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By Vijay Kumar

Income Tax

Hospital, not industrial undertaking; Review of assessment orders - If wrong claims availed, quoting wrong application of law not allowed to be reviewed, a chaotic situation will arise, putting a big dent to exchequer – disciplinary action against officers directed : Madras HC

REVENUE by going in appeal has invited disciplinary action against its own officers.

Neither the respondent nor the DHCL are the 'industrial undertakings' within the meaning of Section 72A(7)(aa) of the Act and hence the set-off availed by the respondent for the assessment year 2000-2001 is illegal; that the impugned action initiated by the appellant is very well within the stipulated time of limitation prescribed under Section 147 of the Act and the appellant being the Assessing Officer has got jurisdiction to reassess such set-off illegally availed by the respondent.

Action against officer for dereliction of duty: The High Court did not stop there and observed, This Court wonders as to how such a huge claim of Rs.11,60,29,077/- has 'escaped' the assessment of the Department, leading to illegal availing of set-off by the respondent for the said amount that too when there is no order permitting the respondent to avail such set-off, causing loss of revenue to the State. Therefore, the officers of the appellant at the helm of affairs at the relevant point of time shall be made responsible for their lethargic attitude in discharging their official duties and for their dereliction in duty.

Customs

Goods seized under Customs Act – once provisional release order is issued, six month period to issue notice prescribed under Section 110 (2) is not applicable though importer did not take provisional release of goods: Bombay HC

THERE seems to be lot of confusion among the trade and field in respect of Section 110(2) of the Customs Act which stipulate that if no show cause notice is issued under Section 124 within six months from the date of seizure of the goods, the goods shall be returned to the person from whose possession the same were seized. As normally the investigation cannot be completed within six months, it is a common practice to issue notice only for confiscation of the goods seized before the expiry of six months from the date of seizure. Even in cases where the goods are provisionally released, the notices are issued within six months.

UP Trade Tax

High Court should not have interfered on findings of fact of Department and Tribunal: Supreme Court

High Court ought not to have interfered with the orders of the departmental authorities and the Tribunal, that too on the question of appreciation of the factual aspects. The High Court has not analyzed as to how the conclusions of the Tribunal suffer from any infirmity . If fact finding authority comes to certain conclusions honestly and bonafide the mere fact that Court may have a different perspective of that question, cannot be a ground to interfere with the finding even though another view may be possible. Considering the limited jurisdiction exercisable under Section 11 of the Act, such a course is not available. Section 11 of the Act confers limited jurisdiction to interfere with the order of the Tribunal only on the question of law, which is required to be precisely stated and formulated. In the instant case, even that has not been done.

Income Tax

Twisting and texturising of POY, amounts to manufacturing or production: Bombay High Court

It would be clear that POY has different physical and chemical properties and when POY chips undergoes the process of texturising and/or twisting, the yarn i.e. twisted and/or texturised or both results in a product having different physical and chemical properties. In other words the process applied to POY either for the purpose of texturising or twisting constituted manufacture as the article produced is recognised in the trade as distinct commodity pursuant to the process it undergoes and which amounts to manufacture. Under the Central Excise Act, the Union of India itself treat the POY as distinct from POY, drawn twisted or textured or both. From all the material `the court had no hesitation in arriving at a conclusion that the process which POY undergoes in the process of texturising and twisting results into a new and distinct product and regarded in the Trade as distinct from the commodity involved in the manufacture. The process amounts to manufacture as the original commodity loses its identity.

See our columns tomorrow for the judgements