Calcutta High Court Judgments — 2021

The High Court held that interest subsidy and excise refund are capital receipts and do not form part of book profit under Section 115JB. The Tribunal has the power to entertain such claims even if a revised return was not filed before the Assessing Officer.

The High Court at Calcutta (Original Side) allowed the appellant's request to withdraw the appeal. The Court noted that the appellant had approached the competent authority for settlement of disputes under the Vivad Se Vishwas Scheme, 2020. Consequently, the appeal was dismissed as withdrawn. The Court granted the appellant liberty to pursue their application before the competent authority under the aforementioned scheme. No other issues were decided, and no substantive legal principles were established or applied in this order.

The High Court held that the delay in filing the first appeal was sufficiently explained by the illness of one of the landlords and the time taken to obtain a certified copy of the trial court's order. Therefore, the delay was condoned.

The High Court found merit in the Revenue's submission, stating that the delay of 32 days was not huge and reasonable grounds were made out for condonation. The ITAT's order was set aside.

The Tribunal held that the principles of natural justice were not followed by the respondent authorities in initiating the impugned actions. Section 14AA(5) of the Central Excise Act explicitly states that the manufacturer shall be given an opportunity of being heard in respect of any material gathered on the basis of the audit under sub-section (1) and proposed to be utilized in any proceeding. The Court referred to the legislative intent of Section 14AA, which is to scrutinize cases of abnormally high availment of MODVAT credit and prevent its misuse, emphasizing that the scheme incorporates the observance of natural justice principles before audit material is used against the assessee. The Court cited Mohinder Singh Gill & Anr. vs. the Chief Election Commissioner, New Delhi & Ors. on civil consequences and the principle that a post-decisional hearing is generally not a substitute for a pre-decisional hearing. It also referred to other decisions interpreting Section 14AA, which held that an assessee has a right of hearing before an order under Section 14AA is passed. Consequently, the impugned notices and all steps and proceedings taken thereunder were set aside and quashed. The Court allowed the writ petition but clarified that this would not prevent the respondent authorities from proceeding afresh in accordance with law. The issue of retrospective operation of the sections was implicitly addressed by quashing the proceedings for violation of natural justice.

The Tribunal noted that the appellant's counsel pointed out that the tax effect in the appeal was ₹49,63,636/-. This amount was below the minimum limit prescribed for filing appeals in the High Court as per Circular No.17/2019 dated August 8, 2019. In view of this fact, the appellant sought permission to withdraw the present appeal. The Court, in view of the facts stated, dismissed the present appeal as withdrawn. The legal issues raised in the appeal were expressly kept open. No finding was given on the merits of the original assessment or the Tribunal's order.

The High Court held that the Entry Tax Act, 2012 was in force at the time of its amendment and that the amendments introduced by the West Bengal Finance Act, 2017 were valid and not discriminatory. Consequently, the impugned order of the learned tribunal was set aside.

The High Court, respectfully agreeing with the reasoning of the Allahabad High Court in Ashok Kumar Agarwal, the Rajasthan High Court in Bpip Infra Private Limited, and the Delhi High Court in Man Mohan Kohli, allowed all the writ petitions. The Court held that the Legislature introduced new provisions for reassessment (Sections 147-151) via the Finance Act, 2021, effective from April 1, 2021. Consequently, any reassessment notices issued after March 31, 2021, must comply with these substituted sections. The Court found that the Executive/Respondents/Revenue cannot use administrative power under Section 3(1) of the Relaxation Act, 2020, to undermine parliamentary supremacy or frustrate the purpose of the substituted statutory provisions. The Explanations A(a)(ii)/A(b) to the Notifications dated March 31, 2021, and April 27, 2021, were declared ultra vires the Relaxation Act, 2020, and thus null and void. All impugned notices under Section 148 of the Income Tax Act were quashed. The Assessing Officers were granted liberty to initiate fresh reassessment proceedings in accordance with the relevant provisions of the Act as amended by the Finance Act, 2021, and after complying with legal formalities.

The Tribunal permitted the appellant to withdraw the present appeal. The reasoning was based on the appellant's submission that they intended to pursue settlement of disputes under the Vivad Se Vishwas Scheme, 2020, and the respondent's lack of objection. The Tribunal granted liberty to the appellant to move an application for settlement of disputes under the aforementioned scheme. No finding was made on the merits of the original appeal, and no issue was left undecided as the appeal itself was withdrawn. The operative direction was to permit the withdrawal of the appeal.

The High Court held that the writ petitions filed by the Central Board of Trustees (EPFO) are maintainable, even if the Regional Provident Fund Commissioner (RPFC) or Assistant Provident Fund Commissioner (APFC) had made partial recovery of dues. The Court found that the EPF Appellate Tribunal's orders were subject to judicial review under Article 226/227 of the Constitution.

The High Court allowed the Revenue's prayer to withdraw the appeal. This was based on the tax effect of the remaining issues being below the monetary limit for appeals, and the Revenue's admission that earlier questions were decided against them in prior proceedings.

The tribunal held that the APL, through its nominees, can exercise voting rights in the tier-one companies and influence decisions in lower-tier companies as shareholders. However, the APL cannot directly interfere with the internal affairs of companies or lift the corporate veil.

The High Court allowed the prayer made by the learned counsel for the appellant (Revenue). The appeal was dismissed as withdrawn. The Court explicitly stated that the legal issue raised in the appeal was kept open. The reasoning for allowing the withdrawal was based on the Circular No.17/2019, which revised the monetary threshold for filing appeals before the High Court. The Revenue's submission that the tax effect was below this revised limit formed the basis for the Court's decision to permit withdrawal.

The Tribunal held that the appeal filed by the Revenue is infructuous. This decision was based on the submission by the assessee's counsel that the dispute has been settled under the Vivad se Vishwas Act, 2020, and the tax amount has been deposited. Consequently, the appeal was dismissed as infructuous. The Tribunal explicitly stated that the substantial questions of law were left open. The operative direction was the dismissal of the appeal.