Jurisprudentiol – Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Rajasthan Sales Tax Act

Jaljira is masala - Supreme Court

DIFFERENT ingredients are used in preparation of Masala after grinding and mixing several ingredients and when they are so grinded they lose their own identity and character and a new product separately known to the commercial world comes into existence. Sales tax is levied on sale of commercial commodities, therefore, individual spices could be termed as different commercial commodities. When they are grinded and mixed they give rise to a separate commercial commodity altogether which could be taxed separately. It is settled law that when one particular item is covered by one specified entry, then the Revenue is not permitted to travel to the residuary entry. If from the records it is established that the product in question could be brought under a specific entry then there is no reason to take resort to the residuary entry.

Income Tax

Sec 28(va) - Whether payment received under negative covenant is capital receipt - YES, rules Supreme Court Larger Bench

THE issue before the Apex Court is - Whether non-compete fee received prior to 1/04/2003 is capital receipt or revenue receipt. And the verdict goes in favour of the assessee.

Service Tax

Income declared to Income Tax Department cannot be treated as proceeds of service provided - High Court: it was for department to show evasion of service tax and that money found with the assessee represented proceeds of services provided by it.

LEAST expected from the counsel for the department is to know the status of the order followed in the impugned order: the Commissioner and the Tribunal have followed an earlier order of the Tribunal. On being asked, counsel for the revenue states that he has no knowledge about the status of the order. When an appeal is filed by the department, the least expected from the counsel for the department is to know the status of the order followed in the impugned order. In absence thereof, the representation by the department can hardly be responsible representation. It is hoped that the department and its counsel will take appropriate measures in this regard.

See our columns Tomorrow for the judgements