Delhi High Court

Re-assessment Order Passed Without Considering Detailed Reply Of The Assessee: Delhi High Court

Case Title: Rithala Education Society Versus Union Of India

Citation: 2022 LiveLaw (Del) 816

The Delhi High Court held that the significance of issuing a show cause notice prior to issuing a re-assessment notice has been lost because the order under Section 148A(d) of the Income Tax Act was made without taking into account the detailed reply filed by the assessee.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh has observed that the department has not examined the petitioner's plea that the petitioner-society has included all the transactions carried out by the Citizen Model School in its books of accounts.

Delhi High Court Allows Deduction To PVR On Difference Between Market Price & Issue Price Of ESOP

Case Title: PVR Ltd. Versus Commissioner Of Income Tax

Citation: 2022 LiveLaw (Del) 817

The Delhi High Court has allowed the appeal of PVR Ltd. and allowed the deduction on the difference between the price at which stock options were offered to employees of the appellant company under ESOP and ESPS and the prevailing market price of the stock.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has relied on the decision of the Karnataka High Court in the case of Commissioner of Income Tax vs. Biocon Ltd. and has observed that an assessee is entitled to claim a deduction under Section 37(1) if the expenditure has been incurred. The expression "expenditure" will also include a loss, and therefore, the issuance of shares at a discount where the assessee absorbs the difference between the price at which they are issued and the market value of the shares would also be expenditure incurred for the purposes of Section 37(1). The primary object is not to waste capital but to earn profits by securing the consistent services of the employees. Therefore, it cannot be construed as a short receipt of capital.

Attempt By CIT To Exclude Genuine Disputes Under The VSV Act Is Extremely Hyper-Technical: Delhi High Court

Case Title: Kapri International Pvt. Ltd. Vs CIT

The Delhi High Court has held that the attempt by the CIT to exclude genuine disputants of tax liability from the possibility of settlement under the Direct Tax Vivad Se Vishwas Act (VSV) is extremely hyper-technical.

The division bench of Justice Mukta Gupta and Justice Anish Dayal has observed that any proceeding challenging a decision by the department in respect of tax, interest, penalty, fee, etc. would come within the purview of a "dispute", which would enable a party to approach the department for a resolution under the VSV Act.

Intention To Evade Tax Is Absent, Taxpayer Needs To Be Given Another Chance: Delhi High Court

Case Title: Nirmal Kumar Mahaveer Kumar Versus Commissioner of CGST

The Delhi High Court has held that the petitioner/taxpayer needs to be given another chance to establish why the subject goods did not reach their designated designation before the expiry of the e-way bill.

The division bench of Justice Rajeev Shakdher and Justice Tara Vitasta Ganju has remanded the matter to the respondent to take a fresh decision on the matter, after giving the petitioner due opportunity to produce relevant material and evidence to establish its case.

Bombay High Court

Bombay High Court Directs CBIC To Issue Clarification Regarding Distribution/ Reporting Of ISD Credit

Case Title: Unichem Laboratories Limited versus Union of India and Ors.

The Bombay High Court has directed the Central Board of Indirect Taxes and Customs (CBIC) to issue a clarification in relation to the distribution/ reporting of the ISD credit.

The Bench of Justices K.R. Shriram and Gauri Godse was dealing with a batch of writ petitions, highlighting the difficulties faced by the petitioners in the distribution/ reporting of the ISD credit.

Secured Creditors Shall Take Priority Over Government Dues Under SARFAESI Act: Bombay High Court

Case Title: Jalgaon Janta Sahakari Bank Ltd. Versus Joint Commissioner of Sales Tax Nodal 9

The Bombay High Court has held that the rights of secured creditors to realise secured debts shall have priority over government dues, including revenues, taxes, cesses, and rates due to the Central Government, State Government, or local authority under the SARFAESI Act.

The three judge bench headed by Chief Justice Dipankar Dutta, Justice M.S.Karnik and Justice N.J. Jamadar has observed that the Sales Tax Commissioners did not claim that they registered the claim with the CERSAI to adhere to the mandate contained in section 26B(4) of the SARFAESI Act. Non-registration of the claim and/or order of attachment entails the consequences envisaged under section 26C (2) of the SARFAESI Act. Thus, dual disability sets in. Firstly, in the absence of material to show that the first charge under section 37 of the MVAT Act was enforced by a valid attachment order before the registration of security interest by the petitioner/secured creditors with the CERSAI, the petitioner cannot be deprived of the right of priority under section 26E of the SARFAESI Act. Secondly, with the registration of the security interest with the CERSAI on July 9, 2020, coupled with the absence of registration of the department's demand and order of attachment, the claim of the respondents/department becomes subservient to the right of the secured creditor.

Kerala High Court

No Legislative Competence To Amend KVAT Act After Introduction Of GST Act: Kerala High Court

Case Title: State Tax Officer & Anr Vs. Baiju A.A

Citation: 2022 LiveLaw(Ker) 462

The Kerala High Court has held that legislative competence to amend the Kerala Value Added Tax (KVAT) Act after the introduction of the GST Act is impermissible.

The division bench of S.V.Bhatti and Justice Basant Balaji has observed that the amendment made by the Finance Act of 2018 to the provisions of the erstwhile KVAT Act to enable the department to initiate assessment proceedings in respect of assessments pending as of March 31, 2018 was illegal because the KVAT Act has already been repealed.

Madras High Court

​​Exporter Can't Be Deprived Of MEIS Benefits Due To Technical Error In Electronic System: Madras High Court

Case Title: M/s Gupta Hair Products (P) Ltd. Versus The Deputy Director General of Foreign Trade

The Madras High Court has held that due to technical error or lacunae in the electronic system, the petitioner/exporter cannot be deprived of its benefit/incentive under the Merchandise Export from India Scheme (MEIS).

The single bench of Justice Abdul Quddhose has directed the department to consider the petitioner's representation seeking to get the benefit under the MEIS for the subject shipping bill and pass orders within a period of six weeks.

Assessee Entitled To Avail Cenvat Credit Of Service Tax Already Paid During Transitional Period: Madras High Court

Case Title: The Assistant Commissioner of GST & Central Excise Versus M/s.Ganges International Private Limited

Citation: 2022 LiveLaw (Mad) 382

The Madras High Court, consisting of Justice R. Ramdevan and Justice Mohammed Shaffiq, has held that the assessee is entitled to avail cenvat credit of the service tax already paid but the assessee was unable to claim due to a transitional provision that has come into effect from 01.07.2017.

Telangana High Court

Investigation Post Filing Application Would Not Debar Applicant From Seeking Advance Ruling: Telangana High Court

Case Title: M/s. Srico Projects Pvt. Ltd. Versus Telangana State Authority for Advance Ruling

The Telangana High Court has held that the investigation post-filing of the application would not debar the applicant from seeking an advance ruling.

The division bench of Chief Justice Ujjal Bhuyana and Justice C.V.Bhaskar Reddy has observed that the word "proceedings" has neither been defined in Chapter XVII nor in the definition clause, i.e., in Section 2 of the CGST Act. The inquiry or investigation would not come within the ambit of the word "proceedings".

Madhya Pradesh High Court

Dept. Failed To Establish Element Of Tax Evasion: Madhya Pradesh High Court Quashes Penalty

Case Title: M/s Daya Shanker Singh Versus State Of Madhya Pradesh

The Madhya Pradesh High Court quashed the penalty for the expiry of e-way bill as the department failed to establish that there existed any element of evasion of tax, fraudulent intent or negligence on the part of the petitioner.

The division bench of Justice Sujoy Paul and Justice Prakash Chandra Gupta has observed that the delay of almost 4:30 hours before which the E-way Bill expired appears to be bona-fide and without establishing fraudulent intent and negligence on the part of the assessee, the notice/order imposing penalty could not have been passed.

Jharkhand High Court

If Assessee Disputes Interest Liability Then Dept. Has To Follow Procedure Laid Down u/s 73 or 74 of the CGST Act: Jharkhand High Court

Case Title: Bluestar Malleable Pvt. Ltd. Versus The State of Jharkhand

The Jharkhand High Court has held that if any assessee disputes the liability of interest under Section 50 of the CGST Act, then the department has to follow the specific procedure as stipulated under Section 73 or 74 of the CGST Act.

The division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan has observed that the department failed to follow the procedure as enshrined in Section 73 or 74 of the JGST Act.

Show Cause Notice Containing "NA" In Column Of Date,Time, Venue Of Personal Hearing: Jharkhand High Court Quashes Adjudication Order

Case Title: M/s. Om Prakash Store Versus The State of Jharkhand

The Jharkhand High Court has quashed the adjudication order and held that the notice issued under notice under Section 73 of the CGST Act, in the column of date, time and venue of personal hearing, was indicated by the respondents as "NA", which means not applicable.

The division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan has observed that the adjudication order was not in accordance with the procedure prescribed in law. The order deserves to be quashed on the grounds of non-compliance with the statutory provisions of the JGST Act and for non-compliance with the principle of natural justice.

ITAT

Compensation For Compulsory Acquisition Of Commercial Land Exempted From Income Tax: ITAT

Case Title: ITO Versus Shri Suresh Prasad

The Patna Income Tax Appellate Tribunal (ITAT) has held that the compensation received in respect of an award or agreement has been exempt from the levy of income tax as per section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013 (RFCTLARR Act).

The two-member bench of Sonjoy Sarma (Judicial Member) and Manish Borad (Accountant Member) has observed that no distinction was made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income tax under the RFCTLARR Act.

Sum Received By Bank Under Liquidation, Whose Liability Towards DICGCI Not Cleared- Not Taxable Due To Diversion Of Income At Source: ITAT

Case Title: The JCIT(OSD) versus General CO.OP Bank Ltd.

The Ahmedabad Bench of the ITAT has ruled that the sum received by a bank who is under liquidation, and whose statutory liability to repay the Deposit, Insurance and Credit Guarantee Corporation of India (DICGCI) is not fully satisfied, is not taxable since all the income received by the assessee bank is diverted at source.

The Bench of Members T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) held that in view of the mandatory condition contained in Section 21 (2) of the DICGCI Act, till the liability of the assessee towards the DICGCI is cleared, the assessee bank has no discretion or authority to apply the funds received by it and that all the funds realized by the bank is diverted at source.

ITAT Quashes Time Barred TDS Default Order Passed Against Google India

Case Title: Google India Pvt. Ltd. Versus The Deputy Commissioner of Income Tax

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the TDS default order passed against Google India on the grounds that it was time barred.

The two-member bench of George George K. (Judicial Member) and Padmavathy S. (Accountant Member) has observed that for the years under consideration, the period of four years from the end of the financial year in which payment was made or credit was given expired on 31.03.2012, whereas the notice was issued by the AO on 20.11.2012.

ITAT Rejects The Claim Of NDTV To Treat Expenditure As Pre-Operative In Nature For The Assessment Year 2009- 2010

Case Title: M/s. NDTV Studios Ltd. Versus Income Tax Officer

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the business of the NDTV Studios had not been set up during the assessment year 2009- 2010 and all the expenses claimed by the assessee were pre-operative in nature, which should have been capitalised.

The two-member bench of Yogesh Kumar U.S. (Judicial Member) and N.K.Billaiya (Accountant Member) has observed that the expenses claimed by the assessee are not deductible as business expenditure and have been disallowed.

CESTAT

Interface Development Services By BlackRock India - Not An 'Intermediary Service': CESTAT

Case Title: M/s. BlackRock Services India Private Limited versus Commissioner of CGST

The Chandigarh Bench of CESTAT has ruled that the services provided by BlackRock India, relating to development of interface for an operating system for investment managers, is not an intermediary service.

The Bench of Ajay Sharma (Judicial Member) and P.V. Subba Rao (Technical Member) held that the 'Business Support Services' rendered by BlackRock to its US based clients would qualify as an export of service in terms of Rule 6A of Service Tax Rules, 1994, and thus, BlackRock was eligible for refund of un-utilised CENVAT credit availed on the input services used in providing the said business support services.

Mandatory Deposit U/S 35F Of Excise Act Cannot Be Made By Way Of Debit In Electronic Credit Ledger Maintained Under CGST Act: CESTAT

Case Title: M/s. Johnson Matthey Chemical India Pvt. Ltd. Versus Assistant Commissioner CGST

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a mandatory deposit under section 35F of the Excise Act cannot be made by way of debit in the Electronic Credit Ledger maintained under the CGST Act.

The two-member bench headed by Dilip Gupta (President) and P. Anjani Kumar (Technical Member) has observed that as per the provisions of section 41 of the CGST Act, credit lying in the electronic credit ledger can be utilised only for self-assessed output tax.

No Penalty Can Be Imposed For Introducing The Importer To IEC Holder: CESTAT

Case Title: Girish Kumar Singh Versus Commissioner Of Customs

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a penalty cannot be imposed for introducing the importer to the Importer-Exporter Code (IEC) holder.

The bench of Anil Chaudhary (Judicial Member) has observed that no penalty can be imposed without proving the role of the person being charged.

AAR

Printing Of Question Papers Constitutes Supply Of Service And Printing Answer Booklets Constitutes Supply Of Goods: Karnataka AAR

Applicant's Name: P.K.S Centre for Learning

The Karnataka Authority of Advance Ruling (AAR) has held that the printing of question papers constitutes a supply of service and the printing of answer booklets constitutes a supply of goods.

The two-member bench of M.P.Ravi Prasad and T.Kiran Reddy has observed that the GST exemption is available on the question papers. However, GST is payable on the answer booklets.