CESTAT Sets Aside ₹93.75 Lakh Demand Against HCL, Upholds BPO Works Contract Credit Denial

On 1 September, the Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that CENVAT credit cannot be denied merely because input services were received at premises not included in the taxpayer's centralised registration, while upholding denial of credit on works contract services used for construction or setting up of Business Process Outsourcing (BPO) branches. A Bench comprising Judicial Member P.A. Augustian and Technical Member Sanjiv Srivastava partly...

CESTAT Mumbai Sets Aside ₹1.80 Crore SAD Demand Against Emerson Process Management

On 2 September, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai set aside a Special Additional Duty of Customs (SAD) demand of Rs.1,79,95,057 against Emerson Process Management (India) Private Limited for the period from April 2012 to July 2013. A Bench comprising Judicial Member Ajay Sharma and Technical Member M.M. Parthiban held that the extended period of limitation could not be invoked in the absence of suppression of facts or mala fide intention, as the company's...

CESTAT New Delhi Bars Extended Limitation Where RCM Liability Is Revenue-Neutral

On 3 September, the Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observed that the extended period of limitation cannot be invoked where service tax payable under the Reverse Charge Mechanism (RCM) would have been available as CENVAT credit, as such a revenue-neutral situation does not establish an intention to evade tax. A Bench comprising Technical Member P.V. Subba Rao partly allowed an appeal filed by Kaps Advertising, restricting the service tax demand to...

Gujarat High Court Quashes GST Demand Against Deceased Proprietor, Says Legal Heir Must Be Properly Heard

The Gujarat High Court has held that GST proceedings initiated against a deceased taxpayer cannot be sustained when the legal heir was neither made a noticee nor given a meaningful opportunity to respond, quashing proceedings initiated against a proprietor who had died several years earlier. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati allowed a petition filed by Ushaben Kalpeshbhai Patni, the wife of the deceased proprietor, Kalpeshbhai Ramubhai Patni, and quashed...

Customs Cannot Indefinitely Detain Goods Through Panchnama To Reset Limitation: Gujarat High Court

The Gujarat High Court on 25 August held that Customs authorities cannot use a Panchnama to indefinitely restrain goods and later issue a formal seizure order to bypass the time limits under Section 110 of the Customs Act, 1962, ruling that the limitation period starts from the date of detention if the mandatory order under the provision was not passed. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati held that the vehicle belonging to petitioner Pranavbhai Ambalal...

Kerala High Court Sets Aside Income Tax Assessment Treating PG Student's Stipend As Salary

The Kerala High Court on 17 August set aside an income tax assessment order treating the stipend received by a postgraduate medical student as salary, holding that the Assessing Officer failed to consider his claim that stipend paid to a student is exempt from income tax. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji allowed the appeal filed by Nahas Kakkattummal and set aside both the Single Judge's judgment and the assessment order, directing the Assessing Officer...

Madras High Court Upholds GST Authorities' Power To Block Electronic Credit Ledger For Tax Recovery

The Madras High Court on 25 August held that Goods and Services Tax (GST) authorities can block an electronic credit ledger, including through a negative blocking entry, to recover tax dues, even where recovery proceedings arising from the assessment order have been stayed. Justice Senthilkumar Ramamoorthy passed the ruling while disposing of a writ petition filed by Zigma Machinery & Equipment Solutions against the Assistant Commissioner, Coimbatore-I Division. The Bench held: “In...

Future Commercial Use Cannot Determine Stamp Duty Value: Karnataka High Court

Recently, the Karnataka High Court quashed orders demanding differential stamp duty on a 37-acre land parcel in Hassan district, holding that authorities cannot determine the value of land merely on the basis of an alleged intention to use it for resort or commercial purposes, unless such intended use is established through relevant documents.Justice M.G.S. Kamal allowed a writ petition filed by Disthi Vishal Pvt. Ltd. and another, challenging orders passed by the District Registrar and the...

Delhi High Court Sets Aside ₹533.79 Crore Sales Tax Demands Against Railways Over Rolling Stock Transactions

The Delhi High Court has set aside assessment orders and revisional orders involving aggregate sales tax demands of ₹533,79,21,617. The demands concerned rolling stock financed through the Indian Railway Finance Corporation (IRFC). The court held that the authorities had wrongly treated the entire rolling stock financed through IRFC as having first belonged to the Railways. They had then treated it as having been sold by the Railways to IRFC.The division bench of Justices Anil Khetarpal and...

Customs Act | Delhi High Court Refuses To Entertain Challenge To Absolute Confiscation, Cites Alternative Remedy

The Delhi High Court has refused to entertain a writ petition challenging the absolute confiscation of a 117-gram gold bar, holding that the Petitioner has an efficacious statutory remedy of filing a revision application before the Central Government under Section 129DD of the Customs Act, 1962.The Division Bench of Justices Anil Khetarpal and Shail Jain dismissed the petition of an Indian national who was intercepted at the Delhi airport after he crossed the Green Channel.A statement was...

No Automatic Release Of Seized Goods Where Customs Claims Oral Show Cause Notice: Delhi High Court

The Delhi High Court has held that unconditional release of seized goods under Section 110(2) of the Customs Act, 1962, cannot be ordered merely because no written show cause notice was issued when the Customs Department specifically asserts that an oral show cause notice under Section 124(a) was issued.The Division Bench of Justices Anil Khetarpal and Shail Jain was dealing with a petition seeking release of a 100-gram gold bar seized from the petitioner at Delhi airport.Petitioner argued that...

GST Authority Not Bound To Seek Additional Documents: Supreme Court Refuses To Interfere With Delhi HC Order

The Supreme Court on Thursday dismissed an appeal against the Delhi High Court's order holding that a GST adjudicating authority is not bound to seek additional documents or clarifications from a taxpayer before passing an order merely because it finds the material already furnished insufficient. The case arose from a plea by Sodexo India Services Private Limited challenging the GST adjudication order.The High Court dismissed its challenge to a GST demand of around ₹8.75 crore under Section 74...