Supreme Court

Sabka Vishwas Scheme : Supreme Court Grants Relief To Company Which Missed Deadline Due To IBC Moratorium

Case Title: Shekhar Resorts Limited vs Union of India

Citation : 2023 LiveLaw (SC) 15

No one can be expected to do the impossible, the Supreme Court remarked while granting relief to a company which could not avail the benefit of settlement of tax dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, due to moratorium imposed on it.

Supreme Court Sets Aside Bail Condition To Deposit Rs 70 Lakhs In Case For Wrongfully Claiming ITC

Case Title: Subhash Chauhan Versus UOI

Citation: 2023 LiveLaw (SC) 61

The Supreme Court has overturned a bail condition imposed by the High Court that a person accused of illegally claiming Input Tax Credit must deposit Rs. 70 lakhs, the alleged amount of improperly claimed ITC.

'Premature For High Court To Opine On Tax Evasion' : Supreme Court Sets Aside HC Order Which Quashed Notice Under Section 130 CGST Act

Case Title: State of Punjab Versus Shiv Enterprises Civil Appeal No. 359 of 2023

Citation : 2023 LiveLaw (SC) 56

Observing that it was "premature" on the part of the High Court to quash a show-cause notice issued under Section 130 of the Central Goods and Service Tax Act by invoking Article 226 jurisdiction, the Supreme Court recently set aside an order passed by the Punjab and Haryana High Court.

The Supreme Court noted that there were allegations about evasion of tax and hence it was premature on the part of the High Court to opine anything on whether there was any evasion of the tax or not. The same was to be considered in an appropriate proceeding for which the notice under Section 130 of the Act was issued.

Supreme Court Stays Madras High Court’s Order Directing Payment of Tax On Manufacture Of Water Borehole Drilling Rigs

Case Title: M/s. Paranthaman Hydraulics and Equipments Versus State Of Tamil Nadu

The Supreme Court has stayed the order passed by the Madras High Court directing the payment of a minimum 4% tax on the manufacturing of the water borehole drilling rigs.

The division bench of Justice Krishna Murari and Justice C.T. Ravi Kumar has observed that tax at the rate of 4% has already been deposited by the petitioner. The direction in the order to pay another 4% shall remain in abeyance until the next date of listing.

Delhi High Court

Payment Of Tax And Penalty To Release Detained Goods Can’t Be Treated As “Admission” On The Part Of Assessee: Delhi High Court

Case Title: Ram Prakash Chauhan Versus Commissioner of Delhi (GST)

Citation: 2023 LiveLaw (Del) 78

The Delhi High Court has held that the payment of tax and penalty to release the detained goods shall not be treated as "admission" on the part of the assessee.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the petitioner had paid the tax and penalty for the release of the goods and that the said payment was not voluntary. Neither the show-cause notice nor the order of demand clearly sets out the reason for imposing the tax liability as well as the penalty.

CAAR Not Barred From Giving Ruling On The Ground Of Preliminary Exercise Being Done By Customs Officer: Delhi High Court

Case Title: Directorate of Revenue Intelligence (Hqrs.) versus M/s Spraytec India Ltd

Citation: 2023 LiveLaw (Del) 82

The Delhi High Court has ruled that merely because an officer of customs contemplates that a question may arise for consideration, does not mean that the question is “pending” consideration so as to bar the Customs Authority for Advance Ruling (CAAR) from deciding the issue in an application for advance ruling, under Clause (a) of the proviso to Section 28-I (2) of the Customs Act, 1962.

No Provision In GST Act for Confiscating Currency From The Premises : Delhi High Court

Case Title: Arvind Goyal CA Versus UOI

Citation: 2023 LiveLaw (Del) 83

The Delhi High Court ruled that there is no provision in the GST Act that would allow for the forcible removal of currency from the premises of any person.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the powers of search and seizure are draconian powers and must be exercised strictly in terms of the statute and only if the necessary conditions are satisfied.

VAT Department Not To Initiate Coercive Measures Against PSU Pawan Hans: Delhi High Court

Case Title: Pawan Hans Ltd. Versus Commissioner of Trade and Taxes

Citation: 2023 LiveLaw (Del) 65

The Delhi High Court has granted a stay to helicopter charterer PSU Pawan Hans Ltd. against a VAT demand of Rs. 176 crores.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the issue needs consideration and directed the VAT department not to initiate coercive measures for recovery of the VAT demand confirmed by the Delhi VAT Tribunal in the interim.

Bombay High Court

Clause Contained In The Tax Invoice Amounts To An Arbitration Clause: Bombay High Court

Case Title: Bennett Coleman & Co. Ltd Versus MAD (India) Pvt.Ltd

The Bombay High Court has held that the clause contained in the invoices, which clearly stipulates a reference to arbitration, deserves to be construed as an arbitration clause.

The single bench of Justice Bharati Dangre has observed that any document in writing exchanged between the parties that provide a record of the agreement and in respect of which there is no denial by the other side would squarely fall within the ambit of Section 7 of the Arbitration and Conciliation Act, 1996, and would amount to an arbitration clause.

Madras High Court

Expiry Of E-way Bill Does Not Create Any Scope For Tax Evasion: Madras High Court Imposes Minor Penalty

Case Title: Tvl.Thiruvannamalaiyar Transport Versus The Deputy State Tax Officer

Citation: 2023 LiveLaw (Mad) 24

The Madras High Court has imposed a minor penalty and held that the expiry of the E-way bill does not create any scope for evasion.

The single bench of Justice M. Sunder has observed that assuming there was no breakdown and assuming the portal was active, the maximum penalty would be Rs. 5,000.

No Promissory Estoppel Involved In Grant Of Temporary Reprieve From Service Tax On Works Contract; Madras High Court

Case Title: M/s. Raju Construction & Ors. versus The Government of India & Ors.

The Madras High Court has dismissed a batch of writ petitions challenging Notification No.6/2015-Service Tax, dated 01.03.2015, which withdrew service tax exemption on services in nature of works contract, as granted under the Mega Exemption Notification No.25/2012-Service Tax, dated 20.06.2012.

Entities Evading Tax Payment Are Liable To Be Punished Under Criminal Charges With Penalties: Madras High Court

Case Title: M/s.Tirupur Sree Annapoorna Versus Tamil Nadu Sales Tax Appellate

Citation: 2023 LiveLaw (Mad) 3

The Madras High Court, while analysing the growing trend of tax evasion, has stated that companies, firms, or entities that evade tax payments are liable to be punished under criminal charges with substantial penalties.

Refund Or Carry Forward The ITC To GST Regime Is Dealer’s Choice: Madras High Court

Case Title: Easwaran Brothers India Private Limited Versus The Assistant Commissioner (ST) (FAC)

Citation: 2023 LiveLaw (Mad) 4

The Madras High Court has held that the dealer has two options: refund or carry forward the ITC to the GST regime.

The single bench of Justice M. Sundar has observed that the dealer cannot be compelled to opt for one of the two, i.e., refund or carry forward the ITC to the GST regime. It is, after all, an option given to the dealer. The provisional refund order issued by the department and the issuance of what is known as "Form-P" clearly defined the entitlement of the dealer.

Can the Writ Court Condone Delay Beyond Time Limit Under GST Act: Madras High Court Refers Issue To DB

Citation: 2023 LiveLaw (Mad) 27

The Madras High Court has referred to the division bench the issue of the power of the high court under Article 226 to condone the delay beyond the maximum time limit stipulated under the GST Act.

The single bench of Justice Abdul Quddhose has observed that there were two contradictory views expressed by two judges of the Madras High Court.

Kerala High Court

Presence Of Gold In Pocket Without The Appropriate Documentation Raises Suspicions Of Tax Evasion: Kerala High Court

Case Title: Sasi Pathirakunnath Versus Assistant State Tax Officer

Citation: 2023 LiveLaw(Ker) 21

The Kerala High Court has held that the presence of gold in your pocket without the appropriate documentation raises suspicions of tax evasion.

The bench of Justice Gopinath P. has observed that there is no satisfactory explanation for the fact that there was a discrepancy in the number of documents produced by the petitioner in the evening before the department and the quantity of gold actually recovered from the petitioner.

Extension Of Limitation To Issue Order Under S. 73 Of CGST Act Would Also Extend Time Limit To Issue SCN: Kerala High Court

Case Title: Pappachan Chakkiath versus Assistant Commissioner & Ors.

The Kerala High Court has ruled that when the time limit for issuing an order under Section 73(10) of the CGST Act stands extended by a notification, the time limit for issuance of show cause notice under Section 73(2) would also stand extended.

Karnataka High Court

Circular Regarding Mismatch Of ITC Is Applicable For 2019-20 In Case Of Identical Errors: Karnataka High Court

Case Title: M/s Wipro India Ltd. Versus Assistant Commissioner Of Central Tax

The Karnataka High Court has held that the circular regarding the mismatch of input tax credit (ITC) is applicable for 2019–20 in the case of identical errors.

Allahabad High Court

Allahabad High Court Stays Rs.1,081 Crores GST Demand Against Paytm

Case Title: One 97 Communications Limited Versus UOI

The Allahabad High Court has stayed the Goods and Service Tax (GST) demand of Rs. 1,081 crores against Paytm.

"The amount of tax due on the transaction has already been paid, and the only dispute is whether it is to be treated as an intra-state sale or an inter-state sale; recovery of the demand raised shall remain stayed till the next date of hearing," the division bench headed by Chief Justice Rajesh Bindal and Justice J.J. Munir said while listing the matter for hearing on April 27, 2022.

Rajasthan High Court

Rajasthan High Court Grants Bail To Accused On The Payment Of GST Evasion Amount

Case Title: Vikas Bajoria Versus Union Of India

The Rajasthan High Court has granted bail to the accused as he has already paid the amount of alleged GST evasion.

The single bench of Justice Mahendra Kumar Goyal has released the accused on bail on furnishing a personal bond of Rs. 1,00,000 together with two sureties in the sum of Rs. 50,000 each to the satisfaction of the trial court.

Taxpayer Cannot Be Compelled To Pay Tax On The Services Rendered By It Twice: Rajasthan High Court

Case Title: M/s. Skylark Infra Engineering Pvt. Ltd. Versus UOI

The Rajasthan High Court has held that the taxpayer cannot be compelled to pay tax on the services rendered twice.

The division bench of Justice Pankaj Mittal and Justice Subha Mehta ruled that the petitioner's supply of manpower to a company in Rajasthan is either an inter-state transaction subject to CGST+RGST or an intra-state transaction subject to IGST. The petitioner has deposited 18% of the IGST, and the respondents or department has recovered 35% of the CGST and RGST by attaching the petitioner's accounts.

Online Gaming Not Betting/Gambling; Rajasthan High Court Grants Interim Relief to Myteam 11

Case Title: Myteam11 Fantasy Sports Private Limited versus Union of India

The Rajasthan High Court has observed that the issue regarding the nature of gaming services provided online is no longer res-integra, adding that such gaming services have been held to be games of skill and not games in nature of betting or gambling.

Orissa High Court

Vedanta Claimed Unutilized ITC Refund, No Scope For Supplementary Refund Application Based On Fresh Calculation: Orissa High Court

Case Title: Vedanta Limited, Jharsuguda Versus Union of India

The Orissa High Court has held that Vedanta has claimed the refund of the unutilized input tax credit on account of zero-rated supplies by clubbing up all the transactions relating to three units. There is no scope to insist on consideration of a supplementary refund application based on a fresh calculation made by taking individual unit-wise transactions into account.

Andhra Pradesh High Court

GST Dept. Can’t Retain Disputed Amount Paid Due To Inadvertent Error: Andhra Pradesh High Court

Case Title: Varshan Enterprises Versus Office of GST Council

The Andhra Pradesh High Court has held that the GST department cannot retain the disputed amount that is paid to them due to an inadvertent error.

The division bench of Justice C. Praveen Kumar and Justice A.V. Ravindra Babu has observed that the amounts that were paid by the assessee or petitioner who furnished the incorrect details cannot be taken as a tax due from the department or respondents, legally. The department cannot contend that the claim, if any, of the petitioner is barred by limitation.

Since Investigation By DGGI Started Prior To Filing Of Application, AAR Order Is Invalid : Andhra Pradesh High Court

Case Title: M/s Master Minds versus AAAR (GST)

Citation: 2023 LiveLaw (AP) 6

The Andhra Pradesh High Court has ruled that the term ‘any proceedings’ referred to in the proviso to Section 98(2) of the CGST Act/ Andhra Pradesh GST Act (APGST Act), includes within its ambit the investigation initiated against the applicant under the said Act.

Telangana High Court

Subsumption Of Service Tax Will Not Absolve Liability To Pay GST If Service Tax Was Agreed To Be Paid In Agreement : Telangana High Court

Case Title: Smt K. Himabindu v. TSRTC

In a Writ Petition, the Telangana High Court ordered that the Petitioner is liable to pay the GST on the license fee in place of service tax as the Petitioner was paying service tax separately under the terms of Deed of License.

Search And Seizure Of Cash And Jewellery By ED Without Recording The ‘Reasons To Believe’: Telangana High Court Quashes Seizure

Case Title: M/s. Musaddilal Gems and Jewels (India) Private Limited Versus UOI

The Telangana High Court has set aside the search and seizure of cash and jewellery by ED as it was done without recording the "reasons to believe."

Tripura High Court

State Of Tripura Has No Jurisdiction To Levy VAT For Supply Of LPG Cylinder Under Work Orders Executed Outside The State: Tripura High Court

Case Title: M/s Maharaja Gas Agency versus State of Tripura & Ors.

The Tripura High Court has ruled that the State of Tripura has no jurisdiction to levy VAT under the Tripura Value Added Tax Act, 2004 (TVAT), on transport or supply of LPG cylinders to Tripura under the work orders executed outside the State. The bench of Acting Chief Justice T. Amarnath Goud and Justice Arindam Lodh held that that the situs of the sale would be the place where the contracts were executed.

Jammu & Kashmir And Ladakh High Court

Units Located In J&K Entitled For Central Excise Duty Exemption Prior To 1st July 2017 Liable To Pay GST: J&K & Ladakh High Court

Case Title: Godrej Consumer Products Limited Versus Union of India

Citation: 2023 LiveLaw (JKL) 4

The Jammu and Kashmir and Ladakh High Court has held that units located in Jammu and Kashmir are entitled to central excise duty exemption prior to July 1, 2017, and are therefore liable to pay GST.

The division bench of Justice Tashi Rabsdan and Justice Mohan Lal has observed that in terms of the Central Excise regime as it existed prior to July 1, 2017, the units located in Jammu & Kashmir and other states were eligible to avail exemption from payment of Central Excise duty in terms of area-based exemption notifications. While exemption was available to the units located in Jammu and Kashmir, who were required to pay Central Excise Duty and avail exemption by way of refund of the cash component of duty paid, under the GST regime there was no exemption, and the existing units availing exemption from payment of Central Excise Duty prior to July 1, 201,7 are required to pay CGST and SGST/IGST like a normal unit. Thus, no exemption is available to the units by way of either an ab initio exemption or a refund.

Jharkhand High Court

Benefit Under SVLDRS Scheme Cant Be Denied Based On Dept. Decision To File Appeal: Jharkhand High Court

Case Title: M/s Om Prakash Kashyap Versus UOI

The Jharkhand High Court has held that the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS scheme), cannot be denied by the designated committee for the reason that the department has decided to file an appeal against the order.

Patna High Court

GST Registration Cancelled Without Granting Opportunity Of Personal Hearing: Patna High Court Quashes Order

The Patna High Court has held that the GST registration was canceled without granting him the opportunity of a personal hearing.

The division bench of Chief Justice Sanjay Karol and Justice Partha Sarthy has quashed the GST cancellation order and held that the authority ought to have at least referred to the contents of the show cause and the response thereto, which was not done. Not only is the order non-speaking, but it is also cryptic in nature, and the reason for cancellation is not decipherable.

Calcutta High Court

Writ Court Can’t Classify Products Under Customs Tariff Act, Technical Analysis Is Required: Calcutta High Court

Case Title: M/s Harsh Polyfabric Versus UOI

Citation: 2023 LiveLaw (Cal) 18

The Calcutta High Court has held that a writ court cannot answer the classification of products under the Customs Tariff Act as it requires technical analysis.

CESTAT

Customs Broker Is Not Liable For Undervaluation Of Exported Goods: CESTAT

Case Title: M/s. Sri Velavan Logistics Services Private Limited Versus The Commissioner of Customs

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that customs brokers cannot be held liable for the undervaluation of exported goods.

The bench of P. Dinesha (a judicial member) has observed that the valuation of any goods could never be the domain of a customs broker as it depends upon the contract between the exporter and the importer, in which the customs broker has no say.

Decision Of CG Not To Impose Anti-Dumping Duty, Quasi-Judicial In Nature; Principles Of NJ Must Be Followed: CESTAT

Case Title: Chemical and Petrochemicals Manufactures Association (CPMA) versus Union of India & Ors.

The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has reiterated that the decision taken by the Central Government to not impose anti-dumping duty under Section 9A of the Customs Tariff Act, 1975, is quasi-judicial in nature and not legislative, and thus, the requirement of a reasoned order must be compiled with.

Once The Flat Buyer Cancels The Booking Builder Not Liable To Pay Service Tax: CESTAT

Case Title: Credence Property Developers Pvt. Ltd. Versus Commissioner of CGST & Central Excise

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that once the buyer cancelled the booking and the consideration for service was returned, the service contract got terminated, and once it is established that no service is provided, then refund of tax for such service becomes admissible.

Service Tax Not Payable On Intermediary In The Sale Of Space or Time For Media Agency On Commission Basis: CESTAT

Case Title: Drishty Communication Private Limited Versus C.C.E. & S.T.-Rajkot

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on intermediaries in the sale of space or time for media agencies on a commission basis.

Responsibility Of Assessee To Know The Eligibility Before Making Export Benefits Claim: CESTAT

Case Title: M/s Cipra Enterprises Versus Commissioner of Customs

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the appellant made a wrong claim of export benefit under MEIS, having been misadvised by the Customs House Agent (CHA).

Clinical Establishments Providing Health Care Services Are Exempted From Service Tax: CESTAT

Case Title: M/s. Maharaja Agrasen Hospital Charitable Trust Versus

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that clinical establishments providing health care services are exempt from service tax.

Notice Under Customs Act Can Be Issued Only After The Assessment Is Modified On Appeal: CESTAT

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that once an assessment is made, it stands unless it is reviewed under Section 28 of the Customs Act or modified in an appeal.

The two-member bench headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member)has observed that any assessment can be modified in two ways: first, through an appeal, and second, through a process of review under Section 28.

Gold Balas Are Gold Ornaments Having Definite Shape To Be Worn By The Local People: CESTAT

Case Title: Sailendra Narayan Panda Versus Pr. Commissioner of CGST & CX, Bhubaneswar

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has released the gold balas from custody and held that gold balas are gold ornaments having a definite shape to be worn by the local people.

The bench of P.K. Choudhary (Judicial Member) has observed that the Gold Control Act of 1968 has already been repealed since 1990. Under the new fiscal policy, the possession of gold is not an offense.

Onus is On The Customs Department To Prove That The Goods are Smuggled: CESTAT

Case Title: Dharmesh B. Bhavsar Versus Principal Commissioner, Customs

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the onus is on the Customs Department to lead evidence in support of an allegation as to the smuggled nature of goods.

The bench of Anil Choudhary (a judicial member) has directed the department to release the goods within a period of 15 days. The appellant shall not be liable for payment of godown rent, detention charges, or demurrage.

“Activation Charges” Of Equipment/Software Features Covered Under The Activity Of Sales Of Goods, Not “Service”: CESTAT

Case Title: Black Box Limited Versus Commissioner of Central Excise & ST, Ahmedabad-iii

The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the “activation charges” of equipment/ software features are covered under the activity of sales of goods and not covered under the provisions of “Service”.

Excise Duty Not Payable On Test Production: CESTAT

Case Title: M/s Tribhuvan Metal Industries Versus Commissioner of Central Excise

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that excise duty is not payable on test production.

The bench of Anil Choudhary (Judicial Member) has observed that the appellant/assessee has done only test production prior to November 11, 2010, and they have been doing mainly trading of finished goods as the factory was not fully set up at the testing stage.

No Case Is Made Out By Customs For Confiscation Of Goods Meant For Export: CESTAT

Case Title: M/s Medista Overseas Versus Commissioner, Central Excise & Central Goods and Service Tax

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that a No Objection Certificate (NOC) is not required from the Drug Controller in respect of an export consignment filed for the export of drugs to Liberia.

Promotional Activities Undertaken By Cricketers Are Not Covered Under Business Support Service: CESTAT Quashes Service Tax Demand Against Irfan Pathan and Yusuf Pathan

Case Title: Yusufkhan M Pathan Versus C.C.E. & S.T.-Vadodara-ii

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand against the international cricketers, Irfan Pathan and Yusuf Pathan.

The two-member bench of Ramesh Nair (judicial member) and Raju (technical member) has observed that the apparel that the appellant had to wear was team clothing, which bears the brand names and marks of various sponsors. The appellants were not providing any service as independent individuals. It cannot be said that the appellants were rendering any services that could be classified as business support services.

Payments Made Through Cenvat Account Is Liable To Be Re-Credited If Excise Duty Is Paid In Cash: CESTAT

Case Title: M/s Mideast Integrated Steels Ltd. Versus Commissioner of CGST & Excise

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that once the duty has been paid in cash, earlier payments made through the Cenvat Account are liable to be re-credited to the Account and no objection that such re-credit was not on the basis of any eligible document can be adopted by the department.

The bench of P.K. Choudhary (Judicial Member) has observed that the suo motu credit of Cenvat reversed earlier involved only an account entry reversal and, in the process, no outflow of funds from the assessee, and accordingly, filing of a refund claim under Section 11B of the Central Excise Act, 1944, is not required.

AAAR

18% GST Applicable On Services Of Project Management Consultancy Services: Maharashtra AAAR

Applicant’s Name: M/s. Worley Services India Pvt. Ltd.

The Maharashtra Appellate Authority for Advance Ruling (AAAR) has ruled that project management consulting services are subject to 18% GST.

The two-member bench of D.K. Srinivas and Rajiv Kumar Mittal has upheld the AAR’s ruling and observed that services provided through their professionals are in the nature of professional and technical services as the services provided require technically qualified and trained professionals and staff. Thus, the services provided by the appellant will merit classification under SAC 998349 with the description "Other technical and scientific services."

Administering Of COVID-19 Vaccine By Hospitals Attracts 5% GST: AAAR

The Andhra Pradesh Appellate Authority for Advance Ruling (AAAR) has ruled that hospitals must pay 5% GST when administering the COVID-19 vaccine.

The two-member bench of Sanjay Pant and M. Girija Shankar has observed that the administration of the COVID-19 vaccine is not an exempt supply as it is not covered under the definition of "healthcare services." Further held, it is a composite supply wherein the principal supply is the "sale of vaccines" and the ancillary supply is the "service of administering vaccines."

AAR

Salted, Flavoured Potato Chips, Chivda, Sev, Hing Bhujiya Attracts 12% GST: Gujarat AAR

Applicant’s Name: Prajapati Keval Dineshbhai

The Gujarat Authority for Advance Ruling (AAR) has observed that 12% GST is applicable on salted and flavouring potato chips, chivda, sev, and hing bhujiya.

Readily Available Food, Beverages Sold Over Counter Is A Supply Of Goods, Does Not Qualify As “Restaurant Services”: Gujarat AAR

Applicant’s Name: Ridhi Enterprise

The Gujarat Authority of Advance Ruling (AAR) has held that readily available food and beverages that are not prepared in the restaurant and sold over the counter are supplies of goods that are liable to GST and do not qualify as "restaurant services."

The two-member bench of Amit Kumar Mishra and Milind Kavatkar relied on the ruling of the Appellate Authority of Advance Ruling, Uttrakhand, pronounced in the case of M/s Kundan Mishthan, in which it was ruled that sales of sweets, namkeens, cold drinks, and other edible items from sweet shop counters will be treated as supplies of goods with applicable GST rates of the items being sold and input credit will be allowed on supplies.

Supply Of Sharpener Along With Pencils Is A Mixed Supply: Gujarat AAR

Applicant’s Name: Doms Industries Pvt. Ltd.

The Gujarat Authority for Advance Ruling (AAR) has ruled that the supply of sharpeners along with pencils is covered under the category of "mixed supply."

The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that a mixed supply containing more than two supplies shall be treated as a supply of the particular supply that attracts the higher rate of tax in the mixed supply. The applicant is required to use the HSN code of the particular supply, which attracts a higher rate of tax among all the taxable supplies contained in a pack or box.

GST Exemption On Hiring Of Goods Transportation Vehicle By GTA: Chhattisgarh AAR

Applicant’s Name: Prahallad Ray Rekhraj Agrawal Bazar Neora

The Chhattisgarh Authority for Advance Ruling (AAR) has ruled that GST is not payable on the hiring of goods transportation vehicles by the Goods Transportation Agency (GTA).

The two-member bench of Sonal K. Mishra and Rajesh Kumar Singh has observed that the service by way of giving on hire a means of transportation of goods to the applicant GTA is exigible for the nil rate of GST as stipulated under Notification number 12/2017-Central Tax (Rate) dated June 28, 2017. When no tax is payable, the question of taking any input tax credit does not arise.

Training, Coaching Services Does Not Come Under ‘Educational Institution’, No GST Exemption Available: Kerala AAR

Applicant’s Name: Tutor Comp Info Tech Private Limited

The Kerala Authority for Advance Ruling (AAR) has ruled that training and coaching services do not come under the definition of "educational institution" to claim GST exemption.

The two-member bench of S.L. Sreeparvathy and Abraham Renn S has observed that institutions providing services by way of education as a part of the curriculum for obtaining a qualification recognised by any law for the time being in force and those engaged in providing education as a part of an approved vocational education course are covered by the definition of "educational institution."

No GST Payable On Afforestation Carried Out By Charitable Organisation: Gujarat AAR

Applicant’s Name: M/s. Vikas Centre For Development

The Gujarat Authority for Advance Ruling (AAR) has held that the afforestation carried out by the charitable organisation is exempt from GST.

The two-member bench of Amit Kumar Mishra and Milind Kavatkar observed that the activities of mangrove plantations are covered under charitable activity. The applicant is registered under Section 12AA of the Income-tax Act, 1961, as a charitable trust, and thus the service of planting mangroves by the applicant is eligible for exemption from the payment of GST.

Medical Monitoring Services To Senior Citizens At Door Step Attract 18% GST: West Bengal AAR

Applicant’s Name: Snehador Social & Health Care Support LLP

The West Bengal Authority for Advance Ruling (AAR) has ruled that services of regular medical monitoring, along with other logistical support, provided by the applicant to senior citizens at their doorsteps, attract 18% GST.

Supply Of Services For Right To Use Car Parking Space Attracts 18% GST: West Bengal AAR

Applicant’s Name: Eden Real Estates Private Limited

The West Bengal Authority for Advance Ruling (AAR) has held that the supply of services for the right-to-use car parking spaces attracts 18% GST.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik has observed that the supply of services for the right to use a car parking space is a separate supply and not to be construed as a composite supply of construction of residential apartment services.

18% GST Payable On The Composite Supply Of Welding Services On Railway Tracks Along With Labour Services: West Bengal AAR

Applicant’s Name: Purple Distributors Pvt. Ltd.

The West Bengal Authority of Advance Ruling (AAR) has ruled that the conversion of short weld rails (SWR) to long weld rails (LWR) by flash butt welding on the railway tracks along with the supply of labour services shall be treated as composite supplies.

Contract For Construction Of New Railway Siding Is Covered Under “Works Contract”, Attracts 12% GST: West Bengal AAR

Applicant’s Name: Triveni Engicons Private Limited

The West Bengal Authority for Advance Ruling (AAR) has ruled that the contract for the construction of new railway siding is covered under the definition of a "works contract" and attracts 12% GST.

Treated Water Obtained From CETP Attracts 18% GST: Gujarat AAR

The Gujarat Authority for Advance Ruling (AAR) has observed that treated water obtained from the Common Effluent Treatment Plant (CETP) attracts 18% GST.

The two-member bench of Amit Kumar Mishra and Milind Kavatkar has observed that the applicant is also a common effluent treatment plant engaged in collecting, conveying, treating, and disposing of effluents from its member dyeing and bleaching units and obtaining water by the process of reverse osmosis. The treated water is not used for drinking purposes by the public at large but is supplied to industries for their use.

18% GST Payable On The Forest Permit Fee: Telangana AAR

Applicant: M/s Singareni Colleries Company Ltd.

The Telangana Authority for Advance Ruling (AAR) has held that 18% GST is payable on the forest permit fee.

The two-member bench of B.P. Naga Siva Kumari observed that the permit fees collected by the forest department are used by forest officials to monitor mining activity, assess the quantity and type of mineral being quarried, conduct surveys, and keep a constant eye on the movement of the produce, and are unrelated to social or farm forestry.

GST Not Payable On Reimbursement Of Tree Cut Compensation Paid To Farmers By Pure Agent: Karnataka AAR

Applicant’s Name: Sree Subha Sales

The Karnataka Authority for Advance Ruling (AAR) has ruled that a pure agent is not liable to pay GST on reimbursement of compensation amounts paid to farmers and landowners.

The two-judge bench of M.P. Ravi Prasad and Kiran Reddy T. has ruled that reimbursement of land compensation amounts paid to farmers and landowners during the course of work is subject to GST if the applicant does not qualify as a pure agent.

Direct Taxes

Supreme Court

Income Tax Act - For Block Assessment, Normals Procedure Not Applicable; Interest Can Be Levied Without Sec 158BC Notice : Supreme Court

Case Title: K.L. Swamy v. Commissioner of Income Tax And Anr.

2023 LiveLaw (SC) 54

The Supreme Court recently held that revenue was justified in levying interest under Section 158BFA(1) of the Income Tax Act for late filing of the return for the block period even in absence of any notice under Section 158BC of the Act and for the period prior to 01.06.1999.

A Bench comprising Justice M.R. Shah and Justice C.T. Ravikumar was considering a batch of petitions dealing with the same issue.

Non-Banking Finance & Leasing Companies Not Liable To Pay Interest Tax On Instalments Paid Under Hire Purchase Agreement : Supreme Court

Case Title: M/s. Muthoot Leasing And Finance Ltd. versus CIT

Citation : 2023 LiveLaw (SC) 7

The Supreme Court has held that non-banking finance and leasing companies are not liable to pay tax on the interest component included in the hire-purchase instalment paid under the hire purchase agreement.

Income Tax Act | Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied : Supreme Court

Case Title: Red Chilli International Sales Versus ITO

Citation: 2023 LiveLaw (SC) 16

The Supreme Court recently set aside an order of the Punjab and Haryana High Court which dismissed a writ petition filed by an assessee against a notice issued under Section 148A of the Income Tax Act 1961 for reopening assessment.

The High Court had dismissed the writ petition on the ground of availability of alternative remedy. Taking exception to the High Court's approach, the Supreme Court observed that writ petitions have been entertained to examine whether the conditions for the issuance of notice under Section 148 of the Income Tax Act have been satisfied.

Delhi High Court

Claim That Investment In Shares Was A Capital Account Transaction, Non-Application Of Mind By AO: Delhi High Court Quashes Reassessment Notice

Case Title: Blackstone Capital Partner Versus ACIT

Citation: 2023 LiveLaw (Del) 92

The Delhi High Court has quashed the reassessment notice as the AO failed to apply his mind as to whether an investment in shares was a capital account transaction.

Explanation 2 To S. 37(1) of Income Tax Act, Which Bars Deduction of CSR Expenses, Is Prospective In Nature: Delhi High Court

Case Title: Pr. Commissioner of Income Tax versus M/s Steel Authority of India Ltd.

Citation: 2023 LiveLaw (Del) 95

The Delhi High Court has reiterated that Explanation 2 to Section 37(1) of Income Tax Act, 1961, inserted by the Finance Act, 2014, which bars deduction of CSR expenses while computing income from business or profession, is prospective in nature.

The bench of Justices Rajiv Shakdher and Tara Vitasta Ganju remarked that deductibility of CSR expenses under Section 37(1), prior to its amendment by the Finance Act, cannot depend upon how the funds are spent by the recipient.

Information Triggering Reassessment Proceedings Needs To Be Furnished To The Assessee: Delhi High Court

Case Title: Charu Chains & Jewels (P) Ltd. Versus ACIT

The Delhi High Court has held that the underlying information or material that formed the basis for triggering the assessment or reassessment proceedings was required to be furnished to the assessee.

The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has noted that the petitioner has indicated that it will file a further response once the information or material is provided, and even if the information or material is not provided, it will reserve its right to file a further response.

Bombay High Court

Assessee Not Entitled for Deduction without A Certificate Declaring The Warehouse as Part Of The Port: Bombay High Court

Case Title: Principal Commissioner of Income Tax Versus Maharashtra State Warehousing Corporation

The Bombay High Court has held that the assessee cannot claim the deduction under Section 80IA(4) of the Income Tax Act in the absence of a certificate declaring the warehouse to be part of the port.

Nothing New Happened Between The Date Of Reassessment Order And The Date Of Forming The Opinion By AO: Bombay High Court Quashes Reassessment Order

Case Title: Clear Media (India) Private Limited Versus Deputy Commissioner of Income-tax

The Bombay High Court has quashed the Reassessment Order and held that between the date of the order of assessment sought to be reopened and the date of the formation of an opinion by the Assessing Officer, nothing new has happened. There was no new information received, nor was there any mention of new material on file.

CBDT Circulars Can’t Prescribe Limitation To Decide Application For Compounding Of Offence: Bombay High Court

Case Title: Footcandles Film Pvt Ltd. & Anr. versus Income Tax Officer – TDS & Ors.

The Bombay High Court has ruled that orders, instructions or directions issued by the CBDT under Section 119 or under the Explanation to Section 279 (6) of the Income Tax Act, 1961, cannot put fetters on the power of income tax authorities under Section 279(2) to consider an application for compounding of offence, by prescribing a period of limitation.

The bench of Justices Dhiraj Singh Thakur and Valmiki SA Menezes, took note that Section 279 (2) of the Income Tax Act, which provides for compounding of certain offences, either before or after the institution of proceedings, does not provide any rule of limitation.

It Is A PAN Which Follows The Jurisdiction And Not The Jurisdiction Which Follows PAN: Bombay High Court

Case Title: PCIT Versus M/s Capstone Securities Analysis Pvt. Ltd.

The Bombay High Court ruled that the transfer of PAN is a result of the order transferring jurisdiction and that the PAN follows the jurisdiction rather than the other way around.

Bombay High Court Quashes Reassessment Order On Asian Paints In View Of Full Disclosure

Case Title: Asian Paints Ltd. Versus The Assistant Commissioner of Income-tax

The Bombay High Court has quashed the reassessment order as the assessee, Asian Paints, disclosed fully and truly all facts material and necessary for the assessment.

Reassessment Notice after 4 Years should have the Sanction Of PCIT: Bombay High Court

Case Title: MA Multi-Infra Development Pvt. Ltd. Versus ACIT

The Bombay High Court ruled that issuing a reassessment notice after four years is subject to the approval of the Principal Chief Commissioner of Income-tax (PCIT).

The division bench of Justice Dhiraj Singh Thakur and Justice Kamal Khata has ruled that the approval for the issuance of a notice under Section 148 ought not to have been obtained from the Additional Commissioner of Income Tax but from the authority specifically mentioned under Section 151(ii) of the Income Tax Act.

Failure To Adjust Interest Paid By NCPA Is Hyper-Technical, Should Not Affect Sabka Vishwas Scheme: Bombay High Court

Case Title: National Centre for the Performing Arts Versus Union of India

The Bombay High Court has held that failure to adjust interest paid by the National Centre for the Performing Arts (NCPA) was hyper- technical and should not come in the way of implementation of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 ( SVLDRS).

The division bench of Justice Nitin Jamdar and Justice Abhay Ahuja has observed that the object of the SVLDR Scheme should not be lost sight of, as the scheme has itself been formulated for the smooth settlement of disputes. The interpretation of the provisions should be to carry forward the object rather than to frustrate the it by giving rise to more litigation.

Calcutta High Court

Consideration For Advisory Services Not Taxable As Fees For Included Services Under India-US DTAA: Calcutta High Court

Case Title: Commissioner of Income Tax (International Taxation & Transfer Pricing) versus M/s. The Timken Company

The Calcutta High Court has reiterated that consideration for advisory services cannot be treated as Fees for Included Services under Article 12(4)(b) of the India-US Double Taxation Avoidance Agreement (DTAA). The Court thus upheld the ITAT’s order setting aside the additions made to the foreign assessee Company’s income for the compensation received by it for rendering advisory services to its Indian subsidiary.

Tribunal Being Fact-Finding Body, Unless Perversity Shown, High Court Can’t Interfere: Calcutta High Court

Case Title: PCIT Versus Britannia Industries Ltd.

The Calcutta High Court has held that unless and until the order passed by the Tribunal suffers from any perversity or ignores any vital fact in an appeal under Section 260A of the Income Tax Act, the Court is not expected to interfere with the order.

Gujarat High Court

Sale Consideration Out Of Transfer Of Capital Asset Is Liable To Capital Gain: Gujarat High Court

Case Title: Deepak Nitrate Versus DCIT

The Gujarat High Court has held that the detachable warrant has an existence of its own along with the debenture purchased by the assessee for a sum of Rs. 50. The realization would be a sale consideration arising out of the transfer of a capital asset and is subject to capital gain.

Gujarat High Court Quashes Reassessment Order Citing Inability Of Assessee To Secure Relevant Documents Amid Covid-19 Lockdown

Case Title: Kavita Krushna Kumar v. Union of India

The Gujarat High Court recently quashed a reassessment order and final notice of assessment issued against to an assessee after she failed to produce the relevant documents, particularly Form-F prescribed under Gujarat Value Added Tax Act, 2003 amid Covid-19 lockdown.

The division bench of Justice Sonia Gokani and Justice Sandeep N. Bhatt allowed the petition under Article 226 of the Constitution on the ground that not giving proper opportunity to the petitioner as per the law is a clear violation of principle of natural justice.

Assessee Entitled For Deduction On Export Benefits On Account Of The Refund Of Excise Duty: Gujarat High Court

Case Title: PCIT Versus M/s. Reckitt Benckiser Healthcare India Ltd.

The Gujarat High Court has upheld the tribunal’s order, by which it was held that the assessee was entitled to and eligible for deduction on export benefits on account of the refund of excise duty under Section 80IC of the Income Tax Act.

Once Assessee Shows Genuineness Of Transactions, No Additions Can Be Made: Gujarat High Court

Case Title: PCIT Versus M/s.Neotech Education Foundation

The Gujarat High Court has held that the assessee has discharged the primary onus to prove the creditworthiness of the transaction.

Reopening The Assessment Based On Change Of Opinion, Not Valid: Gujarat High Court

Case Title: Shahlon Silk Industries Pvt. Ltd. Versus ACIT

The Gujarat High Court has held that the Assessing Officer cannot have any jurisdiction to issue the notice for reopening the assessment when the assessment is sought to be reopened beyond a period of four years.

The division bench of Justice N.V. Anjaria and Justice Bhargav D. Karia has observed that there was a change of opinion by the Assessing Officer to reopen the assessment for the assessment year 2013-2014, more particularly when the issues raised in the reopening assessment were already considered during the assessment proceedings under Section 143(3) of the Act, 1961.

Failure Of Taxpayer To Disclose Fully: Gujarat High Court Refuses To Quash Reassessment

Case Title: Omni Lens Pvt. Ltd. Versus ACIT

The Gujarat High Court has refused to quash the reassessment because the taxpayer has not truly and fully disclosed the material.

The division bench of Chief Justice Aravind Kumar and Justice Ashutosh Shastri observed that if the petitioner or assessee was not remedial and has now questioned the issuance of a notice, he is required by law to cooperate with the authority in the adjudication process. When the authority ultimately passes any adverse order, the entire remedy created under the special statute is very much available to the petitioner.

Rajasthan High Court

Material Referred In “Reasons To Believe” Not Supplied To Assessee, Reassessment vitiated: Rajasthan High Court

Case Title: Micro Marbles Private Limited Versus Office of the Income Tax Officer

The Rajasthan High Court has held that the material referred to in the "reasons to believe" was not supplied to the assessee, and the entire proceedings for the reopening of the assessment and leading to the consequential assessment stand vitiated in law.

ITAT

ITAT Sustains Disallowance As Cash Payment Exceeds Rs. 20,000 To Single Party In Single Day

Case Title: Shri Kalimuthu Harichandran Versus ACIT

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has sustained the disallowance under section 40A(3) of the Income Tax Act as a cash payment exceeds INR 20,000 to a single party in a single day.

Income From Domain Name Registration Not Taxable As “Royalty”; Registrar Merely An Intermediary: Mumbai ITAT

Case Title: PDR Solutions FZC versus DCIT

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that a domain name registrar does not have any right in the domain name, which is registered by it merely as a facilitator. Thus, the income received by it from domain name registration is not taxable as “Royalty”, the ITAT ruled.

When AO Has Taken One Of The Possible Views The PCIT Is Prohibited From Adopting Different View: ITAT

Case Title: Prerak Goel Versus PCIT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), while quashing the revision order, held that when the Assessing Officer (AO) has taken one of several possible views, the Principal Commissioner of Income Tax (PCIT) is prohibited from adopting a different view.

The two-member bench of Aby V. Varkey (Judicial Member) and B.R. Baskaran (Accountant Member) relied on the decision of the Supreme Court in the case of Malabar Industrial Co., Ltd. v. CIT, in which it was ruled that if the AO has taken one of the possible views, then the assessment order cannot be considered to be prejudicial to the interests of revenue merely for the reason that the PCIT has a different view on the very same matter.

TDS Not Applicable To Salary/Commission Paid To Partners: ITAT

Case Title: ACIT Versus Dhar Construction Company

The Gauhati Bench of the Income Tax Appellate Tribunal (ITAT) has held that the TDS is not applicable to salary or commission paid to partners.

Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition

Case Title: M/s Sagitarius Securities Pvt. Ltd. Versus I.T.O.

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that it is impossible for a company to get its accounts audited on 31st March and present the same for approval in the Annual General Meeting on March 31st.

Company’s Income Cannot Be Assessed Under ‘Salary’: ITAT

Case Title: Ducere Technologies Private Limited Versus DCIT

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that since the assessee is a company, its income cannot be assessed under the heading "salary."

The bench of K. Narasimha Chary (a judicial member) has restored the issue to the file of the Assessing Officer to verify the availability of brought-forward losses for the purpose of setting off the current year's income against losses.

Interest Income Earned By A Co-Operative Society Eligible For Deduction: ITAT

Case Title: Amore Commercial Premises Co-Op Society Ltd. Versus Central Processing Centre

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that interest income earned by a co-operative society on its investments held with co-operative banks would be eligible for claim of deduction under section 80P(2)(d) of the Income Tax Act.

The two-member bench of Kuldip Singh (Judicial Member) and S Rifaur Rahman (Accountant Member) found that the CIT(A) erred in upholding the assessee's denial of deduction under Section 80P(2)(d).

Hire Charges Received Under ‘Time Charter Agreement’ Not Taxable As Royalty, If Control Over Ship Remained With Owner: ITAT

Case Title: Nan Lian Ship Management LLC versus ACIT (Int. Tax)

The Mumbai bench of the ITAT has ruled that hire charges received by the owner of a ship for chartering its vessel under a ‘Time Charter Agreement’, is not taxable as ‘royalty’ under Section 9(1) (vi) of the Income Tax Act, 1961, if control and dominance over the ship remained with the assessee/ owner and not with the charterer.

2% TDS Deductible On Common Area Maintenance Charges: ITAT

Case Title: HV Global Pvt. Ltd. Versus ITO

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that 2% TDS is deductible on common area maintenance charges.

The two-member bench of C.M. Garg (Judicial Member) and Pradip Kumar Khedia (Accountant Member)has observed that the common area maintenance charges were not part of the actual rent paid to the owner by the assessee company. Payments of rent and common area maintenance charges have been made to distinct entities or companies; therefore, the authorities below were not right in creating the liability payable by the assessee firm.

Assessing Officer Not Justified In Rejecting Audited Books Of Accounts For Producing Photocopy Of Bills: ITAT

Case Title: Blue Stampings & Forgings Ltd. Versus Dy. Commissioner of Income Tax

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessing officer was not justified in taking drastic action and rejecting books of account that are audited solely on the basis of general remarks that photocopies of the bills have been produced instead of original bills.

Merely Making Unsustainable Claim Will Not Amount To Furnishing Of Inaccurate Particulars Of Income: ITAT

Case Title: Galaxy Construction and Contractors Pvt. Ltd. Versus DCIT

Citation: ITA No.1402/PUN/2019

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the mere making of a claim, which is not sustainable by the law itself, will not amount to furnishing inaccurate particulars of income.

The bench of S.S. Vishwanethra (Judicial Member) has observed that the appellant cannot be held guilty of furnishing inaccurate particulars of income, and, therefore, the Assessing Officer was not justified in levying a penalty under Section 271(1)(c) of the Income Tax Act.

Delay By State To Issue Necessary Certificates: ITAT Quashes Revision Order

Case Title: Kusum Mehta Versus CIT

The Calcutta Bench of Income Tax Appellate Tribunal (ITAT) has quashed the revision proceedings initiated in the name of the deceased person.

The revenue department acted quickly after receiving the legal heir certificate, according to the two-member bench of George Mathan (Judicial Member) and Arun Khodpia (Accountant Member). However, there has been a delay at the level of the state government in issuing the necessary certificates. Fault cannot be placed on the revenue or the assessee.