Tax Weekly Round-Up [16th December - 22nd December 2024]

SUPREME COURT Coconut Oil Classifiable As 'Edible Oil' For Central Excise Tariff; If Sold As Cosmetic, Taxable As 'Hair Oil' : Supreme Court Case : Commissioner of Central Excise, Salem v. M/s Madhan Agro Industries (Pvt) Ltd Case no.: CIVIL APPEAL NO. 1766 OF 2009 The Supreme Court has held that pure coconut oil, packaged and sold in small quantities ranging from 5 ml to 2 litres, would be classifiable as 'Edible oil' for the purposes of the Central Excise Tariff Act, 1985. It...

Notice Issued Against Dead Person Is Invalid; Participation Of Legal Heirs In Proceedings Doesn't Make It Legal: Kerala High Court

The Kerala High Court stated that notice issued against a dead person is invalid and participation of legal heirs of deceased in the proceedings won't make it legal. The Division Bench of Justices A.K. Jayasankaran Nambiar and K.V. Jayakumar observed that “the consent of the parties cannot confer jurisdiction to the assessing authority for initiation of an action which is otherwise illegal and 'non-est'.” In this case, the appellants are the legal heirs of Late assessee who expired...

'Hiring' Of Helicopters By Andaman & Nicobar Admin Not Exigible To Tax Under Central Sales Tax Act: Delhi High Court

The Delhi High Court has held that the supply of helicopters by Pawan Hans Ltd. to the Andaman & Nicobar Islands administration, under an agreement executed in the year 2003, is not exigible to tax under the Central Sales Tax Act, 1956. A division bench of Justices Yashwant Varma and Ravinder Dudeja reasoned that the agreement did not qualify as a 'sale' between the parties. It noted that while Pawan Hans (appellant) was obliged to place a helicopter at the service of the A&N...

Orders Issued U/S 73 Of CGST Act Must Carry Digital Or Physical Signature Of Officer In Order To Be Treated As Valid: Kerala High Court

The Kerala High Court stated that orders issued under Section 73 of the CGST/SGST Acts must carry the digital or manual signature of the officer passing the order in order to treat the order to be a valid order. The Bench of Justice Gopinath P. was considering the issue that whether orders issued under Section 73 of the CGST/SGST Acts must carry the digital or manual signature of the officer passing the order in order to treat the order to be a valid order for the purposes of the...

Assessment Pending Prior To Resolution Cannot Be Quantified After Approval Of Resolution Plan: Allahabad High Court

The Allahabad High Court has held that the resolution applicant cannot be burdened with new claims after approval of a resolution plan. The bench comprising Justice Shekhar B. Saraf and Justice Vipin Chandra Dixit held that the principle underlying the Insolvency and Bankruptcy Code, 2016 is to give a fresh start to the successful resolution applicant. It held that any action obstructing the aforementioned principle is illegal and beyond the 'Lakshman Rekha' of the Code. “The...

Mistake Committed By Assessee Was Inadvertent & Technical; No Wrongful Availment Of ITC: Kerala High Court Quashes Demand Order

The Kerala High Court while quashing the demand order stated that there has been no wrong availment of credit, and that the only mistake committed by the assessee was an inadvertent and technical one, where he had omitted to mention the IGST figures separately in Form GSTR 3B. The Division Bench of Justices A.K. Jayasankaran Nambiar and K.V. Jayakumar observed that “……The mistake was also insignificant because it is not in dispute that there was no outward supply attracting IGST that...

GST | Delhi HC Orders Refund Of Service Tax Paid On Ocean Freight, Cites Gujarat HC Judgment Declaring It Unconstitutional

The Delhi High Court on Thursday ordered the GST Department to refund the service tax paid by certain importers on ocean freight (transportation of goods by vessel). In doing so, a division bench Justices Yashwant Varma and Dharmesh Sharma cited the Gujarat High Court's judgment in M/s Sal Steel Ltd. & Anr. vs. Union of India (2019) where it was declared that levy of service tax on ocean freight is unconstitutional. The Gujarat High Court had rendered the decision in connection...

DTAA | Foreign Company Providing Software To Its Agents In India Doesn't Mean It Has 'Permanent Establishment' In India: Delhi HC

The Delhi High Court has held that 'software' being an intangible property, cannot alone constitute 'Permanent Establishment' (PE) of a foreign entity in India. PE is defined under Article 5 of the Double Taxation Avoidance Agreement (DTAA) between India and the United States of America as- a fixed place of business through which businesses of an enterprise are wholly or partly carried on. A foreign entity's PE in India would exigible to tax. Some examples of fixed places are given...

[Taxation Law] Market Research, Promotional Activities, Training Or Deployment Of Software Are 'Auxiliary Functions' Under DTAA: Delhi HC

The Delhi High Court has reiterated that “activities such as market research, promotional activities, training or deployment of software would clearly not breach the threshold of auxiliary functions as are envisaged under the DTAA.” Double Taxation Avoidance Agreement (DTAA) was signed between India and the US to prevent International Double Taxation and encourage international trade. Determination of core or auxiliary activity is a relevant factor to ascertain whether a unit of a...

Person Arrested U/S 69 CGST Act Must Be Communicated Grounds Of Arrest 'In Writing': Delhi High Court

The Delhi High Court has held that grounds of arrest must be furnished to a person arrested under Section 69 of the Central Goods and Services Tax Act, 2017, 'in writing'.Justice Anish Dayal held that the Supreme Court's judgments in Pankaj Bansal and Arvind Kejriwal with respect to offence under PMLA and in Prabir Purkayastha with respect to offences under UAPA will also apply to offences under the CGST Act.“It is evident from the principles as enunciated by the Supreme Court that the...

There Cannot Be 'Disconnect' Between Reasons For Initiating Reassessment U/S 147 Of IT Act & Grounds On Which Final Order Is Passed: Delhi HC

The Delhi High Court has held that only 'original reasons' which formed the basis for initiating reassessment proceedings under Section 147 of the Income Tax Act can be taken into consideration by the Assessing Officer, for coming to the conclusion that income had escaped assessment. A division bench of Justice Yashwant Varma Hon'ble Mr. Justice Dharmesh Sharma observed that there cannot be a 'disconnect' between the reasons which had been originally recorded for initiation of ...

S.68 IT Act | Whether Assessee Discharged Burden To Substantiate Identity & Genuineness Of Share Application Money Is 'Question Of Fact', Not Law: Gauhati HC

The Gauhati High Court refused to entertain an appeal with respect to genuineness of credit received by an assessee from share application money, holding that the same would require it to venture into factual matrix of the case which is beyond its jurisdiction under Section 260A of the Income Tax Act, 1961. The appeal was preferred by the Revenue, following CIT(A) reversing the additions made by it on the strength of alleged share application money received by the Assessee. Its second...