Jurisprudentiol-Thursday's cases

By Vijay Kumar

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Ignoring judicial discipline and recording conclusions diametrically contrary to judgment of Tribunal is either illustrative of gross incompetence or clear irresponsible conduct and serious transgression of quasi-judicial norms - Revenue to pay litigative costs: CESTAT

THE Addl. Commissioner observed that since the judgment of the Tribunal in the appellant's case was appealed before the Delhi High Court & the High Court had dismissed Revenue's appeal only on the ground of limitation and not on merits, the Tribunal decision had not attained finality; thus unworthy of efficacy as a binding precedent.

The Commissioner (A) too took a similar view and rejected the appeal filed by the assessee.

It is axiomatic that judgments of this Tribunal have precedential authority and are binding on all quasi-judicial authorities (Primary or Appellate), administering the provisions of the Act. If an adjudicating authority is unaware of this basic principle, the authority must be inferred to be inadequately equipped to deliver the quasi-judicial functions entrusted to his case. If the authority is aware of the hierarchical judicial discipline (of precedents) but chooses to transgress the discipline, the conduct amounts to judicial misconduct, liable in appropriate cases for disciplinary action.

Income Tax

Whether when assessee facing Customs duty evasion charge deposits certain sums as per High Court's bail order, same cannot be construed as penal in nature till time adjudication is pending - YES: ITAT

THE assessee incurred expenditure for hiring lawyers and other support services to get the bail for him, as the assessee was in judicial custody due to his arrest by DRI in the Custom Duty Evasion case. AO made disallowance of the same. The CIT(A) held that the expenditure was incurred for defending the assessee in criminal proceedings initiated by the Department of Revenue Intelligence (DRI) and was an expenditure which was of personal in nature and not allowable under the provisions of the Act.

The assessee made payment as per direction of High Court of Delhi given in the bail order which enlarged the assessee on bail in the criminal case of Custom Duty Evasion. The Assessing Officer disallowed the amount by treating the same as penal in nature, by invoking the provisions under Explanation to section 37(1).

The issue before the Bench is - Whether when the assessee facing Customs duty evasion charge deposits certain sums as per High Court's bail order, the same cannot be construed as penal in nature till the time adjudication is pending. And YES is the answer of the Tribunal.

Service Tax

Refund - When it is held that no Service Tax is payable, whatever has been paid by the appellant, whether by way of tax or interest, has to be treated as deposit and amount is to be refunded: CESTAT

THE amounts deposited by the appellant whether by way of tax or interest, it assumed the character of deposit when it was held in its favour that no Service Tax is payable and or exigible. Thus, it is held that the adjudicating authority has erred in rejecting the refund claim of Rs.97,520/- on the ground of mismatch. The appeal is allowed, the impugned order is set aside and the adjudicating authority is directed to issue the refund of Rs.97,520/- within a period of four weeks.

See our Columns Tomorrow for the judgements