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By Vijay Kumar

Income Tax

High Court quashes transfer of file from one ITO to another – time spent in litigation not excluded from limitation : AP High Court

THE High Court stays the transfer of a file from one ITO to another; the transferred ITO ignores the High Court order and proceeds with the assessment. Later on the High Court quashing the transfer, the old ITO proceeds with assessment. Tribunal rules that it is time barred; High Court concurs.

The Income Tax Appellate Tribunal, Hyderabad Bench, by its order dated 23.01.1995, referred the following question, which according to it covered the controversy raised in the four questions proposed by the Revenue, for the opinion of this Court under Section 256(1) of the Income Tax Act:

Whether on the facts and circumstances of the case, the Tribunal, is right in holding that the extended limit as provided under S.153 ( 1)(b) of the Income Tax Act, 1961 is not available in this case

Customs

Revenue wants stay of order favourable to it – application dismissed: CESTAT

THIS is a classic case of how the litigation loving Revenue routinely files appeals and when once somebody prepares a paper, he is the Supreme Court – no higher authority bothers to check or read the draft. The Department has surpassed itself in making mindless appeals. CBEC field formations also do not appear to be taking a cue from the sustained drive of the key High Courts of Delhi and Mumbai against frivolous appeals being filed by the Income Tax Department which has been suffering costs in eight out of 10 orders.

In this case, the Department is praying for a stay against an order which is favourable to it.

Central Excise

Gas Turbine Fuel manufactured and used captively for production of electricity which in turn is used for manufacture of exempted goods – Benefit of captive consumption available : Tribunal

The appellants are manufacturing Gas Turbine Fuel. This GTF is used as fuel by them in their Captive Power Plant ( CPP ) for manufacture of Electricity. This Electricity in turn is used in the manufacturing operations viz. manufacture of dutiable final products. Incidentally, they also manufacture exempted goods. They also use this electricity to light up the residential quarters of their workers, the canteen & guesthouse etc., all of which can neither be considered to either belong to the dutiable or exempted category.

The department finds this funny. What - manufacturing an excisable item GTF , producing electricity & lighting up residential quarters, canteens, guesthouses? Okay, so they also use this electricity to manufacture dutiable goods & also exempted goods – but what does the Revenue earn in this entire exercise – no doubt, Excise duty on the dutiable final product. Isn't that sufficient? No. They want Central Excise duty also on GTF [Gas Turbine Fuel] manufactured by the assessee and captively utilized in producing electricity which in turn is used for manufacture of exempted goods & used in non-excisable activities.

See our columns Tomorrow for the judgements