Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Commercial Training or Coaching Service - CBEC Circular dated 20.06.2003 restricting exemption under Notification No 12/2003 ST only to standard text books is illegal and unauthorized: CESTAT

THE clarification in the Board Circular dated 20.06.2003 is misconceived, clearly illegal and contrary to the statutory exemption Notification dated 20.06.2003. Where the legislature has spoken or in exercise of its statutory power exemption is granted by the Central Government under Section 93 of the Act, the CBEC has no manner of power, authority or jurisdiction to deflect the course of an enactment or the exemption granted. Grant of exemption from the liability to tax is a power exclusively authorised to the Central Government under Section 93 of the Act. This statutory provision accommodates no participatory role to the Board. In seeking to engraft restrictions on the generality and plenitude of the exemption granted by the Central Government, the CBEC transgressed into the domain of the Central Government under Section 93 of the Act, a course of action clearly prohibited.

Income Tax

Whether merely because AO order does not contain reasons as to why he accepted assessee's claim, his order becomes susceptible for revision u/s 263 - NO: AP HC

THE assessee is a private limited company and registered as NBFC with the RBI. Initially, it was a franchisee of M/s Coca-Cola Company and was engaged in the Bottling business. In December, 1997, the business of the assessee was taken over by the said Company as a going concern and the assessee received Rs.56.23 Crores as consideration/compensation. This amount received by the assessee was invested by it in stages in shares of Companies quoted on the Stock Exchange and in units of Mutual Funds. The assessee also owns a Kalyanamandapam at Vijayawada from which it gets rental income by letting it out for various functions.

THE issues before the Bench are - Whether merely because the order of the AO does not contain reasons as to why he accepted the assessee's claim, his order becomes susceptible for revision u/s 263; Whether it is open to the Commissioner to reopen the assessment on the ground that a different view is possible; Whether merely because of large frequency and volume of transactions, a conclusion that an assessee is a trader cannot be drawn without considering the period of holding of those shares by the assessee; Whether merely because of large frequency and volume of transactions, a conclusion that an assessee is a trader can be drawn without considering the period of holding of those shares by the assessee and Whether the fact that the assessee has an administrative set up and incurs considerable administrative expenditure can be a factor to hold that the assessee is a trader. And the verdict goes against the Revenue.

Customs

Customs Valuation - Strictures against the Deputy Commissioner, GATT Valuation Cell, Mumbai - HC remands matter with a direction to Commissioner to assign the job to some other officer for adjudication.

DEPUTY Commissioner of Customs has a closed mind and treats a compliance with the principles of natural justice as a mere formality. Hence, while we are inclined to set aside the impugned order and remit the matter back for fresh decision after complying with the requirements of Rule 12, we direct the Commissioner of Customs to assign the case to some other officer, other than the officer by whom the impugned order is passed. We record our disapproval of the manner in which the affidavit in reply has been drafted.

See our Columns Tomorrow for the judgements