Tax
CESTAT Chandigarh Sets Aside Penalties On DLF Projects For Service Tax Dispute Over Ongoing Projects
On 21 August, the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a taxpayer's bona fide belief on the applicability of a service tax valuation scheme to ongoing projects can constitute reasonable cause for non-payment of differential tax, warranting waiver of penalties. Judicial Member S.S. Garg and Technical Member P. Anjani Kumar set aside the penalties imposed on DLF Projects Ltd. under Sections 76 and 77 of the Finance Act, 1994, while...
Karnataka High Court Upholds Entry Tax Levy On Hydraulic Oil Dismisses Wipro's Challenge
The Karnataka High Court on 11 August dismissed seven revision petitions filed by Wipro Enterprises Pvt. Ltd. challenging the levy of entry tax on Hydraulic Oil brought into Karnataka for use in the manufacture of Hydraulic Cylinders. A Division Bench comprising Justices S.G. Pandit and K. Manmadha Rao upheld the Karnataka Appellate Tribunal's orders sustaining the levy under the Karnataka Tax on Entry of Goods Act, 1979 (KTEG Act). The judges held: “..the questions as to whether Hydraulic Oil...
GST Authorities Must Sell Seized Goods After Due Notice If Owner Does Not Appeal: Karnataka High Court
The Karnataka High Court held that Goods and Services Tax authorities must proceed with the sale of seized goods under Section 129(6) of the Central Goods and Services Tax Act, 2017 and Karnataka State Goods and Services Tax Act, 2017 after issuing due notice if the owner of the goods does not avail the available appellate remedy. Justice B.M. Shyam Prasad disposed of a writ petition filed by TPJ Carriers, a transporter, and directed the State GST authorities to bring the seized goods to sale...
Six-Month Limit Does Not Apply To Currency Seized As Evidence Under Customs Act: Madras High Court
The Madras High Court on 10 August held that the six-month time limit under Section 110(2) of the Customs Act, 1962 for issuing a show-cause notice does not apply to Indian currency treated as a “thing” under Section 110(3) when Customs officers retain it as material evidence during an investigation. A Division Bench of Justices G. Jayachandran and N. Mala allowed a writ appeal filed by the Principal Commissioner of Customs against an order directing the release of Rs. 21.55 lakh recovered from...
AO Can't Reopen Scrutinised Issue On Mere Change Of Opinion Without Tangible Material: Gujarat High Court
The Gujarat High Court on 19 August held that an Assessing Officer (AO) cannot reopen an assessment on an issue already specifically examined during the original scrutiny merely on a change of opinion, unless fresh tangible material shows that income had escaped assessment because of suppression of material facts. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati allowed a writ petition filed by Loonchand Dhanraj HUF and quashed the reassessment proceedings initiated through a...
Stamp Duty Cannot Be Levied On Final Conveyance If Documents Form One Transaction: Bombay High Court
The Bombay High Court on 20 August held that where several agreements and a subsequent conveyance form part of one continuous property transaction, stamp authorities cannot treat the final conveyance as a fresh transaction and levy stamp duty again merely because the documents bear different names. Justice Amit Borkar quashed the demand of Rs. 2.60 crore raised against Kumar Housing Corporation Private Limited towards alleged deficit stamp duty, along with the consequential penalty and other...
Service Tax Refund On Advance Cannot Be Time-Barred After Contract Termination: CESTAT Kolkata
On 20 August, the Kolkata Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that service tax paid on an advance is refundable where the contract is subsequently terminated without any service being provided, and that the limitation period under Section 11B of the Central Excise Act, 1944 does not apply to such a refund claim. A Bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan passed the ruling while allowing an appeal filed by Sry Real Estate Private...
Gujarat High Court Quashes GST Orders Based On AI-Generated Non-Existent Case Laws
The Gujarat High Court on 20 August quashed GST cancellation and appellate proceedings against Faiz Enterprise after finding that the State Tax Officer had relied exclusively on AI-generated case laws, including non-existent and irrelevant authorities. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati held that adjudication proceedings cannot be sustained where an authority relies on unverified AI-generated case laws instead of independently applying its mind to the...
NIL Value Invoices Can't Disguise Overburden Disposal As Sale To Avoid Service Tax: CESTAT New Delhi
On 20 August, the New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that lifting and disposal of mining overburden cannot be treated as a sale merely because invoices were issued, where the transaction involved no sale price or consideration. Judicial Member Binu Tamta and Technical Member P.V. Subba Rao found that the arrangement between Northern Core Drilling Pvt. Ltd. and Jindal Saw Ltd. (JSL) involved the provision of a taxable service, upheld the...
1% Construction Cess Only On Actual Construction Cost, Not Entire Contract Value: Kerala High Court
The Kerala High Court on 19 August held that 1% cess under the Building and Other Construction Workers Welfare Cess Act, 1996 can be levied only on the portion of a composite works contract attributable to the actual “cost of construction” and not on the entire contract value. A Division Bench comprising Chief Justice Soumen Sen and Justice Syam Kumar V.M. passed the ruling while disposing of a batch of 18 writ appeals filed by Class A registered work contractors of the Kerala Water Authority...
Kerala High Court Denies AVT McCormick's ₹49.54 Lakh Refund Claim Over Transitional ITC
The Kerala High Court on 20 August held that a claim for refund of transitional input tax credit can be allowed only if the taxpayer establishes that the disputed credit stood in its Electronic Credit Ledger as on 1 July 2017. Justice Johnson John dismissed AVT McCormick Ingredients Pvt. Ltd.'s writ petition challenging the assessment order passed by the Assistant Commissioner of Central Tax and Central Excise, which had rejected its claim for refund of Rs. 49.54 lakh. He observed: "...As per...
CENVAT Credit On Rent-a-Cab Catering Photography Cannot Be Denied For Lack Of Nexus: CESTAT Bangalore
The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 20 August held that CENVAT credit cannot be denied on Rent-a-Cab, Outdoor Catering, Event Management, Cleaning and Photography services merely because they have no nexus with the output services. A Bench comprising Technical Member R. Bhagya Devi partly allowed the appeal filed by Texas Instruments (India) Pvt. Ltd., holding that credit on these services was allowable, while remanding other issues for...