Jurisprudentiol – Wednesday 's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Plastic bhusa used as fuel in Marine Boiler – whether permission from Maharashtra Pollution Control Board was taken or not is immaterial to issue of availing Cenvat Credit under the CCR , 2004 – Revenue appeal Dismissed – CESTAT

Revenue is of the view that this ‘plastic bhusa ' is not covered under the definition of input/fuel or capital goods inasmuch as it does not find a mention in the definition of ‘input' given under rule 2 of the Cenvat Credit Rules, 2004.

Income Tax

Search - Assessee offers to pay tax on excess jewellery to buy peace - additions - CIT(A) and Tribunal find explanation satisfactory but sustain disallowance - Once explanation accepted it is not permissible for Revenue to impose tax liability - it would mean illegal extraction of tax: High Court

SEARCH & Seizure is a routine activity in Income Tax Department. Recovery of jewellery, semi-precious and precious stones and cash are most common items. In may cases, although the assessees do painstakingly explain the source of purchases and cash withdrawals from banks but also make an offer to pay tax on anything declared as ''excess'' by the AO. This is done by the assessee to buy peace and avoid protracted litigation. But there are cases within such instances where the AO prefers not giving quietus to issue and proceed with huge additions. However, the appellate authority and the Tribunal accept the explanation given by the assessee but even then they also sustain the partial disallowance made by the AO on which the assessee has offered to pay tax. Now the question is: Is it permissible for the Revenue to still fasten the assessee with the liability to tax when it has accepted the explanation of the assessee relating to the source of purchase?

Sales Tax

Sales Tax – Two questions referred to High Court – Only one is answered – HC requested to answer the unanswered question: Supreme Court

We set aside the order of the High Court insofar as it relates to the first question of law and remit same to it with a request to answer same referred to by Sales Tax Tribunal, after affording opportunity to both parties, and pass fresh order in accordance with law as expeditiously as possible. To this extent, the impugned order of the High Court is modified.

See our columns Tomorrow for the judgements