The Central Sales tax Act , 1956
S. 3. When is a sale or purchase of goods said to take place in the course of inter -state or commerce- When is a sale or purchase of goods said to take place outside a State – The situs of sale of intangible property like trademarks & patents the situs of the owner of an intangible asset , would be the closest approximation of the situs of an intangible asset. On the above reasoning it was held that the exercise of the right to a trade mark or a patent right ; which has been obtained by the assessee , who had their principal palaces business in the State of Kerala is exercised from the places of business in the State of Kerala is exercised from the principal places of business . When transferring their rights obtained under a statute to another entity having place of business in another state ; from where the transferee intend to exercise such rights thereafter , postulate , a movement of the intangible corporeal goods from one State to another and hence would be an interstate sale assessable to tax under the CST Act. The Transferor’s principal places of business being with in the State of Kerala , the sale would be an interstate sale . The transfer is not a transfer of right to use , but a transfer of property in goods vesting the complete rights with the transferee and transferor having no subsisting right thereafter .Accordingly S. 3 of the CST Act applies on all forces and the agreement of transfer of the intangible , incorporeal rights , nay, goods ,occasions the movement of the said goods from Kerala to other State where the transferee has their principal places of business . The agreement executed in Gujarat and Puducherry does not make the sale with in that Sate or union Territory , as S.4 of the CST Act provide that sale of goods is deemed to take place in a State only when the goods are with in the State . Other wise any goods could be taken by the seller to another state and delivered to the purchaser making it an inter-state sale. Accordingly dismissing the petition ,sustaining the order of to the extent the transfer of patent right is assessed under the CST Act. [S.4, Art. 286(1) (a),366(29A)(d), ITAct, S.9(1) (i), Kerala Vale added Tax Act , 2003 ]

S. 254(2A): Appellate Tribunal – Extension of stay -Guidelines specified to ensure expeditious hearing of cases referred to Special Benches and Third Members- Inordinate delay in fixation of hearing of Special Bench & Third Member cases is inappropriate and contrary to the scheme of the Act. It also reduces the efficacy and utility of the mechanism to deal with important matters-Guide lines referred in the order are , (a) Wherever special benches are constituted, the special benches shall, as far as possible, commence hearing within 120 days of the benches being constituted. (b) It is only in exceptional circumstances that the adjournment may be granted, at the instance of the either party, in Special Benches and Third Member cases, and the hearing of such matters should be scheduled by the registry in due consultation with both the parties. Even when adjournment is granted, it shall not be generally granted beyond 30 days. (c) The guidelines shall also be followed with respect to Third Member cases, and the Registry will take up the matter with the respective benches, for scheduling the hearing, in terms of the above guidelines. [ S. 92, 254(1) ]

S. 220 : Collection and recovery – Assessee deemed in default -If the assessee has exercised on time its statutory remedy of filing an appeal and also filed a stay petition, procedural fairness demands that the authorities may wait, before taking further steps, until the appellate authority decides on the stay petition.[ S.220(6) ]

S. 147: Reassessment -Bogus share capital- Search in the premises of shreeji Polymers (India) Ltd – Specific information was available with the authorities -Allegation that assessee is a dummy concern used to route unaccounted money by way of bogus share application money is sufficient to reopen assessment .[ S. 68,148 ]

S.92BA:Domestic transfer pricing- Arms Length price- Specified Domestic Transactions ( SDT)- Purchase of loan from HDFC Ltd -Loan could never be termed as an expenditure – Payment made by the petitioner to the global Pvt Ltd for rendering services would not fall with in the meaning of a SDT – Payment of interest to HDFB Trust which is a welfare trust for providing general welfare to the employees of the petitioner and not the petitioner – The Trust has been set up exclusively for the welfare of its employees and there is no question of petitioner being entitle to 20% of the profits of such Trust – transaction would not fall with in the meaning of S. 40A(2) (b) of the Act hence is not covered as SDT- Loan cannot be treated as expenditure -Indirect share holding is not covered under S.40A(2)(b) of the Act- – From Revenues contention that a share holder has beneficial interest in the assets of the company is contrary to all cannons of company law -Law does not permit to hold that HDFC Ltd is the beneficial owner of 22.64% of the shares of the petitioner by clubbing the share holding of HDFC investments Ltd with the share holding of HDFC Ltd- None of the three transactions that form the subject matter of the petition with in the meaning of S.92BA(1) of the Act , required to be disclosed by the petitioner by filing form 3CEC – Accordingly the petition was allowed. [ S.40A(2)(b),92CA(1), 271G ]

S. 69C : Unexplained expenditure – Bogus purchases – Business of manufacturing cycle/cycle rims- The item-wise break-up of each and every purchase item along with comparative figures of the previous years was furnished – All the payments have been made by account payee cheque/bank draft- All the payments have been made by account payee cheque- Sample copies of the bills raised by those parties were submitted and it was stated that the bills contained the complete address of the parties, their TIN Nos., etc. Further, the purchases have been made against C Forms which have been duly issued by the assessee company-The fact that the vendors are not available at the given address is not sufficient to treat the purchases as bogus if the assessee has discharged primary onus and substantiated the purchases through documentary evidence and payment is made through banking channels. None of these documents have been proved to be false or untrue and thus the initial burden cast on the assessee was duly discharged- Decision of the CIT(A) is deleting the addition is affirmed .[ S.143(3) ]

S. 50C: Capital gains-Full value of consideration – Stamp valuation-The valuation of the stamp authority cannot be adopted for the purpose of collecting capital gain tax in the hands of the assessee, if there is a long gap between the date of execution of the MOU and the execution of a formal development agreement.[ S.45, 269UL(3) ]

S. 41(1) : Profits chargeable to tax – Remission or cessation of trading liability – Provision for doubtful debt- Burden is revenue to prove that excess provision for bad and doubtful debt written back in profit and loss account was allowed as deduction in previous years -Deletion of addition is held to be justified [ S. 36(1)(viia) ]

S. 14A : Disallowance of expenditure – Exempt income – Disallowance cannot exceed exempt income [ S. 263 ,R.8D ]

S.37(1): Business expenditure – Ad hoc disallowance of 10% claim – Bricks, machinery repairs, cartage , labour expenses- No ad hoc disallowances can be made without rejecting the books of account and also allowed in the past consistently such expenses in scrutiny assessments . [ S.143(3), 144 ]