After spike in petro prices, ASSOCHAM tells Govt to Bring petrol, diesel under GST :      Petrol, Diesel Prices Hiked For 8th Day To New Highs - Petrol price in Mumbai 84.4 - Delhi 76.57 - Kolkata 79.24 - Chennai 79.47 :      The newly formed Malaysian Government announces that GST will be scrapped from 1st June :      Free services provided by banks are not liable to GST confirms Finance Ministry :      No consensus on GST concession for digital payments :      Supreme Court reserves the Aadhaar Verdict after the 2nd longest ever hearing on any case :      GST on Electric Car Batteries Could Come Down Drastically :      GST on luxury hotels likely to stay @ 28% :      Tax Department Unearths 100 Crore Evasion By Delhi Catering Firms :     

Supreme Court Case Law Analysis - Commissioner of Central Excise Vs Grasim Industries Ltd & Ors decided on 11th May, 2018

18th May 2018

A five judge  larger bench of the Hon’ble Supreme Court recently examined a reference regarding central excise valuation in general and the relationship between the nature of excise duty and the measure of the duty. This reference arose due to a perceived conflict between two judgements of the Apex Court in the following cases. :

Union of India and Ors. v. Bombay Tyre International Ltd. and Ors.  and
Commissioner of Central Excise, Pondicherry v. Acer India Ltd.

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Malaysia to scrap GST from 1st June - What it means for India?

17th May 2018

The Finance Ministry of Malaysia confirmed that GST will be scrapped effective from 1st June 2018. Malaysia was the last nation before India to introduce a GST at 6%  uniformly on all goods.  In barely three years of introduction, GST in Malaysia became hugely unpopular and was perceived as the main reason for spike in prices. Removal of GST was indeed the main poll promise made by the Pakatan Harapan coalition if voted into power.

Effective from 1st June, GST will be charged at "zero per cent" and later fully abolished when the Malaysian Parliament repeals the GST Act 2014. The recently formed government under Dr. Mahathir has promised to bring back the Sales and Services Tax to replace the GST.

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If the principles of natural justice were ignored, mere existence of an alternative statutory remedy can’t bar the High Court from intervening.

12th May 2018

If the principles of natural justice were ignored by the adjudicating authority, mere existence of an alternative statutory remedy cannot bar the High Court from intervening.

In a recent judgement passed on 8th May, 2018, the Calcutta High Court in Sadguru Forwarders Pvt Ltd. Vs Commissioner of Customs (Port) Kolkata has held that since the petitioner was not allowed to cross-examine the witness even though this was specifically asked for, the principle of natural justice have been violated. Accordingly, the order passed by Customs denying cross examination was set aside.

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Aadhaar verdict on its validity reserved by Supreme Court after the  2nd longest ever hearing in Supreme Court's history

11th May 2018

A five judge bench of the Supreme Court reserved its verdict on 10th May after hearing Sr. Advocates Shyam Divan and Gopal Subramanian representing a bunch of petitions challenging Aadhaar's constitutionality.  The grounds for the challenge essentially is that Aadhaar Act violates citizen's privacy and is a potential tool for the Government to keep a watch over citizens.

The Aadhaar case hearing  is said to be the second longest hearing in Supreme Court's history since independence. It was heard over four months and arguments covered various aspects including that risks involved in providing bio-metrics were not explained nor citizen's consent obtained. The crux of the case is, whether Aadhaar crosses the line on right to privacy which admittedly is not an absolute right.

 

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Recent Court / Tribunal Judgements

17th May, 2018 : Chhattisgarh HC :  Kishan Lal & Co Vs Addl Commr of Commercial Taxes, Chhattisgarh : The Hon’ble Court sets aside the assessment orders for 2006-07, 2007-08 & 2008-09 on two counts.  Firstly, relying on the Supreme Court judgement in Commr of Customs Vs Toyo Engineering Ltd., the Court held that an order cannot traverse beyond the scope set out in the notices. Secondly, proviso (a) to Section 49(3) prohibits revision after three calendar years. Since the notices are dated 14-7-2015 and seek to revise the assessment orders dated 1-5-2009, 1-5-2010 and 22-1-2008, they were clearly beyond the prescribed time limit of three years.

 17th May, 2018 : Chhattisgarh HC :  Commissioner, Central Excise Vs M/S Jindal Steel And Power Ltd.  "Whether …taking re-credit of CENVAT amount after the Revenue had already rejected his claim can be termed as a fraudulent….?”   Cenvat Credit was availed on input service tax attributable to generation of electricity partly used captively to manufacture final products and partly sold. On objections, regarding reversal under CCR Rule 6 (3A), they reversed credit of Rs.49,62,640/-.  But later took re-credit of the amount. The Department objected to the suo motu re-credit and issued a show cause notice. When notice was issued, the assessee reversed the credit and once again took credit after re-reversing the entry.
The Court considered the question and concluded : The assessee has not taken the re-credit of its own, but on the basis of its Auditor's objection. The issue concerning Cenvat credit is already under adjudication. There appears no mala fide or fraudulent act on the part of the assessee, more so, when the first proceedings are pending. (Ed. this is a case where re-credit was taken, twice. Maybe a case of defiance, but with the knowledge of the Dept, not fraud)

14th May, 2018: High Court of Chattisgarh : Sainik Mining & Allied Services Ltd. Vs Union of India & Ors - The petitioner claimed transitional input credit of Rs 1.17 Cr and entered the data, but due to glitches in the IT system it reflected as an error. The petioners contented that they cannot be denied legitimate input credit because of IT glitches. The Court sites the Govt Circular for grievance redressal for technical glitches and directs the petitioner to approach the AC State GST.

11th May, 2018 : The Supreme Court of India : Commissioner of CEx, Vs Grasim Ind : A five judge  larger bench of the Hon’ble Supreme Court recently examined a reference regarding central excise valuation in general and the relationship between the nature of excise duty and the measure of the duty. This reference arose due to a perceived conflict between two judgements of the Apex Court  i.e. Union of India and Ors. v. Bombay Tyre International Ltd. and Ors. and Commissioner of Central Excise, Pondicherry v. Acer India Ltd.

9th May, 2018 : Madhya Pradesh High Court : Prestige Polymers Pvt.Ltd. Vs CC. The Court directed the petitioners to file an appeal against an order granting provisional release while imposing certain conditions. The petitioner challenged the conditions. The Hon'ble Court also held that the adjudicating authority (a quasi judicial authority) is not bound to follow any conditions prescribed by DRI in their letter.

8th May, 2018 :  Calcutta High Court : Sadguru Forwarders Pvt Ltd. Vs CC (Port) Kolkata : If principles of natural justice were ignored, mere existence of an alternative statutory remedy can’t bar the High Court from intervening. It was held that since the petitioner was not allowed to cross-examine the witness, the principles of natural justice have been violated. Accordingly, the order passed by Customs denying cross examination was set aside.

4th May, 2018 : Allahabad HC has passed the judgement on the three questions (mixed with questions of facts) which remained after the major issues in a batch of petitions were settled by the Supreme Court relating to vires of the UP Tax on Entry of Goods into Local Areas Act IOL Vs State Of U.P.

4th May 2018 : Bombay HC : Sunsuk Ind Vs. CCE, Mumbai-IV

3rd May, 2018 : Supreme Court disposes off an appeal for exemption from State entertainment tax without going into the merits  as after GST, there is no entertainment tax. Exemption to be claimed from GST. State of Gujarat Vs Kiran Kumar Rameshbhai Devmani

3rd May, 2018 : Bombay High Court : Commr of Central Excise Mumbai III Vs. CEAT Ltd. 

2nd May, 2018 : UOI Vs Shree Alloys Industries Pvt. Ltd.

1st May 2018 : Calcutta HC : Kamarhati Co Ltd.  Vs. Senior Jt Commr Commercial Taxes Corp Divn : Court sets aside the Revisional Authority saying "the relevant ‘C’ Forms were not available with the petitioners, for no fault of the petitioners, at the time of the passing of the revisional order. Therefore, the petitioners are entitled to have an opportunity to produce the relevant ‘C’ Forms..."

1st May, 2018 : Calcutta HC : Weaverly Jute Mills Pvt. Ltd. Vs. Union of India & anr.

24th April 2018 : Madras HC Metal Weld Electrodes, Chennai Vs. CESTAT, SZB & CCE, Chennai IV : The Hon'ble Court ruled that the pre-deposit order merges with the final order passed by the Tribunal. Hence there is no need to delve into the pre-deposit order. In short, the petitioner's appeal in CESTAT got dismissed for non-compliance and the petition against the pre-deposit order also got dismissed by Court. Tax payers should pay more attention to such avoidable risks!

Click for earlier Judgements in 2018

Tax Risk Management Part 1

An Introduction

 

Risk comes from not knowing what you’re doing. 
- Warren Buffet

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Tax Risk Management Part 2

Tax Risks as Black Swan Events!

If you were asked "What 'tax risks' you perceive in your business?" What would be your answer?

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Indirect Tax Risk Management

Indirect Risk Tax Management
 

 

 

 

Recent Tax Judgements from Courts & Tribunal

Economic Survey of India 2017-18