Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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Seizure - Notice is required to be given to person from whose custody the goods were seized even for granting extension of time to issue show cause notice – Seizure quashed - High Court

The person from whose custody the goods have been seized under section 110 of the Act is entitled to a notice under section 124 of the Act and is entitled for a reasonable opportunity of making a representation and reasonable opportunity of being heard before an order of confiscation of goods is passed. In the present case, admittedly no notice under section 110(2) read with 124 of the Act has been issued to the petitioner within a period of 6 months. In fact the notice has not been issued till today. Consequently, the continued detention of the goods seized beyond the statutory period of 6 months (which can be extended up to one year) under section 110(1) of the Act is illegal.

Income Tax

India-Singapore DTAA - assessee enters into agreement with Singapore-based Group Co for logistics services - Sec 195 - unless Revenue establishes that technical skills or experiences were 'made available' to assessee, may be through e-commerce, such payments cannot be subjected to TDS: ITAT

THE expression 'make available' incorporated in various Double Taxation Avoidance Agreements (DTAAs) indeed calls for necessarily making available tangible evidence if Revenue wants to tax the payments made towards fees for technical services provided by non-residents. Unless the transfer of technical knowhow or experience or skills is made to the assessee so that it can use it on its own or for future use, no payment made for providing services of technical nature can be subjected to TDS. True, some of the modern skills can be transferred or passed on to the assessee through e-commerce but the Revenue needs to collect pertinent documents to establish the same before the payments are subjected to the TDS.

Service Tax

Appellants under bona fide doubt regarding their activity is a reasonable cause to not deposit the service tax in time - Penalties under sections 76, 77 and 78 not imposable in view of section 80 of the Finance Act, 1994 - CESTAT.

The appellant is entitled to get the relief as per the provisions of section 80 of the Finance Act, and following the ratio of the case of ETA Engineering Ltd. (supra) holding that the appellants were under bona fide doubt regarding their activity, was a reasonable cause on their part not to depositing the service tax in time, the penalties under section 76, 77 and 78 of the Finance Act, not imposable.

See our columns Tomorrow for the judgements