Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

By placing shares in private domain, no advice or technical assistance relating to conceptualizing, devising, development, modification, rectification or up-gradation of any working system of any organization could be said to have been rendered by appellant - classification done by department under ‘Management Consultancy Service' has no basis - Order set aside and appeal allowed: CESTAT

THE appellant were registered with the department under the "stock broking service" during the year 1998-99 & 1999-2000. The appellant collected placement fee of Rs. 10 lakhs and Rs. 4,27,90,000/- for private placement of unlisted shares. Since the placement of listed shares was only taxable, the appellant did not discharge any service tax on the unlisted shares.

A show-cause notice dt. 04/01/2002 was issued to the appellant demanding service tax on the above transaction amounting to Rs.21,89,500/- along with interest for the delayed payment amounting to Rs. 12,02,278/- up to January 2002. Interestingly, the show-cause notice did not mention under what category the service tax demand was made.

Income Tax

Exemption - Whether word 'aggregate annual receipts' of other educational institution is to be understood as clubbing of annual receipts of all educational institutions run by an assessee society - NO: HC

THE issues before the Bench are - Whether once an educational society has been incorporated under the Societies Registration Act, it assumes the character of a juridical person; Whether when the status of such society is described as an association of juridical person in the return of income, the question of treating the assessee as an association of persons does not arise; Whether the real test for application of exemption benefits u/s 10 is the assessee, who claiming these exemptions is running educational institutions solely for education purposes and not for purpose of profit; Whether the word “aggregate annual receipts” of other educational institution is to be understood as clubbing of annual receipts of all educational institutions run by an assessee society and Whether such interpretation shall render the intention of the Legislature to separately treat the educational institutions wholly or substantially financed by the Government for the purpose of granting exemption as otiose. And the verdict goes in favour of the assessee.

Customs

Fixed Wireless Terminals cannot be treated as cellular phones - Divergent views within Department - Extended period not invokable - Stay Granted: CESTAT

ON the question whether the parts/components of FWTs were covered by the description "parts, components and accessories of mobile handsets including cellular phones" given under Notification No.21/2002-Cus. and Notification No.21/2005-Cus, the appellant has not been able to establish a prima facie case so as to claim the benefit of the two Notifications.

See our Columns Thursday for the judgements