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 July3 to July 10, 2022.
Read More: https://www.taxscan.in/itat-weekly-round-up-14/155494/
The Madras High Court held that no Court order is require to decide internal issue of the Designated Committee and directs Sabka Vishwas Scheme Designated Committee to issue discharge certificate in Form-4.The High Court observed that the reason cited by the respondents is totally unsustainable as it is an internal issue of the Designated Committee under the Scheme to go for an alternative mechanism to do it either manually or otherwise. Therefore, for such process, they need not wait for an order from this Court.
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.
A division bench of the Karnataka High Court has held that Justice P.S. Dinesh Kumar and Mr. Justice Anant Ramanath Hegde has held that the limitation period cannot be invoked to deny the refund of service tax paid by mistake.Allowing the plea of the assessee, the Court held that “In view of the admitted fact that the services rendered by the assessee satisfy all conditions of Rule 6A of the Service Tax Rules, 1994 and the services provided by it are export services, it is entitled for refund of the tax. In view of authority in the case of Shiv Shanker Dal Mills, the refund cannot be denied on the ground of limitation.”
The division bench of the Karnataka High Court has held that an extended period of limitation cannot be invoked when CENVAT Credit availed on bona fide belief and acted in good faith.The Coram of Mr. Justice P.S.Dinesh Kumar and Mr. Justice Anant RamanathHegdeby relying on the decision in Shriram Value Services Pvt.Ltdhas held that the CENVAT credit availed on bona fide belief cannot be held to be done with an ulterior purpose for evading the Duty and therefore, the extended period of limitation would not be available to the Revenue Authority. The division bench dismissed the appeal.
In a taxpayer-friendly ruling, a division bench of the Andhra Pradesh High Court has held that the delay of more than one year in disbursing the VAT refund after passing the same by the department shall attract interest under section 38 (1)(a) of APVAT Act, 2005 r/w. Sub-Section 6 of APVAT Rules, 2005.Allowing the writ petition, the Court directed the department to refund the amount which the petitioner is entitled to with interest calculated therein as per the provisions of Section 38 (1)(a) of APVAT Act, 2005 r/w. Sub-Section 6 of APVAT Rules, 2005, within a period of three (3) months from the date of receipt of this order.
In conclusion of a seven-year legal battle, the Delhi High Court has granted relief to an officer of the Central Board of Indirect taxes and Customs (CBIC) and held that allowing Disciplinary Proceedings to continue ad infinitum would not only be highly prejudicial to an individual but is also destructive of the Rule of Law.The division bench observed that “there is no gainsaying the legal position that the Disciplinary Proceedings cannot continue ad infinitum. Allowing such proceedings to continue ad infinitum would not only be highly prejudicial to the Petitioner herein but destructive of the Rule of Law. The RespondentUnion of India, being a „State‟ under Article 12 of the Constitution is bound to act in a fair non-discriminatory, reasonable and non-capricious manner. The conduct of the Respondent in the facts of the present over a long period of 05 years and not merely on one two dates of hearing, disentitles it for any discretionary relief of extension of time.” “Once the application for extension of time to complete Disciplinary Proceedings filed by the Respondent was rejected, the Disciplinary Proceedings did not survive and all steps taken subsequent thereto by continuing the Disciplinary Proceedings were manifestly arbitrary, illegal and non-est in the eyes of law,” the bench said.
The division bench of Madras High Court presided by Mr. Justice R. Mahadevan and Mr. Justice J.Sathya Narayana Prasad has invalidated the continuation of reassessment proceedings for want of fresh notice.The division bench of Madras High Court while allowing the Writ petition has held that the limitation period of six years for reopening the assessment for the year 2011-12 under section 147 of the Act, came to an end on 31.03.2018 and there is no requirement to go into the other issue based on the factual matrix, whether the appellant has disclosed fully and truly all the material particulars that are necessary for assessment for the relevant assessment year.
The Madras High Court has dismissed a petition filed by a taxpayer alleging “harassment” by the GST department.Rejecting the plea of the petitioner, the Court concluded that “Accordingly, this Criminal Original Petition is dismissed. The Police shall issue notice, within two weeks, from today, for causing the appearance of the petitioner, for enquiry and after enquiring the petitioner, the Police may either register a complaint, if any cognisable offence is made out or close the complaint.”
The Rajasthan High Court comprising Justice Sandeep Mehta and Justice Vinod Kumar Bharwani has held that the GST Circular regarding the refund of accumulated ITC under section 54(3)(ii) would not be applicable in cases where the input and the output supplies are the same, is contrary to the provisions of the Central GST Act.While concluding, the High Court held that the circular dated 31.03.2020, being a subordinate legislation, is repugnant and conflicting to the parent legislation i.e. Section 54(3)(ii) of the CGST Act and hence, the same cannot be applied to oust the legitimate claim for accumulated ITC refund filed by the petitioner. Otherwise also, the claim for refund of ITC filed by the petitioner was for a period prior to issuance of the circular dated 31.03.2020.
The single bench of the Calcutta High Court has held that an opportunity of hearing must be given before taking penal action under Customs Brokers Licensing Regulations.The Coram of Mr. Justice Md. Nizamuddinby relying on the decision of the Supreme Court in the case of Uma Nath Pandeyhas held that “I am of the considered view that the impugned order of imposing of penalty being Annexure P4 to the writ petition is not sustainable in law and the same is accordingly set aside and the matter is remanded back to the respondent Customs Authority to pass a fresh order after giving an opportunity of hearing to the petitioner”.
The Single Bench of Calcutta High Court has held that no recovery of central excise duty, interest, and penalty without service of adjudication order. The single bench directed the respondent to refund the amount recovered more than 20 percent of the demand from the petitioner based on the adjudication order dated 17th October 2012, from its bank and pass the necessary order for withdrawal of the impugned order of attachment of bank account in the question of the petitioner within seven days from date since the statutory pre-deposit amount for filing Appeal against the adjudication order dated 17th October 2012 has already been made by the petitioner.
The Rajasthan High Court has recently admitted a petition challenging Rule 86B of Central GST Rules, 2017 wherein the Court has issued a notice to the Centre. It was also submitted that in view of the lacuna in the system of matching, reversal and reclaim of input tax, the notification no. 94/2020 Central Taxes, dated 22.12.2020 amended CGST Rules 2017 and inserted rule 86B to be effective from 01.01.2021 is arbitrary, unreasonable and violative of Article 14, 19(1)(g) and 300A of the Constitution of India and ultra vires the parent Act. As per Rule 86B the petitioner has been restrained from utilizing the amount available in its electronic credit ledger to discharge his liability towardsoutput tax in excess of ninety-nine percent, in case where the value of outward taxable supply other than exempt supply and zero-rated supply in a month exceeds fifty lakh rupees.
The Court observed that “considering the contentions put-forth by the counsel for the petitioner and taking into account the facts and circumstances of the case and without expressing any opinion on the merits of the case, this court deems it just and proper to enlarge the petitioner on bail.” Allowing the appeal to the petitioner, the Court further observed that “Accordingly, the bail application under Section 439 Cr.P.C. is allowed and it is ordered that the accused-petitioner Kamal Chand Bothra S/o Shri Bhikam Chand Bothra shall be enlarged on bail provided he furnishes a personal bond in the sum of Rs.50,000/- with two sureties of Rs.25,000/- each to the satisfaction of the learned trial Judge for his appearance before the court concerned on all the dates of hearing as and when called upon to do so.”
The Calcutta High Court, on Thursday quashed a re-assessment notice under section 148 of the Income Tax Act, 1961 issued against a dead person.Quashing the order, the Court held that “Considering the facts and circumstances of this case as appears from record the aforesaid impugned notice dated 28th March 2021 under Section 148 of the Act and all subsequent proceedings on the basis of the aforesaid notice are quashed. However, quashing of the impugned notice and proceeding will not prevent the assessing officer concerned to initiate any fresh proceeding in future in accordance with law.”
The division bench observed that “if it is possible or feasible to open the portal so that the assessee may be able to file its TRAN 1 return or revised return or re-revised return in Maharashtra, an attempt should be made for that. If it is not possible or feasible, the concerned Assistant Commissioner shall communicate the same to petitioner within two weeks of uploading of this order. In such a case, petitioner should be permitted to make unutilized credit in its GST 3B Forms to be filed on the monthly basis. We find that similar approach has been taken by the Hon’ble High Court at Calcutta in Nodal Officer, Jt. Commissioner, IT Grievance, GST Bhavan Vs. M/s. Das Auto Centre in its judgment pronounced on 14.12.2021. Similar view also has been taken by Panjab & Haryana High Court in the case of Hans Raj Sons Vs. Union of India reported in 2020 (34) G.S.T.L. 58 (P & H).”
A division bench of the Orissa High Court has held that the GST appellate authority cannot dismiss an appeal merely on the technical ground that the certified order is not submitted along with the appeal memo.
The High Court observed that the action of the respondent, WBGST Authority in blocking the Input Tax Credit (ITC) of the petitioner without intimating the recorded reasons for the same to the petitioner is arbitrary, illegal, and in violation of principles of natural justice since it deprives the right of the petitioner to effectively defend or oppose such action of the respondent authority. The counsel for the respondent failed to prove that the recorded reasons based on which the impugned action of blocking of Input Tax Credit (ITC) has been taken, were communicated/intimated to the petitioner.
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