Tax Cases Weekly Round-Up: 8 To 14 October, 2023
Mariya Paliwala
15 Oct 2023 6:15 PM IST
Supreme Court Customs Duty - Undervaluation Must Be Proved By Evidence Of Prices Of Contemporaneous Imports; Else Benefit Of Doubt Goes To Importer : Supreme Court Case Title: Commissioner of Customs (Imports), Mumbai v. M/s Ganpati Overseas Citation : 2023 LiveLaw (SC) 864 The Supreme Court has recently highlighted that the transaction value (the price actually paid...
Supreme Court
Customs Duty - Undervaluation Must Be Proved By Evidence Of Prices Of Contemporaneous Imports; Else Benefit Of Doubt Goes To Importer : Supreme Court
Case Title: Commissioner of Customs (Imports), Mumbai v. M/s Ganpati Overseas
Citation : 2023 LiveLaw (SC) 864
The Supreme Court has recently highlighted that the transaction value (the price actually paid or payable for the goods) should be the primary basis for customs valuation and that other valuation methods be invoked sequentially only when there is evidence to doubt the correctness of the declared transaction value.
Services Provided to IIT & NIT Exempt From Service Tax: Supreme Court Holds After Interpreting 'Or' & Semicolon In Exemption Notification
Case Title : Commissioner, Customs Central Excise and Service Tax, Patna v. M/s Shapoorji Pallonji and Company Pvt Ltd; Union of India v.M/s Shapoorji Pallonji and Company Pvt Ltd
Citation : 2023 LiveLaw (SC) 885
In an interesting judgment, the Supreme Court held that the Indian Institute of Technology and the National Institute of Technology will come under the Mega Service Tax Exemption Notification issued by the Department of Revenue in 2012(and amended and clarified by a subsequent notification issued in 2014).
Delhi High Court
Travelling Expenses Incurred By Directors For Business Purposes And Not Personal, Delhi High Court Allows Travel Expenses
Case Title: PCIT Versus M/S. Azure Retreat Pvt Ltd
The Delhi High Court has held that the travelling expenses were incurred by the directors for business purposes of the company.
Delhi High Court Quashes Order Exempting Indian Trade Promotion Org. From Entertainment Tax On Trade Fairs
Case Title: Govt. Of NCT Of Delhi & Ors. Versus M/S Indian Trade Promotion Org. & Ors
The Delhi High Court has quashed the order of the Financial Commissioner exempting the Indian Trade Promotion Organization from entertainment tax on trade fairs.
Statutory Appeal Period Under Customs Act, Appellate Authority Has No Power To Condone Delay: Delhi High Court
Case Title: Shambhu Synthetics Pvt. Ltd Versus Commissioner Of Customs
The Delhi High Court has held that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days.
Delhi High Court Allows Deduction To Hyatt Regency Towards Repair, Renovation, Refurbishment, Consultancy Expenses As Revenue Expenditure
Case Title: M/S Asian Hotels Ltd. Versus CIT
The Delhi High Court has allowed the income tax deduction to Hyatt Regency towards repair, renovation, refurbishment, and consultancy expenses as revenue expenditure.
Active Involvement In Customs Duty Evasion: Delhi High Court Dismisses Plea Seekings Directions For Pre-Deposit Waiver
Case Title: Ajay Sagar Versus Principal Commissioner Of Customs (Import)
The Delhi High Court, while dismissing the petition seeking directions for waiver of the pre-deposit requirement as placed in terms of Section 129E of the Customs Act, 1962, noted that the case of the petitioner does not fall under the category of rare and exceptional cases.
Madras High Court
Dept. Failed To Produce New Or Tangible Information To Justify The Reopening Of Assessment Against IDFC: Madras High Court
Case No.: IDFC Limited Versus The Deputy Commissioner of Income Tax
The Madras High Court has quashed the reassessment proceedings against the IDFC as the department failed to produce any new or tangible information to justify the reopening of the assessment.
Jharkhand High Court
Wrong Collection Of TCS On Purchase Of Coal For Generation Of Power: Jharkhand High Court Directs Refund
Case Title: Adhunik Power & Natural Resources Ltd. Versus Central Coalfields Limited
The Jharkhand High Court has directed the Tax Collected as Source (TCS) refund wrongfully collected despite verifying purchase of coal was used for generation of power.
Wrong Collection Of TCS On Purchase Of Coal For Generation Of Power: Jharkhand High Court Directs Refund
Case Title: Adhunik Power & Natural Resources Ltd. Versus Central Coalfields Limited
Citation: 2023 Livelaw (Jha) 59
The Jharkhand High Court has directed the Tax Collected as Source (TCS) refund wrongfully collected despite verifying purchase of coal was used for the generation of power.
Calcutta High Court
Calcutta High Court Upholds Constitutional Validity Of Explanation to Section 10AA(1) Inserted By Finance Act 2017
Case Title: IFGL Refractories Ltd. & Anr. Versus Union of India & Ors.
The Calcutta High Court has upheld the constitutional validity of the explanation to Section 10AA(1) of the Income Tax Act inserted by the Finance Act 2017.
Kerala High Court
Difficulties Faced On Initial Phase Of GST Implementation, Kerala High Court Sets Aside Disallowance Of ITC
Citation: 2023 LiveLaw (Ker) 548
Case title: Anaz Abdul Rahiman Kutty v State Tax Officer
The Kerala High Court recently addressed the difficulties faced by small scale dealers during the initial phases of GST implementation in understanding the provisions of GST Act.
Allahabad High Court
‘Reasons Are Heart And Soul Of Any Judicial And Administrative Order’: Allahabad HC Quashes Unreasoned Order Of GST Registration Cancellation
Case Title: M/S World Solution vs. State Of U.P. And 2 Others [WRIT TAX No. - 931 of 2023]
Case Citation: 2023 LiveLaw (AB) 368
While setting aside order cancelling GST registration of assesee on grounds that it was unreasoned, the Allahabad High Court has held that ‘reasons are heart and soul’ of any order. In absence of reasons assigned, the order is vitiated in law.
Bakery Shortening And Vanaspati Are As Same: Allahabad High Court Applies Common Parlance Test
Case Title: The Commissioner vs. Adani Wilmar [Sales/Trade Tax Revision No. - 100 Of 2023]
Case Citation: 2023 LiveLaw (AB) 370
The Allahabad High Court has applied the Common Parlance Test and held that bakery shortening and vanaspati are the same.
Burden To Prove Concession Rightly Claimed Upon Assesee In Original Proceedings, Burden Shifts Upon Department In Reassessment Proceedings: Allahabad High Court
Case Title: M/S Amrit Steels v. Commissioner Commercial Tax
Case Citation: 2023 LiveLaw (AB) 371
The Allahabad High Court has recently held that the burden to prove that concession has been rightly claimed is upon the assesee in the original proceedings. However, the Court held that in reassessment proceedings, burden shifts upon the Department to prove that assesee had wrongly claimed concession.
Intent To Evade Tax Sine Qua Non For Initiation Of Proceedings U/S 129 And 130 Of CGST Act: Allahabad High Court
Case Title: M/S Shyam Sel And Power Limited vs. State Of U.P. And 2 Others
Case Citation: 2023 LiveLaw (AB) 374
The Allahabad High Court has held that it is necessary for the authorities to establish intention to evade tax for proceedings under Sections 129 and 130 of Central Goods and Service Tax Act, 2017. The Court held that without recording a finding a as to intention to evade tax, proceedings can at best be initiated under Section 122 of the Act.
Income Tax Act | Alternate Remedy Available, Orders Are Appealable, Writ Jurisdiction Need Not Be Invoked, Allahabad High Court
Case Title: Vivek Saran Agarwal vs. Union Of India And 3 Others
Case Citation: 2023 LiveLaw (AB) 376
The Allahabad High Court has refused to quash order and consequential notice under Sections 147 and 148 of the Income Tax Act, 1961 in writ proceedings under Article 226 of the Constitution of India. The Court held that all permissible grounds of defence remain open to assessee at the stage of proceedings under Section 148.
GST Act | No Provision To Disclose Route Of Transportation Of Goods: Allahabad High Court Quashes Demand
Case Title: M/S Om Prakash Kuldeep Kumar v. Additional Commissioner Grade-2 And Another
Case Citation: 2023 LiveLaw (AB) 378
The Allahabad High Court has held that unlike the Value Added Tax Act, 2008, there is no specific provision in the Goods and Service Tax Act, 2017 which requires assesses to declare route of transportation/ transit of goods. Therefore, goods cannot be detained for not being transported through the regular route.
Allahabad High Court Sets Aside Non-Speaking Order Cancelling GST Registration, Says Reason Is 'Heart Beat' Of Every Conclusion
Case Title: M/S Namo Narayan Singh vs. State Of U.P. And 2 Others Citation: 2023 LiveLaw (AB) 380
The Allahabad High Court has held that any order devoid of reasons will become lifeless as reasons are the heartbeat of every order.
Rajasthan High Court
‘Kurkure’ And ‘Cheetos’ Classifiable As ‘Namkeen’, Not ‘Snacks’ Under VAT Act: Rajasthan High Court
Case Title: Ms Pepsico India Holdings Private Ltd. Versus Assistant Commissioner
The Rajasthan High Court has held that ‘Kurkure’ and ‘Cheetos’ are classifiable as ‘namkeen’, not 'snacks' under the VAT Act.
ITAT
No Basis Of Allocation Or Actual Cost Incurred For Affiliates: ITAT Confirms Additions For Cost Reimbursement As FTS
Case Title: Kraft Foods Group Brands Versus ACIT (International Taxation)
The Mumbai Bench of Income Tax Appellate Tribunal, while confirming the additions for cost reimbursement as fees for technical services (FTS), noted that the assessee had no basis of allocation or actual cost incurred for affiliates.
Tax Not Payable On Interest Accrued On FD Which Is Subject To CBI’s Prohibitory Order: ITAT
Case Title: M/s. Bellary Iron-Ores Pvt. Ltd. Versus ITO
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that tax is not payable on interest accrued on FD, which is subject to the CBI’s prohibitory order.
Income Received By UK Telecom Company From Indian Telecom Company For Rendering Roaming Services To Customers Abroad Is Not ‘Royalty’: ITAT
Case Title: M/s. Telefonica UK Limited Versus DCIT
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that income received by a UK telecom company from an Indian telecom company for rendering roaming services to customers abroad is not ‘royalty’.
CESTAT
Activity Of Fitting Power Lens Into Spectacle Frames Does Not Amount To Manufacture, Excise Duty Demand Not Sustainable: CESTAT
Case Title: M/s. Medical Research Foundation Versus The Commissioner of GST & Central Excise
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the activity of fitting power lenses into frames does not amount to manufacture, and the demand for excise duty is not sustainable.
Tax Claims Of The Govt. Extinguishes Post Approval Of Resolution Plan By NCLT: CESTAT
Case Title: Icomm Tele Ltd Versus Commissioner of Central Tax Puducherry - GST
The Hyderabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that all claims prior to the National Company Law Tribunal (NCLT) approval date of government authorities in relation to all taxes for which the appellant was liable to pay shall stand extinguished on the approval date.
No Service Tax Payable On Supply Of Water And Electricity To The Tenants: CESTAT
Case Title: GMR Hyderabad International Airport Ltd Versus Commissioner of Central Excise & Service Tax, Hyderabad - IV
The Hyderabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT)has held that there is no requirement to discharge any service tax on the supply of water and electricity to their concessionaires or tenants, who were paying for these two utility services on an actual basis plus a markup of 10%.
Recipient Of GTA Services Not Liable To Pay Service Tax Which Was Already Paid By Transport Agency: CESTAT
Case Title: Dhariwal Industries Limited Versus C.C.E. & C.-Anand
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that recipients of goods transport agency (GTA) services are not liable to pay service tax that was already paid by the transport agency.
Pollution Control Services Of Factory Are Input Services, Eligible For Cenvat Credit: CESTAT
Case Title: Solvay Specialities India Pvt Ltd Versus C.C.E. & S.T.-Surat-ii
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that services that are in relation to pollution control in the factory are input services in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 and hence are eligible for Cenvat credit.
CENVAT Credit Availed On ‘Banking And Financial Services’ Used In Providing Renting Of Immovable Property Service Is Admissible: CESTAT
Case Title: Bangalore Housing Development & Investments versus Commissioner of Central Tax, Bangalore North
The Banglore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that CENVAT credit availed on ‘banking and financial services’ used in providing renting of immovable property is admissible.
