Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

ST - appellant entering into a contract and putting their buses at disposal of PRTC, a Punjab State Government Undertaking and receiving an amount on per day basis which was to be paid on fortnightly basis - repair and maintenance of the buses and expense on diesel was to be borne by appellant and the driver was also to be provided by appellants on their expense - buses, however, were to be operated by PRTC on various routes as stage coaches and conductors were of PRTC - activity taxable as Rent a Cab service - since Commr(A) has not considered appellant's claim with regard to their eligibility for abatement under Notification No. 1/2006-ST and also exemption under Notification No. 6/2005-ST, matter remanded: CESTAT.

THE department was of the view that the appellants are providing rent-a-cab service taxable under Section 65 (105) (o) read with Section 65 (91) and 65 (20) of the Finance Act, 1994, to PRTC and, hence, they would be liable to pay service tax on the amount being received by them from PRTC. Section 65 (91) during the period of dispute defined "rent a cab scheme operator"

Income Tax

Income Tax - Section 11 (5), 12AA , 13(1)(d) - Whether the assessee-trust loses entitlement to exemption u/s 11 merely because it placed some funds with chit funds - Whether such participation by the assessee can be construed as investments or utilisation of surplus funds

THE assessee, a Trust registered u/s 12AA, runs educational institutions. It claimed exemption u/s 11. The AO noted that the assessee had placed Rs. 2,08,456/- and Rs. 96,230/- with chit funds during the relevant previous year but they were not approved investments u/s 11(5). Hence it resulted in violation of the nature specified in Section 13(1)(d). The AO held that assessee was not eligible for exemption u/s 11 and the excess of income over expenditure was accordingly assessed to tax.

Central Excise

CE - Duty on cigarettes for period 17/03/2012 to 27/05/2012 - unless amendment moved to Finance Bill, 2012 on 07/05/2012 to replace 10% ad valorem rate of duty with specific rate was made effective from 17/03/2012 by declaration under Provisional Collection of Taxes Act, 1931, effective date of enhancement would be date of enactment of Finance Bill, 2012 i.e 28/05/2012 - Prima facie case for 100% waiver of pre-deposit

AS per the proposal in Finance Bill, 2012 Excise duty proposed was specific rate + 10% ad valorem (on 50% of RSP/1000 sticks) said proposed rate was made effective from 17.03.2012 under the PCTA, 1931. On 07/05/2012, the notice of amendment was moved to replace the 10% advalorem duty with increase in specific rate.

See our Columns Thursday for the judgements