Jurispruden tiol – Tomorrow's cases

By Vijay Kumar

Income Tax

Income Tax liability of foreign employee of Indian Company – tax proposed to be recovered from Indian Company’s guarantee – company can file appeal against assessment order against the employee – Notice not served, assessment annulled : ITAT

The appellant as a person, who is likely to be saddled with the tax liability should be permitted to pursue the appeal. More so, when he is aggrieved by the additions made by the assessing officer and consequent denial of liability to be assessed.

The evidence of dispatch of notice does not contain the full address of the assessee. It was well within the knowledge of the assessing officer that the assessee was not at the address to which the notice dated 13/4/1999 under section 143(2) of the Act was sent by him. In the above circumstance, the assessing officer cannot seek to rely on the presumption of service of notice. There is no evidence on record to show that there was a service of notice on JMH within the statutory period laid down in the proviso the section 143(2) of the Act. The Delhi High court held that defective postal receipt evidencing dispatch of notice under section 143(2) cannot give rise to any presumption of valid service of notice. In the case of CIT Vs. Lunar Diamonds 143 Taxman 691 ( Del.) It has been held that the failure of the Revenue to prove service of notice under section 143(2) within the time would result in annulment of the assessment framed as bad in law. In the facts and circumstance of the present case, we are of the view that there was no proper and valid service of notice within the time laid down in the proviso to section 143 (2) of the Act. Therefore, the assessment is liable to be annulled and the same is accordingly annulled.

Central Excise

Forged CT-3, forged re-warehousing certificates and diversion of raw material procured by 100% EOU – duty liability quite clearly on the perpetrator, not supplier and so is the case with penalty: Tribunal

THE appellant, a 100% EOU, were availing the facility in terms of Notification No.1/95-CE, dt.9.1.95 as amended & was procuring the duty free indigenous raw material against CT-3 certificate for use in the manufacture of final product to be exported so as to fulfill the export obligations.

On a visit by C.Ex. officers who conducted various checks and verifications, it was seen that the said appellant was not maintaining any statutory record required to be maintained by a 100% EOU. Further investigations conducted revealed that the CT-3 certificate against which duty free raw material was received by them were forged inasmuch as the same were prepared by the Excise Clerk of the unit and was signed by CMD of the factory. Statements of various company personnel revealed that the said duty free raw material procured against forged CT-3 certificate never reached their factory nor was the same utilized by them; signature of the Superintendent of Central Excise in-charge of the factory was forged by them; that AR-3A were never presented to their jurisdictional Central Excise officers; that re-warehousing certificate were also forged and sent to the supplier of the material.

Motor cab – seating capacity – NCCD – Registration certificate from Motor Vehicles Authority should have been relied upon instead of opinion of the manufacturer : Supreme Court

The finding that they manufacture bodies for user thereof for maxi cabs with seating capacity of 12 persons excluding the driver is a finding of fact. Only because the manufacturers of chassis had classified them under Sub-Heading 8702.90, the same having regard to the independent manufacturing activities carried on by the respondent, was not decisive.

The question in regard to the payability of duty would furthermore depend upon the registration certificates in respect of the vehicle in question.

It is a statutory document granted under the provisions of the Motor Vehicles Act, 1988. Such a certificate is issued upon an inspection of the vehicle by the authorities of the transport department. What is relevant was the terms of the contract entered into by and between the respondent and their customers. On a chassis classifiable under Sub-Heading 8706.29, the manufacturer can make a body thereupon having regard to the nature of orders placed by their customers. In a given case, it may be of sixteen seating capacity but it may be more or less than the same in some other cases. What is, therefore, relevant is the seating capacity for which the registration certificates had been granted and not the opinion of the manufacturer of the chassis.

See our columns tomorrow for the judgements