Top 18 Rulings from Tribunals, Commissions, Regulatory Authorities: Jobs for Transgender Persons; Kulda Coal Mine hazard; Fine on person pretending to be Advocate; and more I August 2022 roundup

This roundup contains rulings on Karnataka Textbook Society, Penalty on Umed Bhawan Palace, Kulda Coal Mine, Transgender Candidate, Illegal Beach Sand Mining and Shrimp Farming, Bogus Parties and Dubious Transactions, Director’s Breach of Duty, Late Payment of TDS, National Accreditation Board for Testing and Calibration Laboratories, Reduction of the Share Capital, Corporate Insolvency Resolution Proceedings.

Authority for Advance Ruling (AAR)

Authority for Advance Ruling (Karnataka) |Karnataka Textbook Society is neither classified as a “State Government” nor an “Educational Institution”

In a case relating to whether Karnataka Textbook Society(‘KTBS’) can be classified as an “educational institution” or “State Government” for the purpose of applicability of Goods and Services Tax (GST) on printing services provided to it by the Applicant, and whether the 12 percent tax rate charged by the printers for printing textbooks supplied to KTBS is correct or needs to be changed; the two-member bench of M.P Ravi Prasad and T. Kiran Reddy has observed that the society registered under the Karnataka Societies Act,1960, and receiving grants from the Karnataka Government for the supply of free textbooks to students enrolled in government and aided schools and by sales to Private schools cannot be considered as “State Government”.

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When does printing of stationery items for exams amounts to ‘supply of service’ or ‘supply of goods’ to educational institutions? Karnataka Authority for Advance Ruling explains

In a case relating to whether printing of stationery items for conduct of examinations would amount to supply of service or supply of goods, the two-member bench of M.P Ravi Prasad (State) and T. Kiran Reddy (Central) has stated that the provisions of Central Goods and Services Tax Act ,2017 (CGST Act) and Karnataka Goods and Services Tax Act, 2017 (KGST Act) are in pari materia, which means they have the same provisions but differ only on specific provisions, and held that if the activity of printing gives essential character to the printed product, it will be a supply of service and if the usage of product gives essential character, it will be supply of goods.

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Custom, Excise and Service Tax Appellate Tribunal (CESTAT)

CESTAT sets aside penalty on Umed Bhawan Palace for delay in service tax; Situation found revenue neutral

Anil Choudhary (Judicial Member) allowed an appeal which was filed involving the question of as to whether penalty under Section 78 of Finance Act, 1994 was rightly imposed. The Tribunal after perusing records found that there was no deliberate non-compliance and further the situation is wholly revenue neutral. Thus, there is no incentive for the appellant to evade payment of service tax under the Reverse Charge Mechanism (‘RCM’). The appeal was allowed setting aside the penalty under Section 78.

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Whether Cenvat credit of Service Tax be availed on debit notes under the scheme of the Cenvat Credit Rules, 2004? CESTAT answers

P.K. Choudhary (Judicial Member) allowed an appeal holding that Cenvat Credit of Service Tax can be availed on debit notes. The appeal was preferred by the appellant against the Order passed by the First Appellate Authority by which a demand of Cenvat Credit of Rs. 20,89,464/- and Service Tax of Rs. 23,622/- had been confirmed along with interest and imposition of penalty.

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CESTAT | Services involving supply of goods/deemed supply of goods to be classified under ‘works contract services’ only

The coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) allowed the appeals which assailed from the demand and confirmed recovery of differential duty aggregating to Rs. 16.75 crores in addition to penalties in the matter of “works contract service”.

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Securities Appellate Tribunal (SAT)

SAT| Shareholders can ratify Director’s Breach of Duty through a special resolution

The Bench of Tarun Agarwala, J., Presiding Officer, and Meera Swarup, Technical Member, while allowing the appeals held that the shareholders of the company by passing a Special Resolution can ratify the Director’s Breach of Duty.

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SAT | Directions of debarment and the penalty imposed by Whole time Member held to be harsh and excessive ; Penalty reduced by 75%

While dealing with the appeal preferred by the appellants against the order dated 08-06-2021 of the Whole Time Member (‘WTM’), the Coram of Tarun Agarwala, J. (Presiding Officer), M.T. Joshi, J. (Judicial Member), Meera Swarup (Technical Member) held that the directions of debarment and the penalty given by the WTM were harsh and excessive. Therefore, the Court, while partly allowing the appeal, reduced the penalty.

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National Company Law Appellate Tribunal (NCLAT)

“If one does not come before the Court or Tribunal with clean hands his claim deserves to be rejected”, says NCLAT; imposes a cost of Rs 1 lakh on the Appellant for appearing through counsel personifying to be an advocate

The Bench of Rakesh Kumar, J., Judicial Member, and Dr. Ashok Kumar Mishra, Technical Member, while dismissing a company appeal, imposed a cost of Rs 1 lakh on the appellant for not disclosing his status, to avoid court fees and appearing before the Bench through a third party, who pretended to be an advocate.

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“Reduction of Share Capital is a matter of domestic concern”; NCLAT confirms reduction of the share capital approved by the shareholders of Precious Energy Services Ltd.

While deciding the instant appeal filed by Precious Energy Services Ltd., against the order of NCLT holding the reduction of share capital to be against the interests of the company; the Bench of Justice Anant Bijay Singh (Judicial Member) and Shreesha Merla (Technical Member) allowed theappeal by referring to the decision of Panruti Industrial Co., (Private) Ltd., 1959 SCC OnLine Mad 138 which stated that “reduction of share capital is a matter of domestic concern; one for the decision of the majority of the shareholders of the company”.

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NCLAT | Time taken for preparation of the certified copy of the order/judgment excluded for limitation under Section 61 of the Insolvency & Bankruptcy Code, 2016

Dismissing a time-barred appeal, the Principal Bench of National Company Appellate Tribunal comprising of Ashok Bhushan, J. and Barun Mitra held that the power to condone the delay cannot be exercised exceeding 15 days.

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Income Tax Appellate Tribunal (ITAT)

Whether the interest paid on late payment of TDS after deduction can be claimed as expenditure for determining the taxable income? ITAT examines and elucidates

While deciding the instant appeal wherein the relevant question arose that whether the interest paid on late payment of TDS after deduction can be claimed as expenditure for determining the taxable income; the Bench of A.D. Jain (Vice President) and Dr B.R.R Kumar (Accountant Member) examined the issue of allowability as per the provisions of Income Tax Act and various judicial pronouncements. The Bench held that interest payment on late payment of TDS is not eligible business expenditure for deduction and it is not compensatory in nature.

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Bogus Parties and Dubious Transactions- Read ITAT’s observations on a matter concerning “non-existent lenders”

While deciding the instant appeal pertaining to the Assessment Year 2015-16 where the Revenue challenged the decision of CIT(A) for deleting the addition of Rs 4,33,18,870 made on account of unsecured loan under Section 68 of the Income Tax Act, 1961, the Bench of Shamim Yahya (Accountant Member) and Yogesh Kumar US (Judicial Member) held that the non-existence of the parties who have given loan to the assessee, clearly indicates their nature being prima facie bogus. Furthermore, non-discussion of the financials further cast doubt on the lender’s creditworthiness.

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What is the effect of commencement of proceedings under the IBC, over any pending proceedings before another Court or Tribunal? ITAT discusses

While deciding the instant appeal in the backdrop of Corporate Insolvency Resolution Proceedings (CIRP) pending against the assessee before the National Company Law Appellate Tribunal (NCLAT), the Bench of Rama Kanta Panda (Accountant Member) and K. Narasimha Chary (Judicial Member), held that once the proceedings have commenced by institution of application under Sections 7 or 9 or 10 of the Insolvency and Bankruptcy Code, 2016 (hereinafter IBC or the Code), the continuance of pending proceedings in any Court of law or Tribunal is prohibited.

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National Green Tribunal (NGT)

Kulda coal mine environment and health hazards: Construct road; fix liability for past violations and protect villagers from further damage, holds NGT

The Bench of Adarsh Kumar Goel, J (Chairperson) and Sudhir Agarwal, J (Judicial Member) and Prof. A. Senthil Vel (Expert Member) took suo moto cognizance based on media report titled “Non compliance of EC conditions by Kulda coal mine, Odisha & Tamnar Thermal Plant, Chhattisgarh” highlighting environment norms violations, particularly EC conditions in relation to operation of Kulda coal mine and Tamnar thermal plant, Chhattisgarh.

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NGT | Strict Actions against illegal beach sand mining and shrimp farming

The Coram of Justice K. Ramakrishnan (Judicial Member) and Dr Satyagopal Korlapati (Expert Member) directed to take action against violators, initiate prosecution, and recover penalties under the respective mining rules for illegal beach sand mining and shrimp farming along the coastal stretches of the Bay of Bengal.

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National Consumer Disputes Redressal Commission (NCDRC)

NCDRC| Points of law regarding ‘limitation’ and ‘consumer’ should not be raised in revision just for the sake of prolonging a case

While deciding the instant revision petition under Section 21(b) of Consumer Protection Act, 1986, the Bench of Dinesh Singh (Presiding Member) and Karuna Nand Bajpayee, J., (Member) observed that points of law regarding “limitation” and “consumer” have to be applied on the facts of the case, and the facts can only be determined by leading evidence before the forum of first instance (in rare cases by filing additional evidence before the forum of appellate jurisdiction) and should not be raised in revision just for the sake of prolonging the lis.

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State Consumer Disputes Redressal Commission (SCDRC)

SCDRC| Consumers should not suffer due to VLCC’s unfair trade practices of giving misleading ads and then slapping them with a disclaimer regarding outcome of their programs

While deciding the instant appeal filed by VLCC Health Care Ltd. against the order of the District Consumer Court whereby they were directed to refund and compensate the respondent for the mental agony caused due to the failure of VLCC’s weight loss program; the Bench of Raj Shekhar Attri, J. (President) and Rajesh K. Arya (Member) observed that VLCC’s act of giving false assurances on one hand by way of misleading advertisements, and on the other hand obtaining a declaration from the consumers qua no guarantee/assurance regarding the result and outcome of the program, is a clear example of unfair trade practices adopted by them, and for which the consumers cannot be made to suffer at their hands.

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Maharashtra Administrative Tribunal (MAT)

Maharashtra Administrative Tribunal (MAT) directs State to come out with clear policy regarding provision of the job posts for other genders

The coram of Mridula Bhatkar (Chairperson) and Medha Gadgil (Member) (A) while dealing with an application by a transgender person (applicant) to allow her to apply for the post of Police Sub Inspector as a Transgender candidate, directed the State to come out with a clear policy regarding provision of the posts for other gender.

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*Kriti Kumar, Editorial Assistant has put this roundup together.

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