Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Petitioner had procured inputs under Rule 19(2) of CER, 2002 without payment of excise duty and used same in manufacture of goods exported - argument of revenue that since petitioner paid excise duty subsequently after issuance of show cause notice, hence, the petitioner is not eligible for drawback benefit is not acceptable because there is no such condition mentioned in proviso to Rule 3 (1) of the Drawback Rules, 1995: HC

THE petitioner is engaged in manufacture and export of skimmed milk powder, full cream milk powder, butter oil etc. The petitioner was sanctioned drawback and the amount was also paid to the petitioner. Later on, notices were issued to the petitioner for recovery of the amount on the ground that the petitioner was not eligible to receive drawback under Rule 16 of Customs & Central Excise Duties Drawback Rules, 1995. Consequently, the petitioner was ordered to deposit the amount with interest.

Income Tax

Whether fact that TDS was not deducted on certain payments made by assessee, was declared so in return filed, even then AO can resort to re-assessment on ground of failure to make full and true disclosure of facts - NO: HC

THE issues before the Bench are - Whether reopening of assessment is warranted after the expiry of four years, although the assessee has, in pursuant to queries raised by the AO, disclosed all details of the dealers, who have received payments in excess of Rs 50 lakhs; Whether further assessment can be reopened on the alternate ground that the assessee has not provided details of payments below Rs 50 lakhs, when there is no distinction with respect to TDS liability due to the size of payments; Whether assessment can be reopened beyond the expiry of four years, although the AO has failed to raise the issue of non-deduction of TDS, at the time, when all details of payments and dealers were provided by the assessee; Whether it is the responsibility of the assessee to raise the contention that such tax at source is not required to be deducted and justify the same by pointing out legal provisions and judgements, if any; Whether the fact that tax at source was not deducted on such payments made by the assessee was part of the returns filed, does not mean that there was no failure on part of the assessee to disclose true and full material facts; Whether prior to conferring jurisdiction on the AO, for issuing notice for reopening assessment beyond a period of four years, twin conditions of section 147 must be simultaneously satisfied; Whether once primary facts are before the AO, he requires no further assistance by way of disclosure from the assessee and Whether the assessee is duty bound to tell the assessing authority what inferences, whether of facts or law, should be drawn. And the assessee's writ is allowed.

Service Tax

BAS - show cause notice should not be read with hyper technicality - What that is intended by subject, language and object of show cause notice shall be understood in such manner that said notice seeks to achieve - appellant advanced the object of its client service provider giving source of information to ultimate user through code number - Pre-deposit ordered: CESTAT

THE first count of service tax demand of Rs. 2,95,63,317/- is under the category of "Business Auxiliary Service". Second count of demand is under category of "Management, Maintenance or Repair Service". The appellant submitted that a reading of Para 2.5 of show cause notice does not indicate nature of service provided to be "Business Auxiliary Service" for the reason that access code number was provided by the appellant to reach to the source of information to serve their purpose. According to the appellant, there was no service provided by appellant to be taxable because real service was provided by other service provider on use of contact code by service seeker. On the second count of demand it was submitted that when software were not goods prior to 1.6.2007, management, maintenance or repair thereof shall not be liable to service tax for the period up to 31.5.2007.

See our Columns tomorrow for the judgements