Judicial updates (Tax Laws)- 27th Jan 2022

Claim of Assessee of Profit lower than 8% cannot be denied for mere non-submission of Tax Audit Report

ACIT Vs Vairam Constructions (ITAT Chennai) dated 18/01/2022

Rs. 258 Crore illegal ITC availment case – HC refuses Bail to accused

Paritosh Kumar Siingh Vs Senior Intelligence Officer (Chhattisgarh High Court) dated 18/01/2022


Income Tax Notice issued issued against a dead person, is null and void

Dharamraj Vs ITO (Delhi High Court) dated 17/01/2022


Directors’ personal property cannot be Attached to Recover Companies Sales Tax Dues
Sunita Ramesh Bansal Vs Assistant Commissioner of State Tax (Gujarat High Court) dated 13/01/2022


HC disposes petition as department granted credit as per courts direction which was earlier not given

Siddharth Enterprises Vs Nodal Officer (Gujarat High Court) dated 12/01/2022


Expenses towards provision for pension fund allowable as expenses

ACIT Vs Punjab & Sind Bank (ITAT Delhi) dated 05/01/2022


HC directs unblocking of Electronic Credit Ledger as one year period was expired

Krishna Fashion Vs Union of India (Delhi High Court) dated 18/01/2022

GST Cash credit account of assessee cannot be provisionally attached

Manish Scrap Traders Vs Principal Commissioner (Gujarat High Court) dated 12/01/2022


If assessee resold goods imported from AE without any value addition, than most appropriate method for determining ALP is RPM

Randox Laboratories India Private Limited Vs ACIT (ITAT Bangalore) dated 04/01/2022

GST updates NACIN (Presentation)

GST updates NACIN

•This Presentation covers the GST changes/observations/ press releases released by CBEC since the last updateon 04.12.2021.

It supplements the earlier GST Updates.

•This presentation is based on CGSTAct/Rules/Notifications, except the provisions related solely to SGST provisions. Similar parallel provisions in State Laws may be referred to as required

Download

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CGST Bhiwandi Commissionerate arrests businessman for running fake ITC network (bogus billing of more than 63 Crores) Press Release Dated 22th Jan 2022

  The officers of Bhiwandi Commissionerate of CGST Mumbai Zone have arrested a businessman was running a Fake GST Input Tax Credit racket. Acting on an intelligence from Central Intelligence Unit of Mumbai CGST Zone, the officers initiated coordinated action at different locations in Thane, Bhiwandi, Raigad and Mumbai and detected GST evasion of Rs 11.4 crores through generation and passing of fake ITC through intricate web of bogus billing of more than 63 Crores.

          The search was conducted at Bhiwandi based business premises of M/s. Adarsh Scrap Traders which was indulging in bogus billing and availment and passing on of fake ITC and thus defrauding the Government exchequer of its rightful GST revenue. The initial investigation revealed that firm had fraudulently claimed and passed on Input Tax Credit (ITC) of Rs.11.4 Crores without actual supply or receipt of goods. The proprietor of the firm, confessed to the bogus billing and running of fake ITC racket. He was arrested on 21.01.2022 under Section 69 of CGST Act, 2017 and was produced before the Hon’ble Additional Chief Metropolitan Magistrate, Fort, Mumbai, today on 22.1.2022. The Hon’ble CMM has remanded the accused to 14 days judicial custody, till 04.02.2022.

          The amount of fake ITC involved is likely to go up during the ongoing investigation once the entire network is investigated. The roots of this network are spread across the cities of Nagpur, Pune, Delhi and Nasik apart from Mumbai and Thane. At this stage, it seems that around 25 entities are part of this network. Jurisdictional Commissionerates are being informed to initiate legal action against the firms falling in their jurisdiction.

          This operation is a part of efforts by CGST Mumbai Zone to eradicate fake ITC networks, which have been vitiating the healthy economic ecosystem of the country and defrauding the Government Exchequer. This the Sixth arrest by Bhiwandi Commissionerate in last 6 months. The department will intensify the drive against fake ITC networks and other GST evaders in the coming months.

***

CGST Bhiwandi Commissionerate/CP/PK

सीजीएसटी भिवंडी कमिश्नरी ने एक व्यवसायी को गिरफ्तार किया


नकली आईटीसी नेटवर्क, 63 करोड़ रुपये की फर्जी बिलिंग का मामला
Posted Date:- Jan 22, 2022

सीजीएसटी भिवंडी कमिश्नरी ने एक व्यवसायी को गिरफ्तार किया और एक नकली आईटीसी नेटवर्क को तोड़ दिया जिसने 63 करोड़ रुपये की फर्जी बिलिंग की।

सीजीएसटी मुंबई जोन के भिवंडी कमिश्नरी के अधिकारियों ने 25 से अधिक फर्जी संस्थाओं के एक नकली इनपुट टैक्स क्रेडिट रैकेट का भंडाफोड़ किया है, जिसने 63 करोड़ रुपये से अधिक की फर्जी बिलिंग की और नकली आईटीसी के माध्यम से सरकार को 11.4 करोड़ रुपये का चूना लगाया। एक फर्जी इकाई के मालिक को गिरफ्तार किया गया है।

मुंबई सीजीएसटी जोन की सेंट्रल इंटेलिजेंस यूनिट से एक खुफिया जानकारी पर कार्रवाई करते हुए, अधिकारियों ने ठाणे, भिवंडी, रायगढ़ और मुंबई में विभिन्न स्थानों पर समन्वित कार्रवाई शुरू की और फर्जी बिलिंग के जटिल वेब के माध्यम से नकली आईटीसी के उत्पादन और पासिंग के माध्यम से 11.4 करोड़ रुपये की जीएसटी चोरी का पता लगाया ।

तलाशी, मैसर्स के भिवंडी स्थित व्यावसायिक परिसर में की गई। प्रारंभिक जांच से पता चला है कि फर्म ने धोखे से दावा किया था और माल की वास्तविक आपूर्ति या प्राप्ति के बिना 11.4 करोड़ रुपये के इनपुट टैक्स क्रेडिट (आईटीसी) को पारित कर दिया था। फर्म के मालिक ने फर्जी बिलिंग और फर्जी आईटीसी रैकेट चलाने की बात कबूल की। उन्हें सीजीएसटी अधिनियम, 2017 की धारा 69 के तहत 21.01.2022 को गिरफ्तार किया गया था और आज 22.1.2022 को माननीय अतिरिक्त मुख्य मेट्रोपॉलिटन मजिस्ट्रेट, फोर्ट, मुंबई के समक्ष पेश किया गया। माननीय सीएमएम ने आरोपी को 04.02.2022 तक 14 दिनों की न्यायिक हिरासत में भेज दिया है।

पूरे नेटवर्क की जांच के बाद चल रही जांच के दौरान इसमें शामिल नकली आईटीसी की मात्रा बढ़ने की संभावना है। इस नेटवर्क की जड़ें मुंबई और ठाणे के अलावा नागपुर, पुणे, दिल्ली और नासिक शहरों में फैली हुई हैं। इस स्तर पर, ऐसा लगता है कि लगभग 25 संस्थाएं इस नेटवर्क का हिस्सा हैं। क्षेत्राधिकार आयुक्तालयों को उनके अधिकार क्षेत्र में आने वाली फर्मों के खिलाफ कानूनी कार्रवाई शुरू करने के लिए सूचित किया जा रहा है।

यह ऑपरेशन सीजीएसटी मुंबई ज़ोन द्वारा नकली आईटीसी नेटवर्क को मिटाने के प्रयासों का एक हिस्सा है, जो देश के स्वस्थ आर्थिक पारिस्थितिकी तंत्र को खराब कर रहा है और सरकारी खजाने को धोखा दे रहा है। पिछले 6 महीनों में भिवंडी कमिश्नरी द्वारा यह छठी गिरफ्तारी है। विभाग आने वाले महीनों में नकली आईटीसी नेटवर्क और अन्य जीएसटी चोरों के खिलाफ अभियान तेज करेगा।

Judicial updates -21st January 2022

SC in G.T. Girish Vs Y. Subba Raju (D) By LRs judgment dated 18th Jan 2022 held that Subordinate Legislation in the form of Statutory Rules is a ‘law’ u/s 23 of Indian Contract Act


Matter involving large scale State Revenues should be disposed speedily Dalmia Refractories Limited Vs State of Tamil Nadu (Madras High Court) dated 11/01/2022


One Time Settlement (OTS) of Bank Loan is Not a Right of Borrowers held by SC in
matter of Bijnor Urban Cooperative Bank Limited dated 15/12/2021


SEBI impose penalty for dealings in illiquid Stock Options at the BSE In Re Ashok Kumar Sharma HUF (SEBI) -23/12/2021


Taxation

Rajasthan HC disposes Plea seeking extension of due dates till portal Glitches removed

Tax Bar Association Vs Union of India (Rajasthan High Court) dated 12/01/2022

If AO accepts objections of assessee and does not assess or reassess the income which was the basis of notice than he cannot made additions on other issues

Yashoda Shivappa Nagangoudar Vs ITO (Bombay High Court) dated 05/01/2022

Provisional custom duty paid by Assessee cannot be treated as deposit

Nirma Ltd Vs C.C.-Jamnagar(prev) (CESTAT Ahmedabad) dated 13/01/2022

Bombay HC in Vodafone Idea Ltd. Vs ACIT dated 03/01/2022 held-

Reopening of Assessment not permissible to take another view on same material

For legal updates

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Regards,

Bipul Kumar

Tribunals/Quasi-Judicial Bodies

In India, Tribunals are a part of the Executive branch of the Government which are assigned with the powers and duties to act in judicial capacity for settlement of disputes. Part XIV of the Constitution of India makes provisions for establishment and functioning of the Tribunals in India. They are quasi-judicial bodies that are less formal, less expensive and enable speedy disposal of cases.

There are tribunals for settling various administrative and tax-related disputes, including Central Administrative Tribunal (CAT), Income Tax Appellate Tribunal (ITAT), National Company Law Tribunal (NCLT), Customs, Excise and Service Tax Appellate Tribunal (CESTAT), National Green Tribunal (NGT) and Securities Appellate Tribunal (SAT), among others. Tribunals were added in the Constitution by Constitution (Forty-second Amendment) Act, 1976 as Part XIV-A, which has only two articles viz. 323-A and 323-B. Article 323A provides that a law made by the parliament may provide for establishment of an Administrative Tribunal for the Union and a separate Administrative Tribunal for each state or two or more states. Article 323 B empowers the parliament or state legislatures to set up tribunals for matters other than those mentioned under Article 323A.

Types of Tribunal in India

1. Debt recovery Tribunal

The Debt Recovery Tribunals have been constituted under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993. The original aim of the Debts Recovery Tribunal was to receive claim applications from Banks and Financial Institutions against their defaulting borrowers. (DRT) was established for expeditious adjudication and recovery of debts due to banks and financial institutions in order to reduce the non-performing assets of the Banks and Financial Institutions. Prior to the introduction of Debt Recovery Tribunal, petitions had to be filed separately for adjudication of cases and execution proceedings in different courts depending upon their jurisdiction. DRT acts as a single judicial forum for adjudication of cases as well as execution of the decrees passed for recovery of debts due to banks and financial institutions under RDDBFI Act and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.

2. National Company law

Tribunal National Company Law Tribunal (NCLT) is a quasi-judicial body exercising equitable jurisdiction, which was earlier being exercised by the High Court or the Central Government. It has been established by the Central government under section 408 of the Companies Act, 2013 with effect from 1st June 2016. The Tribunal has powers to regulate its own procedures. The establishment of the National Company Law Tribunal (NCLT) consolidates the corporate jurisdiction of the following authorities:

i)Company Law Board


ii) Board for Industrial and Financial Reconstruction.

iii) The Appellate Authority for Industrial and Financial Reconstruction

iv) Jurisdiction and powers relating to winding up restructuring and other such provisions, vested in the High Courts.

3. Consumer Forum

To protect the rights of the consumers in India and establish a mechanism for settlement of consumer disputes, a three-tier redressal forum containing District, State and National level consumer forums has been set up. The District Consumer Forum deals with consumer disputes involving a value of upto Rs. 1 crore. State Commission has jurisdiction in consumer disputes having a value of upto Rs.10 crore. The National Commission deals in consumer disputes above Rs.10 crores, in respect of defects in goods and or deficiency in service. It is important to note that consumer courts do not entertain complaints for alleged deficiency in any service that is rendered free of charge or under a contract of personal service.

4. Motor Accident Claims

Tribunal (MACT) The Motor Accidents Claims Tribunal deals with matters related to compensation of motor accidents victims or their next of kin. Victims of motor accident or legal heirs of motor accident victims or a representing Advocate can file claims relating to loss of life/property and injury cases resulting from Motor Accidents. Motor Accident Claims Tribunal are presided over by Judicial Officers from the State Higher Judicial Service and are under direct supervision of the Hon’ble High Court of the respective state.

5. Central Administrative Tribunal (CAT)

Central administrative Tribunal is a multi-member body to hear on cases filed by the staff members alleging non-observation of their terms of service or any other related matters and to pass judgments on those cases. This Tribunal established in pursuance of the amendment of Constitution of India by Articles 323A.

6. National Green Tribunal (NGT)

National Green Tribunal was established for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right relating to environment and giving relief and compensation of damages to persons and property and for related matters.

7. Income Tax Appellate Tribunal (ITAT)

ITAT is a quasi judicial institution set up in January, 1941 and specializes in dealing with appeals under the Direct Taxes Acts. The orders passed by the ITAT are final, an appeal lies to the High Court only if a substantial question of law arises for determination.

Presently ITAT has 63 Benches at 27 different stations covering almost all the cities having a seat of the High Court

Judicial updates (GST)-18th Jan 2022

Electronic Credit Ledger automatically gets unblocked after 1 Year

Ambika Creation Vs Commissioner, Govt. of Gujarat (Gujarat High Court) dated 12/01/2022

HC cancels summon under GST as Petitioner was co-operating

FSM Education Pvt. Ltd. Vs Union of India (Bombay High Court) dated 10/01/2022

HC grants bail to CA on furnishing bail bond of Rs. 50 Lakh in Bogus ITC claim

Amit Kumar Agarwal @ Amit Agarwal Vs State of Odisha (Orrisa High Court) dated 11/01/2022

HC sets aside retrospective amendment In IPR denying GST reimbursement

Ultratech Cement Limited Vs State of Odisha (Orissa High Court) dated 04/01/2022

GST paid during Investigation shall be treated as amount paid ‘under protest’

Aditya Energy Holdings Vs Directorate General of GST Intelligence (Madras High Court) dated 10/12/2021

In absence of proper details & substantiating documentary evidences advance ruling cannot be given

Chep India Private Limited (GST AAR Tamilnadu) dated 28/12/2021

ITC of GST restricted U/s. 17(5)(d) cannot be utilised

INOX Air Products Pvt Ltd. (GST AAAR Tamilnadu) dated 02/12/2021

Advance ruling under GST cannot be given on facts related to Pre-GST period

Handloom Weavers Cooperative Society Ltd. (GST AAR Tamilnadu) dated 30/12/2021

Regards,

Bipul Kumar

DGGI Officials bust network involving fake invoices worth more than Rs 4,500 crore (Press release dated 14th Jan 2022)

Recently a case was booked by DGGI against some fake firms, which were found non existing at their principal place of business. To trace the real persons behind these fake firms, the physical address from where GST returns were actually filed was ascertained. Then search was conducted on 06.01.2022 at that premises in Delhi. During search, it was found that proprietor is engaged in providing services of ‘Cloud Storage’ on his servers to various customers for maintaining their financial accounts.

On scrutiny of one of the suspicious server, details of certain firms were found in tally data. It was informed by the proprietor that this tally data is being maintained by one syndicate based in Kolkata. The address details of these persons were obtained from Proprietor and then searches were conducted at various premises in Kolkata on 10.01.2022.

During search huge amount of incriminating documents including mobiles phones, various cheque books, stamps of various firms and SIM cards have been recovered. On analysis of electronic devices, documents, mobiles and e-mail of these persons, it has been found that these persons are remotely maintaining data on the server found at the premises in Delhi.

Scrutiny of Tally data has shown that there are 636 firms being operated by this syndicate. The mastermind of syndicate has accepted that they have issued only invoices in these firms and not supplied any goods against them. They have issued invoices involving taxable value of approx. Rs. 4,521 crore  having ITC implication of approx. 741 crore.

During the course of investigation, GST amounting to Rs. 4.52 crore has been got deposited by reversal of ITC available in the ITC ledger of these firms. Further, till now approx. Rs. 7 crore lying in various bank accounts of these firms has been frozen. The mastermind behind the whole racket has been arrested on 13.01.2022. Further investigation in the case is under progress.

Allahabad HC imposes cost on GST officer for seizure of goods without any justification

Allahabad HC imposes cost on GST officer for seizure of goods without any justification

Shri Surya Traders Vs Union of India (Allahabad High Court) Judgement dated 06/01/2022*

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Judicial updates (GST & Income Tax) -11 Jan 2022

GST

Patna HC Quashes GST order passed in violation of Principles of Natural Justice

Sky Vision Media Private Limited Vs State of Bihar (Patna High Court) dated 04 Jan 2022

Cash credit account cannot be provisionally attached- HC issues contempt notice to Principal Commissioner

Manish Scrap Traders Vs Principal Commissioner (Gujarat High Court) dated 05/01/2022

Levy of basic excise duty & NCCD not violative of Article 14 of Constitution

V.S. Products Vs Union of India (Karnataka High Court) dated 04/01/2022

HC quashes Order for not providing hearing opportunity to Assessee

Naresh Aggarwal Agencies Pvt. Ltd. Vs State of Punjab & anr. (Punjab and Haryana HC) dated 21/12/2021

INCOME TAX

Penalty cannot be imposed merely for non-filing of Audit Report Electronically

SLV Housing Development Corporation Vs ACIT (ITAT Bangalore) dated 22/11/2021

CIT cannot invoke section 263 if there was lack of inquiry from the end of AO

Pushp Steel and Mining Private Ltd. Vs PCIT (ITAT Delhi) dated 22/12/2021

RPM method used by Taxpayer cannot be rejected without pointing defect in the same

Randox Laboratories India Private Limited Vs ACIT (ITAT Bangalore) dated 04/01/2022

Regards,

Bipul Kumar