Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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Pre-deposit - Petitioner has no money. If he is to be believed, no waiver can be granted as Government revenue is not safeguarded; If he is not believed, waiver cannot be granted as it is assumed he has money: Delhi High Court

The Court considered two options:

1. Believe the petitioner: Then the Court cannot pass any order to safeguard the realisation of penalty, because he has no money.

2. Don't believe the petitioner: In that case, it is assumed that he has the money but he is not willing to deposit and the strategy adopted by the petitioner is to prolong the proceedings and avoid depositing the amount of penalty.

Looking at the matter from any point of view, the High Court did not find any fault with the orders passed by the tribunal.

Income Tax

By passing a restraint order u/s 132(3), time limit available for framing assessment cannot be extended; a panchanama prepared on revocation of prohibitory order wherein only thing mentioned is 'search is finally concluded', is not a valid panchanama: ITAT by majority

A panchanama prepared on the revocation of prohibitory order u/s. 132(3) wherein the only thing mentioned is 'search is finally concluded', is not a valid panchanama – Therefore, the panchanama prepared on 8-9-1997 cannot be said to be a panchanama prepared in pursuance to the warrant of authorization for search within the meaning of See. 158BE (1) of the Act. If a panchanama prepared on the revocation of prohibitory order u/s. 132(3) wherein the only thing mentioned is 'search is finally concluded', is held to be a panchanama prepared on the conclusion of search within the meaning of Explanation to Sec. 158BE , it would amount to an extending the period of limitation for completion of assessment on account of restraint order u/s. 132(3).

Service Tax

Services of Financial leasing provided to clients – Whether service tax to be paid at rate prevailing at time of receipt of EMI or at time of entering lease agreements – Tribunal finds prima facie case in favour – waives pre-deposit

The Tribunal observed that in absence of specific provision, the rate of tax applicable to the service tax shall be the rate prevailing on the date of rendering the services.

Central Excise

Revenue Appeal after assessee's appeal had been decided; When appeals are on different aspects of Commissioner's order, doctrine of merger does not apply – Larger Bench decision in LML case distinguished: CESTAT by majority

When the Tribunal kept all the issues open for decision at the lower level, the Revenue took the longer route of fighting out its appeal. It took three long years at the Appellate Tribunal to get a decision in its favour that too by a Majority after reference to the Third Member. It is obvious that Revenue scraped through by the skin of its teeth given that the issue was too close to call with Apex Court decisions supporting both the viewpoints. Just imagine what would have happened to the denovo case based on the earlier order of the Tribunal if Revenue had lost its appeal.

See our columns tomorrow for the judgements