Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Management, Maintenance or repair of roads - Retrospective exemption by Finance Act, 2012 - Prima facie, runways at airports are species of genus "road" - CESTAT directed to hear appeal without pre-deposit: HC

THE appellant is registered as Service Tax Provider and carries on the business of maintenance and repairs of roads including runways at different airports. The Service Tax demanded was Rs.10.25crores for the period 2005-06 to 2009-10. CESTAT directed a pre-deposit of Rs. 3 crores.

The issue for consideration before the Tribunal on merits would be whether the word "roads" would include within it "runways" at airports. Prima facie, it appears that runways at the airports are species of the genus "road". Therefore, the runways should also normally receive the same treatment as roads for service tax purpose.

Income Tax

Whether when there is nothing on record that assessee has claimed TDS credit for deduction made against advance received from customers, any addition is warranted - NO: ITAT

AO made an addition on account of TDS claimed on advance against running contracts observing that assessee itself had admitted that the TDS claim had been made in respect of advances receipts also. As per the provisions of Rule 37BA read with Sec. 199, ‘credit for tax deducted at source and paid to the Central government, shall be given in assessment year in which such income is assessable.' Since TDS credit had been claimed during the year, the corresponding advance receipts had also to be taken in the income related to AY 2008-09. Assessee contended that AO had understood advance against running contracts appearing in the liability side and concluded that the said amount of advance money received from various customers is after deduction of TDS and consequently surmises the amount as income of the assessee which was factually wrong. The said amount was not advance received by the assessee from the customers but was the balance resulting upon working as per the method of revenue recognition prescribed by Accounting Standard 7.

Customs

Territorial Jurisdiction - Customs - DEPB Licences - Release of TRA for DEPB licences - No part of cause of action had arisen within jurisdiction of the High Court of Gujarat - The petition is required to be rejected only on this ground: HC

THE DEPB licences were issued at Varanasi. The port of export was shown at Varanasi. The licences were issued by Director General of Foreign Trade, New Delhi. Such licences were transferred in favour of the petitioners also by the same authority. On the basis of purchase of such licences the petitioners imported goods which landed at Mumbai. The customs authorities at Mumbai refused to permit imports thereof on the basis of the DEPB licences so purchased by the petitioners. Clearly, no part of the cause of action can be stated to have arisen within the local limits of this court. The ultimate order that the Joint Director of Foreign Trade passed was also at New Delhi. The ultimate order cancelling the licences which the petitioners have challenged in the petition subsequently, was also passed by the authority at New Delhi. Merely because the officer of DRI issued a summons to the petitioners during the course of investigation, would not give any jurisdiction to the High Court to entertain this petition.

See our columns Tomorrow for the judgements