The Supreme Court in the M/s Sansera Engineering Limited[1] has concluded the long outstanding issue of distinction between the refund and rebate under the erstwhile indirect taxation laws. The assessee tried to distinguish rebate from refund, since there was no specific time limit mentioned for rebate. Before dealing with the said judgment and its implications under the GST laws, a brief background on the thin line of distinction between refund and rebate is sina qua non.

Read more: SC in Sansera Engineering Limited – Rebate vs Refund – Implications under GST Laws

In this 102^nd edition, we bring you articles dealing with certain landmark judgments. The article on the judgment of Supreme Court in Mansukh Dyeing and Printing Mills, upholding the decision of Bombay High Court in AN Naik Associates & Others is a must read. The Supreme Court held that the expression ‘otherwise’ which appears in Section 45(4) [old] covers the instance of ‘retirement’ also and not to be restricted only to instances of dissolution. This puts a lot of cases under stress, who took the stand that old section covers only instances of dissolutions.

The next article is on the judgment of Supreme Court in Sansera Engineering Limited, wherein it was held that time limit that was applicable for refund under Section 11B is equally applicable to rebate filed under Rule 18 of Central Excise Rules. This also puts an end to a long outstanding issue of different treatment to rebate. Now, under GST laws, though expression ‘rebate’ is not used, the methodology is still being used, so, we tried to apply the rationale of Sansera to the current law.

Read more: SBS Wiki E Journal January 2023

1. Supreme Court in Pawan Kumar Goel[1] - No Vicarious Liability on Director of Company in Cheque Bounce issue, if the Company is not arraigned as accused:

The Supreme Court in the case of Pawan Kumar Goel has reiterated that the director of a company is not vicarious labile, if the company is not arraigned as accused. The facts of the case are that Pawan Kumar Goel has supplied certain products to M/s Ravi Organics Limited. For settling the payment, Ravi Organics Limited has given a cheque, which when presented, got dishonored. Pawan Kumar Goel has filed a criminal complaint under Section 138 of Negotiable Instruments Act, 1881 (‘NI Act’) against the director of the Ravi Organics Limited. The Magistrate Court and Sessions Courts have upheld the complaints. The Director has approached the High Court against the orders of lower courts and High Court cancelled all the previous orders stating that the complaint was lodged against the director of the company instead on the company by placing reliance on Aneeta Hada vs Godfather Travels & Tours Private Limited[2] and SMS Pharmaceuticals Limited vs Neeta Bhalla & Another[3].

Read more: Summary of Misc Judgments

1. Chennai ITAT in P Srinivasan vs ITO[1] - Receipt of Gift from Uncle’s son and daughter-in-law to the assessee can be said to be constructive gift from Uncle and accordingly not taxable in light of Section 56(2)(vii) in the hands of assessee:

An interesting issue has come up for consideration before Chennai ITAT. The assessee has received Rs 50 lakhs from his uncle (father’s brother) as gift. However, the said amount was received from the bank account of uncle’s son and daughter-in-law who are non-resident Indians. The AO has considered the amounts received from uncle’s son and daughter-in-law and held that the same as taxable since the later are not considered as ‘relative’ as per the definition provided in Section 56(2)(vii). The Commissioner (Appeals) has also upheld the order of AO.

Read more: Summary of IT Decisions