Single Partner In A Firm Cannot Invoke Arbitration Without Explicit Authority From Other Partners: Kerala High Court

The Kerala High Court has held that one partner of a partnership firm cannot, without explicit authorisation from the other partners, invoke an arbitration clause or seek appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996.Justice S. Manu, delivered the judgment in an arbitration request.The arbitration request was filed by a partner of M/s P K Chandrasekharan Nair and Co., a partnership firm, which was operating a retail outlet of petroleum products of...

Income Tax Act | SBI Not 'Assessee In Default' U/S 201 For Not Deducting TDS While Obeying Court's Interim Order: Kerala High Court

The Kerala High Court has held that the State Bank of India (SBI) cannot be treated as an 'assessee in default' under Section 201 of the Income Tax Act for not deducting Tax Deducted at Source (TDS) on Leave Travel Concession (LTC) payments, as it was bound by an interim order which prohibited such deduction. Justices A. Muhamed Mustaque and Harisankar V. Menon examined whether the SBI, having been restrained by an interim order of the High Court from deducting TDS, could be held to be...

Assessee Missed Hearing Due To Faulty VC Link & Hearing Email Sent At 3AM: Kerala High Court Quashes CIT(A) Order

The Kerala High Court has set aside an order passed by the Commissioner of Income Tax (Appeals) after finding that the assessee missed the hearing due to the non-functional video-conference link (VC link) and because the hearing link was emailed at an odd hour, i.e., at 3:13 a.m. CDT (Central Daylight Time) while he was in the U.S. Justice Ziyad Rahman A.A. stated that the assessee could not utilise the opportunities for reasons beyond his control. Therefore, the assessee can be...

Affidavit Of Cost Accountant In Personal Hearing Cannot Be Ignored When Facts Are Admitted By State Tax Officer: Kerala High Court

The Kerala High Court has held that an affidavit by professionals, such as a cost accountant, given during a personal hearing, cannot be ignored, especially when a state tax officer admits facts referred therein. Justice Ziyad Rahman A.A. stated that when a professional swears an affidavit before this Court, highlighting the matters that transpired during the course of the hearing, the same cannot be simply ignored, particularly in a situation where, to some extent, there is an...

KVAT Act | Permission For Compounding Tax Cannot Be Cancelled For Suppression; Only Suppressed Turnover Can Be Taxed: Kerala High Court

The Kerala High Court has held that under the KVAT Act (Kerala Value Added Tax Act, 2003), the assessing authority cannot cancel permission to pay tax at compounding rates for suppression in the same year it was opted, and only the suppressed turnover can be taxed at normal rates. Justice M.A. Abdul Hakhim opined that cancellation proceedings are still pending, and the cancellation is not carried out, and the assessment is not concluded on a best judgment assessment basis. In such a...

Cancelled GST Registration Cannot Be Restored Solely To Claim ITC Benefit U/S 16(6) CGST Act: Kerala High Court

The Kerala High Court has held that a cancelled GST registration cannot be restored solely to claim the ITC (Input Tax Credit) benefit under Section 16(6) CGST Act (Central Goods and Services Tax Act, 2017). Section 16(6) of the Central Goods and Services Tax Act, 2017, enables the taxpayer to claim the input tax credit available in the ledger, in case the order cancelling the registration is revoked by any order, either under Section 30 or pursuant to any order made by the appellate...

Contractor Can Claim Increased GST During Work, Even If Bills Were Paid Before Rates Increased: Kerala High Court

The Kerala High Court has held that a contractor can claim increased GST (Goods and Services Tax) during work, even if bills were paid before the rate increase. Justice Ziyad Rahman A.A. opined that at the time of execution of the contract, the rate was only 5% and the increase took place during the execution of the work. Thus, the assessee is entitled to a differential amount of tax. In this case, the assessee/petitioner is a partnership firm and is engaged in the construction...

Kerala High Court Directs GST Department To Ensure No Tax Evasion In Frozen Chicken Sale

Disposing of a writ petition alleging that frozen chicken was being sold at 0% GST instead of the applicable 5%, the Kerala High Court recently directed the GST department to ensure that no tax evasion takes place. Justice Ziyad Rahman A.A. also noted that the State GST Department was already investigating the matter. Hence, the Court disposed of the writ petition filed by the petitioner, who is a chicken meat dealer, who alleged that tax evasion was taking place in the sale of...

Income Tax Act | Co-operative Societies Not Engaged In Banking Not Entitled To TDS Exemption U/S 194A(3)(iii): Kerala High Court

The Kerala High Court has held that co-operative societies not engaged in banking are not entitled to TDS (Tax Deducted at Source) exemption under section 194A (3)(iii) of the Income Tax Act. Section 194A(3) of the Income Tax Act, 1961 provides exemptions from TDS on interest for certain persons or institutions. Justice Ziyad Rahman A.A. was dealing with a petition challenging the Constitutional validity of the proviso to section 194A(3) of the Income Tax Act, 1961, which imposed...

DRAT Need Not Mandate 50% Of Debt Due As Pre-Deposit To Entertain Appeals, Must Consider Subject Matter: Kerala High Court

The Kerala High Court recently held that there is no mandate under law that the pre-deposit amount should always be 50% of the debt due, while entertaining appeals under Section 18 SARFAESI [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest] Act, challenging the order of the Debts Recovery Tribunal.It clarified that the Debt Recovery Appellate Tribunal (DRAT), while determining the amount to be deposited, shall take into consideration the subject matter...

Arbitration Agreement Is Valid Even Without Signature If Parties Acted Upon It: Kerala High Court

The Kerala High Court held that written agreement need not to be signed by the parties if the consensus ad idem and intention to arbitrate is reflected from the conduct of the parties and documentary evidence. Justice S. Manu allowed the application seeking reference to arbitration holding that an arbitration agreement in writing may exist even without signatures provided there is a clear evidence that both parties acted upon it. Sigmatic Nidhi Ltd had advanced loans to the...

Disclosure Of Income & Payment Of Income Tax Do Not Bar Proceedings Under Benami Transactions Act: Kerala High Court

The Kerala High Court has held that disclosure of income and payment of tax under the Income Tax Act, 1961, does not preclude initiation of proceedings under the Prohibition of Benami Property Transactions Act, 1988. Justice Ziyad Rahman A.A. agreed with the department that the fact that the assessees have disclosed the income in the return and the same was proceeded against under the provisions of the Income Tax Act, by itself, cannot be a reason to interfere with the proceedings...