Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Hiring of buses to State RTC - not rent-a-cab service - Pre-deposit waived and recovery stayed: CESTAT

FROM the terms and conditions of the agreements, it appears that the buses did not fit in the definition of "cab" under Section 65(20) and the transactions between the Corporation on the one hand and the appellants on the other are not to be considered as squarely falling within the ambit of "rent-a-cab" service. Certain factors emerging from the nature of transactions appear to be incompatible with the features of the rent-a-cab scheme. The buses were admittedly being operated as stage carriage under cover of stage carriage permits. The routes were allotted by the RTOs in accordance with the State Government's policy. The buses were plied on such routes with fixed timetable determined by the Corporation. The passengers had to pay fares at rates fixed by the State Government. These fares were collected by the Corporation. All these undisputed facts appear to converge to features of a public transport system. In the totality of all these facts and circumstances, the activities undertaken by the appellants were much more than mere hiring of buses to the Corporation and hence might not be covered by the definition of "rent-a-cab" service.

Income Tax

Whether before invoking provisions of Sec 179 against Director of a Pvt Company it is necessary for Revenue to establish that tax due cannot be recovered from company - YES: Gujarat HC

THE issues before the Bench are - Whether in order to invoke the provisions of section 179 against a director of a private limited company, the Department must first establish that tax dues from the company cannot be recovered; Whether under section 179 of the Act, the Department could only recover tax due from the director of a private limited company and not interest or penalty and Whether on the facts and in the circumstances of the case, the Department is not justified in seeking recovery of the dues against the petitioner on the ground that there was no gross negligence on part of the petitioner to which non recovery can be attributed. And the verdict goes in favour of the assessee.

Central Excise

Issuance of clarifications under Rule 31 of Central Excise Rules, 2002 by Commissioner - The petitioner has not been in position to show that petitioner has right to demand issuance of clarifications and that there is concomitant obligation on part of respondent to issue such clarifications: HC

THE Petitioner filed a writ petition by praying that the Court may be pleased to issue a writ of Mandamus to direct the respondent, to issue certain clarifications on their representations, in terms of provisions of Rule 31 of the Central Excise Rules, 2002.

++ The Petitioner submitted that the respondent has an obligation to issue such clarifications, as prayed for by the petitioner, under Section 37-B of the Central Excise Act, 1944 and also under Rule 31 of the Central Excise Rules, 2002.

See our columns Tomorrow for the judgements