Supreme Court

Disputes Related To Tax Concessions Are Not Arbitrable: SupremeCourt

Case Title: M/s Shree Enterprise Coal Sales Pvt Ltd. Versus Union Of India

Citation: 2022 LiveLaw (SC) 774

The Supreme Court has held that disputes related to tax concessions are not arbitrable.

The division bench of Justice Dhananjaya Y Chandrachud and Justice Hima Kohli has observed that the High Court was in error in holding that the terms of e-auction provided that any dispute was arbitrable. Undoubtedly, a contractual dispute would be amenable to being resolved by arbitration. However, in the present case, the relief related to tax concessions was not of an arbitrable nature.

Delhi High Court

EOU Entitled To Claim Deemed Export Drawback On Inputs WhichRemained Unutilized With Then-Existing DTA Unit: Delhi High Court

Case Title: M/s Combitic Global Caplet Pvt. Ltd. Versus Union Of India

The Delhi High Court has held that duty drawback for goods should extend to unutilized goods which were available at the time of conversion of the Domestic Tariff Area (DTA) unit into a 100% Export Oriented Unit (EOU).

The division bench of Justice Rajiv Shakhdher and Justice Tara Vitasta Ganju has observed that the restriction against the claim of concession in duties and taxes applied only vis-à-vis plants, machinery and equipment that had already been installed. The petitioner was allowed to carry forward the advance authorization to the converted unit i.e., 100% EOU, and thereafter fulfil the outstanding export commitment.

Bombay High Court

It Is The Bonafide Mistake Of Taxpayer Paying To Railways Instead Of GST Department: Bombay High Court

Case Title: Arun Krishnachandra Goswami Vs. Union of India

The Bombay High Court has held that the taxpayer has made a mistake and instead of paying the Government of India through the CGST authorities and the State of Maharashtra through the SGST authorities, the entire amount was paid to the Government of India through Indian Railways.

The division bench of Justice K.R. Shriram and Justice A.S. Doctor has directed that the amounts which have been wrongly paid to railways should be paid to the CGST authorities and SGST authorities within two weeks.

Madras High Court

Transporter Of Goods May Seek Release Of Only The Conveyance:Madras High Court

Case Title: TCI Freight Versus The Assistant Commissioner

Citation: 2022 LiveLaw (Mad) 399

The Madras High Court has held that the transporter may seek release of only the conveyance upon satisfaction of the statutory conditions.

The division bench of Justice Anitha Sumanth has observed that the phrase 'person transporting the goods' in Sections 129(1) and (6) to mean the owner or his agent who has contracted to supply the goods, and not the transporter who will provide the carriage for the same. Both sub-Sections 129(1) and (6) use the phrase 'goods or conveyance' whereas the proviso extends the benefit of release, upon terms, to the transporter, but restricted to the conveyance alone.

Madras High Court Allows Concessional Customs Duty Benefit On Goods Used In Rotor Of Windmills For Notional Billing To Customer

Case Title: Nordex India Private Limited Versus Commissioner of Customs

Citation: 2022 LiveLaw (Mad) 401

The Madras High Court has allowed the concessional customs duty benefit on goods used in the rotor of windmills for notional billing to customers.

The single bench of Justice M. Nirmal Kumar has observed that the imported rotor blades need no customization and mechanisation. Hence, raising an invoice in the name of the client after importing and transporting it to the customer's site is only a notional exercise. It cannot be said that the petitioner is not the importer and that he is the person who has used it for a specific purpose for which it was imported.

Allahabad High Court

PCIT Failed To Recorded Satisfaction Under His Signature Prior To Issuance Of Reassessment Notice By AO: Allahabad High Court

Case Title: Vikas Gupta Versus Union Of India

The Allahabad High Court has held that the Principal Commissioner of Income Tax (PCIT) has not recorded satisfaction under his signature prior to the issuance of a reassessment notice by the Assessing Officer under Section 148 of the Act, 1961.

The division bench of Justice Surya Prakash Kesarwani and Justice Chandra Kumar Rai has observed that subsequent to the issuance of the reassessment notice by the Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority. Therefore, at the point of time when the Assessing Officer issued notices, he had no jurisdiction to issue the reassessment notices. Consequently, the notices issued by the Assessing Officer under section 148 were without jurisdiction.

GST Dept. Made Attachment Without Recording Opinion And Referring To Any Tangible Material: Allahabad High Court Imposes Cost

Case Title: Varun Gupta Versus Union Of India

The Allahabad High Court has held that the department has neither recorded the opinion nor referred to any tangible material which necessitated him to pass the provisional attachment order to protect the interest of the government revenue.

The division bench of Justice Surya Prakash Kesarwani and Justice Jayant Banerji has directed the department to pay the cost of Rs. 50,000 to the petitioner/assessee.

Gujarat High Court

ITR Prior To Death Of Assessee Is The Basis For Computation Of Loss Of Future Income Including Future Prospects: Gujarat High Court

Case Title: Sonalben Alias Charmiben Hirenbhai Jivani Versus Naranbhai Chananbhai Babariya

The Gujarat High Court has held that an income tax return (ITR) filed prior to the death of the assessee is the basis for computation of loss of future income, including future prospects.

The single bench of Justice Gita Gopi has observed that both the parents are dependents of the deceased son and are entitled to apply for compensation. Both the parents are entitled to the compensation amount under the head of dependency loss.

Calcutta High Court

Cancellation Of GST Registration Ultimately Impacts Recovery Of Taxes: Calcutta High Court

Case Title: Bisweswar Midhya, Proprietor of Midhya Construction Versus The Superintendent, CGST

The Calcutta High Court has held that if the registration of a dealer is cancelled, the dealer cannot carry on its business in the sense that no invoice can be raised by the dealer. This would ultimately impact the recovery of taxes.

The division bench of Justice T.S. Sivagnanam and Justice Prasenjit Biswas has held that the suspension of the appellant's registration should be revoked forthwith with a direction to the appropriate authority to issue a show cause notice within a time frame and take up the adjudication proceeding.

Invalid Reassessment Notice, The Entire Proceedings have To Collapse: Calcutta High Court

Case Title: CIT Versus B.P. Poddar Foundation For Education

The Calcutta High Court has held that the foundation of a reassessment proceeding is a valid notice, and if the notice is held to be invalid, the entire edifice sought to be raised has to collapse.

The division bench of T.S. Sivagnanam and Justice Hiranmay Bhattacharyya have observed that the assessing officer is bound to furnish reasons within a reasonable time, the noticee is entitled to file their objection to the notice, and the assessing officer is bound to dispose of it by passing a speaking order.

Rajasthan High Court

Reassessment Notice Can't Be Challenged If Assessee Failed To Submit Crypto Currency Account Transactions: Rajasthan High Court

Case Title: Parmesh Chand Yadav Versus Income Tax Officer

The Rajasthan High Court has held that the reassessment notice cannot be challenged if the assessee failed to submit crypto currency account transactions to the income tax department.

The division bench of Justice Manindra Mohan Shrivastava and Justice Shubha Mehta held that bank transactions alone are not sufficient to verify the trade in crypto currency. The assessee ought to have submitted before the department the relevant ledger statement evidencing that he had entered into trade of crypto currency in the manner as has been asserted by him by way of the information stated by him.

Gauhati High Court

Betel Nuts Are Subject To Decay, Not Required For Investigation:Gauhati High Court Directs To Release

Case Title: Md. Rajibul Islam Versus State of Assam

The Gauhati High Court has directed the release of seized betel nuts as the betel nuts are subject to speedy natural decay and their retention was not required for the purpose of investigation.

The single bench of Justice Robin Phukan has observed that from the date of seizure till date, more than 128 days have already elapsed. There was no allegation of theft in respect of the seized betel nuts. The petitioner has also produced a certificate issued by Gaon Burah and the Chairman of Zutovi Village in respect of purchasing betel nuts from their village.

Telangana High Court

ITC Refund Admissible If Output Supply Tax Rate Is Less Than Inputs Tax Rate: Telangana High Court

Case Title: Micro Systems And Services Sole Proprietorship Vs Union Of India

The Telangana High Court has held that refund of accumulated input tax credit (ITC) on account of inverted structure would be allowed if accumulation of ITC is on account of the rate of tax on output supply being less than the rate of tax on inputs (same goods) at the same point of time as per some concessional notification issued by the government providing for a lower rate of tax for some specified supplies subject to fulfilment of other conditions.

ITAT

Training Fee Paid To Professional Trainer Doesn't Amounts To Fees for Technical Services, No TDS Deductible: ITAT

Case Title: M/s. Infosys BPO Limited Versus DCIT

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that TDS is not deductible on training fees paid to professional trainers as it does not amount to fees for technical services.

The two-member bench headed by N.V. Vasudevan (Vice-President) and Chandra Poojari (Accountant Member) have observed that the nature of service rendered by the non-resident is neither in the nature of technical, managerial, or consultancy service. The nature of service rendered clearly shows that the services rendered by non-residents cannot be termed as technical services for the mere reason that technology is used in providing service. The delivery of a service via technological means does not make the service technical.

Litigation Expenditure Incurred To Protect Business Is Covered Under Revenue Expenditure: ITAT

Case Title: M/s. Mangalam Arts Govind Nagar (East) Versus Deputy Commissioner of Income-tax

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has held that when litigation expenditure is incurred to protect the business, the same is revenue expenditure.

The two-member bench of Sandeep Gosain (Judicial Member) and Rathod Kamlesh Jayantbahi (Accountant Member) has observed that since the assessee has no interest in the ownership of the asset but he is in possession of the asset for conducting its business, the litigation expenditure incurred is only to protect his business and, therefore, it is revenue expenditure. The litigation expenditure incurred by the assessee is revenue expenditure and not capital expenditure.

ITAT Allows Deduction On Residential House Built Up On 3Adjacent Contiguous Plots

Case Title: DCIT Versus Heera Lal Bhasin Legal Heir

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the claim of a deduction under section 54 of the Act for a residential house built on three adjacent contiguous plots. The principle of multiple residential houses/units holds good till the units are in the same physical location and contiguous to each other.

The two-member bench of Astha Chandra (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the assessee sold his house in Delhi, which was falling short of his needs, and constructed a house on three separate plots adjoining each other to enable him to have a house for himself which could accommodate all his family members and the families of his children. The intention of the assessee was to acquire one large piece of land for the construction of a large residential house. Therefore, three similar units were constructed contiguous to each other in a single common compound wall.

Seller Of Agricultural Land Insisting Cash Payment; No Disallowance Can Be Made Under Section 40A (3) Of IT Act: ITAT

Case Title: M/s. Geo Connect Ltd. versus DCIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that no disallowances can be made under Section 40A (3) of the Income Tax Act, 1961 for payments made otherwise than by way of account payee cheques or bank drafts for purchase of agricultural land, where the seller of the agricultural land has insisted on payment in cash.

The Bench of Saktijit Dey (Judicial Member) and Pradip Kumar Kedia (Accountant Member) observed that considerations of business expediency and other relevant factors, which provide an exception to Section 40A(3), have not been diluted even after the amendment of Rule 6DD(j) of the Income Tax Rules, 1962.

Housing Credit To Poor Through Borrowings From Financial Institutions; Not A Charitable Activity: ITAT

Case Title: Dhan Housing and Habitat Development of Poor for Empowerment Confederation versus CIT (Exemptions)

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that grant of housing credit by the assessee trust to the lower strata of society, financed solely through the funds borrowed from financial institutions, is not a charitable activity and thus the assessee cannot be registered as a Charitable Trust under Section 12AA of the Income Tax Act, 1961.

The Bench of Sonjoy Sarma (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) held that the activity undertaken by the assessee trust was purely a money lending activity and though the objective of the assessee was noble, it was not eligible for registration under Section 12AA of the Income Tax Act.

Members Contributions To Club Towards Infrastructure, A Capital Receipt: ITAT

Case Title: JCIT Versus M/s. Royal Western India Turf Club Ltd.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT)consisting of Aby T. Varkey (Judicial Member) and Gagan Goyal (Accountant Member) has held that the voluntary contributions received from the members of the club towards infrastructure facilities were contributions received for a specific purpose and should be treated as a capital receipt.

The assessee submitted that the issue regarding the treatment of entrance fees received from the members was held by the AO as revenue receipts, whereas the assessee's claim was that it was a capital receipt, so not taxable. The assessee was aggrieved by the action of the AO and preferred an appeal before the CIT (A), who upheld the claim of the assessee and held it to be a capital receipt.

CESTAT

CESTAT Allows Interest On Custom Duty Refund From Deposit DateTo Refund Date

Case Title: M/s BBM Impex Pvt. Limited Versus Principal Commissioner of Customs (Preventive)

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the 12% interest on custom duty refund from the deposit date to the refund date.

The bench of Anil Choudhary (Judicial Member) has observed that the amount of deposit made during investigation or audit becomes pre-deposit ipso facto upon contest of the dispute or filing of the appeal, and the assessee is entitled to interest as per law from the date of deposit till the date of refund.

Onus To Prove Charge Of Clandestine Clearance Of Goods Lies On The Department: CESTAT

Case Title: M/s. Shree Hari Sponge Private Limited Versus Commissioner of Central Excise & Service Tax, Bhubaneswar-II

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the onus to prove a charge of clandestine clearance of goods lies with the department.

The two-member bench, P.K. Choudhary (Judicial Member) and Raju (Technical Member), have held that the charge of clandestine clearance of goods is a serious charge and cannot be made on presumptions and assumptions.

Paper Cess Is Not Includible In The Calculation Of Education Cess And Secondary & Higher Education Cess: CESTAT

Case Title: M/s. Uniglobal Paper Private Limited versus Commissioner of CGST & CX, Haldia Commissionerate

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that Paper Cess is not includible in the calculation of Education Cess and Secondary & Higher Education Cess.

The Bench of P.K. Choudhary (Judicial Member) held that though Cess on Paper is an excise duty, however, it is levied under the Industries (Development and Regulation) Act, 1951, and not under the Central Excise Act, 1944.

Amount Deposited Voluntarily During Investigation Can't Be Treated As Amount Towards Pre-Deposit: CESTAT

Case Title: Sky Airways Versus Commissioner of Customs,(Appeals)

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the amount deposited voluntarily during an investigation cannot be treated as an amount towards the pre-deposit as it was not an amount deposited at the time of the filing of the appeal.

The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the appellant/assessee could not have asked for the refund of the amount deposited by the appellant voluntarily during investigation, which amount had been confirmed and appropriated by the order before the Tribunal in the earlier round of proceedings.

Customs Duty Exemption On Imported WAP: CESTAT

Case Title: Commissioner of Customs (Air) Chennai – VII Commissionerate Versus M/s. Ingram Micro India Pvt. Ltd.

The Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that imported WAP is entitled to an exemption from the whole of the customs duties under the ITA.

The two-member bench of Justice Dilip Kumar (President) and P.V. Subba Rao (Technical Member) has observed that imported WAP is a networking equipment working on LAN, connecting Wi-fi enabled devices such as laptops, smartphones, tablets, etc. to a wired network.

CESTAT Allows Cenvat Credit To Indian Oil On Excise Duty Paid Towards Manufacturing Activity

Case Title: M/s. Indian Oil Corporation Limited, Refinery Division Versus Commissioner of CGST & CX

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the cenvat credit to Indian Oil on excise duty paid towards manufacturing activity.

The bench of P.K. Choudhary (Judicial Member) has observed that once duty is paid by the assessee, treating the activity as manufacturing activity by the Department, Cenvat credit is available and there is no question of denial of Cenvat credit.

AAAR

"Flavoured Milk" Is Categorised As"Beverage": AAAR

Applicant's Name: M/s Vadilal Industries Ltd.

The Gujarat Appellate Authority of Advance Ruling (AAAR) has observed that the 'flavoured milk' is categorised as "beverage".

The two-member bench of Vivek Ranjan and Milind Torawane has upheld the AAR's ruling and ruled that the 'Flavoured Milk' is classifiable under Tariff Item 2202 99 30 of the First Schedule of the Customs Tariff Act, 1975.

AAR

No GST On Services Of Sweeping, Segregation And Transport Of Garbage: Karnataka AAR

Applicant's Name: Indian Security and Personnel arrangements

The Karnataka Authority of Advance Ruling (AAR) has ruled that GST is not payable on the services of cleaning and sweeping of lawns and garden path areas and segregating and transporting garbage.

The two-member bench of M.P. Ravi Prasad and T. Kiran Reddy has observed that no GST is payable on the supply of manpower for garden maintenance on an outsourced basis to the Department of Horticulture which is liable for GST at NIL.

12% GST Payable On Works Contract Services Executed To Karnataka Housing Board For Construction Of Police Station: AAR

Applicant's Name: Yankee Constructions LLP

The Karnataka Authority of Advance Ruling (AAR) has ruled that 12% GST is payable on work contract services executed for the Karnataka Housing Board for the construction of a police station.

The two-member bench of M.P. Ravi Prasad and T.Kiran Reddy has held that work contract services executed to the Karnataka Slum Development Board under the Pradhan Mantri Awas Yojana, as a main contractor, are liable to 12% GST till 17.07.2022 and liable to tax at 18% GST from 18.07.2022.

Supply Of Services For Plantation Of Mangrove Seeds And Seedlings In Coastal Areas Attracts 18% GST: AAR

Applicant's Name: Raj Mohan Seshamani

The West Bengal Authority of Advance Ruling (AAR) has held that the supply of services for the plantation of mangrove seeds and seedlings in coastal areas would attract 18% GST.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that no GST is payable on the supply of services for cultivation, planting and nurturing of fruit trees.

Supply Of Services For Printing On Duplex Board Attracts 12%GST: AAR

Applicant's Name: Anamika Agrawal

The West Bengal Authority of Advance Ruling (AAR) has held that the supply of services for printing on duplex board belonging to the recipient, including cutting, punching, and lamination of the duplex board, so printed, would attract 12% GST irrespective of whether the recipient of the services is registered under the GST Act or not.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that the activities of printing on duplex boards belonging to its customer, including cutting, punching, and lamination, as and when required by the customer, shall be treated as services by way of job work.

GST Exemption On Composite Supply Of Service By Milling Food Grains Into Flour To State Govt. For Public Distribution System: AAR

Applicant's Name: Himalayan Flour Mill Pvt. Ltd.

The West Bengal Authority of Advance Ruling (AAR) has ruled that the composite supply of services by way of milling of food grains into flour to the Government of West Bengal for distribution of flour under the Public Distribution System is eligible for GST exemption.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that the value of by-products retained by the appellant and yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost, must obviously be included as part of the value of supply and also be considered a bona fide form of consideration.The value of supply shall be the consideration in money and shall also include all the components for non-cash consideration.