Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Export under DEPB - Good exported and consideration realized - Unreasonable and unfair to insist on continuation of bank guarantee: HC

IN this case, the goods were neither detained, nor were subject to proceedings which culminated in any assessment order. In the circumstances, the insistence that the petitioner continue to maintain a bank guarantee for Rs. 2 crore is unwarranted. The customs authorities did not show how this condition, in addition to the bond insisted in the case of the shipment, was essential; the samples necessary for the investigation and issuance of show cause notice, if any, had been drawn. The goods were exported and the consideration was received in respect of the earlier shipments covered by the three bills; bank realization certificate towards export proceeds in respect of the said shipping bills were received on 06.07.2011.

Income Tax

Whether clause (2) of Explanation 5 to Sec 271(1)(c) prescribes any time limit within which assessee is required to deposit tax with interest - NO: SC

FOR the accounting year ending 31.3.87, assessee was required to file his return of income under Section 139(1) on or before 31st July1987. Such return of income was not filed. It is important to note that although on August 1, 1987 the Karta made a statement under Section 132(4) surrendering an amount of Rs. 42,32,000/-, the assessee chose not to file its return of income on due date, i.e., 31st July, 1987. Failure to file such return of income on 31st July, 1987 and failure to pay tax thereon was the main reason relied upon by the Department to deny to the assessee the benefit of immunity under clause (2) of Explanation 5 to Section 271(1)(c). The Karta also later on retracted his statement dated August 1, 1987. However, according to the Department, the assessee had complied with all the conditions of clause (2) of Explanation 5 except payment of tax in time.

Service Tax

Penalty - Whether Commissioner (A) order in favour of assessee means no penalty; matter referred to Third Member: CESTAT

MEMBER (J): The complexity of the Notification which has already resulted in passing of a favourable order by Commissioner (Appeals), cannot be understood by a common person not very well conversant with the legal interpretations.

Member (T): the question is whether an error made by the Commissioner (Appeal) will result in damage to the rights of the government. The matter has to be decided with reference to the appellant's actions and not with reference to the actions of the Commissioner (Appeal).

Referred to Third Member

See our columns Tomorrowfor the judgements