Tax Cases Weekly Round-Up: 23 April To 29 April, 2023

Bombay High Court Goa Value Added Tax (12th Amendment) Act, 2020 Defies The Doctrine Of Separation Of Powers: Bombay High Court Case Title: Rohan Lobo Versus State Of Goa The Bombay High Court has held that the Goa Value Added Tax (12th Amendment) Act, 2020, is an impermissible judicial override defying the doctrine of separation of powers. Material Triggering Reassessment Must Be Furnished To The Assessee: Bombay High Court Case Title: Anurag Gupta Versus ITO The...

ITAT Directs AO To Charge 6.5% Gross Profit Rate On Bogus Purchases

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has directed the AO to charge a 6.5% gross profit rate on bogus purchases.The bench of Kuldip Singh (Judicial Member) and Gagan Goyal (Accountant Member) has observed that the entire addition has been made by the AO as well as CIT (A) on the basis of guesswork and estimation on the basis of some alleged information received from the Sales Tax Department of Maharashtra and from DGIT (Inv.), Mumbai.The assessee is an individual running a...

Profile Of An Assessing Authority Can’t Be Stern And Unreasonable, Programmed Solely To Collect Tax: Kerala High Court

The Kerala High Court has held that the profile of an assessing authority can no longer be that of a stern and unreasonable automaton that is programmed solely to collect the tax."We have come across assessing authorities passing orders in a mechanical manner without showing how the taxable event is attracted in a given case or without giving reasons for denying the claim of an assessee for exemption or deduction, and we deem it appropriate to observe that in matters of assessment under a taxing...

Supreme Court Upholds Requirement Of ‘Pre-Import Condition’ To Claim IGST And GST Compensation Cess On Imports Made Under ‘Advance Authorization’

The Supreme Court has upheld the requirement of ‘pre-import condition’ incorporated in the Foreign Trade Policy of 2015-2020 (FTP) and Handbook of Procedures 2015-2020 (HBP) to claim exemption of Integrated Goods and Services Tax (IGST) and GST Compensation Cess on inputs imported into India for manufacture of export goods, on the basis of ‘Advance Authorization’.The bench comprising Justices S. Ravindra Bhat and Dipankar Datta set aside the judgment of the Gujarat High Court where it had...

Section 16-B Of Himachal Pradesh General Sales Tax Act Is Not Ultra Vires Any Provision Of Law: Supreme Court Reiterates

The Supreme Court has ruled that Section 16-B of the Himachal Pradesh General Sales Tax Act, 1968 (HPGST Act) is not ultra vires any provision of law. The bench comprising Justices S. Ravindra Bhat and Dipankar Datta set aside the judgment of the Himachal Pradesh High Court where it had held that Section 16-B of the HPGST Act was inconsistent with Section 35 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and was ultra...

Company Or Its Directors Not Liable To Pay Excise Duty If Job Workers Are Independent Contractors/Manufacturers: CESTAT

The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that a company or its directors are not liable to pay excise duty if the job workers of the assessee company were independent contractors or manufacturers.The bench of P. K. Choudhury (Judicial Member) and K. Anpazhakan (Technical Member) have observed that if the job workers are proven to be independent contractors with little or no supervision by the assessee, then they are the manufacturers and the...

Higher Price Not Charged Than The Price Re-Fixed On The Rejected Footwear: CESTAT Quashes Excise Duty Demand Against Bata

The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the concessional rate of excise duty to Bata as there was no allegation against Bata that it has charged a higher price than the price re-fixed on the rejected footwear.The bench of P.K. Choudhary (Judicial Member) and Rajeev Tandon (Technical Member) observed that the stickers were put on the rejected footwear after the completion of manufacture and there is no allegation against the appellant that they...

Order Prescribing Conditions Of Provisional Release Is Too Harsh: CESTAT Directs Release Seized Goods

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the order prescribing conditions of provisional release was too harsh and the assessee has already paid duty amounting to Rs. 1,18,94,536.The bench of Dr. Suvendu Kumar Pati (Judicial Member) and Sanjiv Srivastava (Technical Member) modified the conditions in the order of provisional release, stating that used equipment (capital goods) imported by the appellant and seized under seizure memo no....

Entitlement Of ITC After Cancellation Of GST Registration Can Be Considered During Revocation: Rajasthan High Court

The Rajasthan High Court has held that the assessee is entitled to lodge an ITC claim when the department considers the issue of revocation of GST registration cancellation.The bench of Justice Vijay Bishnoi and Justice Praveer Bhatnagar has directed the firm to file an application for restoration of its GST registration before the competent authority, which shall consider and decide the application filed by the petitioner-firm in the light of the notification dated March 31, 2023, issued by the...

Material Triggering Reassessment Must Be Furnished To The Assessee: Bombay High Court

The Bombay High Court has held that providing information to the assessee without furnishing the material based upon which the information is provided would render an assessee handicapped in submitting an effective reply to the show cause notice.The bench of Justice Dhiraj Singh Thakur and Justice Valmiki Sa Menezes has observed that the reassessment proceedings initiated are unsustainable on the ground of violation of the procedure prescribed under Section 148A(b) on account of the failure of...

Tax Deposited During Search Can't Be Retained By Department Till Adjudication Of Notice: Punjab and Haryana High Court

The Punjab and Haryana High Court has held that deposits of tax during searches cannot be retained by the department until the adjudication of the notice.The bench of Justice Ritu Bahri and Justice Kuldeep Tiwari has directed the department to return the amount of Rs. 2.54 crores to the petitioner along with simple interest at the rate of 6% per annum from the date of deposit until the payment is made.The officials of the department/respondents searched the factory premises of the...

Functionality For Bank Account Validation Is Now Integrated With The GST System: GSTN

The Goods and Service Tax Network (GSTN) has issued an advisory on bank account validation.The functionality for bank account validation is now integrated with the GST system.The feature is introduced to ensure that the bank accounts provided by the taxpayer are correct.The bank account validation status can be seen under the Dashboard→My Profile→Bank Account Status tab in the FO portal.The taxpayer will also receive the bank account status details via registered email and mobile number...