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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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PJ/Case Laws/2012-13/1418

Whether it is justifiable to initiate recovery proceedings after 30 days of filing appeal and during pendency of stay applications?

Case: HINDUSTAN ZINC LTD V/S UNION OF INDIA & ORS
 
Citation: 2013-TIOL-67-HC-RAJ-CX
 
Brief Facts: - The petitioner, Hindustan Zinc Ltd. filed a writ petition before the High Court to consider the matter relating to stay of recovery of arrears during the pendency of stay applications. The petitioner referred to Circular No. 967/2013-Cx by saying that the recovery stays until the next date in this matter or until disposal of the stay application by the Appellate Authority, whichever is earlier, there shall be stay over recovery of the amount as involved in the appeals said to have been filed by the petitioner before the Appellate Authority. The High Court made it clear that pendency of this writ petition or passing of this order shall not be of any impediment in the Appellate Authority considering the stay application/s moved by the petitioner; and for that matter, the petitioner shall be under an obligation to attend the date of hearing, if at all fixed by the Appellate Authority for consideration of the stay application.

Appellant’s Contention: - The appellant submits that on the basic issues, the present petition is akin to CWP No.541 /2013 wherein notices have been ordered to be issued by this Court today with passing of limited stay order. However, he frankly submits that in the present case, they have filed separate appeals which are pending before the Commissioner (Appeals), Jaipur-II and has also filed other appeals against the appellate orders which remain pending before the Custom, Excise and Service Tax Appellate Tribunal (CESTAT'). It is submitted that essentially the grievance as arising out of predicament is that the Appellate Authority as also the Appellate Tribunal have not taken up the respective appeals and stay applications for hearing/consideration; and while the matters remain simply pending, the Central Board of Excise and Customs has issued the questioned circular bearing number 967/01/2013-CX dated 01.01.2013 which, in effect, requires recovery proceedings to be initiated after 30 days of the filing of the appeal in case no stay is granted. It is submitted that the stipulations contained in the said circular are likely to cause unnecessary prejudice to the petitioner whose appeals and the stay applications on one hand remain pending without the Appellate Authority/Tribunal taking up the same for consideration; and on the other hand, the disputed demands being sought to be recovered by adopting coercive methods.

He has also referred to an order dated 09.01.2013 said to have been passed by the Hon'ble Andhra Pradesh High Court in WP No. 734/2013. He submits that as per his instructions, there are only two posts of Commissioner (Appeals) at Jaipur, one of which is vacant since the month of October 2011 and several of such matters remain pending consideration.

Reasoning of Judgment: - The Hon’ble High Court held that as regards the appeals, said to have not been taken up by the Commissioner (Appeals) as per the interim order passed in CWP No. 541/2013: R.S W.M . Limited Vs. Union of India & Ors = (2013- TIOL - 61-HC-RAJ-CX) and maintaining parity, in their view, the petitioner is entitled to the similar order but so far the appeals pending before the CESTAT are concerned, this order would not be operative and in that regard, the petitioner would otherwise be free to take recourse to the appropriate remedies in accordance with law including making of a request before the CESTAT for early taking of the appeals and the stay applications. Subject to the observations, let notices be issued to the respondents to show cause as to why this petition be not admitted and finally disposed at this stage. Notices of the stay application be also issued. Notices are be made returnable on 06.02.2013 and be given ' Dasti ' to the petitioner, if so desired. In the meanwhile and until the next date in this matter or until disposal of the stay application by the Appellate Authority, whichever is earlier, there shall be stay over recovery of the amount as involved in the appeals said to have been filed by the petitioner before the Appellate Authority. It is made clear that pendency of this writ petition or passing of this order shall not be of any impediment in the Appellate Authority considering the stay application/s moved by the petitioner; and for that matter, the petitioner shall be under an obligation to attend the date of hearing, if at all fixed by the Appellate Authority for consideration of the stay application. It is further made clear that the petitioner shall be under an obligation to abide by the order that might finally be passed by the Appellate Authority on the prayer for interim relief in the appeal/s; and for that matter, pendency of this writ petition shall not be of any impediment in the Appellate Authority passing the appropriate order in accordance with law nor the petitioner shall be entitled to avoid its liability.
 
Decision: - The appeal was dismissed.

Comment:-This is one of the several writ petitions being filed in the High Courts after the issuance of the draconian circular 967 dated 1.1.2013 which has been the subject matter of litigation as its purpose is to harass the assessees by resorting to unjust coercive methods of recovery. This circular has increased the work load of High courts and added unnecessary cost to the appellants. Nevertheless, stay from recovery proceedings were granted in this case also till the disposal of stay applications filed by the assessee.

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