#delhihighcourt Archives - Page 3 of 30

26 Oct

Department directed to refund IGST On Telecommunication Services Rendered By Vodafone Idea To Foreign Telecom Operators: Delhi High Court

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Title: Vodafone Idea Limited Versus Union Of India & Ors.

Citation: W.P.(C) No.2472/2023, CM Nos.9473/2023, 9474/2023 & 51283/2023

Decided on: 09.10.2023

Coram: Justice Vibhu Bakhru and Justice Amit Mahajan

Introduction

The Delhi High Court in the present matter directed the respondents to refund IGST On Telecommunication Services Rendered By Vodafone Idea To Foreign Telecom Operators. The Delhi High Court, while delivering its judgement made the observation that the date on which payments had been received from FTOs would be the relevant date for the purpose limitation under Section 54(1) of the CGST Act. Further, the court noted that the place of supply of services under Rule 6A of the ST Rules are similar to Section 2(6) of the IGST Act inasmuch as the services will be treated as export of services when (a) the provider of service is located in the taxable territory, (b) the recipient of the service is located outside India, and (d) the place of provision of the service is outside India.

Facts of the case

The petitioner holds a telecommunication license from Government of India, and is engaged in providing telecommunicationservices including services in the nature of International Inbound Roaming Services (“IIR”) and International Long Distance Services (“ILD”) to inbound subscribers of FTOs. The petitioner has entered into various service agreements (International Roaming Agreements) with FTOs for providing IIR and ILD services. Undisputedly, the consideration for providing IIR and ILD services to subscribers of FTOs during their visit to India, is paid by FTOs to the petitioner. The petitioner filed its applications for refund of IGST claiming that it had exported services and paid integrated tax as provided under Section 16 (3) of the Integrated Goods and Services Tax Act (hereafter ‘IGST Act’).

The petitioner has filed the present petition challenging the order passed by the Appellate Authority, wherein the petitioner’s appeal under under Section 107 of the Central Goods and Services Tax Act was dismissed. The petitioner is aggrieved by rejection of its claims for refund of Integrated Goods and Service Tax (hereafter ‘IGST’) in respect of telecommunication services rendered by the petitioner pursuant to agreements with Foreign Telecom Operators (FTOs). The petitioner’s appeal was rejected on mainly two grounds: First, that the services provided by the petitioner in respect of which refund of IGST was claimed did not as qualify export of services. And second, that the claims preferred were beyond the period of two years from the relevant dates and therefore, were barred by limitation.

Issue before the court

whether the telecom services provided by the petitioner to inbound subscribers of FTOs constitute export of services and whether its claims were within the period of limitation as specified under Section 54(1) of the CGST Act.

Court’s observation and analysis

In terms of Section 54(1) of the CGST Act, a claim for refund may be made within a period of two years from the relevant date. The Delhi High Court, while delivering its judgement made the observation that the date on which payments had been received from FTOs would be the relevant date for the purpose limitation under Section 54(1) of the CGST Act.

Further, the court noted that the place of supply of services under Rule 6A of the ST Rules are similar to Section 2(6) of the IGST Act inasmuch as the services will be treated as export of services when (a) the provider of service is located in the taxable territory, (b) the recipient of the service is located outside India, and (d) the place of provision of the service is outside India. There is no contention that the decisions rendered on the question of export of services in the context of Rule 3 of the Export of Services Rules, 2005 are also applicable to the controversy in question.

Hence, the present petition was allowed and the respondents were directed to refund the amounts as claimed by the petitioner.

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Written by- Amrita Rout

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18 Oct

Title: Raghav Chadha vs. Rajya Sabha Secretariat (FAO 264/2023)

Date of Decision: October 17, 2023

CORAM: Hon’ble Mr. Justice Anup Jairam Bhambhani

Introduction

In the matter of FAO 264/2023, the Delhi High Court reviewed an order dated 05.10.2023 passed by the Additional District Judge, Patiala House Courts, New Delhi, which had recalled an earlier order granting interim relief to the appellant, Raghav Chadha. The case revolved around the revocation of an official accommodation allotment by the Rajya Sabha Secretariat and the subsequent legal actions undertaken by the appellant.

Facts of the Case

Raghav Chadha, the appellant, was a Member of the Rajya Sabha, and he had been allotted an official accommodation at Bungalow No. AB-5, Pandara Road, New Delhi. Subsequently, the allotment was cancelled, and he was offered an alternative accommodation. Dissatisfied with this development, Chadha filed a suit seeking relief against dispossession and other related claims.

The appellant had also sought interim protection through an application under Order XXXIX Rules 1 & 2 of the Code of Civil Procedure (CPC) and had applied for leave under section 80(2) of the CPC to file the suit without serving notice to the respondent.

On April 18, 2023, the learned Trial Court granted ad-interim protection to the appellant and issued notice to the respondent on the application under section 80(2) of the CPC. Importantly, the respondent was neither represented nor heard during the making of this order.

The respondent subsequently filed a review application under Order XLVII Rule 3 read with Order XLI Rule 5 CPC, arguing that the grant of interim relief was contrary to the provisions of section 80(1) and 80(2) of CPC. The respondent contended that the Court could not have granted any relief without first deciding the application under section 80(2) CPC and that the appellant had originally sought leave under section 80(2) but later changed his position, creating a contradictory stance.

Court’s Analysis and Decision

The learned Trial Court, in its impugned order dated 05.10.2023, reviewed and set aside the interim relief granted to the appellant, as well as the notice issued to the respondent on the application under section 80(2) of CPC. The key findings of the Court included: The Court held that there was non-compliance with the mandatory provisions of Section 80(2) of CPC. The appellant’s argument regarding substantial compliance of the notice requirement under Section 80(1) was rejected.

The Court also noted that the appellant had initially sought leave under section 80(2) but later argued that no notice under Section 80(1) was required, creating a contradictory position.

The Court emphasized that the application for review was allowed based on the interpretation given by the Supreme Court regarding Section 80(2) of CPC. Since the Court found that no urgent or immediate relief needed to be granted, the Court ordered the return of the plaint for presentation after complying with the requirement of Section 80(1) of CPC.

This judgment by the Delhi High Court emphasizes the significance of complying with statutory notice requirements and the consequences of changing positions during legal proceedings.

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Written by- Tarishi Verma

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Delhi High Court emphasized adherence to statutory notice requirements, and ordered the plaint's return

18 Oct

Delhi High Court Upholds Transfer Pricing Method Selection in Hellmann Worldwide Logistics Case

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Title: The Pr. Commissioner od Income Tax-4 vs. Ms. Hellmann Worldwide Logistic India Pvt. Ltd. ITA 1424/2018

Date of Decision: 04.10.2023

CORAM: Hon’ble Mr. Justice Rajiv Shakdher and Hon’ble Mr. Justice Girish Kathpalia

Introduction

The case of ITA 1424/2018 involves an appeal brought under Section 260A of the Income Tax Act, concerning the assessment proceedings for Assessment Year 2008-09. The revenue challenged the order of the Income Tax Appellate Tribunal (ITAT) dated 29.08.2017. The dispute primarily revolved around the selection of the most appropriate method (MAM) for transfer pricing.

Facts of the Case

The respondent, M/S Hellmann Worldwide Logistics India Pvt. Ltd., is a private limited company engaged in various freight and logistics services.

The Assessing Officer initiated scrutiny assessment due to the company’s international transactions, which included charges for import and export freight services with its associated enterprises (AE).

The Transfer Pricing Officer (TPO) initially rejected the Comparable Uncontrolled Price (CUP) method used by the company as the most appropriate method.

The Dispute Resolution Panel (DRP) reduced the transfer pricing adjustment, but the revenue challenged the methodology used.

Court’s Analysis and Decision

The core issue revolved around the choice of the most appropriate transfer pricing method under Section 92C of the Income Tax Act.

The Revenue argued that the company and the Assessing Officer had not initially considered internal Transactional Net Margin Method (TNMM) as MAM and, therefore, the Tribunal had no authority to direct its application.

The Delhi High Court cited relevant precedents, including “Matrix Cellular” and “Dentsply India,” which affirmed that the choice of MAM could be different from that initially adopted if it was found to be more appropriate.

The Court upheld the Tribunal’s detailed reasoning in the impugned order, which established the need for an accurate arms length price for taxation. The Tribunal had directed the company to carry out internal Functional Assets & Risk (FAR) analysis, internal comparability, and, if necessary, provide external comparables under TNMM as MAM.

During the appeal’s pendency, the TPO eventually adopted external TNMM as MAM.

In conclusion, the Delhi High Court found no substantial question of law to answer and upheld the Tribunal’s reasoning, emphasizing that the ultimate aim of transfer pricing is to determine an accurate arm’s length price.

Written by- Tarishi Verma

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17 Oct

Discrimination solely based on disability is Unsustainable : High Court of Delhi

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Title: National Federation Of The Blind V Kendriya Vidyalaya Sangthan & Ors

W.P.(C) 9520/2018 & CM APPL. 37096/2018

Decided On: 16.10.2023

Coram: HON’BLE THE CHIEF JUSTICE & HON’BLE MR. JUSTICE SANJEEV NARULA

Introduction:

The present case is filed by the National Federation of the Blind against the Advertisement of Kendriya Vidyalaya Sangathan which did not follow the proper reservation guidelines according to the Rights of Persons with Disabilities Act, 2016.

Facts of the Case:

Advertisement number 14 published by the respondent Kendriya Vidyalaya Sangathan3 in August 2018 for recruitment has been challenged as certain subjects have vacancies for one category of disability only and certain subjects have no vacancy at all for any disability. It is contended that the minimum 4% reservation bar is also not met by Kendriya Vidyalaya in the advertisement.

further submitted that the respondent has not been maintaining a vacancy-based roster despite specific directions. Instead, the respondent has been maintaining a post-based roster. Also, the respondent didn’t take any steps to fill the vacancies by undertaking a special recruitment drive.

Respondent submitted that the decision to provide vacancies for certain disabilities at certain posts is a well-examined decision based on the acts the person will have to do at the particular post.

Court’s analysis and Judgement:

The Hon’ble High Court of Delhi held that The impugned advertisement distinguishes the persons with disabilities from others, and puts a restriction on their potential to participate in the recruitment process to their full ability. The distinction is purely on the basis of disability. advertisement has the effect of excluding persons with disabilities from the race of recruitment, in complete violation of the mandatory reservation provision. The advertisement was held unsustainable as it is violative of the Rights of Persons with Disabilities Act, 2016.

The Hon’ble High Court further directed the Kendriya Vidyalaya Sanghatan to create a vacancy-based roster within 3 months and adjust the vacancies according to the Rights of Persons with Disabilities Act, 2016.

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Written By: Sushant Kumar Sharma

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1 Oct

Delhi High Court Navigates Quorum Quandaries and Remedies in PMLA Appeals

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Case Title: Gold Croft Properties Pvt Ltd vs. Directorate of Enforcement

Date of Decision: 19th September 2023

Case Number: LPA 167/2023

Coram: Hon’ble Chief Justice and Hon’ble Mr. Justice Subramonium Prasad

Introduction

This case involves an appeal against a judgment passed by a Single Judge in a writ petition. The appellant, Gold Croft Properties Pvt Ltd, challenged an order by the Adjudicating Authority under the Prevention of Money Laundering Act, 2002 (PMLA), which denied their application for deferment of proceedings. The appellant contended that the Adjudicating Authority was not properly constituted at the time. This appeal aims to contest the Single Judge’s decision upholding the Adjudicating Authority’s order.

Factual Background

The case arose when the State Bank of India filed a complaint in August 2020 alleging the diversion of funds by the accused for purposes other than those the funds were availed for. An FIR was subsequently registered by the Central Bureau of Investigation (CBI) in February 2022 for various offenses. The appellant was not initially named as an accused in this FIR. The Enforcement Directorate (ED) registered an ECIR against the appellant and others, followed by a Provisional Attachment Order in September 2022. The ED filed a complaint before the Adjudicating Authority in October 2022 for the confirmation of the Provisional Attachment Order.

The appellant also mentioned that a chargesheet related to the predicate offense had been filed by the CBI. The appellant then filed an application before the Adjudicating Authority, which is the subject of this appeal, arguing that the Adjudicating Authority lacked a proper quorum as required under the PMLA and that they had not been supplied with a copy of ‘Reasons to Believe’ by the ED, which led to the Provisional Attachment Order.

Legal Issues

Whether the Adjudicating Authority had the required quorum under the PMLA.
Whether the appellant should have approached the Appellate Tribunal instead of filing a writ petition.
Whether the application for deferment of proceedings was maintainable.
Whether the Provisional Attachment Order was justified under the PMLA.

Contentions

Appellant’s Argument: The appellant argued that the Adjudicating Authority lacked the required quorum as specified under the PMLA. They also contended that their application should not have been rejected without a proper hearing, and a single-member bench was not in accordance with the PMLA.
Respondent’s Argument: The ED argued that the application was not maintainable, as the Appellate Tribunal provided an alternative remedy. They also defended the validity of the Provisional Attachment Order and the composition of the Adjudicating Authority.

Observation and Analysis

The court reviewed the Provisional Attachment Order and the complaint, finding that the Order was based on a detailed analysis of various documents and materials. It concluded that the Adjudicating Authority had sufficient grounds to believe that the appellant possessed proceeds of crime.

The court also clarified that the PMLA allows for the formation of single-member benches, citing precedent from an earlier case (J Sekar vs. Union of India & Ors). The application filed by the appellant requesting a two-member bench was deemed not maintainable.

Decision of the Court

The court dismissed the appeal, upholding the judgment of the Single Judge, and found that the writ petition filed by the appellant was not maintainable. It held that the appellant should have pursued the statutory remedies provided by the PMLA, including the option to appeal before the Appellate Tribunal.

Written by – Ananya Chaudhary

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