Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Government Circular extending the exemption even if the Commissioner had cancelled the certificate - Government Circular binding on the Authorities: Supreme Court

IF an industrial unit has obtained an eligibility certificate for exemption from trade tax under the exemption scheme which was in forceupto31.03.1990 and no act of forgery or cheating has been committed in obtaining the certificate or if no conditions of the certificate is violated, then even if the Commissioner has cancelled the certificate in exercise of his powers under Section4A(3) of the Act, then also the outstanding amount prior to the date of cancellation or modification would be remitted unless the unit has not realized the tax from its customers. The aforesaid circular is binding on the authorities under the Act as noticed by a Constitution Bench of Supreme Court in the case of Collector of Central Excise, Vadodara vs. Dhiren Chemical Industries , (2002-TIOL-83-SC-CX-CB) .

Income Tax

Whether while granting administrative approval u/s 158BG CIT is obliged to give a hearing opportunity to assessee - NO: High Court

BOTH the assessees are doctors, carrying on medical profession. A search u/s 132 was carried out at the residence and the business premises of the assessee. During search, certain incriminating documents were found. AO made the additions which were upheld by the CIT(A). On further appeal, Tribunal had observed that in the instant cases, no opportunity was given by the CIT while giving approval u/s 158 BG, so, no enhancement can be made out.

The issues before the Bench are - Whether while granting administrative approval u/s 158BG CIT is obliged to give a hearing opportunity to assessee and Whether in case an assessee follows cash basis of accounting, interest income must be taken on receipt basis only. And the verdict partly goes in favour of Revenue.

Service Tax

CENVAT - Rule 2(l) of CCR, 2004 - By no stretch of imagination can events conducted by Event Management Company and buying & supplying movie tickets to woo customers be considered as promotion of business activities of a bank - prima facie not an Input Service: CESTAT

AS regards the Insurance Auxiliary Service, this service is for providing group insurance policy, which is a part and parcel of the salary and perks given to the employees and, therefore, it would qualify as an eligible input service for CENVAT credit. As regards the Real Estate Agent Service, even though the appellant claims that it is towards part of the employees perks, there can be a dispute whether it is a service activity or a welfare activity. In the case of Event Management Service, the claim of the appellant is that the events are conducted to attract customers and to promote business of the bank. Buying movie tickets and supplying the same, by no stretch of imagination, can be considered to be promotion of business activities.

See our Columns Tomorrowfor the judgements