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By Vijay Kumar

VAT

VAT classification - Kerala VAT Act is aligned with Customs Tariff which in turn is aligned with HSN and consequently each product in question was required to be seen in context of HSN Code and judgments based thereon: Supreme Court

THE short question involved in this Civil Appeal is whether mosquito repellents and other items fall under Entry 44(5) of Schedule III to Kerala VAT Act, 2003. Under Section 6 of 2003 Act, goods specified in the Second and Third Schedules are charged to duty at the rates specified therein whereas goods not falling within the said two Schedules are assessable to duty under separate Notifications to be issued by the State Government. The narrow controversy in the present case which arose for determination before the High Court was: Whether the above enlisted items fall under para 44(5) read with Section 6(1 )( a) of the 2003 Act? According to the appellant, the said items fall under Para 44(5) which, at the relevant time, attracted duty at the rate of 4%, whereas, according to the Department, the said items came under Section 6(1 )( d) read with Notification No.82 of 2006 - Entry No.66 which attracted the rate of duty of 12.5%.

Central Excise

Since, department has accepted earlier adjudications on same issue for part of period, Revenue cannot be permitted to re-agitate the same point for a part of remaining period: Supreme Court

No two proceedings on the same issue : Since, the department has accepted the earlier adjudications on the same issue for part of the period, revenue cannot be permitted to re-agitate the same point for a part of the remaining period. There cannot be second proceedings raising the demand for the same period.

Undervaluation – related person : even if ATL & ITCL are taken to be related persons [Court is not holding so], it has not influenced the price. There is no under- valuation. ATL has been selling the product to ITCL and Indian Railways at or about the same price.

Income Tax

For debts to be classified as 'bad', assessee has only to write it off as irrecoverable in accounts, if subsequently any part of written off debt is recovered, same to be charged to tax; primary power, rather obligation of Tribunal, is to dispose of appeal on merits & incidental power to remand is only an exception and should be sparingly used: Third Member

Bad Debts : The net effect of change made in the statutory provision w.e.f . 1.4.1989 is that it was necessary for the assessee to establish that debt had become bad in the previous year before amendment, whereas now for debts to be classified as 'bad', the assessee has only to write it off as 'irrecoverable' in its accounts. If subsequently any part of written off debt is recovered, the same would be charged to tax by virtue of section 41(4) of the Income-tax Act.

ITAT – Remand Powers : The primary power, rather obligation of the Tribunal, is to dispose of the appeal on merits. The incidental power to remand is only an exception and should be sparingly used when it is not possible to dispose of the appeal for want of relevant evidence, lack of finding or investigation warranted by the circumstances of the case. Remand in a casual manner and for the sake of remand only or as a short cut, is totally prohibited. It has to be borne in mind that litigants in our country have to wait for long to have fruit of legal action and expect the Tribunal to decide on merit. It is, therefore, all the more necessary that matter should be decided on merit without allowing one of the parties before the Tribunal to have another inning, particularly when such party had full opportunity to establish its case. Unnecessary remands, when relevant evidence is on record, belies litigant's legitimate expectations and is to be deprecated. Having regard to aforesaid principle, it is necessary to look into records to see whether there is sufficient material on record to dispose of the issue on merit and there is no need to remand the issue to provide a fresh inning to the Revenue.

See our columns tomorrow for the judgements