Jurisprudentiol – Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.VAT/CST

Sale of Goods at Duty Free Shops in Airports - The State of Karnataka has no right to tax any such transaction, which takes place at duty free shops which are not within customs frontiers of India – Supreme Court

IT is very clear that no tax on the sale or purchase of goods can be imposed by any State when the transaction of sale or purchase takes place in the course of import of goods into or export of the goods out of the territory of India. Thus, if any transaction of sale or purchase takes place when the goods are being imported in India or they are being exported from India, no State can impose any tax thereon; when any transaction takes place outside the customs frontiers of India, the transaction would be said to have taken place outside India.

Income Tax

Whether even if assessee undertakes frequent transactions of sale and purchase of shares, if principal is investment, bonus would also remain investment, and income earned from sale is to be treated as capital gains - YES: ITAT

BONUS shares can be issued only out of accumulated profit in the form of general reserve available with the issuing company. Issuance of such shares does not enhance the value as the reserves of the issuing company get reduced on issuance of bonus shares. Therefore, the nature of bonus shares has to be taken as same as the original shares. This view finds support from the decision in the case of Madan Gopal Radhey Lal. Accordingly, it has to be held that the original equity shares and the bonus shares were held on investment account.

Service Tax

All refund claims except those mentioned under specific proposition of law laid down by Apex Court in Mafatlal Industries Ltd case, have to be and must be filed and adjudicated under provisions of Central Excise Act or Customs Act, as the case may be – Karnataka HC

WHEN the Act provides a complete mechanism for correcting any errors whether on fact or on law the burden is to work out his remedy within four corners of law. If the remedy is to be worked out within the four corners of law the party has accepted invoking the jurisdiction of the authority to refund within the period prescribed under the Act. In that view of the matter, we do not find any merit in this appeal. The order passed by the Tribunal is strictly in accordance with law and the law declared by the Apex Court. There is no merit in this appeal.

See our columns Tomorrow for the judgements