Jurisprudentiol–Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

C&F Agent – selling of tea for the principal – No return filed due to a bona fide belief – Demand barred by limitation – issue not decided on merits: CESTAT

IT is contended by the Revenue that the appellants failed to submit the Return and to observe the procedure. Tribunal held that procedural failure on the part of the appellants was a result of bona fide belief. As such, demand of tax is barred by limitation and the impugned order is liable to be set aside. The impugned order set aside on limitation without going into the merits of the case.

Income Tax

DTAA –Income tax payable on rendering of services in India and utilisation of services in India; TDS to be deducted and if not deducted, payer liable to pay the TDS to Government - no tax on services purely off-shore and outside India; – High Court

THE twin criterion of rendering of services in India and utilisation of services in India becomes evidently noticeable in respect of "start, up services and overall responsibility." However, in respect of "technical services" the rendering of services being purely off-shore and outside India, the remuneration whatever paid towards technical services does not attract tax liability. However, the split up remuneration paid towards "start up services and overall responsibility", appellant had duty in law to effect TDS. The failure to do so makes it vicariously liable to pay the tax on the amounts paid to REOL towards, "start up services and overall responsibility." However, it would not incur any liability to pay tax towards the amount paid in respect of "technical services."

Customs

Challenge to safeguard Duty on Soda Ash - Writ Petitions ought to be entertained, when there is either a complete lack of jurisdiction or a palpable error so grave which requires imminent interference by a writ court – Petition dismissed – High Court

THE levy is in public interest, which is made to give effect to a provision in the statute that domestic industry is to be protected from onslaught of increased quantities of export which cause or threaten to cause market disruption; power is conferred on a senior functionary i.e., the Director General, who is required to exercise the same after due analysis of material and evidence collected by him after taking into account the presence of critical circumstances.

See our columns tomorrow for the judgements