Tax Cases Weekly Round-Up: 7 To 13 January 2024

Supreme Court

Definition Of 'Manufacture' U/s 2(e)(1) Of UP Trade Tax Act Does Not Include Blending And Packaging Tea: Supreme Court

Case Title: Commissioner Of Trade Tax, U.P. v. M/s Mishra Tea Blending And Packing Industries, UP [CIVIL APPEAL NOS. 5677-5678/2011]

Citation: 2023 LiveLaw (SC) 1076

Recently, the Supreme Court has held that the definition of 'manufacture' under Section 2(e)(1) of the U.P. Trade Tax Act, 1948 does not include blending and packaging tea.

Hiring Of Motor Vehicle Or Cranes Is Not 'Sale Of Goods' If Control Over Equipment Is Retained By Contractor, VAT Can't Be Levied: Supreme Court

Case Title: M/s. K.P. Mozika v Oil and Natural Gas Corporation Ltd. & Ors.

Citation: 2024 LiveLaw (SC) 26

The Supreme Court has held that the hiring of motor vehicles/cranes from a contractor is a service and would not attract Sales Tax or Value Added Tax (VAT) assuming the transaction to be the sale of goods. The Court clarified that the transfer of the right to use the goods not only includes possession but also control over goods by the user. If the control over the goods remains with the contractor during the hire period, then it cannot be termed as sale of goods and only service tax can be levied.

Delhi High Court

Investment In Shares In Indian Subsidiary 'Capital Account Transaction', Not Income: Delhi High Court

Case Title: M/S Angelantoni Test Technologies Srl V. Assistant Commissioner Of Income Tax

The Delhi High Court has held that investment in shares by a company in its Indian subsidiary is a “capital account transaction” which does not give rise to any income. Therefore, the same cannot be treated as income for taxation.

Delhi High Court Directs Income Tax Commissioner To Accept BCI's Form No.10 After Condoning Delay

Case Title: Bar Council Of India Versus Commissioner Of Income Tax (Exemption)

The Delhi High Court has directed the income tax commissioner to accept Form No. 10 submitted by the Bar Council of India (BCI) after condoning the delay.

Income Tax: Denial of 80lA Benefit In 4th Year Of Assessment, U-Turn By Department Is Not Justified: Delhi High Court

Case Title: Pr. Commissioner Of Income Tax Versus M/S Bt Global Communications India Pvt. Ltd.

The Delhi High Court has held that the Principal Commissioner Income Tax (PCIT) wrongly invoked jurisdiction under Section 263 of the Income Tax Act and fell in error by taking a U-turn in the fourth assessment year, thereby denying the benefit of Section 80IA of the Income Tax Act.

Coconut Oil Sold By Amway As Hair Oil, Not Classifiable As Edible Oil Under DVAT Act: Delhi High Court

Case Title: Amway India Enterprises Private Limited Versus Commissioner, Vat, Delhi & Ors.

The Delhi High Court has held that coconut oil sold by Amway as a hair oil cannot be classified as edible oil under the DVAT Act.

Taxpayer Not Provided Opportunity To Object To Retrospective Cancellation Of GST Registration: Delhi High Court Directs Restoration

Case Title: M/S Een Een Sales Corporation Versus Assistant Commissioner Of Central Goods And Service Tax

The Delhi High Court has held that taxpayers are not provided an opportunity to object to the retrospective cancellation of GST registration.

Bombay High Court

Defect Notice Caused No Prejudice Since Last 30 Years, Assessee Clearly Understood Purport Of Notice: Bombay High Court

Case Title: Veena Estate Pvt. Ltd. Versus Commissioner of Income-Tax

The Bombay High Court has held that even assuming that there was a defect in the notice, it had caused no prejudice to the assessee, and the assessee “clearly understood” what the purport and import of the notice were under Section 274 read with Section 271 of the Income-tax Act, 1961. The principles of natural justice cannot be read in abstract form.

Madras High Court

Reopening Of Assessment Inspired From 'Review' & 'Change Of Opinion' By Subsequent AO Is Deprecated: Madras HC

Case Title: BNY Mellon Technology Private Limited Vs Additional / Joint / Deputy / Assistant Commissioner of Income Tax

Citation: 2024 LiveLaw (Mad) 12

While setting aside the order disposing of the assessee's objection to re-opening of the assessment pursuant to the issue of notice u/s 148 of the Income Tax Act, 1961 and the consequent reassessment order, the Madras High Court held that there is no scope for re-opening the assessment, since the reasons cited for same was inspired from change of opinion of the Assessing officer.

Karnataka High Court

Tax Exemption Can't Be Denied To Govt's Helicopter Pilots Trainer For Non-Furnishing GSTIN: Karnataka High Court

Case Title: M/S Hatsoff Helicopter Training P Limited Versus State Of Karnataka

The Karnataka High Court has held that tax exemption cannot be denied to the government's helicopter pilot trainer merely for non-furnishing goods and service tax identification numbers (GSTIN) initially.

Calcutta High Court 

Calcutta High Court Quashes Ex Parte Order Imposing Excise Duty On Incineration Of Lean Gas Used In Generation Of Electricity

Case Title: M/s Himadri Speciality Chemical & Anr. Versus The Commissioner of Central Excise

Citation: 2023 LiveLaw (Cal) 12

The Calcutta High Court has quashed the ex parte order imposing excise duty on the incineration of lean gas used in the generation of electricity.

Gujarat High Court

S. 80IA(4) Deduction Available To Assessee Engaged In Developing Infrastructure Projects Like Roads, Canals: Gujarat High Court

Case Title: The Principal Commissioner Of Income Tax (Central), Versus Montecarlo Construction Ltd.

LL Citation: 2024 LiveLaw (Guj) 3

The Gujarat High Court has allowed the deduction under Section 80IA(4) of the Income Tax Act to the assessee engaged in developing infrastructure projects like roads, canals, etc.

SARFAESI Act | Charge Of Secured Creditor Will Precede Over The Charge Based On Dues Of Sales Tax: Gujarat High Court

Case Title: Madhaviben Jitendrabhai Rupareliya vs State of Gujarat

LL Citation: 2024 LiveLaw (Guj) 4

The Gujarat High Court has reiterated that the charge of the Secured Creditor will precede the charge of an Unsecured Creditor.

Kerala High Court

Re-Sellers Of Machine Adopted Same Classification As Seller: Kerala High Court Quashes Penalty Under KVAT Act

Citation: 2024 LiveLaw (Ker) 40

Case Title: M/S. Professional Copier Services India (Pvt) Ltd Versus State Of Kerala

The Kerala High Court has quashed the penalty under the Kerala Value Added Tax (KVAT) Act and held that re-sellers of machines have not wilfully classified machines under the wrong head and have adopted the same classification as the seller.

Jharkhand High Court

Heavy Earth Moving Vehicles Under MVA Can Only Be Driven By Licensed Individuals: Jharkhand High Court

Case Title: Steel Authority of India Ltd vs. The State of Jharkhand and others

LL Citation: 2024 LiveLaw (Jha) 3

The Jharkhand High Court has ruled that registration of mining equipment, including drill masters and dumpers is mandatory under the Motor Vehicles Act. However, the Court has further said that the issue of whether a vehicle is taxable or not will depend upon the test as to whether the vehicle is proposed to be used for transporting goods from one place to another.

 Allahabad High Court

Typo Error In E-Way Bill, Penalty Can't Be Imposed If There Is No Intention To Evade Tax: Allahabad High Court

Case Title: M/S. Hindustan Herbal Cosmetics vs. State Of U.P. And 2 Others [WRIT TAX No. - 1400 of 2019]

Case Citation: 2024 LiveLaw (AB) 9

The Allahabad High Court has held that a minor typographical error in the e-way bill without any other material establishing an intention to evade tax will not attract a penalty under Section 129 of the Goods and Service Tax Act, 2017.

CGST Act | Once Registration Is Cancelled, Uploading Notice On Portal Not Sufficient Notice, Must Be Given At Assesee's Address: Allahabad HC

Case Title: M/S Eastern Machine Bricks And Tiles Industries vs. State Of U.P. And Others

Case citation: 2024 LiveLaw (AB) 14

The Allahabad High Court has held that once the registration of the assesee is cancelled, any notice for proceedings under the Central Goods and Service Tax Act, 2017 shall be served on the address of the assesee. The Court observed that merely uploading notice on the web portal without any intimation to the assesee will vitiate any subsequent action as being bad in law.

Patna High Court

Appellate Authority Cannot Dismiss Appeal For Non-Prosecution Due To Non-Appearance Of Assessee Or Authorized Representative: Patna High Court

Case Title: M/s Nav Nirman Construction vs The Union of India & Ors

LL Citation: 2024 LiveLaw (Pat) 4

The Patna High Court has observed that the appellate authority is not empowered to dismiss the appeal for non-prosecution due to the non-appearance of the Assessee or authorized representative as the appellate authority has a duty and obligation to take into consideration the merits of the matter, examine the grounds raised by the appellant even if the appellant or authorized representative presence is not recorded; and decide the issue on merits.

'No Reason To Interfere With The Levy Of Tax On The Sale Of 'Korai'': Patna High Court

Case Title: M/s Raj Kumar Sao Kishori Lal Sao vs The State Of Bihar & Ors

LL Citation: 2024 LiveLaw (Pat) 7

In a recent ruling, the Patna High Court has upheld the imposition of tax on the sale of 'Korai,' a processed by-product used as cattle feed.

Gauhati High Court

Industrial Units Can't Be Discriminated For Budgetary Support-Based Turnover: Gauhati High Court

Case Title: Shree Balaji Enterprise v. Union of India & Ors. and Other connected matters

Citation: 2024 LiveLaw (Gau) 3

The Gauhati High Court recently held that the exclusion of industrial units who were eligible to avail benefits under the NEIIPP, on the classification that they did not pay Central Excise Duty either because their annual turnovers were below the threshold limit of 1.5 crores or that they had produced items which were already exempted, cannot be permitted to be a ground to deny the benefits of budgetary support scheme.

ITAT

Information Found In Pen Drive/Laptop Of Employees Can't Be Considered As Credible Evidence Without Corroborative Evidence: ITAT

Case Title: Padmashree Dr. D.Y. Patil University Versus DCIT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the information found in the pen drive or laptop of employees cannot be considered credible evidence unless it has been corroborated with any other evidence.

ITAT Deletes Addition Of Unexplained Investment In Stock Valuation Difference

Case Title: Ethiraj Hotel Mart Versus DCIT

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition of unexplained investment in stock as a difference in the valuation of stock.

CESTAT

CESTAT Orders Absolute Confiscation Of Gold Smuggled Without Payment Of Customs Duty

Case Title: Rakesh Luthra Versus Commissioner of Customs

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ordered the absolute confiscation of gold smuggled without the payment of customs duty.

ONGC Not Liable To Pay Service Tax On Consideration For Right To Use Natural Resources: CESTAT

Case Title: M/s.Oil and Natural Gas Corporation Ltd. Versus The Commissioner of GST& Central Excise

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Oil and Natural Gas Corporation Ltd. (ONGC) is not liable to pay service tax on consideration for the right to use natural resources.

Make My Trip, A Facilitator Between Hotel And Customer, Entitled To Claim Benefit Of Abatement Notifications: CESTAT

Case Title: M/s Make My Trip (India) Private Limited Versus Additional Director General, Directorate General of GST Intelligence

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that Make My Trip acted as a facilitator between hotel and customer for short-term accommodation service.