Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Daman and Diu Sales Tax - a clarificatory notification would take effect retrospectively. Such a notification merely clarifies the position and makes explicit what was implicit: SC

AN explanation should only explain or clarify. If it excepts, excludes or restricts, it is not an explanation, but a proviso, and should be considered as operative only from the date of its coming into effect. Therefore, had the notification issued by the Government, instead of removing the ambiguity in the earlier notification, introduced fresh conditions bringing substantial changes in the Notification then the notification would not have been explanatory or clarificatory. The meaning to be given to an 'explanation' must depend upon its terms, and no "theory of its purpose can be entertained unless it is to be inferred from the language used." An explanation may be added to include something within or to exclude something from the ambit of the main notification or the connotation of some word occurring in it. An explanation, normally, should be so read as to harmonize with and clear up any ambiguity in the main notification and should not be so construed as to widen the ambit of the notification.

Income Tax

Whether when assessee has responded to notice issued u/s 158BC, filed return and participated in assessment proceedings, can later challenge jurisdiction of block assessment merely because search warrant was not issued in his name - NO: HC

THE assessee carried on business as a proprietor in the name and style of M/s. Rekha Silk Industries. There was a search operation on 31.8.1995 in the premises of Shri. Sridhar Sarada and Shri. Ramachandran Sarada, which resulted in recovery of materials relating to several transactions in stock and shares. Incidentally, the assessee was also residing in the same, where the search was conducted. Based on the materials recovered pertaining to the assessee, notice u/s 158 BC(a) was sent to the assessee on 05.12.2005.

The issues before the Bench are - Whether the assessment made based on the materials seized in the course of the search operation of two other persons sharing the same premises with the assessee, can be considered as assessment made u/s 158BD of the Income Tax Act; Whether when the assessee has responded to the notice issued u/s 158BC, filed its return and participated in the assessment proceedings, can later challenge the jurisdiction of the block assessment merely because the search warrant u/s 132 was not issued in his name; Whether reference to Section 143(3) notice read with proceedings u/s 158BC does not make the assessment as the one not falling u/s 158BD and Whether when the AO has to proceed for block assessment, the only chapter applicable in a given set of circumstances is Chapter XIV-B. And the verdict goes against the assessee.

Service Tax

Refund - Notfn. 11/2005-ST - although no time-limit is set out in notification it is a settled legal position that reasonable time-limit has to be read into law - provisions of s.11B of CEA, 1944 which deals with refund of excise duties has been made applicable to service tax vide s.83 of FA, 1994 and which implies that time-limit of one year from date of payment of tax for filing of refund claim would apply in respect of service tax refunds also: CESTAT

REFUND claims amounting to Rs.11,32,86,358/- were filed by the appellant pertaining to the period April 2007 to December 2010. The appellant filed rebate claims in terms of Notification No. 11/2005-ST in respect of services provided in India to international inbound roamers registered with the Foreign Telecom Network Operator but located in India at the time of providing of such services treating the supply of services as export of services under Export of Services Rules, 2005. The original authority rejected the refund claims on the ground that 7 of these claims were time-barred inasmuch as the claim has been filed after a lapse of more than one year. The claim was also rejected on the ground that the services rendered by the appellant to international roamers were not export of services. Another ground taken for rejection was that of unjust enrichment.

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