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By Vijay Kumar

Central Excise

'Precedence of Crown dues' falls flat once again – Central Excise has no priority over banks which are secured creditors: Bombay High Court

MANY in the Department believe that because they are THE GOVERNMENT, they have precedence over all others and as part of arrears recovery dramas, property can be attached left right and centre. The Courts in this country have been trying to teach some law, commerce economics and plain common sense to the Revenue babus , with absolutely no positive effect.

The Bombay High Court in an exhaustive judgement once again held that, Central Excise arrears do not take precedence over bank dues; even if the property is attached by the Central Excise, it has no effect as the attachment is non est ; and the purchaser of the property from the bank has absolutely no liability to Central Excise.

Customs:

DGFT does not have power to amend licence retrospectively; Once an advance licence was issued and not questioned by licensing authority, Customs authorities are bound to follow same and grant exemption: CESTAT Larger Bench

THE following questions are before Larger Bench of the Tribunal concerning the case of Bhilwara Spinners Ltd. as reported earlier [ 2007-TIOL-1206-CESTAT-MUM ] : -

(i) Whether DGFT has powers to amend the licence including the re-validation (obviously referring to a situation where validity is expired) and whether amendment will be retrospective in nature?

(ii) Whether as to the amendment carried out by the DGFT, whether right or wrong can be the subject matter of the scrutiny and challenge by the customs authorities?

This is what the Bench concluded –

(i) The licensing authorities do not have powers to amend any licence retrospectively.

(ii) The Customs authorities cannot challenge the powers of the licensing authority for amendment of the licence.

Wealth Tax

If assessee is a member of Coop society and if a building or part thereof is allotted or leased to him, assessee would be deemed to be owner of such building or part thereof : Bombay High Court

THE question before the High Court was

"Whether a flat in a tenant co-operative housing society which is transferred to the name of an assessee on 17th April, 1993 and which comes to the legal ownership of the assessee only on that date, can be said to be "belonging" to the assessee as on the valuation date of 31st March, 1993 so as to be liable to wealth tax for the assessment year 1993-94?

Some facts: The society had granted no objection to the previous member to sell the property before 1.4.1993. There was an agreement to sell between the appellant and the previous owner and full consideration had been paid before 1.4.1993. The resolution was passed by the society admitting the appellant as a member before 1.4.1993. The appellant themselves included the said property as their assets in their books for the Annual year 1992-93.

As per Section 4(7) of the Wealth Tax Act, 1957, the requirements are that the assessee must be a member and further that building or part thereof is allotted or leased to them. If these two conditions are satisfied then notwithstanding anything contained in the Act or any other law for the time being in force, such assessee would be deemed to be the owner of such building or part thereof

See our columns Monday for the judgements