Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Deferred Sales Tax - Demand of differential Duty - Prima facie case - Stay Granted: CESTAT

ASSESSEE availing the benefit of pre-payment of the amount of deferred sales taxes as per the provisions of Maharashtra Sales Tax Act, 1959 - Once the entire amount of deferred payment of sales tax has been pre-maturely paid, such payments, in the public interest, are considered as in discharge of deferred balance Sales Tax – definition of transaction value as under s.4 of the CEA, 1944 gets attracted – Prima facie case – Demand has no leg to stand - Waiver of pre-deposit - Stay granted.

Income Tax

Whether when assessee transfers shares to non-resident purchaser who also enters into non-compete agreement, consideration received is required to be bifurcated attributing a part to non-compete fees - NO: ITAT

THE assessee, a shareholder of a closely-held company, owned and managed by Mandhana family for a number of years, entered into a joint venture arrangement with a Germany Company. The German company was acquired by a Dutch company and the Dutch Company acquired all the shares held by Mandhana family for a consideration of Rs 570 per share. All the shareholders in Mandhana family entered into an agreement with Dutch Company for the purpose of this transfer of shares, and one of the clauses in the agreement also provided that the transferor shall not carry on, or be interested in, any business which competed with the business of the share purchaser.

Service Tax

Appellant collecting consideration for plant operation and maintenance and discharging Service tax liability – Clients supplying electricity free of cost for said service – Such cost will have to be included in the value of the taxable services rendered: CESTAT

THE department was of the view that the cost of electricity supplied free by the client, should also be included in the value of taxable services rendered by the clients and accordingly, a show-cause notice was issued to the appellant demanding service tax amounting to Rs.3,31,43,598/- on the cost of electricity which was not included in the value of taxable service during the period January 2004 to July 2008.

See our columns Monday for the judgements