Jurispruden tiol – Tomorrow ' s cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Tribunal cannot reduce penalty below mandatory minimum; When Commissioner (A) dismisses an appeal for failure to make pre-deposit, Tribunal cannot decide appeal on merits; Rajasthan High Court

Where the two limits have been prescribed, being the minimum and upper limit, then obviously the free play is available between the two limits only, and the discretion can be exercised, within those limits, but then, that does not mean, that the authorities have any power to impose penalty less than the minimum prescribed by the Section.

When Commissioner (Appeals) dismisses an appeal for failure to make pre-deposit, Tribunal cannot decide the appeal on merits – admittedly the requirement of pre-deposit has not been complied with. Even the Tribunal has not recorded any finding in this regard, and on the face of language of Section 35F, there is no escape from the conclusion, that the appeal was rightly dismissed by the learned Commissioner, and the learned Tribunal could not entertain the appeal on merits.

Income Tax

Conversion of sales tax liability into loan – no additional Income Tax liable - where a return is filed, law applicable would be law as it stood on date of filing of return – ITAT Third Member

When additional tax has the imprint of penalty the Revenue cannot say that levy of additional tax is automatic under section 143(1A) of the act. If additional tax could be levied in such circumstances it will be punishing the assessee for no fault of his. That cannot ever be the legislative intent.

Central Excise

Interest is paid as a measure of compensation to make good loss for delayed payment – Commissioner (A) holding that assessee is liable to pay interest from month following month in which provisional assessments were finalized is out and out in conflict with mandate of law: Tribunal

The expression "consequent to order for final assessment" in the rule, is suggestive of something which is too obvious. The liability to pay interest arises only when assessment is made but it does not mean that for the period prior to the date of assessment, interest will not be charged. At the stage of final assessment, the assessee may be held entitled to refund or liable to pay the difference between the amount paid on provisional assessment and the amount finally determined as duty payable. In either case, the interest will be paid to the assessee or charged from him, as the case may be, from the first day of the month succeeding the month for which such refund or duty is determined. This is the result of a combined reading of sub-rules (4) and (5) of Rule 7. Whether the assessee is liable to pay any differential amount or is entitled to refund can be found only when the final assessment is made. But it does not mean that interest is to be charged from the first day of the succeeding month when the amount is determined i.e, the assessment is finalized, as held by the Commissioner. The determination merely quantifies the liability.

See our columns tomorrow for the judgements