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Andhra Pradesh HC

Winding up petition cannot be rejected on the ground that net worth of respondent-company is positive

July 15, 2012 1612 Views 0 comment Print

If there is no dispute as to the company’s liability, it is difficult to hold that the company should be able to pay its debts merely by proving that it is able to pay the debts. If the debt is an undisputedly owing, then it should be paid. If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving at the statutory demand stage, that it is solvent. In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterised as a stand alone ground

S. 635 – Production of certified copy of order of company court sufficient for its execution by executing Court

July 4, 2012 1125 Views 0 comment Print

The procedure to be followed in the matter of execution of the order made by the company court is different from that laid down in the Code of Civil Procedure. As per section 635, it is sufficient to produce to the Court which is required to execute its order, a certified copy of the order sought to be executed. It is not necessary to comply with the procedure laid down in section 39 and Order 21, rules 4 and 5 of the Code of Civil procedure and get the order first transferred by the Court which made it to the Court which is to enforce it and then make an application to execute it .

Telecom Infra Service Providers are eligible to procure goods against Form ‘C’

June 12, 2012 1308 Views 0 comment Print

Telecom Infrastructure Service Providers – Entitled to procure goods against ‘C’ Forms at concessional rate of CST @2% – Goods purchased are used in the telecommunication network and therefore covered by Section (1) and 8(3)(b) of the CST Act – Petitions allowed – Penalties levied on the appellants set aside.

Condition of Pre-deposit of tax for considering an application for ‘condonation of delay’ not justified

May 10, 2012 1128 Views 0 comment Print

There is no legal provision which provides for condoning the delay in filing the appeal on a condition of depositing 50% of the tax amount. The delay in filing the appeal is condoned or refused depending upon the sufficiency of cause for delay. If the party is found to be prevented by a sufficient cause to the satisfaction of the Appellate Authority/Tribunal, the delay is condoned and if not found to be prevented by a sufficient cause, the delay is not condoned.

Applications for stay should not be disposed of in a routine manner unmindful of the consequences

March 16, 2012 384 Views 0 comment Print

The appellant/assessee availed the benefit under the Works Contracts Composition Scheme in respect of contracts entered into prior to 1-6-2007. The respondent/department issued show cause notice proposing service tax, interest and penalty on the ground that the petitioner was not eligible to avail the benefit under the Composition Scheme. Being aggrieved, the petitioner went in appeal under Section 35B of the Central Excise Act, 1944 (the Act).

Arbitration clause cannot bar HC to admit winding up petition

February 22, 2012 7264 Views 0 comment Print

There is no conflict between the statutory relief of winding up and of the contractual right to have disputes settled by arbitration. Once a bona fide defence is shown to exist, arbitration will be the efficacious and proper remedy. Where, however, the defence is mala fide and a moonshine, arbitrable disputes would not exist and the company judge would have the power to pass appropriate orders Madhya Pradesh Iron & Steel Co. (supra). Existence of an arbitration clause does not oust the jurisdiction of this court to either entertain or to admit a petition for winding up.

No penalty on Sania Mirza as income not offered to tax was due to bona fide mistake

February 9, 2012 6733 Views 0 comment Print

The admitted position is that the amount of Rs.30,63,310/- was shown by her in the return. That being the position, it cannot be said that there was any concealment. There is no dispute about the fact that the amount was correctly mentioned and therefore, there is also nothing inaccurate in the particulars furnished by her.

Hire-Purchase – In absence of bifurcation of EMIs into principal & interest indexing system of accounting is valid

February 7, 2012 834 Views 0 comment Print

In the present case, there is no indication of the assessee’s hire purchase agreements reflecting bifurcation of the EMIs into principal and interest components. In the absence thereof, the common and accepted usage of the indexing system of accounting in the hire-purchase trade must be held to be valid as otherwise the rate of interest under the mercantile system in so far as the later EMIs are concerned would be far higher and contrary to the rate prescribed in the assessee’s agreements. Further, as the assessee had itself employed this system of accounting in its books of account, applying the law laid down in Sanjeev Woollen Mills (supra), the Department was bound to accept the same for the assessment proceedings.

Electricity charges payable to govt are not covered u/s. 43B

December 30, 2011 8673 Views 0 comment Print

Tribunal while allowing the appeal held that the electricity charges partake of the nature of statutory liability and accordingly will have to be allowed as deduction irrespective of whether or not the same has been paid and notwithstanding that the assessee has disputed any liability to pay any part of such charges. Section 43B of the Act does not speak about the electricity charges.

Penalty for concealment can be levied if assessee acted in contumacious manner

December 1, 2011 558 Views 0 comment Print

In T. Ashok Pai v. CIT [2007] 292 ITR 11 the Supreme Court observed that if the explanation given by an assessee is taken to be bona fide, the question of imposition of penalty under section 271(1)(c) of the Act would not arise. Although the findings arrived at in assessment proceedings would constitute good material for penalty proceedings, yet in penalty proceedings, the matter has to be looked at differently since the consequences for the assessee would be different, and penal. Therefore, the rule of strict construction would apply.

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