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In RA-CR No.147 of 2020-PUNJ HC- P&H HC dismisses review application challenging appeal in motor accident case in view of settled law that in review jurisdiction, Court cannot re-appreciate evidence to arrive at different conclusion even if two views are possible in matter
Justice Meenakshi I. Mehta [30-01-2023]

Read Order: Phullo & Others v. Noman & Others 

 

Monika Rahar

Chandigarh, January 31, 2023: The Punjab and Haryana High Court has dismissed review application filed by the respondents in an appeal granting compensation of Rs 7,86,000 to the claimants in a motor accident case, assailing the appeal on the ground that the appellate court did not take into consideration, the evidence which showed that on the date of the alleged accident, the offending vehicle was in the possession of the police. 

The Bench of Justice Meenakshi I. Mehta relied upon the Supreme Court decision which held that it is well settled that in exercise of review jurisdiction, the Court cannot re-appreciate the evidence to arrive at a different conclusion even if two views are possible in a matter. 

“In the light of these observations, it becomes crystal clear that the prayer made by the applicants is beyond the ambit of the above-discussed provisions which confer the review jurisdiction upon the Court”, the Bench added. 

The appellants-claimants preferred an appeal to assail the Award of the Motor Accidents Claims Tribunal, Yamuna Nagar at Jagadhari whereby the claim petition filed by them against the applicants and the Insurance Company under Section 166 of the Motor Vehicles Act, for seeking the compensation on account of the death of Balinder Singh was dismissed. 

The Co-ordinate Bench allowed the appeal and granted compensation amounting to Rs. 7,86,000/-, to them (claimants). The applicants moved this Review Application while averring that the Tractor alleged to be involved was in police custody at the time of the accident, but the Court ignored the same fact as also the depositions as made by Constable Vipin Kumar in this regard and thus, wrongly allowed the appeal. 

The counsel for the applicants contended that while deciding the afore-said appeal, the Co-ordinate Bench did not take the above-referred clinching evidence into consideration which showed that on the date of the alleged accident, the offending vehicle was in the possession of the police. 

Per contra, the counsel for the appellants-claimants argued that the pleas set-forth by the applicants in this Review Application, were beyond the scope of the provisions as contained in Section 114 and Order 47 Rule 1 CPC, hence, the instant application be dismissed. 

After hearing the parties, the Court observed that by way of filing the present Review Application, the applicants prayed for hearing the afore-said appeal afresh and to pass an appropriate order while re-appreciating evidence as led before the Tribunal, but the Court added, 

“it is worthwhile to mention here that re-appreciation and revaluation of the evidence can, by no stretch of imagination, be construed to be intent and purpose for enacting the afore-said provisions' '. 

The Court further observed that the Supreme Court has held that it is well settled that in exercise of review jurisdiction, the Court cannot re-appreciate the evidence to arrive at a different conclusion even if two views are possible in a matter. 

In the light of these observations, the Bench opined that it becomes crystal clear that the prayer made by the applicants was beyond the ambit of the above-discussed provisions which confer the review jurisdiction upon the Court. 

The instant Review Application was dismissed

 

In Criminal Appeal No.256 of 2022-SC-Jurisdiction u/s 482 CrPC is to be exercised sparingly with caution, for securing ends of justice and only in cases where refusal to exercise that power may result in abuse of process of law: SC 
Justices Ajay Rastogi & C.T. Ravikumar [30-01-2023]

Read Judgment: USHA CHAKRABORTY & ANR V. STATE OF WEST BENGAL & ANR 

 

Mansimran Kaur

 

New Delhi, January 31, 2023: The Supreme Court has allowed an appeal instituted under Section 482 of the Code of Criminal Procedure, 1973  seeking quashing of F.I.R. under various Sections of the Indian Penal Code  where the dispute involved was essentially of civil nature and the parties had given a cloak of criminal offence in the issue. 

 

The Division bench of Justice Ajay Rastogi and C.T. Ravikumar allowed the appeal by special leave to be directed against the final judgment passed by the Calcutta High Court by observing that permitting continuance of the criminal proceedings against the appellants in the aforesaid circumstances would result in abuse of the process of Court and also in miscarriage of justice.

 

The High Court declined to exercise the jurisdiction under Section 482 Cr.P.C. holding that perusal of the case diary as also the materials appearing there from prima facie made out a case for investigation. In that view of the matter, the interim order granting stay of all further proceedings pursuant to the registration of the stated F.I.R. was vacated and the stated petition was dismissed.

 

After considering the submissions, the Court noted that the question to be decided was  whether the High Court was justified in declining to invoke the power under Section 482 Cr.P.C. to quash the order dated April 5, 2017  for forwarding the application filed by the respondent  carrying allegations qua the appellant for investigation under Section 156(3), Cr.P.C., the consequential registration of the F.I.R. and the investigation pursuant thereto qua the appellant, in the facts and circumstances of the case and in view of the settled position in the matter of exercise of inherent powers under Section 482, Cr.P.C.

 

In view of the same, the Court noted, “There can be no doubt with respect to the position that jurisdiction under Section 482 Cr.P.C. is to be exercised with care and caution and sparingly. To wit, exercise of the said power must be for securing the ends of justice and only in cases where refusal to exercise that power may result in the abuse of process of law

 

Reference was placed on the cases namely, Paramjeet Batra v. State of Uttarakhand & Ors,  Vesa Holdings Private Limited and Anr. v. State of Kerala and Ors and Kapil Aggarwal and Ors. v. Sanjay Sharma and Ors. 

 

It was further noted by the Court that the respondent alleged commission of offences under Sections 323, 384, 406, 423, 467, 468, 420 and 120B, IPC against the appellants.

 

 A bare perusal of the said allegation and the ingredients to attract them, as adverted would reveal that the allegations were vague and they did not carry the essential ingredients to constitute the alleged offences. 

 

There is absolutely no allegation in the complaint that the appellants had caused hurt on the respondent so also, they did not reveal a case that the appellants had intentionally put the respondent in fear of injury either to himself or another or by putting him under such fear or injury, dishonestly induced him to deliver any property or valuable security, the Court noted. 

 

The same is the position with respect to the alleged offences punishable under Sections 406, 423, 467, 468, 420 and 120 B, IPC. The ingredients to attract the alleged offences and the nature of the allegations contained in the application filed by the respondent would undoubtedly make it clear that the respondent had failed to make specific allegation against the appellants in respect of the aforesaid offences. 

 

For all these reasons, the Court was of the considered view that this case invited invocation of the power under Section 482 Cr.P.C. to quash the FIR registered based on the direction of the Magistrate Court in the afore-stated application and all further proceeding in pursuance thereof.  

 

The Court also stated that it had no hesitation to hold that permitting continuance of the criminal proceedings against the appellants in the aforesaid circumstances would result in abuse of the process of Court and also in miscarriage of justice.

 

The appeal was accordingly allowed. 

 

In W.P.WRIT PETITION No.5571 of 2021-AP HC- First proviso to Sec.98 of AP GST Act puts embargo on Advance Ruling Authority to admit application where questions raised therein are already pending or decided by any proceedings in case of applicant under Act: Andhra Pradesh HC
Justices U. Durga Prasad Rao & T.Mallikarjuna Rao [23-11-2022]

Read Order: M/S MASTER MINDS v. APPELLATE AUTHORITY FOR ADVANCE RULING (GST) AND ORS 

 

Mansimran Kaur

 

Amaravati, January 31, 2023:  Proceedings conducted by the investigating authority under the provisions of the CST/APST Act shall be construed as judicial proceedings, the Andhra Pradesh High Court has held.


While allowing the petition via which the petitioner prayed  for writ of mandamus declaring the impugned order passed by the Appellate Authority for advance ruling as illegal, arbitrary and to set aside the same and pass further appropriate orders, the Division bench of Justice U. Durga Prasad Rao and Justice T.Mallikarjuna Rao observed that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to sub-section (2) of Section 98 of CGST/APGST Act

Factual matrix of the case was that the petitioner was a proprietary concern and a leading educational institution providing coaching to students for obtaining educational qualifications viz., Chartered Accountancy Certificate (CA), Cost and Works Accountancy Certificate (ICWA) and their ilk. 

 

While so, the petitioner filed application for advance ruling vide (as per Rule 104(1)) of CGST Act seeking ruling inter alia on the point whether the coaching/training provided by the applicant for students for the above courses conducted by it fall within the wider meaning of the term ‘education’ and in relation to education and other related aspects. The Advance Ruling Authorityafter elaborate hearing passed its ruling vide order wherein the ARA held that the applicant was not eligible for the exemption under Entry No.66(a) of Notification dated June 28, 2017  as amended.

 

 It also gave rulings on the other related issues raised by the petitioner before it.

 

Aggrieved by the above rulings, the petitioner filed appeal before the appellate authority for advance ruling and after hearing; the appellate authority dismissed the appeal on September 28, 2020 by confirming the rulings made by the ARA. Aggrieved, the present writ petition is filed by the petitioner.

 

After considering the submissions from both the sides, the Court noted that the point for consideration was to determine whether there were merits in the writ petition to allow.

 

In view of the same, the Court noted, “Section 98(2) of the CGST/APGST says that authority may after examining the application and records called for and after hearing the applicant or his authorized representative, by order, either admit or reject the application”.  

 

Further, the Court stated that as per Section 70 of APGST Act, proper officer shall have the power to summon any person either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case of a civil court under the provisions of the Code of Civil Procedure.

 

 Such enquiry referred to in sub-section (1) shall be deemed to be judicial proceedings within the meaning of section 193 and 228 of the Indian Penal Code. Thus, “the proceedings conducted by the investigating authority under the provisions of this Act shall be construed as judicial proceedings as per the CGST/APGST Act”, the Bench said.

 

Any proceedings referred to in 98(2) proviso encompasses within it the investigation against the applicant as per the provisions of CGST/APGST Act and if by the date of filing of the application before the ARA, already such proceedings were commenced, the ARA shall not admit the application inviting advance ruling.  Senior counsel for the respondent had  not placed any contra citations before us to hold any other view, the Court further noted. 

 

Reference was placed on the cases namely, Maharashtra, v. Arihant Enterprises and Karnataka v. M/s.Karnataka Co-operative Milk Producers Federation Limited.

 

The Court thus observed that having regard to the legal position that when investigation has already commenced prior to the filing of application, the ARA shall not admit the application as per proviso to Section 98(2), the Court was hence of the view that the ARA should not have admitted the application in the instant case and issued its ruling. 

 

Therefore, the order was vitiated by law. This fact was brought to the notice of the appellate authority on the grounds of appeal. Therefore, the order of the appellate authority was also vitiated by law, the Court noted while allowing the writ petition.

 

In CR-485-2023-PUNJ HC- P&H HC grants last opportunity to plaintiff to rectify mistakes which occurred in filing of civil suit, imposes cost of Rs 10,000
Justice Harsimran Singh Sethi [23-01-2023]

 

Read Order: Sahiram Rawat v. ICICI Bank Ltd. and Others

 

Monika Rahar

Chandigarh, January 31, 2023: While dealing with a revision petition challenging the lower court order dismissing the plaintiff's suit for declaration on the ground that it did not contain the documents required to be attached to the suit due to which the notice could not be issued to the respondents, the High Court of Punjab and Haryana has granted one more opportunity to the petitioner to rectify the mistakes which occurred in the filing of the civil suit while imposing a cost of Rs. 10,000/-. 

The Bench of Justice Harsimran Singh Sethi held, “As only the suit has been filed so far by the petitioner-plaintiff and even notice is yet to be issued to the respondent-Bank, keeping in view the facts and circumstances of the present case, one more opportunity is granted to petitioner to rectify the mistakes which have occurred in filing of the civil suit as pointed out by the trial Court.

The present civil revision was filed for setting aside the impugned order by which the petitioner’s suit for declaration was dismissed under Order 9 Rule 5 of CPC.

It was the submission of the petitioner’s counsel that the said order was not being challenged on merits but he prayed for another opportunity to rectify the irregularities which occurred in the filing of the civil suit, even if the same was on the basis of cost to be imposed on the petitioner. 

He further submitted that as no proceedings were initiated in pursuance to the suit filed, there was no prejudice which would be caused to the defendant, hence, one opportunity be granted to rectify the defects pointed out by the court below in the suit so that the notice of the suit could be issued in respect of the prayer made by the petitioner in the said suit.

The respondent’s counsel submitted that one opportunity was already given to the petitioner-plaintiff to rectify the mistakes that occurred in the filing of the civil suit and since the petitioner failed to utilise the said opportunity given by the Trial Court, the petitioner be not granted any further opportunity.

After hearing the parties, the Court observed that the suit filed by the petitioner did not contain the documents required to be attached to the suit due to which the notice could not be issued to the respondents. 

“It is a conceded position that the petitioner was given opportunities to rectify the mistake but he failed to avail the said opportunities and the Court has no option but to pass appropriate order keeping in view the fact that the requirement to be complied with while filing the civil suit, were not adhered to despite opportunities been granted by the court below”, the Bench observed. 

Since only the suit was filed so far by the petitioner-plaintiff and the notice was yet to be issued to the respondent-Bank, thus, the Court granted one more opportunity to the petitioner to rectify the mistakes which occurred in the filing of the civil suit as pointed out by the trial Court.

However, the Court clearly observed that even after the grant of the said opportunity, if the compliance was not made, the trial Court will be within its jurisdiction to pass an appropriate order afresh. This order was made subject to the payment of Rs.10,000/- as a cost. 


 

In CR-1417-2019(O&M)-PUNJ HC- In terms of Order 6 Rule 17 CPC, amendment of pleadings can be allowed only if it is necessary for determining real question of controversy between parties: P&H HC
Justice H.S. Madaan [24-01-2023]

Read Order: Mohammad Ilyas v. Mohammad Nazir

 

Monika Rahar

Chandigarh, January 31, 2023:  While dealing with a revision petition, the High Court of Punjab and Haryana has held that in terms of Order 6 Rule 17 CPC, the amendment of pleadings can be allowed only if it is necessary for the purpose of determining the real question of controversy between the parties.

This revision petition before the Bench of Justice H.S. Madaan challenged the order of the Additional District Judge-cum-Appellate Authority, Sangrur via ide which an application filed by the appellant/respondent-tenant for amendment of the written statement, was dismissed.

The facts of the case are that the ejectment petition filed by the petitioner/landlord against the respondent-tenant with regard to the shop in dispute was allowed by Rent Controller, Malerkotla. Feeling aggrieved, the tenant preferred an appeal before Appellate Authority, Sangrur, notice of which was given to the landlord arrayed as a respondent in the appeal, who had put in an appearance. 

During the course of proceedings, the appellant/tenant filed an application for amendment of written reply stating that it has come in evidence that the landlord was the owner in possession of three other shops and this fact was admitted by the landlord in his cross-examination. However, the submission made by the tenant’s counsel before Rent Controller was rejected for the reason that no such plea was taken in the written reply, therefore, the applicant/appellant wanted to amend the written reply.

The landlord/respondent resisted this application in the appeal. The Appellate Authority, Sangrur dismissed the application, leaving the appellant/tenant aggrieved, who filed the present revision petition. 

After hearing the parties, the Court observed that the proviso to Order 6 Rule 17 CPC clearly dilates that 'no application for amendment shall be allowed after the trial has commenced unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial'.

Furthermore, the Bench observed that in terms of Order 6 Rule 17 CPC, the amendment of pleadings can be allowed only if it is necessary for the purpose of determining the real question of controversy between the parties. 

In the present case, the Bench opined that the application was rightly declined by the Appellate Authority because if allowed it would have put the clock back resulting in stretching the proceedings further and the proposed amendment was not such without which the controversy between the parties cannot be adjudicated in an effective and proper manner. 

While dismissing the application, the Appellate Authority, Sangrur observed that these very contentions could be raised at the time of arguments in the appeal, the Bench noted while also adding that the Appellate Authority already protected the rights of the appellant/tenant stating that he can raise the plea in that regard during the course of arguments. 

I find myself in agreement with the Appellate Authority, Sangrur and do not see any illegality or infirmity in the impugned order, which might have warranted interference by this Court by exercising revisional jurisdiction”, the Bench held while dismissing the petition. 

In I.T.A No.1155/DEL/2020-ITAT- Audited books of account can’t be rejected by AO on ground that photocopy of bills have been produced instead of original bills: Delhi ITAT
Accountant Member-Pradip Kumar Kedia & Judicial Member- Anubhav Sharma [23-01-2023]

Read Order: BLUE STAMPINGS & FORGINGS LTD V. DY. COMMISSIONER OF INCOME TAX, FARIDABAD 


Mansimran Kaur

New Delhi, January 31, 2023: The insignificant variation in net profit ratio per se cannot  lead to drastic action of rejection of audited books without anything more, the Delhi Bench of the Income Tax Apellate Tribunal has observed.

While pursuing the captioned appeal instituted by the Assessee seeking to assail additions of Rs.33, 11,185confirmed by the CIT(A) on account of fall in net profits, the Tribunal allowed the same and observed that it found traction in the plea of the assessee that no justifiable reasons were  available to reject the books and embark upon estimations. 

Accountant Member-Pradip Kumar Kedia and Judicial Member- Anubhav Sharma allowed the present appeal by observing that it found traction in the plea of the assessee that no justifiable reasons were available to reject the books and embark upon estimations. 

The assessee was engaged in the business of manufacturing of rough iron forgings and machining parts of vehicles. A survey under Section 133A of the Act was carried, wherein certain disclosures were made by the assessee. 

The Assessee filed return of income declaring Rs.2, 78, 37,670/- for the Assessment Year 2013-14 in question which was subjected to scrutiny assessment. The Assessing Officer while framing the assessment inter alia made certain additions on account of lower net profits percentage by invoking Section 145(3) of the Act. 

 

The amount of addition was subsequently revised under Section 154 of the Act and eventually an addition of Rs.33, 11,182/- was retained on the grounds of lower reporting of net profit.

 

The assessee challenged the aforesaid action of the Assessing Officer before CIT (A). The CIT (A) did not embrace the plea of the assessee and found justification in rejecting the books under Section 145(3) of the Act by the Assessing Officer.

 

Aggrieved, the assessee preferred appeal before the Tribunal.

 

After considering the rival contentions, the Court noted that the estimation of profits consequent upon rejection of books under Section 145(3) was subject matter of controversy.  

 

The Assessing Officer in the present case had not shown as to how audited the books of account maintained by the assessee are incorrect or otherwise incomplete which is likely to vitiate the true profits of the assessee. It is also not the case of the Assessing Officer that entries in respect of certain transactions are altogether omitted or found incorrect. No inherent lacuna in the system of accounting was shown either, the Court stated. 

 

In furtherance of the same, the Tribunal noted that the  Assessing Officer was  not justified in taking drastic action of rejection of books of account which were  audited and were  without any qualification solely on the basis of general remarks that photocopy of the bills were  produced instead of original bills. No specific instance was provided in order to appreciate as to how such delinquency on the part of the assessee resulted in unreliability of books per se, the Court noted. 

 

The Court thus observed, “The Assessing Officer in our view is not justified in taking drastic action of rejection of books of account which are audited and are without any qualification solely on the basis of general remarks that photocopy of the bills have been produced instead of original bills.”   

 

Hence, the Tribunal stated that it found traction in the plea of the assessee that no justifiable reasons were available to reject the books and embark upon estimations. Thus the Tribunal set aside the action of the CIT (A) and directed the Assessing Officer to restore the position taken by the assessee in this regard. The appeal of the assessee was accordingly allowed. 

 

In CUSAA 155/2022-DEL HC- Any preliminary exercise done by Officer of Customs to consider whether any question for consideration arises, would not preclude CAAR from giving its advance ruling on that question: Delhi HC 
Justices Vibhu Bakhru & Amit Mahajan [11-01-2023]

Read Order: DIRECTORATE OF REVENUE INTELLIGENCE (HQRS.) v. M/S SPRAYTEC INDIA LTD 

Mansimran Kaur

 

New Delhi, January 31, 2023:  Merely because an officer of customs contemplates that a question may arise, does not mean that the question is pending consideration. For a question to be stated to be pending, the concerned officer must formally set forth the same for the assessee to contest the same, the Delhi High Court has observed.

While dismissing  the appeal  preferred by the  appellant (Directorate of Revenue Intelligence ) under Section 28 KA of the Customs Act, 1962  impugning an order passed by the Customs Authority for Advance Ruling , whereby the representations made by DRI for treating the CAAR’s order as void ab initio, was rejected, the Division bench of Justice Vibhu Bakhru and Justice Amit Mahajan observed that in order for a question to be considered as pending before any officer of customs, it would be necessary for the question to be raised in any notice enabling the assessee to respond to the said issue. 

The DRI had made representations contending that the said order had been obtained by the respondent by fraud and misrepresentation of facts and therefore, was entitled to be declared as void ab initio in terms of Section 28K(1) of the Customs Act.

DRI claimed that it had not disclosed that the investigation in respect of the import of goods made by the respondent was being conducted by DRI. It claimed that if such disclosure was made by the respondent in its application, the application would be rejected in terms of the provision to Section 28-I of the Customs Act. 

 

The respondent had imported actuator and aerosol valves meant for perfumes and toilet sprays. It was stated that the office premises of the respondent were searched by DRI and various summons were issued by DRI between the period of January to June, 2019.

 

 According to the respondent, the last summon issued by DRI in the year 2019, was on May 16, 2019. It was material to note that the petitioner had imported certain goods against a Bill of Entry dated January 14, 2019. The said consignment was not released. Aggrieved by the same, the respondent had filed a writ petition before this Court.

 

The Coordinate Bench of this Court had disposed of the said writ petition by directing the Revenue to issue a provisional assessment order at the earliest and preferably, within a period of two weeks from that date.

 

Thereafter, the respondent filed an application before the Authority for Advance Ruling (AAR), seeking a ruling on the classification of goods in question under the Custom Tariff Act, 1975.

 

The CAAR issued a ruling in favour of the respondent, accepting its classification of the goods in question. DRI donce again issued the summons in March 2022. The respondent challenged the said summons by filing a writ petition. 

 

After considering the submissions, the Court noted that it cannot be disputed that the respondents statement, that clearance of its goods had been withheld at the instance of DRI, did indicate an investigation had been initiated by DRI. 

 

The reasons for so indicating may be erroneous but the factum that investigation had been initiated by DRI was disclosed. There was no reason to doubt that the respondent believed that the matter was closed as neither any pre-consultation notice nor any other show cause notice was issued by DRI at the material time, the Court noted. 

 

As per the Bench, since DRI had not issued any show cause notice, it couldnot be stated that the question of classification of goods was pending before any officer of customs, appellate tribunal, or any court.

 

It is relevant to note that the CAAR had also concluded to the effect that even if it was disclosed that there was an on-going investigation by DRI, the same would not be relevant to the outcome of the proceedings. Concededly, no pre-consultation notice or show cause notice had been issued by DRI or any other Authority and it would be erroneous to hold that the question of classification was pending before any Custom officer, Appellate Tribunal or any Court, the Court stated. 

 

Further Section 28-1 of the Customs Act was also taken into consideration.  In view of the same, the Court noted that in the present case, DRI had not issued any pre-consultation notice or show cause notice which would indicate that the question regarding classification of any goods was pending before DRI. Thus, even if it is accepted that an officer of DRI is an officer of Customs, it cannot be accepted that the question raised by the respondent in its application under Section 28H of the Customs Act was pending in the applicant's case before DRI.

Any preliminary exercise done by an officer of customs, to consider whether any question for consideration arises, would not preclude the CAAR from giving its advance ruling on that question”, the Bench said while noting that the possibility that a question would arise for consideration of a customs officer, appellate tribunal or court, is not a ground contemplated under Clause (a) of the proviso to Section 28-I (2) of the Customs Act.

 

The Court thus observed that  a distinction must be made between that question pending consideration and a possibility of a question arising consideration. In light of the such observations, the Court failed to find any infirmity with the impugned order and dismissed the appeal.

In CUSAA 155/2022-DEL HC- Any preliminary exercise done by Officer of customs, to consider whether any question for consideration arises, would not preclude CAAR from giving its advance ruling on that question: Delhi HC 
Justices Vibhu Bakhru & Amit Mahajan [11-01-2023]



 

Read Order: DIRECTORATE OF REVENUE INTELLIGENCE (HQRS.) v. M/S SPRAYTEC INDIA LTD 

 

Mansimran Kaur

 

New Delhi, January 31, 2023:  Merely because an officer of customs contemplates that a question may arise, does not mean that the question is pending consideration. For a question to be stated to be pending, the concerned officer must formally set forth the same for the assessee to contest the same, the Delhi High Court has observed.

While dismissing  the appeal  preferred by the  appellant (Directorate of Revenue Intelligence ) under Section 28 KA of the Customs Act, 1962  impugning an order passed by the Customs Authority for Advance Ruling , whereby the representations made by DRI for treating the CAAR’s order as void ab initio, was rejected, the Division bench of Justice Vibhu Bakhru and Justice Amit Mahajan observed that in order for a question to be considered as pending before any officer of customs, it would be necessary for the question to be raised in any notice enabling the assessee to respond to the said issue. 

The DRI had made representations contending that the said order had been obtained by the respondent by fraud and misrepresentation of facts and therefore, was entitled to be declared as void ab initio in terms of Section 28K(1) of the Customs Act.

DRI claimed that it had not disclosed that the investigation in respect of the import of goods made by the respondent was being conducted by DRI. It claimed that if such disclosure was made by the respondent in its application, the application would be rejected in terms of the provision to Section 28-I of the Customs Act. 

 

The respondent had imported actuator and aerosol valves meant for perfumes and toilet sprays. It was stated that the office premises of the respondent were searched by DRI and various summons were issued by DRI between the period of January to June, 2019.

 

 According to the respondent, the last summon issued by DRI in the year 2019, was on May 16, 2019. It was material to note that the petitioner had imported certain goods against a Bill of Entry dated January 14, 2019. The said consignment was not released. Aggrieved by the same, the respondent had filed a writ petition before this Court.

 

The Coordinate Bench of this Court had disposed of the said writ petition by directing the Revenue to issue a provisional assessment order at the earliest and preferably, within a period of two weeks from that date.

 

Thereafter, the respondent filed an application before the Authority for Advance Ruling (AAR), seeking a ruling on the classification of goods in question under the Custom Tariff Act, 1975.

 

The CAAR issued a ruling in favour of the respondent, accepting its classification of the goods in question. DRI donce again issued the summons in March 2022. The respondent challenged the said summons by filing a writ petition. 

 

After considering the submissions, the Court noted that it cannot be disputed that the respondents statement, that clearance of its goods had been withheld at the instance of DRI, did indicate an investigation had been initiated by DRI. 

 

The reasons for so indicating may be erroneous but the factum that investigation had been initiated by DRI was disclosed. There was no reason to doubt that the respondent believed that the matter was closed as neither any pre-consultation notice nor any other show cause notice was issued by DRI at the material time, the Court noted. 

 

As per the Bench, since DRI had not issued any show cause notice, it couldnot be stated that the question of classification of goods was pending before any officer of customs, appellate tribunal, or any court.

 

It is relevant to note that the CAAR had also concluded to the effect that even if it was disclosed that there was an on-going investigation by DRI, the same would not be relevant to the outcome of the proceedings. Concededly, no pre-consultation notice or show cause notice had been issued by DRI or any other Authority and it would be erroneous to hold that the question of classification was pending before any Custom officer, Appellate Tribunal or any Court, the Court stated. 

 

Further Section 28-1 of the Customs Act was also taken into consideration.  In view of the same, the Court noted that in the present case, DRI had not issued any pre-consultation notice or show cause notice which would indicate that the question regarding classification of any goods was pending before DRI. Thus, even if it is accepted that an officer of DRI is an officer of Customs, it cannot be accepted that the question raised by the respondent in its application under Section 28H of the Customs Act was pending in the applicant's case before DRI.

Any preliminary exercise done by an officer of customs, to consider whether any question for consideration arises, would not preclude the CAAR from giving its advance ruling on that question”, the Bench said while noting that the possibility that a question would arise for consideration of a customs officer, appellate tribunal or court, is not a ground contemplated under Clause (a) of the proviso to Section 28-I (2) of the Customs Act.

 

The Court thus observed that  a distinction must be made between that question pending consideration and a possibility of a question arising consideration. In light of the such observations, the Court failed to find any infirmity with the impugned order and dismissed the appeal.

 

In R/SPECIAL C.A. No. 16916 of 2018-GUJ HC- AO has to form opinion of belief of escapement of income to tax by assessee for reopening assessment; Change of opinion or borrowed opinion cannot form basis for reopening: Gujarat HC
Justices Aravind Kumar &  Ashutosh J. Shastri [02-01-2023]

Read Order: NILA INFRASTRUCTURES LIMITED v. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 

 

Tulip Kanth

 

Ahmedabad, January 31, 2023: In a case where the assessee had made adequate disclosures during assessment proceedings, the Gujarat High Court has quashed a Notice for re-opening the assessment and opined that the Authority should have reason to believe that income of the assessee has escaped assessment and such escapement is by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.

 

The Division Bench of Justice Aravind Kumar and Justice Ashutosh J. Shastri asserted, “As such, we have dealt with the said issues and before embarking upon such inquiry, it would be necessary to note that for reopening the assessment, the assessing officer (for short “AO”) has to prima facie form an opinion of belief of escapement of income to tax by the assessee.”

 

The petitioner had filed its original return of income for the A.Y. 2011-12 on September 27, 2011 declaring total income at Rs 11,99,50,930 and the revised return of income was filed on September 27,2012 declaring total income at Rs 12,02,45,130. The Authority passed an assessment order u/s 143(3) of the Income Tax Act, 1961 assessing the income at Rs 13,64,40,534. Thereafter, the authority issued notice to petitioner u/s 148 and an order came to be passed u/s 143(3) r/w Section 148.The petitioner-Company had invoked extraordinary jurisdiction of the High Court.

 

It was the petitioner’s case that later on, the respondent issued impugned notice u/s 148 for re-opening the assessment for the A.Y 2011-12. The petitioner - assessee raised multiple objections and requested to drop the reassessment proceedings but an order came to be passed rejecting such objections.

 

It was the petitioner’s case that the impugned notice issued u/s 148 as well as order disposing of objections, were bad in law, illegal.

 

The first reason assigned for reopening the assessment concluded u/s 143(3) was that the assessee has debited Rs 4,48,56,594 as interest and financial charges and assessee has paid interest of Rs 60,27,397 to Adani Enterprise, Rs 1,05,22,915 to India Bulls and Rs 92,75,843  to Gruh Finance but had not deducted and paid the TDS on the above amount and hence, there was escapement of income of Rs 2,09,60,183. 

 

As per the Bench, the records on hand indicated that the assessee had duly deducted and paid the TDS on the above payment and copy of the account of the said parties had been tendered at the time of assessment and along with the objections for reopening. Also, there was material available with the Assessing Officer and the assessee had not suppressed or withheld any information at the time of assessment proceedings and on this score itself the present impugned notice couldnot be sustained, the Bench added.

 

Also, noticing that the assessee was paying VAT under the composition scheme and said scheme envisaged payment of VAT/service tax on a certain percentage of turnover, the Bench opined that the assessee had followed the system of accounting rightly and claimed service tax/VAT. 

 

On the issue that the assessee had claimed MAT credit for earlier years and reduced the tax liability to that extent, the Bench opined that though it was specifically contended that there was no prohibition or restriction under Section 115JAA with regard to carry forward and setting off of MAT credit belonging to amalgamating company by the amalgamated company, yet this fact had been completely ignored. 

 

“In other words, there is no independent finding recorded for reopening and it is trite law that based on borrowed opinion, reopening of the assessment is impermissible”, the High Court mentioned while noticing that the Assessing Officer might have reopened the assessment to fish out evidence which is impermissible.

 

During the course of the assessment proceedings, assessee had submitted three communications based on which the assessment was sought to be reopened and the Assessing Officer took note of these facts and formed an opinion.

 

The Bench stated that this opinion was now sought to be substituted and made as a ground for reopening of the assessment which was impermissible as change of opinion cannot be the basis for reopening the assessment. For such reasons, the Civil Application was allowed and the Notice as well as the order were quashed.

 

In D.B. Civil W.P. No.17550/2022-RAJ HC- If sufficient cause is shown by person chargeable with tax, then as per Sec.75(5) of Rajasthan GST Act, Officer can adjourn hearing but such adjournment is not to be granted for more than 3 times: Rajasthan HC
Justices Manindra Mohan Shrivastava & Vinod Kumar [07-12-2022]

Read Order: Tanushree Logistics Private Limited v. State Of Rajasthan And Ors 


 

Tulip Kanth

 

Jaipur, January 31, 2023: While highlighting the recent judicial pronouncements of the Supreme Court which settle the legal position with regard to maintainability of the writ petitions under Article 226 of the Constitution by the High Court against the assessment order, limiting the scope of interference by the writ court in cases where remedy of statutory appeal is available, the Jaipur Bench of the Rajasthan High Court has dismissed certain writ petitions leaving it open for the petitioner to avail alternative remedy of appeal.

 

The Division Bench of Justice Manindra Mohan Shrivastava and Justice Vinod Kumar Bharwani was considering an objection raised by the respondents with regard to maintainability of the writ petitions, seeking to challenge an order of assessment under Section 50 & 74 of the Rajasthan Goods and Service Tax Act, 2017 on the ground that these writ petitions had been filed against the order of assessment though the petitioner had an efficacious and alternative statutory remedy of appeal u/s 107.

 

It was the petitioner’s case that in all the cases the respondents had acted in flagrant violation of provisions contained under Section 74 inasmuch as the mandatory requirement of giving summary of grounds in form DRC-01 was not supplied along with show cause notice and, therefore, there was apparent violation of Rule 142 of Rajasthan Goods and Service Tax Rules, 2017. 

 

It was also submitted that various documents collected by the respondents, which included survey report and statements seven in number, which formed the basis for impugned order of assessment were never submitted to the petitioner. It was the petitioner’s case that as provided u/s 75(5), he was entitled to three opportunities but those opportunities were never granted to him and all of a sudden, without any reply on record, the impugned order was passed.


 

The Bench was of the view that no case of violation of principles of natural justice was made out by the petitioner as a detailed inquiry was made against the petitioner and then summons u/s 70 were issued on several occasions and opportunity was granted to provide information. 

 

Furthermore, after going through the contents of show cause notices, the Bench found the same to be detailed giving the grounds including the provisions of law under which the tax was proposed to be imposed on the petitioner. 

 

“The respondents have stated in the reply that during period under consideration, due to technical problems, DRC-01 form could not be attached but full care and caution was taken that summary of grounds are clearly stated in the show cause notice so that the petitioner--assessee has full notice and knowledge of the material particulars and the grounds on which the action is proposed to be taken against him. Therefore, argument in this regard as raised by the petitioner is sans substratum”, the Bench stated.

 

It was also noticed by the High Court that the petitioner requested for adjournments on July 14, 2022, August 1,2022 and then on September 21,2022. The petitioner did not avail the opportunity granted to him more than once and also did not ask for disclosure of any particular record, report or statement but avoided to file any reply.

 

“The argument based on right to get three adjournments as a matter of course, is based on provisions contained under Section 75(5) of the Act. The said provision provides that proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing provided that no such adjournment shall be granted for more than three times to a person during the proceedings’, the Bench held while noting that the petitioner was, in fact, granted three adjournments and when he failed to submit any reply, the order was passed against him. 

 

While referring to the judgments of the Supreme Court in Assistant Commissioner of State Tax and Others Versus Commercial Steel Limited and State of Madhya Pradesh and Another Versus Commercial Engineers and Body Building Company Limited, the Bench said, “The law declared in the aforesaid decisions, particularly in cases where challenge arises out of an order of assessment in the matter of imposition of tax, leaves no manner of doubt that except in limited circumstances as dealt with hereinabove, the writ petitions would not be maintainable.”

 

Thus, the objection of maintainability of the writ petitions was sustained and the writ petitions were held to be not maintainable as the petitioner had an efficacious alternative statutory remedy of filing of an appeal.

 

In Special Leave to Appeal(C) No.19038/2022-SC- Unless Appeal is listed and there is interim order, mere filing of appeal would not operate as stay: Supreme Court
Justices A.S.Bopanna & Hima Kohli [24-01-2023]

Read Order: SANJIV KUMAR SINGH Vs. THE STATE OF BIHAR & ORS 

 

LE Correspondent

 

New Delhi, January 30, 2023: While terming the act of the District Magistrate in rejecting the NOC as unjustified, the Supreme Court has referred to Order 41 Rule 5 of CPC and opined that unless the appeal is listed and there is an interim order, the mere filing of the appeal would not operate as a stay.

 

In this matter, the petitioner was before the High Court seeking a direction to the second respondent-District Magistrate, East-Champaran, Motihari, Bihar to grant ‘No Objection Certificate’ (NOC) for starting MS/HSD retail outlet dealership over land situated in the District of East Champaran in  Bihar.

 

The District Magistrate had rejected the request of the petitioner for issuance of NOC. When the said order was  assailed before the Patna High Court, the High Court also dismissed the petition only on the ground that the respondents herein had contended that as against the decree passed in favour of the petitioner in respect of the said judgment, an appeal had been filed before the High Court and the same was yet to come up for hearing.

The petitioner had assailed the order of the High Court.

 

It was also pointed out that the appeal was filed on March 11, 2022 which was registered on March 15, 2022 and the scrutiny for posting the appeal before the Court was yet to be completed.

 

“Though, such contention is put forth by the respondents, keeping in view the provisions as contained in Order 41 Rule 5 of CPC, unless the appeal is listed and there is an interim order, the mere filing of the appeal would not operate as a stay”, the Division Bench of Justice A.S.Bopanna and Justice Hima Kohli said.

 

If that be so, the judgment  would enure to the benefit of the petitioner as on today and the rejection of the NOC only on the ground that the appeal had been filed, would not be justified, the Bench held.

 

Thus, the Bench observed that the High Court was not justified in rejecting the petition. 


Setting aside the Order passed by the Patna High Court, the Bench directed the  District Magistrate to take note of the decree and issue the NOC within a period of two weeks which would be subject to the result of the appeal pending before the High Court.


 

In W.P.(T) No.493 of 2022-JHA HC- Delay, if any, is condonable up to 30 days beyond period of 60 days u/s 85(3A) of Finance Act, 1994: Jharkhand HC
Justices Aparesh Kumar Singh & Deepak Roshan [04-01-2023]

 Read Order: GLOBAL CONSTRUCTION AND ORS V. UNION OF INDIA AND ORS 

 

Mansimran Kaur

 

Ranchi, January 30, 2023:  Under Section 85 of the Finance Act, 1994 the statutory limit of 60 days is prescribed for preferring an appeal, observes Jharkhand High Court 

 

While dealing with the present writ petition, wherein the petitioners not only challenged the appellate order, but also sought quashing of the show-cause notice dated August 6, 2017, the order-in-original dated December 18, 2018 and the garnishee notice dated September  30, the Jharkhand High Court observed that since  the track consignment report had an incomplete address of the petitioner, valid service of notice of the order in original cannot be presumed.  

 

The Division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan allowed the instant appeal by observing that the presumption of proof of service of notice is a rebuttable piece of evidence and the track consignment report having an incomplete address of the petitioner, valid service of notice of the order in original cannot be presumed. 


The writ petitioners approached this Court against the garnishee notice dated September 30, 2021 issued under Section 79 of the Central Goods & Services Tax Act, 2017 whereby the respondent Deputy Commissioner (Preventive), Central Goods & Services Tax and Central Excise, Ranchi had frozen the bank account of the petitioners. 

The writ petition was disposed of without going into the merits of the case since the petitioners had approached the appellate authority against the order-in-original dated  December  18, 2018 and immediately on the next date i.e.  September  30, 2021 the impugned garnishee notice had been issued during pendency of the appellate proceedings. 

 

By order dated November 3, 2021 passed in the said writ petition the petitioners were granted liberty to move the authority that had issued the garnishee notice and pray for its recall. It was also left open to the petitioners to approach the appellate authority for expeditious disposal of appeal. 

The appeal was  dismissed on grounds of limitation as being beyond the statutory limit of 60 days prescribed under Section 85 of the Finance Act, 1994 and also beyond the condonable period of 30 days under Section 85(3A) of the Finance Act, 1994 through the impugned order dated December  23, 2021 passed by the Commissioner (Appeals), Central Goods & Services Tax and Central Excise, Ranchi . 

After considering the submissions, the Court noted that the two facts  that emerged  from the pleadings on records which cannot be ignored were, firstly  that the certified copy of the impugned order was provided to the appellant on  December  19, 2020 by the Adjudication Branch of Central Goods & Services Tax and Central Excise, Ranchi which means that by that time the relaxation of limitation period as per the directions of the Apex Court in Suo Motu Writ Petition ( had commenced due to the COVID lockdown.

 The other fact which emerged from the information obtained under RTI from the office of the Principal Commissioner, Central Goods & Services Tax and Central Excise, Ranchi dated January 24, 2022 was that the booking journal or the track consignment report of the speed post does not contain the complete address of the petitioner.

 

In view of the same, the Court noted, “the presumption of proof of service of notice is a rebuttable piece of evidence and the track consignment report having an incomplete address of the petitioner, valid service of notice of the order in original cannot be presumed”. 

 

It was also noted, “Under Section 85 of the Finance Act, 1994 the statutory limit of 60 days is prescribed for preferring an appeal. The delay, if any, is condonable up to 30 days beyond the period of 60 days under Section 85(3A) of the Act”. 

 

Hence, in light of such observations, the appeal was allowed.