Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Though tax amount is paid case has not attained finality - Granting of Informer reward at this stage, is not proper - Appeal disposed of: HC

THOUGH the department has recovered the duty evaded on account of service tax dues together with interest, the matter has not attained finality. The payment of a reward at this stage cannot be directed, less so by the Court in the exercise of its extra ordinary jurisdiction under Article 226 of the Constitution. So long as the proceedings initiated by the Assessee are pending, the issue as regards the liability of the assessee is still at large before the CESTAT which has to decide the issue.

It is now a settled principle of law that a reward under the policy of the Union Government is purely an ex gratia . There is no vested right as such to the payment of a reward.

Income Tax

Whether income earned from development of software upgrades for Network Management Systems for smooth and trouble free working of VSAT service provided by assessee, as part of business of telecommunication services, is eligible for deduction u/s 80-IA(4) - YES, rules Delhi HC

THE assessee is a public limited company and was providing satellite based telecommunication solutions including VSAT services, up-linking services, play out services and broadband service through satellite. It had earned income from the said services, besides rental income and income from other sources. In the return of income, it had claimed deduction u/s 80IA of the Act of Rs.4,88,29,013/- and after the adjustment, had declared total taxable income of Rs. 5,45,89,013/-.

The AO treated Rs.1,42,34,278/- as income earned by the assessee from domestic satellite service. The AO held that the said satellite was not a 'domestic satellite' as it was owned by Department of Space, Government of India, which was not an Indian company and was being operated by British Telecom (Worldwide), a foreign company.

Customs

Charging interest is a substantive provision and can be charged only if statute makes a substantive provision in that regard - provisional assessments are governed by Sec 18 and at relevant time when assessments were finalized there was no provision for recovery of interest – interest not chargeable u/s 28AA as no SCN has been issued: HC

THIS case began its journey in the year 1979. The Respondent had imported a consignment of Caustic Soda in the year 1979. The duty payable on the imported Caustic Soda was 92.5% as per the Customs Tariff Act, 1975. At that time the Central Government had issued a special order under Section 25(2) of the said Act by which the State Chemicals and Pharmaceuticals Corporation of India Ltd. were exempted from paying customs duty on the import of Caustic soda in excess of 10% ad-valorem.

See our columns Tomorrow for the judgements