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    SBS Wiki E Journal June 2022

    SBS Wiki E Journal June 2022

    In this 95th edition of, we bring you the judgments which have shaken the trade. The Supreme Court in the matter of Union of India vs. Ashish Agarwal has tried to put an end to the controversy on the re-assessment. Though the majority of the High Courts have ruled in favour of tax payers, the Supreme Court stated that it was a genuine and bona fide mistake on the part of the revenue and for which the revenue cannot be made remediless and allowed the appeal of revenue, deeming the notices issued on or after 01.04.21 under Section 148 as show cause notices issued under Section 148A. Though, the Supreme Court has not specifically stated that the extensions made under TOLA, 2020 are not valid, there exists an interpretation that notices issued on or after 01.04.21 must be treated as issued in light of new time lines as per Section 149. If such an interpretation is taken, then assessment for AY 13-14, AY 14-15, AY 16-17 and AY 17-18 would get time barred. In other words, the whole TOLA is being ignored. This definitely paves way to the second round of litigation, which has to be eventually settled by Supreme Court.

    The other article is on another judgment of Supreme Court in the matter of Mohit Minerals Private Limited, which tried to put an end on the issue of taxation of ocean freight involved in CIF contract under reverse charge on the importer. The Gujarat High Court in the earlier round of litigation held the matter in favour of tax payer by stating inter-alia that importer cannot be called as service recipient and accordingly he cannot be called for payment of tax under reverse charge on ocean freight in CIF circumstances. The Supreme Court though held that importer can be called as service recipient, has ruled against the revenue by holding that on application of principles of composite supply, the revenue cannot split the transaction of import into import of goods and import of services and ask to pay tax on the latter. However, the Supreme Court has not dealt with the question, whether the concept of composite supply can be applied qua import of goods transaction. Hence, in our view, this judgment may also be subjected to a review.

    The next article is on certain interesting issues on refund of old taxes vis-à-vis transitional provisions under GST laws. We have identified certain issues which are being given different treatments by different courts. We have collated such issues and shared our view on the same.

    The next article is on the taxability of management support services received by Indian Entity from its Parent Entity located outside India. However, we have restricted the study to a special situation, where royalty is already being paid by the Indian Entity to Parent Entity and in addition to that, there are other amounts which are being paid for management support services. We have analysed, whether the additional amounts paid would also be considered as royalty or not.

    The next article is on the recommendations to the provisions of Companies Act, 2013 and LLP Act, 2008 by company law committee. We have made our analysis and provided our comments for the changes made by the committee. We recommend readers to share their views also on the suggestions made by committee for a better law.  

    We hope that you will have good time reading this edition and please do share your feedback. I will also urge clients to mail us topics or issues on which you want us to deliberate in our future editions, so that we can contribute to the same.

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