How to Answer Case Laws With Examples – Direct Tax & Indirect Tax

How to Answer Case Laws With Examples – DT & IDT. How to Answer Direct Tax Case Laws,How to Answer Indirect Tax Case Laws. Check Various Formats For How to Answer Case Laws with 9 Examples. In this article we provide complete details for How to Answer Direct Tax and Indirect Tax Case Laws in CA Final Exams. Now you can scroll down below n check more details for “How to Answer Case Laws With Examples – DT & IDT”

How to Answer Case Laws with examples – DT & IDT

Case Law 1 –

Can a former director of a company be held liable for the recovery of the customs dues of such company?

ANITA GROVER

LAW

• As per section 142 of the customs act, 1962 read along with the Customs Rules, 1995, Central Government could recover dues belonging only to defaulter.

FACTS

• A demand notice was raised against the director of a company in respect of the customs duty payable by a company of which she was a former director.

DISCUSSION

• As stated above, it was only the defaulter against whom steps might be taken for the recovery of dues.
• In the present case, it was the company who was defaulter.
• Hence, provision of section 142 is applicable to company.

CASE LAW

Facts of the given question are similar to the facts of a decided case law ‘ANITA GROVER’ in which court have held in the same manner.

CONCLUSION

As discussed above, custom dues of company cannot be recovered from its directors.

NOTE

HC has taken a similar view in case of ‘VANDANA BIDYUT CHATTERJEE’.

Case Law 2 – 

Whether the activity of running guest houses for the pilgrims is liable to service tax?

LAW-

As per section 65(105(zzzzw) of the FA 1994, service provided to any person by hotel, inn, guest house, club or camp site, by whatever name called for providing of accommodation for a continuous period of less than three month is a taxable service.

Facts of the case- (max 2 line)

Assessee was running guest houses for the pilgrims.

Discussion (application of law to the facts)

• As stated above, service provided to any person by hotel, guest houses etc. for providing accommodation for continuous period of less that three month is a taxable service.
• Hence, in the present case, service provided by assessee by way of accommodation service to pilgrims is liable to service tax.

CASE LAW

• Facts given in this question are similar to the facts of a decided case law ‘TIRUMALA TIRUPATI DEVASTHANAMS,TIRUPATI in which the court have held in the same manner.

CONCLUSION

• As discussed above, assessee is liable to pay service tax.

Case Law 3 –

Whether section 66E(i) of the Finance Act, 1994 which levies service tax on the service portion of activity wherein goods being food or any other article for human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of activity, is ultra vires the Article 366(29A)(f) of the Constitution?

HOTEL EAST PARK

LAW

• As per provision of FA 1994 and Rule 2C of ST Rules 1994, the service portion in case of restaurant service is presumed to be 40% of the bill value and in case of outdoor catering 60% of the bill value and the same is subjected to stax.

DISCUSSION

• Thus, the value of food should be considered as 60% and 40% in case of restaurant services and outdoor caterer services respectively.
• It is generally observed that the hotel and restaurant owners charge VAT on the total bill amount.
• It is to be understood that the portion on which service tax is charged cannot be subject to VAT, as it results into double taxation.
• There is no provision in the VAT-ACT for the bifurcation of this amount.
• The state government should work for this and make rules in confirmation of the rules as provided in the Finance act 1994, so that the consumers are not double taxed over the same amount.

CASE LAW

• Facts given in this question are similar to the facts of a decided case law ‘HOTEL EAST PARK’ in which the court have held in the same manner.
• Court held that Section 66E(i) of the Finance Act 1994 is intra vires the Article 366(29A)(f) of the constitution of india.

CONCLUSION

• As discussed above, Section 66E(i) of the Finance Act 1994 is intra vires the article 366(29A)(f) of the constitution of india.

Case Law 4 –

  Can a software be treated as goods and if so, whether its supply to a customer as per an “End User Licence Agreement” (EULA) would be treated as sale or service?

INFOTECH SOFTWARE DEALERS ASSOCIATION               NOV 2013

LAW

• Services of adaptation, customization, design, development, enhancement, implementation, programming, upgradation of information technology software are one of the declared services provided under section 66E.

• Facts of the case are similar to the decided case law ‘Infotech Software Dealers Association’ wherein HC noted the following observation
• If software is goods, then, if there is sale or deemed sale, then there cannot be any service tax.
• In any other case, it would be liable to ST.
• Depending upon terms of End user license agreement transaction may not amount to sell in all cases.
• On the issue as to whether the transaction would amount to sale or service, the HC was of the view that, it would depend upon the nature of individual transaction.

CONCLUSION

• As discussed above, transaction may not amount to sell in all cases and it may vary depending upon the terms of EULA.

Case Law 5 –  A society, running renowned schools, allows other schools to use a specific name, its logo and motto and receives a non-refundable amount and annual fee as a Whether this amounts to a taxable service. ?

MAYO COLLEGE GENERAL COUNCIL                    MAY 2014

LAW

• Unless the following four aspects are present ,an activity cannot be charged with ST
• I) the person who provides the service
• II) the person who receives the service
• III) the actual rendering the service
• IV) the consideration for the service. 
• Further, it cannot be charged to ST, if service is covered in negative list or exempted by way of notification.

FACTS

Assessee allows other schools to use a specific name, its logo and motto for a consideration.

DISCUSSION

• As stated above, it can be seen that assessee was providing franchise service to other schools which were neither covered in negative list nor exempted and therefore , such service is taxable.

CASE LAW

• The facts of the case are similar to the decided case lay ‘ MAYO COLLEGE GENERAL COUNCIL’ in which court have held in the same manner.

CONCLUSION

• As discussed above, assessee is liable to pay ST.

Case Law 6 – Whether the clearances of two firms with common brand name, common management, accounts and goods being manufactured in the same factory premises, can be clubbed for the purposes of SSI exemption?

DEORA ENGINEERING WORKS

ANSWER

Facts of the given questions are similar to facts of a decided case law ‘DEORA ENGINEERING WORKS’ in which court have observed the following points and held that clearance of the goods under the same brand name manufactured by both the firms had been rightly clubbed.

• Partners of both the firms were common and belonged to the same family.
• They manufacturing and clearing the goods in the same factory premises, with common management and accounts

Case Law 7 –  Whether mere dispatch of a notice under section 124(a) would imply that the notice was “given” within the meaning of section 124(a) and section 110(2) of the said Customs Act, 1962?

PURUSHOTTAM JAJODIA

FACTS

• In the present case, SCN U/S 124(a) was dispatched by registered post on the date of expiry of stipulated period u/s 110(2) and received by the petitioner after the expiry of such period.

LAW

• According to section 110(2) of the customs act, 1962 where no SCN is GIVEN within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized.
• According to section 124(a) of the customs act,1962 , no order confiscating any goods or imposing any penalty on any persona shall be made unless the owner of goods or such person is GIVEN notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty

DISCUSSION

• Mere dispatch of notice will not imply that notice was ‘given’
• Instead ‘giving’ of notice would be complete if notice reached the person concerned or having been tendered, had been refused by the concerned person.
• Since in the given case SCN to the assessee was given only on last day of limitation and it was received by the assessee after expiry of limitation period, it could not be treated as ‘given’ within the stipulated period.

CASELAW

Facts of the given questions are similar to the facts of a decided case law ‘Purushottam Jajodia’ in which court have held in the same manner.

CONCLUSION

As discussed above, department was directed to release the goods. The petition was allowed.

Case Law 8 –  s judicial review of the order of the Settlement Commission by the High Court or Supreme Court under writ petition/special leave petition, permissible?

SAURASHTRA CEMENT LTD

Facts of the given question are similar to the facts of a decided case law ‘Saurashtra Cement Ltd’ in which court have held that

• Settlement commission is set up under a statute for settlement of revenue claims.
• The decision of settlement commission is final & it also has power to grant immunity from prosecution, subject to satisfaction of certain conditions.
• Although the decision of settlement commission is final, finality clause would not exclude the jurisdiction of the HC (writ petition to HC) under article 226 of the constitution OR that of SC under article 32 or 136 of the constitution (writ petition or special leave petition to SC).
• The court would ordinarily interfere if the settlement commission has acted without jurisdiction.
• The court held that, judicial review is concerned with the decision making process & NOT with decision of settlement commission.

CONCLUSION

As discussed above, judicial review of the order of the settlement commission by the HC or SC under writ petition or special petition is permissible.

Case Law 9 –  Whether the amendment made by Finance Act, 2013 in section 37C(1)(a) of Central Excise Act,1944 to include speed post as an additional mode of delivery of notice is merely clarificatory in nature having retrospective effect or does it operate prospectively?

JAY BALAJI JYOTI STEELS LTD.

LAW

• Any postal article registered at post office and a receipt issued in respect of such article is to be treated as ‘registered post’ in view of section 28 of Indian Post Office Act.
• Since, both ‘speed post’ and ‘registered post’ satisfy said requirements, they have to be treated as ‘registered post’.
• It is well settled in law that where amendment being ‘clarificatory in nature , which was brought up to clean up omissions and doubt as to the meaning of the previous act, would operate retrospectively from the date on which original provision was introduced.

CONCLUSION

• As discussed above, communication of notices through speed post would be valid.

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