Jurisprudentiol–Friday's cases

By Vijay Kumar

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

The Tribunal cannot give a go-bye to a patent error found in the orders of the lower authorities. – Even if not challenged - CESTAT

SECTION 76 provides for a penalty on a service tax assessee who commits default simplicter in payment of the tax. Section 78, on the other hand, is a more stringent penalty provision, which provides for a harsher penalty on a service tax assessee who commits default with mens rea . Fraud, suppression, misstatement, contravention of provisions of law with intent to evade payment of duty etc. are the various elements of mens rea mentioned in the text of section 78. The lower authorities ought to have applied their mind to these features of the penal provisions.

Income Tax

Depreciation - Union Govt grants waiver of loan and interest - actual cost of capital assets may change prospectively - cost of assets to be reduced by sum of loan waived off for allowance of depreciation u/s 32: ITAT

DEPRECIATION of capital assets is a common thread which runs through all kinds of businesses. It is significantly large in case of capital-intensive manufacturing sector. To compensate a business entity for depreciation the Income Tax Act has Sec 32. But sometimes a dispute crops up when the cost of capital assets changes. In other words, the 'actual cost' of capital assets undergoes an alteration because of subsequent developments in the business. The matching provision in the I-T Act for this head is Sec 43(1). The actual cost may change when a loan taken or granted against creation of such capital is waived off or there may be cessation of other types of liabilities linked to a block of capitals.

Central Excise

Appeal not filed against Assistant Commissioner's order – High Court cannot entertain writ: High Court

Admittedly, as against the order impugned in this Writ Petition, the petitioner has an appeal remedy before the Commissioner of Customs and Central Excise (Appeals), which is not availed of by it. Nothing also prevented the petitioner from availing such remedy. Without availing the said remedy, the petitioner has directly approached this Court under Article 226 of the Constitution of India by way of this Writ Petition, which is not maintainable.

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