on several bank lockers.

Central Govt changes Rules on Value of Supply of Lottery [Read Notification]

The Central Government, on the recommendations of the Council, has changed certain rules regarding the value of supply of lottery further to amend the Central Goods and Services Tax Rules, 2017 in the exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017).

Last week, CBIC has notified a uniform rate of 28% for lottery. In order to streamline the valuation rule for the lottery with the uniform rate, rules for value of supply of lottery under GST has been modified. From March 1, 2020, the value of lottery shall be 100/128 of the face value of the ticket or the price as notified in the Official Gazette by the Organising State, whichever is higher.

The rules, which are proposed may be called the Central Goods and Services Tax (Second Amendment) Rules, 2020. These rules come into force on the date of their publication in Official Gazette.

 In the Central Goods and Services Tax Rules, 2017, with effect from the 1st March 2020, in rule 31A, for sub-rule (2), the following sub-rule shall be substituted, namely:-

“The value of supply of lottery shall be deemed to be 100/128 of the face value of the ticket or of the price as notified in the Official Gazette by the Organising State, whichever is higher.

Elaborated as for the purposes of this sub-rule, the expression “Organising State” has the same meaning as assigned to it in clause (f) of sub-rule (1) of rule 2 of the Lottery (Regulation) Rules, 2010.”

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NAA directs DGAP to re-investigate, as Profiteering Report wasn’t computed on the basis of each Supply undertaken by Supplier [Read Order]

The National Anti-Profiteering Authority (NAA) directed the Director-General of Anti- Profiteering (DGAP) to re-investigate, as the profiteering report was not computed on the basis of each supply undertaken by the supplier.

In the case of Deputy Commissioner of State Tax vs. M/s Dough Makers India Pvt. Ltd., the National Anti-Profiteering Authority (NAA) directed the Director-General of Anti- Profiteering (DGAP) to re-investigate,and submit report within 3 months and at the same time ordered the respondent to furnish all the details to the department pertaining to invoice–wise and transaction-wise data.

The petitioner namely the Director-General of Anti- Profiteering (DGAP) prepared a report on the profiteering on the basis of the comparison of item-wise average base price in the pre-rate reduction period with the day-wise average base price of each item being supplied by the supplier i.e the respondent in the post-rate reduction period after reconciling the sales data with the Goods and Service Tax (GST) Returns.

It was contended by the Director-General of Anti- Profiteering (DGAP) that this computation was done because the respondent failed to furnish all the details to the department pertaining to invoice–wise and transaction-wise data.

The issue raised in this case was whether the report submitted by the Director-General of Anti- Profiteering (DGAP) was valid or not?

The National Anti-Profiteering Authority (NAA) comprising of a Chairman, Mr. B.N. Sharma; and Technical Members, J.C. Chauhan, and Amand Shah directed the Director-General of Anti- Profiteering (DGAP) to re-investigate and submit report within 3 months as the profiteering report was not on the basis of each supply undertaken by the supplier and at the same time ordered the respondent to furnish all the details to the department pertaining to invoice–wise and transaction-wise data.

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SEBI imposes Penalty on Acquirers of Polo Hotels for Non-Compliance of Directions [Read Order]

The Securities and Exchange Board of India (SEBI) has imposed a penalty on 3 of the directors of Polo Hotels Ltd. for not complying with the directions of the later directed in an earlier order.

SEBI, upon receiving various complaints regarding the irregularities in a substantial acquisition of equity shares of Haryana State Industrial Development Corporation Limited (HSIDC) by M/s Polo Hotels Limited, examined into the possible violation of the provisions of the SEBI Act and various Rules and Regulations made thereunder. It was observed that the Acquirers, Abhay Ram Dahiya, Amardeep Singh and Pankaj Dahiya had acquired 3,00,000 Equity Shares of Polo Hotels Limited for Rs. 72,25,466/- from HSIDC. SEBI had directed acquirers to make Open Offer. Acquirers had filed Appeal before the Securities Appellate Tribunal (SAT), Hon’ble Supreme Court, Review Application, Curative Application which was all dismissed. SEBI passed another order directing the acquirers to deposit Rs. 11,94,40,349 /- in Escrow Account. Acquirers again filed Appeal before SAT, Hon’ble Supreme Court, Review Application a copy of which was not served to the SEBI.

The Adjudicating officer of the SEBI, B.J. Dilip while holding that the acquirers were not indulging in forum shopping and has imposed penalty of Rs 800000/- each also observed, “I also note that the Noticees have a long history of accessing the different appellate forums one after another despite frequent dismissal and rejection of their petitions. Therefore, I don’t find merit in the submission of the notice that the adjudication proceedings can be kept in abeyance in view of filing of review in the matter. I note that the defaults of the Noticees are serious in nature and continuing and they failed to make a public announcement and deprived the shareholders of the exit opportunity. I note that correct and timely announcements play an essential role in the proper functioning of the securities market and failure to do so results in depriving the investors of making well-informed investment decisions. Further, the failure to comply with the direction of the statutory Authority by the Noticees seriously aggravates and hampers the interests of investors. I note that Noticees have grossly failed to comply with the SEBI order dated June 03, 2019, read with the order dated August 01, 2003, passed by SEBI. In view of the above, I consider it as a fit case for the imposition of the exemplary penalty provided under Section 15HB of SEBI Act.”

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