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[Monthly Roundup ] Top Stories like Arshad Warsi pump and dump case; Compensation on failure to deliver ‘Onam Sadya’; Sambhal cold storage collapse incident, and more [April 2023]

tribunals april 2023

AUTHORITY FOR ADVANCE RULINGS

18 percent GST rate applicable on sale of independent running business divisions: Karnataka AAR

In an application sought for advance ruling essentially on the question that whether the transaction of sale of independent running business division, namely, “business of providing/supplying of engineering services primarily relating to semi-conductor services”, constitutes a transaction of “supply” under Section 7 of Central Goods and Services Tax Act, 2017 (‘CGST Act’)/Kerala General Sales Tax Act, 2017 (‘KGST Act’), the two-member bench of Dr. M.P. Ravi Prasad and Kiran Reddy T. ruled that transfer/sale of the division concerned of the business does constitutes a transaction of “supply” under Section 7 of CGST/KGST Acts.

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[PIC02FEMTO Semiconductor Services (P) Ltd., In re, 2023 SCC OnLine Kar AAR-GST 7]

Supply of goods to overseas customer is treated neither as ‘supply of goods’ nor as ‘supply of services’: Karnataka AAR

In an application seeking for determination of liabilities to pay tax on any goods or services or both which is covered under Section 97(2)(e) of the Central Good and Services Tax Act, 2017(‘CGST’), the two-member bench of Dr. M.P Ravi Prasad and Kiran Reddy T held that supply of goods from the applicant to overseas customer is neither treated as ‘supply of goods’ nor as ‘supply of services’.

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[Marubeni India (P) Ltd., In re, 2023 SCC OnLine Kar AAR-GST 6]

CONSUMER DISPUTES REDRESSAL COMMISSION

DCDRC directs restaurant to pay Rs 40,000 as compensation for ordeal sustained by the complainant due to its failure to deliver ‘Sadya’ on Thiruonam day

While deciding the instant consumer complaint wherein the complainant had raised grievance against a reputed multi-cuisine restaurant for its failure to deliver ‘Onam Sadya’, the Bench of D.B. Binu (President) and V. Ramachandran and Sreevidhia T.N (Members) held that the restaurant’s serious deficiency in service has caused the complainant mental agony, inconvenience, hardship and financial loss. The Commission directed the restaurant to pay Rs 40,000 to the complainant as compensation for the agony and hardship sustained by the complainant due to the restaurant’s failure to deliver ‘Onam Sadya’.

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[Bindya V. Suthan v. Maze Restaurant, CC No. 339/2021]

INCOME TAX APPELLATE TRIBUNAL

Reopening of the assessment is indemonstrable in law as reasons inserted in Section 147 IT Act were not considered as evidence: ITAT

In an appeal filed challenging the impugned final assessment order 2022 passed under Section 147 read with Section 144-C(13) of the Income Tax Act, 1961, (IT Act) the two member bench of M. Balaganesh (Accountant Manager), and Sandeep Singh Karhail (Judicial Member) quashed the proceedings of reopening of the assessment made by the assessing officer which was sustained by Dispute Resolution Panel and held that the reopening of the assessment is indemonstrable in law as reasons inserted in Section 147 IT Act were not considered as the evidence.

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[Jowheri Jalaluddin Mullick v. CIT, 2023 SCC OnLine ITAT 257]

NATIONAL COMPANY LAW APPELLATE TRIBUNAL

NCLAT cannot condone delay beyond 15 days in appeal due to lack of jurisdiction even if fraud has been played

A Division Bench comprising of Rakesh Kumar Jain, J. and Mr. Naresh Salecha (Technical Member), held that even if a fraud has been played, the delay beyond 15 days in preferring the appeal cannot be condoned by this Tribunal because of lack of jurisdiction.

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[Pushpa Builders Ltd. v. Paramveer Distributor (P) Ltd., 2023 SCC OnLine NCLAT 146]

“Law will take its own course”; NCLAT refuses to interfere with NCLT’s order approving Resolution Plan

A Division Bench comprising of Ashok Bhushan, J. and Barun Mitra (Technical Member) held that the allocation in Resolution Plan to Creditors can be questioned when the plan value earmarked for them is less than the liquidation value, but mere allocation of meagre amount cannot be a ground to question the Resolution Plan.

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[Pani Logistics v. Vikas G. Jain, Company Appeal (AT) (Insolvency) No. 205 of 2023]

Application u/s 7 IBC not maintainable if Financial Creditor steps into the shoes of Operational Creditor; NCLAT upholds NCLT’s order

While upholding the order of rejection of a S. 7 application by Adjudicating Authority, the Division Bench comprising of Rakesh Kumar Jain, J. and Naresh Salecha (Technical Member), held the application filed by the appellants in the second appeal as Financial Creditor under S. 7 of the Insolvency and Bankruptcy Code, 2016 is not maintainable but they can avail their remedy by filing an application under S. 9 IBC as Operational Creditor in relation to the invoices generated by the seller.

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[Minions Ventures (P) Ltd. v. TDT Copper Ltd., Company Appeal (AT) (Ins) No. 572 and 780 of 2022]

To reject application under Sec. 9 IBC, a genuine pre-existing dispute must exist: NCLAT

While affirming the order passed by the Adjudicating Authority, a Division Bench comprising of Rakesh Kumar, J. and Dr. Alok Srivastava (Technical Member), held that the defense of existence of pre-existing dispute by the appellant was a ‘moonshine defence’, as the same was not raised at the time of inspection but was only raised after the goods were consumed by the Corporate Debtor.

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[Deepak Modi v. Shalfeyo Industries (P) Ltd., Company Appeal (AT)(Ins) No. 1019 of 2022]

Mitigating factors should be considered while imposing penalty for anti-competitive behavior: NCLAT imposes 1% penalty of the turnover on Geep Industries

A Division bench comprising of Rakesh Kumar, J., and Dr. Alok Srivastava* (Technical Member) reduced the penalty imposed on the appellant ‘Geep Industries’ for their anti-competitive behaviour while considering the mitigating factors such as appellant’s business dynamics and situation in the market.

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[Pushpa M. v. Competition Commission of India, 2023 SCC OnLine NCLAT 143]

No embargo on Operational Creditor to file application u/S 9 IBC, even if agreement has an arbitration clause: NCLAT

While upholding the order passed by the Adjudicating Authority, a Division Bench comprising of M. Venugopal, J. and Ms. Shreesha Merla (Technical Member), held that despite the presence of an arbitration clause in the agreement, there is no embargo on the Operational Creditor to file an application under S. 9 of the Insolvency and Bankruptcy Code, 2016 (IBC).

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[Shahi Md. Karim v. Kabamy India LLP]

NATIONAL GREEN TRIBUNAL

State cannot escape liability for violation of environmental norms and negligence by its authorities; responsible to compensate the victims of illegal mining: NGT

The Principal Bench of NGT initiated suo motu proceedings in the light of media reports captioned “three children die during illegal mining in West Bengal”. The three-member Bench of Adarsh Kumar Goel (Chairperson), Sudhir Agarwal (Judicial Member) and A. Senthil Vel (Expert Member) issued advance notice to the West Bengal Pollution Control Board, Mining Officer, District Magistrate, and Inspector of Police, Siliguri, West Bengal and directed the District Magistrate to ensure compensation of amount Rs. 20 lakhs each to the heirs of the deceased and Rs. 5 lakhs to the injured.

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[Three children die during illegal mining in West Bengal, In re, 2023 SCC OnLine NGT 128]

[Sambhal cold storage collapse incident] NGT orders compensation to heirs of deceased and injured persons

The Principal Bench of National Green Tribunal (“NGT”) initiated suo motu proceedings in the light of media report captioned “Sambhal cold storage collapsed incident, death reached at 8, 11 rescued, yet many labourers are buried under the debris”. The three-member Bench of Adarsh Kumar Goel (Chairperson), Sudhir Agarwal (Judicial Member) and A. Senthil Vel (Expert Member), directed the District Magistrate (“DM”), Sambhal, to ensure compensation of Rs. 20 lakhs to the heirs of each deceased and Rs. 2 lakhs to the injured and the State Legal Services Authority was directed to provide legal aid to the injured and kins of deceased.

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[News item published in Nav Bharat Times dated 17.03.2023 titled Sambhal Cold Storage Collapsed Incident, In re, 2023 SCC OnLine NGT 136]

State cannot escape liability for violation of environmental norms; NGT grants Compensation of Rs.20 lakhs to successor of deceased

In suo motu proceedings in the light of media report captioned “Five including man and son suffocated to death at brick kiln in Chhattisgarh”, the three- member Bench of Adarsh Kumar Goel (Chairperson), Sudhir Agarwal (Judicial Member) and A. Senthil Vel (Expert Member), issued advance notice to the State Pollution Control Board and District Magistrate, Mahasamund, Chhattisgarh and administered the District Magistrate to ensure reimbursement of amount Rs.20 lakhs each to the successor of the deceased and Rs.2 lakhs to the injured within two months, and directed State Legal Authority to provide legal aid in the matter.

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[In re: News item published in Times of India dated 16-03-2023 titled (Five including man & son suffocate to death at brick kiln in C’garh]

Railway horns are required to be blown as per ‘Whistle Code’; NGT dismisses plea to prohibit usage of train horns

In an application filed against use of horns by Railways, violating the Noise Pollution (Regulation and Control) Rules, 2000, (‘Noise Pollution Rules’), a five-member Bench of Adarsh Kumar Goel (Chairperson), Sudhir Agarwal (Judicial Member), Arun Kumar Tyagi (Judicial Member), Dr. A. Senthil Vel (Expert Member) and Dr. Afroz Ahmad (Expert Member), dismissed the application on grounds that noise free environment is necessary, but essential activities must be conducted.

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[Ashok Malik v. Ministry of Railways, Original Application No. 291/2023]

ORISSA REAL ESTATE REGULATORY AUTHORITY

Real Estate (Regulation and Development) Act, 2016 applicable only to ongoing projects, and which are to be developed after the commencement of the Act: Orissa RERA

In a complaint case which was remitted back for fresh disposal, by the Real Estate Appellate Tribunal (‘REAT’) , wherein it said that the Authority cannot treat the completion certificate as valid in one case and invalid in another, the two-member bench of Siddhanta Das (Chairperson) and Pradeep Kumar Biswal (Member) dismissed the case of the complainant, that the project concerned, D.N. Oxypark was required to be registered under Section 3 of the Real Estate (Regulation and Development) Act, 2016 (“the Act”) even after obtaining the completion certificate by the Bhubaneswar Development Authority (“BDA”), and observed that the case was not maintainable as the project was completed before the commencement of the Act.

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[D.N. Oxypark Residents Welfare Society v. Jagdish Prasad Nayak, decided on 20-03-2023]

SECURITIES APPELLATE TRIBUNAL

SAT reverses SEBI’s order in Arshad Warsi’s pump and dump case

In the instant appeal filed against the ex parte ad-interim order passed by the Whole Time Members (WTM) of Securities Exchange Board of India (‘SEBI’) in Arshad Warsi’s case, the two-member bench of Tarun Agarwal, J. (Presiding Officer) and Meera Swarup (Technical Member), of Securities Appellate Tribunal, Mumbai, set aside the order passed by WTM and partly allowed the appeal along with other directions.

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[Arshad Hussain Warsi v. SEBI, Appeal No. 284 of 2023]

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