Name:

High Court Category:

State :

Sr No. Order No. & Date Name Category Breif Issue
1 GIB/GUJ/VALIMOHAMMED/27-09-2019/HC-61 VALIMOHAMMED JOSAB & CO. E-way Bill Fact & Issues Involved:  

The Assessee had provided a “winch machine” to “Nirma Limited, Kala Talav” (Job Worker) for some job work to be done. - However, on account of some defect in the machinery, the same was taken directly for the purpose of repairs on 20.8.2019 to “Yadav Trading Co”., namely, the dealer from whom the machinery had been purchased.

It was submitted that a gate pass had been issued by Nirma Ltd. with regard to removal of the Winch Machine from its premises.

However, when the machine was being transported back to the premises of Nirma Ltd.  The vehicle in question being GJ-04-V-4335 was intercepted and the same has been seized under section 130 of the Gujarat Goods and Service Tax on the ground that the e-way bill was not tendered for the goods when it’s in movement.

The Assessee submitted that vehicle came to be intercepted at 18:15 hours on 20.8.2019 and immediately thereafter, at 7.49 p.m., the e-way bill came to be generated.
2 GIB/GUJ/VKC Footsteps/24-07-2020/HC-124 VKC Footsteps India Pvt. Ltd. Refund on accounts of Inverted Duty Structure Facts & Issue of The Case:

Since these petitions are arising out of the common issue, the same were heard analogously and are being disposed of by this common Judgment. The following petitions were clubbed into the said decisions;


Gyscoal Alloys Ltd.
The Quarry Owners Association.
Adani Wilmar Limited.
South Gujarat Textile Processors Association.
Hasankha Rehmankha Belim through His Brother.
ADI Tradelink.
ADI Enterprises.
M/S Topland Engines Private Limited.


The petitioner VKC Footsteps India Pvt is engaged in the business of manufacture and supply of footwear which attracts GST @5%. The Petitioner procures input services such as job work service, goods transport agency service etc. and inputs such as synthetic leather, PU Polyol, etc., on payment of applicable GST for use in the course of business and avails input tax credit of the GST paid thereon. The inputs and input services attract GST at the rate of 12% or 18%.

Thus, GST rate paid by the Petitioner on procurement of input is higher than the rate of tax payable on their outward supply of footwear. Hence, it results in accumulation of unutilized credit in electronic credit ledger of the Petitioners.

Section 54(3) (ii) of the CGST Act lays down the eligibility criteria for the grant of refund on account of inverted duty structure allows refund of any unutilized input tax credit at the end of any tax period due to an inverted tax structure. Here, there is no specific mention of goods (inputs) or services (input services) alone. Hence, it is evident that the provision covers both services and goods.

However, Rule 89(5) of the CGST Rules defines a formula for calculating the amount of ITC refund due to the inverted tax structure. The maximum refund amount is equal to {(Turnover of inverted rated supply of goods and services) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such an inverted rated supply of goods and services.

Circular No. 79/53/2018- GST dated 31.12.2018 provides example at para 4(b) which is informative,


if, the rate of GST on some inputs is higher than the rate of GST applicable on the output supply, while rate of GST on some other inputs is lower than the rate of GST applicable on the said output supply, then that is a situation of inverted duty structure governed by Section 54(3) of the CGST Act
if, assessee supplies goods and none of which involve inverted duty structure, it is not entitled for any refund of unutilized input tax credit,
if, assessee supplies goods involving only inverted duty structure, then entire unutilized credit is refundable to it and (iv)if, an assessee is engaged in making two supplies, one involving inverted duty structure and other not involving inverted duty structure, then it is not entitled for refund for second category of supplies and eligible for refund only for first category of supplies.


The provision of Rule 89(5) of the CGST Rules, 2017 as originally introduced was substituted vide Notification No. 21 /2018-CT dated 18.4.2018 prescribing a revised formula for determining the refund on account of inverted duty structure which was given retrospective effect from 1.7.2017 vide Notification No. 26/2018-CT dated 13.6.2018.

The revised formula inter alia excluded input services from the scope of ‘net input tax credit’ for computation of the refund amount.

Hence, respondents are allowing refund of accumulated input tax credit of tax paid on inputs However, refund of accumulated credit of tax paid on procurement of input services is being denied.

Petitioners have therefore challenged validity of amended Rule 89(5) of the CGST Rule,2017 to the extent it denied refund of input tax credit relatable to input services.

 
3 GIB/TS/Deem Distributors (P) Ltd./03.08.2021/HC-248 Deem Distributors (P) Ltd. DEMAND OF TAX WITH PENALTY Facts of the Case:


Petitioner is Partnership firm engaged in the business of dealing in goods & services relating to Ferrous waste and scrap, re-melting scrap ingots of iron or steel, flat rolled products of iron or non-alloy steel of a width of 600 mm or hot rolled, not clad, plated or coated etc.
Department has issued a notice to the petitioner saying that petitioner is liable to pay Rs. 1,17,35,822/- for the period of February to march 2018 and being advised to pay it, as department said that petitioner claimed input tax credit on the basis of invoices issued by certain supplier/firms which are fictitious and are issuing fake invoices.


Issues

Whether tax demand could be issued or raised when investigation was still in progress? Whether without there being a determination of liability of applicant in any enquiry conducted under the act, a demand for immediate reversal of input tax credit allegedly availed by applicant could be raised ?

          Views of the Court


Sub-Section (1) of Section 74 of the Act may be issued by the proper officer if he is of the opinion that the input tax credit has been wrongly availed or utilized by reason of fraud, or any wilful-misstatement or suppression of facts, to the person who has wrongly availed or utilized input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice.


Sub-Section (5) of Section 74 of the Act, however, enables the person chargeable with tax to, before service of notice under sub-Section (1) of Section 74, pay the tax along with interest payable under section 50 and a penalty of 15% of such tax on the basis of his own ascertainment of such tax or the tax ascertained by the proper officer and inform the proper officer in writing of such payment.

Sub-Section (9) of Section 74 of the Act enables the proper officer to determine the amount of tax, interest and penalty due from such person and issue an order, if the contents of the notice are disputed.


Sub-Section (5) of Section 74 of the Act gives a choice to the tax payer to make any payment, if he is so chooses, but it does not confer any power on the respondents to make a demand as if there has been a determination of liability of the Assessee and demand tax along with interest and penalty.
no tax demand can be issued or raised when investigation is still in progress. The respondents cannot be allowed to put the cart before the horse and collect any tax, interest or penalty before they determine, in an enquiry, after putting the petitioner/assessee of notice, and we are of the opinion that their action is wholly arbitrary and without jurisdiction.

4 GIB/RJ/M/s. Mahesh Vegoils Private Limited/13.07.2021/HC-247 Ms. Mahesh Vegoils Private Limited vs UOI- Raj HC-2021 Taxability
5 GIB/GUJ/YASHO INDUSTRIES LIMITED/24.06.2021/HC-246 YASHO INDUSTRIES LIMITED Versus UNION OF INDIA Litigation FACTS OF THE CASE

The petitioner is a public limited company engaged in the business of manufacturing and exporting specialized chemicals. The Petitioner Company is the holder of Advance Authorization Licences granted in terms of the Scheme set out in Chapter-IV (AA Scheme) of Foreign Trade Policy 2015-2020. It appears that the Directorate of Revenue Intelligence, Kolkata Zonal Unit vide the Communication dated 11.11.2020 addressed to the Mumbai Office of the petitioner, had intimated that an inquiry was initiated against the petitioner and other importers, who had incorrectly availed the benefits of EOU Scheme extra in terms of the Customs Notification Nos.78/2017-Cus, 79/2017-Cus, and 48/2017-Cus respectively, and also simultaneously availed the benefit of refund of duty paid on the goods exported towards fulfillment of the export obligation.

As per the petitioners, the manufacturing unit of the petitioners at Vapi was visited by the officers of the DGGI on 9.2.2021 in connection with the said inquiry and during the said visit, a sum of Rs.3 crore was recovered from the petitioners on the alleged incorrect IGST refunds.

The said payment was made by the petitioners under extreme duress and not on their own volition. It is further case of the petitioners that subsequent to the said visit the officer of DGGI issued the impugned summons invoking Section 70 of the CGST Act, calling upon the petitioners to remain present on 21.4.2021 to give evidence and/or to produce documents.

According to the petitioners, they are facing two parallel investigating proceedings namely the proceedings initiated pursuant to the communication dated 11.11.2020 by the DRI, Kolkata Zonal Unit and the proceedings instituted by the DGGI officer vide the impugned summons, invoking Section 70 of the CGST Act and hence, the petition has been filed.

ISSUE OF THE CASE

The petitioners by the present petition filed under Article 226 of the Constitution of India have challenged the Summons dated 12.4.2021 issued under Section 70 of the CGST Act, calling upon the petitioners to give evidence and produce the documents as mentioned therein in connection with the inquiry initiated against the petitioners.

The petitioners also have sought directions to issue refund/allow recredit of INR 3 Crore paid by the petitioners on 9.2.2021 vide Form No. GST DRC-03.

The petitioners have also sought direction to quash and set aside the impugned Circular dated 5.7.2017, in connection with the assignment of functions to the officers as the 'proper officers' in relation to the various functions of the CGST Act and the Rules made thereunder.
6 GIB/UP/NEETA SALES/21.05.2021/HC-237 NEETA SALES CORP CORRECTION OF MISTAKE IN THE RETURN FACTS AND ISSUE OF THE CASE:

In this case the contention of the learned counsel for the petitioner is that certain mistakes have crept in at the time of filing the GSTR-1 in Form B2B, due to which the invoice had been reflected in column B2Chf though the petitioner had paid all taxes as and when they were due.

Submission, thus, is that the correction in the form uploaded by the petitioner while filing return in GSTR-1 can be corrected at the ends of the respondents. A representation in this regard had been made on 16.9.2020 but no action has been taken as yet. Sri Dhananjay Awasthi learned counsel for the respondent nos.2 and 3, on the other hand, submits that the representation moved by the petitioner is addressed to the Nodal Officer, State GST authorities who is not competent to make any correction. As far as the State authorities are concerned, they can only forward the return filed by the petitioner to the Central Authority.

He further submits that the grievances of the petitioner, if any, can be met by the Commissioner, CGST & Central Excise Jhansi Division, Jhansi who has not been approached so far. Learned counsel for the petitioner, at this stage, states that the petitioner may file a fresh representation before the Commissioner, CGST and Central Excise Jhansi Division Jhansi with the appropriate prayer.
7 GIB/MH/QUALCOMM INDIA/21.05.2021/HC-233 QUALCOMM INDIA PRIVATE LIMITED GRANT OF INTEREST ON REFUND AMOUNT FACTS AND ISSUE OF THE CASE:

In this case the Petitioner, Qualcomm India Private Limited is engaged in the business of providing support services primarily to its foreign affiliates within the meaning of Chapter V of the Finance Act, 1994.In order to provide such services, petitioner receives various input services and avails credit for service tax paid thereon under rule 3 of the CENVAT Credit Rules, 2004. It is stated that services provided by the petitioner qualified as export of service under the erstwhile Export of Service Rules, 2006 as well as under rule 6A of the Service Tax Rules, 1994 read with rule 3 of the Place of Provision of Services Rules, 2012.

The petitioner received the refund amounts as sanctioned. However, the refund amounts were sanctioned beyond three months from the date of filing of refund applications. Therefore, the petitioner claimed that it was entitled to interest on delayed payment of refund under section 11BB of the Central Excise Act, 1944 made applicable to service tax vide section 83 of the Finance Act, 1994.In such circumstances, the petitioner submitted a letter requesting respondent authority to grant 6% p.a. interest on delayed refund for the period after expiry of three months from the date of application till the date of actual refund.

However, there was no response to the said letter. Petitioner again requested the respondent to grant interest on the refund amount sanctioned belatedly for the period from June 2008 to December 2014. Along with the said letter, the petitioner submitted a copy of the order passed by the Central Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad in its own case granting interest on the refund amount sanctioned belatedly.

The Respondent Authority informed the petitioner that no other document evidencing that refund was sanctioned late had been submitted. Hence, he stated that the claim for interest could not be processed on the basis of the letter. However, in the said letter respondent completely ignored the previous letter of the petitioner dated 15.05.2017 and that the letter dated 02.05.2019 was only a sequitur to the earlier letter.
8 GIB/DL/GURCHARAN SINGH/21.05.2021/HC-229 GURCHARAN SINGH LEVY OF IGST FACTS OF THE CASE:

In this case Petitioner Gurcharan Singh has filed this petition against the imposition of IGST on the import of the oxygen concentrator which has been gifted to the Petitioner for personal use, by his nephew, who is located in New York, U.S.A.

The Ministry of Finance (“the Respondent”) issued Notification no. 4/2015-2020, dated April, 30, 2021, by DGFT, which amended para 2.25 of its Foreign Trade Policy, 2015-2020 (“FTP”) to permit import of oxygen concentrators that resulted in exemption from Basic Custom Duty on such items vide Notification No. 28/2021-Customs dated April 24, 2021. Afterwards, the Notification No. 30/2021-Customs, dated May 1, 2021 (“Impugned Notification”), was issued whereby, IGST on oxygen concentrators imported by individuals for personal use, that are supplied free of cost, was scaled down to 12% from 28%.

However, another notification, i.e., Ad hoc Exemption Order No. 4/2021-Customs, dated May 3, 2021 (“Exemption Order”), was issued, which exempted IGST on oxygen concentrators imported for the purpose of COVID relief, subject to certain conditions that included, where the importer is the State Government or, any entity, relief agency or statutory body, authorised in this regard by any State Government (“canalising agency”) till June 30, 2021, that stood in contrast to oxygen concentrators which were imported for commercial use. The Petitioner, has asserted that the imposition of tax is discriminatory, unfair, and unreasonable and impinges upon the Petitioner’s right to life and health.

ISSUE OF THE CASE:

Whether the Respondent’s action, of imposing IGST on oxygen concentrators, which were directly imported by individuals, albeit free of cost, without the aid of a canalising agency is violative of Article 14 of the Constitution?

Whether Article 21 of the Constitution, which includes the right to health and affordable treatment, would require the Respondent to demonstrate that levy and collection of the impugned tax in times of pandemic, war, famine, floods, and such like conditions would subserve public interest?

Whether Article 21 of the Constitution, imposes on the Respondent, a positive obligation to provide adequate resources for protecting and preserving the health and well-being of persons residing within its jurisdiction?
9 GIB/RJ/KEWAL CHAND JAIN/18.05.2021/HC-245 KEWAL CHAND JAIN GRANT OF BAIL FACTS AND ISSUE OF THE CASE:

In this case the petitioner submits that the petitioner has been falsely implicated in this matter and the challan has been filed before the competent court of jurisdiction. Counsel further submits that the provisions of the Central Goods and Service Tax Act, 2017 have not been followed in this case. Counsel further submits that the maximum sentence provided for the alleged offence under the Act is 5 years. Counsel further submits that to show his bona fides, the petitioner has already deposited Rupees One Crore Fifty Four Thousand under protest and the petitioner is 68 years old person and due to ongoing Covid-19 problem, the trial is not proceeding and the petitioner is behind the bars since 25.02.2021. Counsel further submits that the demand is of ₹ 9.32 Crores, therefore the offence is non-bailable and cognizable and upto Rupees Five Crores the offence is bailable and lastly prayed that the petitioner be released on bail.
10 GIB/TR/DHARAMPAL SATYAPAL/17.05.2021/HC-218 DHARAMPAL SATYAPAL LTD ABATEMENT OF DUTY FACTS AND ISSUE OF THE CASE:

In this case the appellant is a manufacturer of Jarda Scented Tobacco falling under Chapter 24 of the Central Excise Tariff Act, 1985. In terms of Section 3A of the Central Excise Act, 1944 read with Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 (hereinafter to be referred to as “the Rules of 2010”) the assessee was liable to pay excise duty on the installed capacity of manufacture instead of actual manufacture and clearance of goods

The appellant had installed one machine in its factory which was sealed and de-sealed at its request by the Excise authorities during the period between 31st August 2015 to 6th November 2015. According to the appellant, such machine was operated/not-operated during the said period.

Since there was closure of production at the unit for continuous period on more occasions than one, the appellant filed a single abatement claim for the periods between 1st October 2015 to 7th October 2015 and 20th October 2015 to 31st October, 2015 under Rule 10 of the said Rules of 2010 and claimed that a total of ₹ 50,32,548/- was admissible. The Assistant Commissioner of Central Excise rejected the application by an order dated 1st January 2016 on two grounds namely, the closure of the production activity at the unit was not for a continuous period exceeding 15 days and that provisions of Rule 6(5) of the said Rules of 2010 were also not satisfied since the machine was not removed from the factory.The appellant filed appeal against the said order. 
11 GIB/RJ/MOHAMMED YUNUS/17.05.2021/HC-225 MOHAMMED YUNUS GRANT OF BAIL FACTS AND ISSUE OF THE CASE:

In this case Petitioner has filed this fourth bail application under Section 439 Cr.P.C. F.I.R. was registered with the Directorate General of Goods and Service Tax Intelligence, Jaipur Zonal Unit (Raj.) for offence under Sections 132 (1)(b),(c)(f) & (1) of the Central Goods and Services Tax Act, 2017 read with Section 132(1)(I)(IV) further read with Section 135(5) of the Central Goods and services Tax Act, 2017

It is contended by counsel for the petitioner that petitioner has remained in custody for a period of about one year and seven months. Maximum sentence provided under the Goods and Services Act is five years. Out of list of twenty witnesses, statement of only one witness has been recorded so far.

Learned counsel for Union of India has opposed the fourth bail application. It is contended that the matter pertains to passing of input tax credit to the tune of more than ₹ 127 crore.
12 GIB/RJ/ABHISHEK SINGHAL/17.05.2021/HC-223 ABHISHEK SINGHAL BAIL APPLICATION FACTS AND ISSUE OF THE CASE:

In this case counsel for the petitioner, submits that the petitioner, Abhishek Singhal has been falsely implicated in this matter and the petitioner is a chartered accountant by profession and he is not liable for the offences committed by co-accused persons. Counsel further submits that the maximum sentence for the offences alleged against the petitioner is five years and the petitioner is in custody since February 19, 2021 and conclusion of trial may take a long time.

Learned counsel appearing on behalf of the respondent-Department has opposed the bail application on the ground that the petitioner is the main accused who is absconding and he has got registered 38 fake firms. Counsel further submits that allegation against the petitioner is of availment bypassing of ITC wrongfully to the tune of Rs.6,36,32,492/- by creating 38 fake firms. Counsel further submits that the petitioner has absconded for about one year.
13 GIB/DL/ROSHNI SANA/12.05.2021/HC-215 ROSHNI SANA JAISWAL PROVISIONAL ATTACHMENT OF BANK ACCOUNTS FACTS AND ISSUE OF THE CASE:

The petitioner was acting as a director on the Board of Directors of a company, going by the name of Milkfood Ltd., between 2006 and 2008. The petitioner is also a shareholder in the said company. The petitioner drew a salary of Rs.1.50 crores per annum qua the financial year (in short „FY‟) 2019-2020.

The respondent, based on the information received, that Milkfood Ltd. was availing Input Tax Credit (in short „ITC‟) against fake/ineligible invoices, commenced investigation, under Section 67 of the Central Goods and Services Tax Act, 2017 (in short „the Act‟), against Milkfood Ltd. The respondent claims that, the statement of the persons, who controlled entities, which enabled Milkfood Ltd. to claim ITC, were recorded in the course of the investigation. It is in this connection, the respondent claims, that “the voluntary statement” of the petitioner was recorded on 03.12.2020. Since the petitioner was aggrieved qua the impugned action of the respondent, she approached this Court by way of the instant writ petition.
14 GIB/MH/KRISHNA MURARI SINGH/06.05.2021/HC-221 KRISHNA MURARI SINGH GRANT OF BAIL FACTS AND ISSUE OF THE CASE:

In this case the petitioner was Chairman and Managing Director of company and search and seizure had been carried out on the premises of company. The summons issued to him on various dates and he attended all summons except one while he had undergone angioplasty. On last date of summon, he was arrested and produced before Court seeking remand. He filed application for bail. There were allegations that he had not deposited with the government tax collected to the tune of Rs. 6,30,00,000. The Magistrate had rejected the bail application of the petitioner and later on, the remand was extended. He filed writ petition contending that his arrest was illegal and despite cooperation and payment, he was been put under arrest for alleged non-payment of GST and alleged illegal availment of ITC.     
15 GIB/RJ/BHAGWAN SAHAY/04.05.2021/HC-224 BHAGWAN SAHAY GUPTA GRANT OF BAIL FACTS AND ISSUE OF THE CASE:

In this case petitioner has filed bail application under Section 439 of Cr.P.C. for offence under Section 132(1)(i) (iv) with Sub-Section (5) of Central Goods & Service Tax Act, 2017.

It is contended by counsel for the petitioner that petitioner is a Chartered Accountant who created the firms on the basis of documents provided by the co-accused. As per the complaint filed by the Department, petitioner instead of charging ₹ 1500/- per GST return, charged around ₹ 3,500/- per GST return. However, there is no allegation in the complaint that he has received any amount or any percentage with regard to the wrong input tax credit

It is further contended that petitioner is in custody from 23.01.2021. The maximum sentence provided for the offence with which petitioner is charged is six months. It is contended that as per the charge-sheet, petitioner has only received ₹ 75,000/- for filing GST returns and ₹ 5,000/- per firm for the registration.

Counsel for the Union of India has opposed the bail application. It is contended that petitioner was instrumental in registration of 11 fake firms and these firms have availed input tax credit to the tune of ₹ 146 crores. It is also contended that petitioner was aware as he was filing GST returns of non-existent firms.
16 GIB/GJ/SUPRIMKUMAR/03.05.2021/HC-202 SUPRIMKUMAR JITENDRABHAI PATEL GRANT OF BAIL FACTS AND ISSUE OF THE CASE:

The case of the prosecution is that the applicant has operated 16 fictitious firms and a tax liability to the tune of ₹ 9,60,47,253/­ had been evaded by misusing the registration numbers of various firms. The investigation culminated in complaint Case No.11282 of 2021 which was filed before the Additional Chief Metropolitan Magistrate, Ahmedabad on 04.02.2021.

A close perusal of the complaint prima facie reveals that there are 16 firms, which were part of scrutiny by the investigating agency. As per the case of the prosecution, the applicant is involved in misusing the registration numbers of these 16 firms and the total tax evasion by generating e-­way bill without revealing the true identity of the real purchaser or real seller is stated to be ₹96,047253/­.

The court has also examined the role and names connected with such firms and prima facie it appears that the applicant is involved in four firms viz: Meet Traders(₹ 39,39,864/­ tax evaded), Ravi Enterprise (₹ 40,14,306/­ tax evaded), V.S. Trading (₹ 38,06,024/­ tax evaded) and Vikas Enterprise (₹ 38,99,983/­ tax evaded). Except these four firms nothing is pointed to this Court with regard to the complicity of the applicant in generating e­way bills of other firms. The total tax evasion of these four firms comes to ₹ 1,60,00,000/­ approx. The applicant is also ready and willing to deposit some of the amount as per the instructions received by learned advocate Mr.Pandya from the applicant.
17 GIB/UP/NEERAJ KASYAP/30.04.2021/HC-191 NEERAJ KASYAP GRANT OF ANTICIPATORY BAIL FACTS AND ISSUE  OF THE CASE:

In this case an anticipatory bail application has been filed on behalf of the applicant - Neeraj Kasyap, seeking anticipatory bail against the summons issued under Section 70 of the Central Goods and Services Tax Act, 2017 by Superintendent of CGST Commissionerate, Gaum Budh Nagar, Greater Noida.

The applicant had only made purchases of certain goods from M/s. G.K. Traders against regular invoices. The purchases were wholly valid and genuine. Yet, the applicant has been summoned under Section under Section 70 of the Central Goods and Services Tax Act, 2017 and is being threatened with arrest.

Having heard learned counsel for the applicant and having perused the record, at present, there is no denial of the fact that inquiry is pending against M/s. G.K. Traders with respect to forged/false invoices prepared and issued by it. The applicant has been summoned only to establish the genuineness or otherwise of the invoices relied upon by the present applicant as may have been issued to him by the said M/s. G.K. Traders.

Even if certain invoices issued by M/s. G.K. Traders are found to be bogus, it may not necessarily lead to either any accusation being made against the applicant or his arrest. Before any accusation is made against the applicant or his arrest is sought in the proceedings against M/s. G.K. Traders, it would have to be the case of the revenue authorities that the applicant had taken benefit of any such fake or bogus invoice, e-way bill etc. issued by M/s. G.K. Traders or he had acted in collusion with M/s. G.K. Traders.
18 GIB/TN/RAMAKRISHNAN/30.04.2021/HC-201 RAMAKRISHNAN MAHALINGAM CANCELLATION OF REGISTRATION FACTS AND ISSUE OF THE CASE:

In this case the appeal of the petitioner has been rejected on the ground that the Input Tax Credit (ITC) availed for various periods was ineligible. The appellate authority has instructed the petitioner to remit the amount due in order to have the appeal admitted.

A show cause notice was issued by the first respondent assessing officer on 22.07.2019 calling upon the petitioner to show cause why the registration not be cancelled, since the petitioner had not filed returns for a continuous period of six months.

Two applications have been filed by the petitioner under Section 30, the first one rejected by an order dated 24.07.2020 referring to non-compliance of the petitioner to notice issued by the assessing officer, and the second dated 09.09.2020, rejected on 12.09.2020, referring to outstanding interest on belated payment of tax dues and for allegedly wrongful claim of ITC. As against order dated 24.09.2020, the petitioner filed an appeal before R2, who has issued the deficiency memo, challenged in this writ petition.
19 GIB/TN/BAJAN LAL BISHNO/30.04.2021/HC-222 BAJAN LAL BISHNOI BAIL APPLICATION FACTS AND ISSUE OF THE CASE:

In this case the petitioner filed writ petition on the ground that he was detained and arrested illegally and was praying for bail. He submitted that he was merely a middleman in procuring the credentials of the defunct companies and passing on the same to other persons for commission and had not filed any returns or beneficiary of tax evasion. The department submitted that petitioner, knowingly, had indulged in the act of providing the credentials of the defunct companies for monetary value which was utilised in getting tax remission by the individuals without there being any supply of goods. It was also alleged that the petitioner had not only received illegal gains from several persons, but also utilised his mobile number for communication for opening various bank accounts and also filed returns.
20 GIB/OD/ UTKAL UDYOG/30.04.2021/HC-200 M/S. UTKAL UDYOG MAINTAINABILITY OF APPEAL FACTS AND ISSUE OF THE CASE:

The Petitioner is aggrieved by the requirement under Section 107 of the Orissa Goods and Service Tax Act (OGST Act), read with Rule 108 of Orissa Goods and Service Tax Rules (OGST Rules) that mandates deposit of 10% of the demand as a pre-deposit for the appeal to be considered.

Counsel for the Petitioner submits that since the Petitioner has no financial means at this stage, his is unable to be even upload the appeal without pre-deposit. Relying upon the decision of Punjab and Haryana High Court in Kelmar (India) Exports v. State of Punjab (CWP No.17975 of 2020 decided on 2nd November, 2020), he urges that the Court should exercise its power under Article 226 of the Constitution either to waive or reduce the pre-deposit percentage to enable the Petitioner to file the appeal.
21 GIB/TN/MAHAVEER FOODS/29.04.2021/HC-236 MAHAVEER FOODS & BEVERAGES CLASSIFICATION OF GOODS FACTS AND ISSUE OF THE CASE:

In this case the petitioner, Mahaveer Foods & Beverages stated that it is a proprietorship concern and procures Tea from registered tea suppliers, Herbs & Spices from dealers in powder form and permitted food colours. All the said items are mixed together and made as a product, which is called Herbal Sharbat Granules. It is only flavoured tea and not a ready to drink or instant tea item. It contained around 90% of Tea.

The writ petitioner mainly contended that it is a fit case for remanding the matter back to the first respondent for fresh adjudication. The first respondent has not considered the grounds mainly raised by the petitioners. The judgments relied on by the petitioners were also not considered. This apart, the Central Food Technological Research Institute, Mysuru, had not at all received the sample products and in the absence of sample products, the results cannot be declared and based on certain presumptions and assumptions, the first respondent proceeded and passed the impugned order and therefore, the impugned order is liable to be set aside.

The petitioner reiterated that no samples were collected nor any report has been given. In the absence of any such report from the Central Food Technological Research Institute, the respondent ought not to have formed an opinion regarding the products manufactured by the petitioner, more specifically, which is to be considered only as tea and appropriately classified. The petitioner has stated that the respondent all along informed that the samples were sent to the Central Food Technological Research Institute, Mysuru, and in an application submitted by the petitioner under the Right to Information Act, a reply was furnished wherein there is an indication that “No samples were received”. Further, it is stated that the analysis were not performed in the absence of any samples and without conducting any analysis of the samples, the 1st respondent decided the issues, which is improper and thus, the impugned order is to be set aside and the matter to be remanded back.

On the other hand the respondent solicited the attention of the Court with reference to the order passed by the Central Food Technological Research Institute in proceedings which states that the payment for analysis is to be paid by the Commissioner of Central Excise. The details regarding the products collected from the petitioner also have been elaborated. In response to the said letter, the Deputy Commissioner office of the Commissioner of Central Excise sent a reply to the Director, Central Food Technological Research Institute, CFTRI Campus, Mysuru, requesting the research institute to intimate the charges for testing the products regarding only the nature and composition of ingredients of the subject samples for taxation purposes. As huge revenue is involved in this issue, an early response is solicited.
22 GIB/TS/VIJAY METAL/28.04.2021/HC-203 VIJAY METAL INTENTION TO EVADE GST FACTS AND ISSUE OF THE CASE:

In this case the petitioner is a trader in steel registered under the CGST Act, 2017 having registered office at Ranigunj, Secunderabad.

In this Writ Petition, the petitioner seeks Writ of Mandamus to declare (i) the action of the Deputy Commercial Tax Officer, Mahabubnagar, Telangana State (1st respondent) in illegally detaining the goods conveyance bearing No.AP13X 6980 on 29.12.2020 at Annasagar, Bhoothpur Mandal, Mahabubnagar District and (ii) collecting from the petitioner ₹ 3,68,555/- towards GST and penalty of ₹ 3,68,555/- on 04.01.2021 and then releasing the said vehicle, as illegal, arbitrary and violative of Articles 14 and 300A of the Constitution of India and (iii) for refund of the said amounts.
23 GIB/TS/SEW INFRASTRUCTURE/28.04.2021/HC-227 SEW INFRASTRUCTURE LIMITED SVLDRS SCHEME  FACTS AND ISSUE OF THE CASE:

The petitioner is engaged in infrastructure development sector and is registered assessee with the Service Tax Department, Hyderabad under the Finance Act, 1994 and also under the Income Tax Act, 1961.

The petitioner filed its return of income under the Income Tax Act, 1961 and claimed a refund and he had also filed its Service Tax return under the Finance Act, 1994. The Intelligence Wing of the Central Excise and Service Tax Department (DGCEI), issued a Garnishee Notice under Section 73(1B) r/w Section 87(b)(i) of the Finance Act, 1994 to CIT towards Service Tax and interest demand against petitioner, and petitioner filed application under 'Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and petitioner's application for settlement of dues under the SVLDRS was accepted by the Tax Department and the petitioner was asked to remit an amount of Rs.18,91,37,548/- as against the original liability of Rs.59,20,19,079 till 30-6-2020

Petitioner contended that because of the COVID-19 Pandemic situation and its own financial difficulties, the only way the petitioner could discharge its liability under SVLDRS was by utilizing the Income tax refund. But, on account of the Garnishee Notice issued by the GST authorities to CIT, the Income Tax Department did not pay to the petitioner the refund. And the petitioner wrote letters seeking modification of the Garnishee Notice to enable it to discharge its liability but CIT did not oblige the petitioner and the petitioner was disabled from discharging its Service tax liabilities by 30.06.2020 and the Income Tax department set off income tax refund of- due to the petitioner against the Service Tax dues of the petitioner.
24 GIB/ND/KOENIG SOLUTIONS/28.04.2021/HC-188 KOENIG SOLUTIONS PRIVATE LIMITED VALIDITY OF ISSUED SUMMONS FACTS AND ISSUE OF THE CASE:

Mr. J.K. Mittal learned Counsel, who appears on behalf of the petitioner, has drawn attention to two show cause notices, dated 12.11.2020 and 25.01.2021. The show-cause notice dated 12.11.2020 was issued by the Assistant Commissioner whereas show cause notice dated 25.01.2021 was issued by Sales Tax Officer.

Mr. Mittal says that the petitioner, qua the financial year 2017-2018 paid the tax on 30.01.2020, and likewise paid the interest in and about 30.11.2020; as quantified in the show cause notices referred to above.  Mr. Mittal also emphasizes the fact, as noticed above, that, pursuant to the reply submitted by the petitioner, the show-cause notice issued by the concerned authority, was closed. It is for these reasons, Mr. Mittal says, that the impugned summons dated 30.03.2021 are without jurisdiction.
25 GIB/DL/ERICSSON INDIA/27.04.2021/HC-204 ERICSSON INDIA GLOBAL SERVICES PVT LTD Classification of Services FACTS AND ISSUE OF THE CASE:

The said petition has been filed by the petitioner challenging the instructions dated 22.05.2019, addressed by the respondent no. 4 the respondent no. 3, advising that all services, whether Engineering Services (Network Engineering Services, Management and Operation of Network Services (Managed Services) in Telecom Sector or Management Consulting Services) in Telecom Sector, are ineligible for the benefit under the Service Exports from India Scheme (hereinafter referred to as ‘SEIS’) announced by the Foreign Trade Policy 2015-20. The petition further impugns the order(s) dated 11.06.2019 and 03.06.2019, whereby the respondent no. 3 has rejected the claim of the petitioner(s) for benefit under the SEIS for the financial years 2015-16, 2016-17 and 2017-18, respectively.
26 GIB/TR/RIMI SALES/26.04.2021/HC-189 M/S.RIMI SALES AGENCY DEMAND OF TAX WITH PENALTY FACTS AND ISSUE OF THE CASE:

In this case the petitioner is a dealer registered under the Tripura GST Act. The petitioner has placed orders to the Kolkata based company for providing certain goods. When the goods were in transport from Kolkata, the vehicle carrying the goods was intercepted and inspected at Churaibari check post. The Taxing Authority found that there were discrepancies and omissions in the E-way bill that the driver of the vehicle was carrying at the time of inspection. On 06.11.2018 the Inspector of Taxes issued a notice to the petitioner under the GST Acts and raised the tentative demand of GST and IGST tax with penalty. He called upon the petitioner to appear before him on 23.11.2018. Curiously, however, on the same date i.e. 06.11.2018 he passed the separate order raising a demand of Rs.32,280/- against the petitioner. He passed yet another order also of 06.11.2018 confirming the demand of GST with penalty in terms of Section 129(3) of the CGST Act. These orders the petitioner has challenged in the present petition
27 GIB/KL/JOSHI JOHN/26.04.2021/HC-187 JOSHI JOHN Registration FACTS OF THE CASE:

The petitioner Joshi john is a Chartered Accountant and he proposed to register “Joshi John & Co.” as a sole proprietorship firm. The petitioner was the working partner of a three-member partnership firm namely ‘R Menon and Associates'. According to the petitioner respondents 2 and 3 were not taking active role in running the partnership.

The petitioner filed an application to ICAI online to dissolve the partners but the provisional body insisted OTP confirmation by other partners. Another application filed by the petitioner to register a new partnership was also not allowed citing the reason that he was in charge of the other partnership. His attempt to register his firm as a sole proprietorship was also denied for the same reason.

ISSUE OF THE CASE:

Whether the 1st respondent-Institute for Chartered Accountants of India can force a Chartered Accountant to continue in a partnership of Chartered Accountants even after dissolution of the Partnership Firm or retirement of the Chartered Accountant, by retaining such unwilling partner in the Partnership Firm, in the register of partnerships maintained by the 1st respondent?
28 GIB/GJ/SANJAY PRAHLADBHAI/26.04.2021/HC-213 SANJAY PRAHLADBHAI PATEL BAIL APPLICATION FACTS AND ISSUE OF THE CASE:

In this case it is submitted that the applicant is arrested in connection with the alleged demand by the GST authorities without determining the extent liability of the said alleged demand. It is submitted that the arrest of the applicant in the alleged offence is effected only on the ipse dixit of the Tax Department and in colourable exercise of powers under section 69 of the Act. It is submitted that the very basis for arriving at a quantified sum of Rs.6.31 crores of the alleged tax evasion is obscure and no detail whatsoever has been provided in support thereof, which clearly shows that the same is a result of figment of imagination of the tax authorities.

It is submitted that in absolutely unprecedented manner, the department has clubbed demands and liabilities in respect of 13 different entities, for making out a case of evasion against the applicant, which is absolutely foreign to tax law. It is also submitted that though the demands in respect of 13 different entities were clubbed to arrive at alleged amount of tax evasion of Rs.6.31 crores against the accused, nevertheless separate complaint is filed against the accused, wherein some of the accused are even shown as witnesses in the charge­sheet.

It is submitted that the present applicant is one of the kingpin and mastermind of the whole racket involving 13 fictitious firms leading to evasion of tax to the tune of ₹ 6.31 cores.  
29 GIB/TN/CARLSTAHL CRAFTSMAN/23.04.2021/HC-209 M/S. CARLSTAHL CRAFTSMAN ENTERPRISES PRIVATE LIMITED Input Tax Credit FACTS AND ISSUE OF THE CASE:

The petitioner challenges order dated 19.09.2019, rejecting his request for carry forward of Input Tax Credit (ITC) into the Goods and Service Tax regime. Admittedly, TRAN-1, the Form for carrying forward credit from the erstwhile Value Added Tax regime to the Goods and Service Tax regime has been filed within time, that is, on 19.09.2017, on the GSTN Portal.

However, an inadvertent error had crept into the Form and instead of posting the amount of credit as Rs.54,94,151/- only an amount of Rs.29,05,595/- was updated. While attempting to correct the error, yet another mistake occurred as the difference was updated in table 7d of the Form instead of table 7b. A request for rectification came to be filed on 12.03.2019, that came to be rejected, by order dated 19.09.2019.
30 GIB/GJ/PUNDRIK RAVINDRABHAI/23.04.2021/HC-197 PUNDRIK RAVINDRABHAI TRIVEDI GRANT OF BAIL FACTS AND ISSUE OF THE CASE:

In this case the applicant is facing the charges under sections 132(1)(b)(c)(f)(k)(l) of the Gujarat Goods and Services Act, 2017 and Central Goods and Services Act, for which the maximum sentence is of five years. The applicant is behind bar since 26.01.2020 i.e. for around 15 months. He would further submit that all the co-accused have been enlarged on bail by the trial Court. Mr. Mehta has also taken the Court to the orders of the trial Court, wherein, it is alleged that all the accused have evased tax by creating fake invoices, however, all the co-accused have been released by the trial Court. He would further submit that, the case of the applicant was not considered by the trial Court on the ground that the investigation is going on.

He would further submit that even the applicant has also preferred an application for releasing him on regular bail being under Section 439 of the Code being Criminal Misc. Application No. 10480 of 2020 before this Court. However, the same was withdrawn on 07.10.2020 on the ground that the investigation was not completed. However, it was observed in the order that it would be open for the applicant to file application, if investigation is not completed within a period of three months. Even, as per the affidavit of the respondent authorities, the investigation is yet not completed. He would further submit that the entire case is relied upon the documentary evidence and therefore the applicant be released on appropriate terms and conditions.
31 GIB/MH/RUNWAL/22.04.2021/HC-179 M/S RUNWAL CONSTRUCTIONS RECOVERY OF EXCISE DUES FACTS AND ISSUE OF THE CASE:

The Petitioner, M/s Runwal Constructions is a Partnership firm registered under the Indian Partnership Act, 1932 and carries on the business of construction and development. 2nd Respondent is the office of the Assistant Commissioner of Central Excise having a claim of Excise duty dues against the respondent, M/s. Bluemoon Engineers Limited and is now claiming the same from the Petitioner.

 

It appears that a certain property situated at Mulund, Mumbai belonging to a company known as Blue Moon Engineers Ltd. had been mortgaged to Indian Bank as security for certain facilities provided by the Bank to Respondent -Company. In exercise of its rights as a mortgagee, the Bank intended to sell said property to recover its dues from Respondent company.

 

At an auction conducted by the Debt Recovery Tribunal (DRT), Kolkata, Petitioner’s offer was accepted. Petitioner was declared successful bidder. Petitioner was declared purchaser of the property for a consideration of Rs. 12 crores paid by the Petitioner. By letter addressed to Petitioner’s Advocate, Respondent authority, the Office of the Assistant Commissioner of Central Excise informed that there was an amount of more than Rs. 1.75 crores payable by Respondent-Company to the Respondent Authority as and by way of Excise Duty and therefore the Petitioner could not claim any title to the property unless said Excise duty claim was settled.

 

It is submitted that at the time of the purchase, Petitioner was unaware of the Excise duty payable by Respondent Company and is not liable to pay any Excise duty and/or alleged arrears of Respondent No. 3 claimed by Respondent authority from Petitioner. It is with this background, after receiving the notice dated 29th/ 30th January, 2008, Petitioner by letter, immediately informed Respondent authority that the property was acquired at an auction held by the DRT, Kolkata and the same was acquired only with workers liability which had already been paid/ settled; that Petitioner had nothing to do with the payment of any Excise duty or arrears thereof which is the liability of Respondent company.
32 GIB/KL/ABDUL SHAJI/22.04.2021/HC-178 ABDUL SHAJI ANTICIPATORY BAIL FACTS AND ISSUE OF THE CASE:

The applicant apprehends arrest for an offence of alleged non-payment of GST to the tune of Rs 17.53 Crores and non -filing of GSTR 3B returns for the period from October onwards. In this case the proprietor of the M/s A.R. Agencies Shri. Rajoob P.A, and his primary colluder, Shri. Abdul Saleem were proceeded against and their business and residential premises searched. Both of them were arrested and remanded to judicial custody. Abdul Saleem stated that he had shared the GST login credentials of M/s A.R. Agencies with the applicant.

It was also contended that the applicant had prepared GST invoices valued at ₹ 348.7 crores using the credentials of the Agency Certain blank cheques and documents which were incriminating were recovered from his house. He was not present. But his father was present, and was informed. Consequent to that, a summons was sent to him under Section 70 of the CGST Act, directing him to appear before the Superintendent of Central Tax and Central Excise with the relevant documents. The applicant states that he is innocent and has nothing to do with M/s A.R Agencies, and does not even know its proprietor.
33 GIB/TR/M/S SARVASIDDHI AGROTECH /20.04.2021/HC-183 M/S SARVASIDDHI AGROTECH LEVY OF CGST AND SGST FACTS AND ISSUE OF THE CASE:

In this case the Petitioner M/S Sarvasiddhi Agrotech Pvt. Ltd. is a registered company and is engaged in supply of rice in the State of Tripura.

The officials of GST department had carried out a surprise visit to the premises of the petitioner- company from where several incriminating documents and sizable quantity of packaged rice were seized. The invoices and other sales details established that for the period under consideration, the petitioner had supplied rice in packages of 25 kg each which carried the brand name Aahar Normal, Aahar Gold or Aahar Premium without payment of GST Therefore, bill books, order books and several bags of branded rice packaged while Sarvasiddhi Agrotech Pvt. Ltd. i.e. the petitioner-company were seized. Sizable quantity of such packaged branded rice was also seized from the premises. In view of these averments, it was alleged that the assessee was liable to pay CGST as well as SGST at prescribed rates on the taxable value of its sales for the period in question which was assessed at Rs.1,03,35,028/-.
34 GIB/RJ/SUMIT DUTTA/20.04.2021/HC-184 SUMIT DUTTA Input Tax Credit FACTS AND ISSUE OF THE CASE:

The petitioner, Sumit Dutta, was an employee in M/s Veto Merchandise and resigned in February 2020.Petitioner has also furnished details to establish that there was actual movement of the goods. It is further contended that co-accused Bhasker Jangir has been given the benefit of bail by this Court. It is contended that offence is punishable by five years imprisonment and is triable by Magistrate.
35 GIB/GJ/BHAVESH KIRITBHAI/19.04.2021/HC-210 BHAVESH KIRITBHAI KALANI PROVISIONAL ATTACHMENT OF BANK ACCOUNTS FACTS AND ISSUE OF THE CASE:

The petitioner herein is the proprietor of the Firm running in the name and style of M/s Global Corporation. He is involved in voluminous transactions of several parties and he follows the law while conducting his business. He came to realize that the Central Bank of India on 20.08.2020 freezed his current account No.3785569992 with the Rajkot Main Branch. Without availing any opportunity, he straightway received the attachment order and realized that from the Office of the Principal Commissioner of Central GST, Mumbai, such order of freezing had happened and since then, he has not been allowed to operate the account.
36 GIB/TN/TARMAL INDUSTRIAL/17.04.2021/HC-192 TARMAL INDUSTRIAL SUPPLY COMPANY REFUND OF AMOUNT FACTS AND ISSUE OF THE CASE:

The petitioner challenges order of the sole respondent i.e. the State Tax Officer, Vellore and T.V.Malai, Roving Squad (SPL) dated 17.10.2020 and consequently seeks a direction to the respondent to refund an amount of Rs.1,82,860/-, which has been collected as penalty. Not just the order but even the notices leading to the passing of the impugned order, are rife with errors. The show cause notice issued prior to passing of the impugned order does not stipulate even basic details such as the date and time of hearing and merely states DD/MM/YYYY at HH/MM, without filling in the fields. The requirement of passing a speaking order has been entirely frustrated in so far as in the field marked 'speaking order' there are no reasons set out for the conclusion arrived at by the authority.
37 GIB/TN/INNOVATIVE MOTORS/15.04.2021/HC-177 TVL. INNOVATIVE MOTORS FILING OF FORM GST FACTS AND ISSUE OF THE CASE:

In this case petitioner is the partner of the business concern, in the name and style of M/s. Innovative, engaging in sale of Yamaha motorcycles and had certain un-utilized amounts to its credit. Due to introduction and implementation of new tax regime, namely Goods and Service Tax on 01.07.2017, the credits as aforesaid were liable to be transitioned and carried forward, for which purpose a Form in TRAN-1 and 2, was to be uploaded in the portal of the Department. There were admittedly manifold glitches in accessing the website and uploading the Form. In fact, Courts all over the country have been dealing with matters where assessees have vented grievances and difficulties in uploading the Forms and relief has been granted in several matters directing the Department to permit access and allow the petitioner therein to upload the declaration Forms.

The learned counsel for the petitioner would submit that the petitioner has been filing regular monthly returns, but has been unable to seek the benefit of carry forward credit, since TRAN-1 form was not uploaded in time. The learned panel counsel appearing for the respondents reiterated the contentions set out in the counter affidavit. She would submit that though the Government has given sufficient time to the petitioner to carry forward the input tax credit to the new GST regime, the same was not utilized by the petitioner due to negligence and the facility extended by the Government for filing TRAN -1 was withdrawn with effect from 28.12.2017 and hence the petitioner is not entitled to avail the input tax credit and this Writ Petition is liable to be dismissed.

This Writ Petition has been filed by the petitioner to direct the respondents to reopen the GST Portal and to allow access to the portal to enable us to file Form GST TRAN – 1.
38 GIB/JH/M/S.BHILAI ENGINEERING/13.04.2021/HC-175 M/S. BHILAI ENGINEERING CORPORATION LTD. RECTIFICATION FACT AND ISSUE OF THE CASE

In the above case the petitioner Mr. Sumeet Gadodia submits that in the canvass of facts and the multiple orders passed by the assessing authority and the appellate authority, the main issue is whether the petitioner is entitled to claim migration of the tax deducted at source as input tax credit in terms of Section 140(1) of the JGST Act, 2017 by including it in GST TRAN-I. It is submitted that earlier the entire ITC of Rs.1,73,69,826/- was denied but in the rectification order passed during pendency of the appeal, the amount of TDS claimed as ITC totaling Rs.43,07,310/- has been denied.

Still the appellate authority has proceeded to adjudicate the appeal preferred against the original order, though the petitioner had prayed for its withdrawal. The appeal preferred against the rectification order has also been dismissed. However, the certified copy of the rectification order is not being supplied. Therefore, petitioner has been compelled to approach this Court.
39 GIB/TN/NANDI DHALL MILLS/07.04.2021/HC-173 M/S SHRI NANDHI DHALL MILLS INDIA PRIVATE LIMITED REFUND FACTS OF THE CASE:

In the above case Shri Nandhi Dhall Mills India Pvt. Ltd. (“the Petitioner”) is registered as a Small Scale Industry and is engaged in the business of dealing in pulses, dhals, and flour and also manufactures food products, grain mill products and dal.

An investigation was conducted by the officials of the Director General of Goods and Services Tax (“the Respondents”) in the premises of the Petitioner on October 22, 2019 and various documents and registers were seized. In the course of the investigation, a statement was recorded to the effect that the Petitioner has not discharged its GST liability correctly and it had accepted that there has been a mistake in computation of GST liability and assured the Respondents that the liability would be discharged along with applicable interest.

Further, a scheme of payment was set out and the undertaking was signed by the Managing Director of the Petitioner on October 22, 2019. Further, the Petitioner remitted a sum of INR 1 crore in FORM GST DRC-03 corresponding to Rule 142(2) and Rule 142(3) of the (“CGST Rules”) read with Section 74(5) of the (“CGST Act”) on the same day. The second installment of the tax amounting to INR 1 crore was paid on October 30, 2019.

Further, the Managing Director of the Petitioner vide letter dated November 05, 2019 retracted its earlier statement and stated that there is no tax liability and that the Managing Director and employees of the Petitioner were forced to accept the liability to tax and the admission was, by no means, voluntary but under the influence of coercion, threat and in a state of panic without giving an opportunity to read the content of the Mahazar and without providing the workings of the actual determination of tax liability.

This writ petition has been filed to restrain the Respondents from demanding any amount from the Petitioner except by following the due process of law and to refund a sum of INR 2 crores along with statutory interest under the provisions of the CGST Act.

ISSUE OF THE CASE:

Whether the Petitioner is entitled to refund of INR 2 crores paid during investigation along with interest?
40 GIB/MH/BYTEDANCE (INDIA)/06.04.2021/HC-231 BYTEDANCE (INDIA) TECHNOLOGY PVT. LTD PROVISIONAL ATTACHMENT OF BANK ACCOUNTS FACTS AND ISSUE OF THE CASE:

In this case the petitioner has a staff of about 800-1000 employees. They have to be maintained, their salaries are required to be paid. The Petitioner has remedy under Rule 159(5) to object to the orders. He submits that the D.G.G.I. had initiated inquiry to verify the correctness of payments of goods and services taxes by the petitioner. It transpires that the petitioner has received taxable services from a concern located outside India without any consideration as per schedule I of C.G.S.T Act, 2017 and as such the petitioner would be liable to pay tax on import of services.

He submits that a huge revenue to the tune of Rs. 78.91 crores is at stake in the matter which the petitioner does not intend to bear. He submits that looking at the scenario, it would not be feasible to recover dues from tax payer, as the petitioner is in the process of closing its business.

Learned senior counsel appearing for the petitioner submits that petitioner would secure revenue’s concern of Rs. 78.91 crores by depositing additional amount in attached/frozen bank accounts and the bank accounts to remain attached/frozen to the extent of Rs. 78.91 crores and petitioner may be allowed to operate the bank accounts over and above the amount of Rs. 78.91 crores over the concerns expressed by the petitioner.
41 GIB/TS/GOLDEN MESH/31.03.2021/HC-228 GOLDEN MESH INDUSTRIES NON-FILING OF GSTR-3B RETURN FACTS AND ISSUE OF THE CASE:

This Writ Petition is filed challenging the Assessment Order dt.27-12-2019 passed by the 1st respondent under the Telangana GST Act, 2017 in relation to the petitioner for the tax period November, 2018.It is not in dispute that petitioner did not file GSTR-3B return for the said month of November, 2018 and notice was issued on 29-01-2019 under Section 46 of the Telangana GST Act, 2017 warning the petitioner that if it did not file its return within 15 days, tax liability would be assessed under Section 62 of the Act based on the relevant material available with the 1st respondent along with interest and penalty. Petitioner did not comply with the request to file GSTR-3B return, and best judgment under Section 62 of the Act was made through the impugned order by 1st respondent.

The 1st respondent is entitled to do best judgment in the absence of filing of GSTR-3B, the method adopted by 1st respondent in multiplying by 3 times the monthly SGST tax of Rs.50,000/- to determine the tax liability is arbitrary and not based on any principle. He also contended that 100% penalty has been levied without indicating under which provision of the Act the same has been levied.
42 GIB/TN/M.G.M.INTERNATIONAL/31.03.2021/HC-208 M/S.M.G.M.INTERNATIONAL EXPORTS LTD REFUND OF SERVICE TAX FACTS AND ISSUE OF THE CASE:

The petitioner was a recipient of service from M/s.IMC Limited. The said company had charged service tax on the petitioner for utilizing the storage facility.This Writ Petition has been filed for a writ of mandamus to direct the respondent to refund the tax amount of Rs.1,10,999/- with minimum interest borne by the petitioner under mistake of law.

The petitioner has filed this Writ Petition for a writ of mandamus to direct the respondent for refund of the amount borne by the petitioner as service tax as a receipient of service of M/s.IMC Limited. The learned counsel for the petitioner further submitted that the petitioner is not aware as to the status of the refund claim filed by M/s.IMC Limited. She however submits that the petitioner has come to know the writ petition was pending before this Court at the behest of M/s IMC Limited.
43 GIB/OD/DEVI PRASAD/31.03.2021/HC-214 DEVI PRASAD TRIPATHY GST EXEMPTION FACTS OF THE CASE:

 

In this case Devi Prasad Tripathy (“the Petitioner”) is an individual advocate practicing in the Hon’ble High Court of Odisha. A notice was issued calling upon the Petitioner to pay service tax/GST by the officials of the Principal Commissioner CGST and Central Excise (“the Respondents”). Further, the Petitioner has been insisted to submit the documentary evidence to prove its claim that the Petitioner is a practicing advocate and does not come under the provision of GST or service tax.

The Court vide its order dated March 31, 2021, directed the Respondent, to issue clear instructions to all the officers in the GST Commissionerates in Odisha not to issue notice demanding payment of service tax/GST to lawyers rendering legal services and falling in the negative list, as far as GST regime is concerned.

ISSUE OF THE CASE:

Whether the notices issued by the Respondents calling upon the Petitioner to pay service tax/GST are valid?
44 GIB/TN/M/S.T.V.SUNDRAM IYENGAR/30.03.2021/HC-196 M/S.T.V.SUNDRAM IYENGAR & SONS PVT. LTD LEVY OF SERVICE TAX FACTS AND ISSUE OF THE CASE:

The petitioner is a dealer in motor vehicle parts and motor vehicle chassis. The petitioner has entered into dealership agreements with various manufacturing entities. The case of the writ petitioner is that the relationship between the petitioner and the manufacturer is on principal to principal basis. In other words, the petitioner purchases chassis from the manufacturers and resells the same in its own name and on its own account.

Respondent issued show cause notice dated 28.08.2018 proposing to levy service tax with interest and penalty on the trade discount received from the manufacturers by way of credit notes – Impugned order dated 17.12.2020 came to be passed confirming the demand of Service Tax together with interest and penalty - Questioning the same, this writ petition came to be filed.
45 GIB/TN/BNP PARIBAS/29.03.2021/HC-180 BNP PARIBAS GLOBAL SECURITIES OPERATIONS REFUND OF UNUTILIZED CENVAT CREDIT FACTS AND ISSUE OF THE CASE:

The petitioner, BNP Paribas Global Securities Operations Private Limited had filed the three refund claims for the various periods.

The three refund claims were considered by the respondent vide three separate Order-in-Originals. The 3rd refund claim filed on 30.10.2017 for the exports made during April 2017 to June 2017, the respondent has allowed the claim vide Order-in-Original.

However, the corresponding refund claims filed on 07.09.2017 and 21.09.2017, the respondent has rejected the claims vide order in Original.

The case of the petitioner is that the reasons given by allowing the refund claim for the period from April 2017 to June 2017 for a sum of Rs.1,65,14,132/- has to be adopted and therefore, the writ petitions are liable to be allowed.

It was submitted that the total value of Input Tax credit which was un-utilized was Rs.6,62,67,726/- which was not taken into GST Account by following the transfer application and therefore the petitioner was entitled to refund claim of the amount even though the petitioner could not debit the duty in the ST-3 return in view of the change in the law.
46 GIB/TN/CHAIZUP BEVERAGES/26.03.2021/HC-198 M/S.CHAIZUP BEVERAGES LLP REFUND OF ITC FACTS OF THE CASE:

In this case the Petitioner is an exporter of tea and had engaged in export transactions without payment of Integrated Goods and Service Tax and accordingly claimed drawback under Customs Act, 1962. Further, despite the transactions being categorized as zero-rated supplies, the Petitioner remitted IGST, Central Goods and Services Tax and State Goods and Service Tax on the purchase of tea and such tax was credited in its electronic credit ledger.

Subsequently, the Petitioner filed an application for refund claim under Section 54 of the CGST Act for the period July, August and September, 2017, vide which 90% of the claim was sanctioned on a provisional basis but was followed by a Show Cause Notice dated April 2, 2018, since the Assistant Commissioner (“Respondent No. 1”) was of the view that the refund was liable to be rejected in entirety invoking third proviso to Section 54(3) of the CGST Act and on the basis that the Petitioner had availed drawback at a higher rate than applicable. Thus, the claim was proposed to be rejected in full and the amount provisionally sanctioned was proposed to be recovered as well.

The Petitioner submitted the reply to the SCN however, refund rejection order was passed by the Respondent No.1 and subsequently confirmed by the Additional Commissioner (Appeals) (“Respondent No. 2”), vide order dated May 12, 2020.

In the meanwhile, the Petitioner took an alternate plea for sanction of refund before Respondent No. 2 after setting off the drawback already claimed for the months of August and September, 2017, which was also rejected, taking note of paragraph 2.5 of Circular No. 37/2018- Customs, on the ground that there has been an excess claim of duty draw back by the Petitioner, as per which, they have renounced their claim for Input Tax Credit.

ISSUE OF THE CASE:

Whether refund claim of ITC for the months of August and September, 2017 can be denied to the Petitioner on the basis of Circular No. 37/2018- Customs?
47 GIB/KA/MAHESH M.C./26.03.2021/HC-232 MAHESH M.C. POWER TO ATTACH BANK ACCOUNTS FACTS AND ISSUE OF THE CASE:

In this case the petitioner has challenged the impugned order passed at Annexure-A as being contrary to the power conferred under Section 5(3) of the KGST Act, 2017/CGST Act, 2017. The petitioner has also assailed the order passed under Section 83 of the CGST Act on various legal contentions including that the power under Section 83 of the Act is to be exercised by the commissioner who must be of the opinion that for the purpose of protecting interest of the Government revenue there could be an attachment provisionally of property, bank account belonging to the taxable person.

Reliance is placed on the judgment of the High Court of Gujarat in Spl. Civil Application No.13132/2019, wherein the High Court of Gujarat has gone in to the aspect of legal challenge as made herein and has held that the satisfaction of the designated officer under Section 83 of the Act must be of the named authority and none else. Further contentions are advanced as regards to the legal contention that the power of the delegation is absent under Section 5(3) of the GST Act.
48 GIB/DL/TMA INTERNATIONAL /26.03.2021/HC-168 TMA INTERNATIONAL PVT. LTD. & ORS. REFUND FACTS AND ISSUE OF THE CASE:

Whether the Petitioners should be granted refund of IGST along with the interest on account of delayed remittance of refund.

In this case the reason for filing petition by Petitioners is the denial of IGST refund by the Revenue Authorities (the Respondent) in accordance with Section 16(3) of the (IGST Act), Petitioners had availed the option to take drawback at higher rate in place of IGST refund.

On November 26, 2019, a detailed order was passed by the Hon’ble Delhi High Court, wherein it agreed with the contention of the Petitioners and observed that such an error is purely inadvertent and not intentional and therefore, should not come in the way of claiming refund of IGST. Accordingly, directed the Respondent to verify as to whether duty drawback/CENVAT credit had been availed by the Petitioners, with regard to Central Excise and Service Tax component.
49 GIB/TN/ VECTRA COMPUTER/25.03.2021/HC-169 TVL. VECTRA COMPUTER SOLUTIONS CANCELLATION OF REGISTRATION FACTS AND ISSUE OF THE CASE:

The petitioner was filing returns under the Tamil Nadu Value Added Tax Act, 2006 and subsequently, under the GST regime also. The petitioner’s registration was cancelled on 06.09.2018 on the ground of non-filing of returns. The said defect was subsequently rectified by the petitioner. The petitioner also remitted GST dues to the tune of Rs.66,781/- together with late fee. The petitioner received notice dated 29.10.2019 in which certain defects have been pointed out. Thereafter, the impugned order came to be passed levying tax and penalty on the petitioner.
50 GIB/MH/ESSEL PROPACK/25.03.2021/HC-239 ESSEL PROPACK LIMITED CENVAT CREDIT FACTS AND ISSUE OF THE CASE:

In this case the petitioner, Essel Propack Limited is engaged in the business of manufacturing multi-layered plastic flexible laminated collapsible tubes and multi-layered plastic flexible laminated web classifiable under Chapter 39 of the First Schedule to the Central Excise Tariff Act, 1985.

In the course of excise audit of the petitioner’s record carried out during February, 2013 for the period from October, 2010 to September, 2012, the auditors took the view that petitioner had availed ineligible credit of service tax paid on certain input services on the strength of documents not covered under Rule 9(2) of the CENVAT Credit Rules, 2004. This led to issuance of show cause-cum-demand notice dated 23.12.2015 by the Joint Commissioner of Central Excise, Thane-1 Commissionerate. Amongst other allegations made it was alleged that petitioner had availed wrongful credit of service tax amounting to Rs.36,224.00 for the period from October, 2011 to July, 2012 in respect of labour services used for civil work, shifting of machinery, etc.

It was alleged that as the services for which CENVAT credit was availed of was not connected with manufacturing activities of the petitioner, the same could not be termed as input service and hence not admissible. The Petitioner replied to the show cause-cum-demand notice. In so far the above allegation was concerned, petitioner contended that the credit taken by the petitioner on the disputed labour charges was correctly availed of by the petitioner. A personal hearing was also granted to the petitioner.
51 GIB/OD/ANURAG SURI/23.03.2021/HC-217 ANURAG SURI AVAILMENT OF ITC FACTS AND ISSUE OF THE CASE:

In this case the applicant M/s. Sai Marketing which is engaged in trading of iron and scraps. In the present petition the Petitioner has questioned the show cause notice issued by Opposite Party No.3 on 23rd July, 2019, the orders dated 5th November, 2019 under Section 74 of the OGST Act as well as the consequential order under Section 74(9) of the OGST/CGST Act raising a demand for the month of March, 2018 under both the OGST and CGST Act for a total sum of Rs.1,25,57,922.80

A separate order was passed by Opposite Party No.3 under Section 74(9) of the OGST Act on the basis of alleged wrong availment of input tax credit (ITC) by the Petitioner and determining the OGST, CGST, interest and penalty to the tune of Rs.1,25,57,922
52 GIB/ML/JUD CEMENTS /23.03.2021/HC-190 JUD CEMENTS LTD. & ANR. NON COMPLIANCE OF PRE-DEPOSIT  

FACTS AND ISSUE OF THE CASE:

In this case the Joint Commissioner dismissed the petitioner’s appeal on the ground that petitioner failed to make the mandatory pre-deposit @ 10% on the amount of tax in dispute as envisaged under Section 107(6)(b) of the CGST Act, 2017.

It has been stated that if the petitioner makes the mandatory pre-deposit under the said Act, he has no objection to hear the petitioner’s appeal on merit.
53 GIB/GJ/RAJKAMAL BUILDER /23.03.2021/HC-226 RAJKAMAL BUILDER INFRASTRUCTURE PRIVATE LIMITED VALUATION AND INTEREST FACTS OF THE CASE:

This writ application is filed against the order dated July 19, 2019 issued to M/S. Rajkamal Builder Infrastructure Private Limited (“Applicant”) in Form GST DRC-01 under Section 50 of the Central Goods and Services Tax Act, 2017 for recovery of the amount towards interest on delayed payment of tax on gross tax liability.

It has been contended by the Applicant that the order has been issued without any authority of law and the demand raised by the Revenue Department (“Respondent”) is not in accordance with law.

ISSUE OF THE CASE:

Whether interest under Section 50 of the CGST Act is to be levied on the net tax liability or on the gross tax liability?

Whether issuance of Form GST DRC-01 under Section 50 of the CGST Act is legal and proper?
54 GIB/TN/CUDDALORE MUNICIPALITY/22.03.2021/HC-181 CUDDALORE MUNICIPALITY LEVY OF SERVICE TAX FACTS AND ISSUE OF THE CASE:

The petitions municipalities, Cuddalore Municipality and Virdhachalam Municipality have challenged the Show Cause Notices and the impugned Orders-in-Originals passed by the respondent authority proposing and levying service tax on the services provided by the petitioners under the provisions of the Finance Act, 1994.

The impugned Show Cause Notice issued and the Orders-in- Originals passed by the respondent are challenged primarily on the ground that they are without jurisdiction. It is submitted that there is no question of proposing or demanding service tax on the activities undertaken by the respective municipalities under the provisions of the Finance Act, 1994.

The petitioners contended that municipalities were not a “person” within the meaning of Finance Act, 1994 as it stood prior to June 1, 2012 and thereafter. It is therefore submitted that the question of levying tax on services provided by the respective municipalities cannot be taxed under the provisions of the Finance Act, 1994.

The counsel for the petitioners submitted that the services rendered by the petitioners are either not taxable or otherwise exempted. He submitted that for instance, fees on pay and use toilets are exempted from tax under Sl.No.38 to the said Notification. He further submitted that for the period prior to 2012, i.e., the period between April 2012 and March 2013 covered by the challenge wherein Order-in-Original has been challenged, no tax can be demanded as the petitioner was not a person providing any taxable service.
55 GIB/TN/TVL.MEHAR TEX/18.03.2021/HC-216 TVL.MEHAR TEX ITC REFUND FACTS OF THE CASE:

In this case Tvl. Mehar Tex (“the Petitioner”) is an exporter and has made zero rated sales during the months of October 2017, November 2017 and February 2018. Accordingly, Petitioner stated that he is entitled to refund claim of SGST for the October month, CGST for the November month and CGST, SGST and IGST for the February month. However, when the refund applications were uploaded, the entire claim got consolidated and figured under the head SGST alone.

While considering the refund applications, the Assistant Commissioner of GST and Central Excise (“the Respondent”) restricted the refund claim to the extent of the Petitioner’s liability for the respective months only under the head of SGST under Rule 92 of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”) and issued notice to show cause as to why refund of CGST and IGST should not be rejected. Subsequently the Petitioner replied to the above show cause notice stating that the entire refund claim got auto-populated under a single head of SGST.

However, the Respondent rejected the refund claims made in respect of CGST and IGST on the ground that the Petitioner has not furnished any documentary proof in support of his claims.

Being aggrieved with the order passed by the Respondent, this petition has been filed.

ISSUE OF THE CASE:

Whether the Petitioner’s claim for refund of CGST and IGST can be denied on the ground that the entire refund amount got consolidated under one head i.e. SGST, due to the technical error and new system of software in GSTN?
56 GIB/JK/NAVNEET/17.03.2021/HC-172 NAVNEET R. JHANWAR PRINCIPLES OF NATURAL JUSTICE FACTS OF THE CASE

Navneet R. Jhanwar (“the Petitioner”) having become entitled for refund of excess tax paid in terms of Section 54 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) submitted a refund application in FORM-GST-RFD-01 before the State Tax Officer (“the Respondent”), wherein the Respondent instead of directing the refund issued a Show Cause Notice (“SCN”) calling upon the Petitioner to show cause as to why the refund claim should not be rejected for the reason that the claim for refund is belated having been filed after the expiry of two years from the relevant date, as per explanation 2 in Section 54 of the CGST Act and that in the instant case the period had expired in April, 2020.

Subsequently the reply to SCN was filed by the Petitioner explaining the delay. Relied upon Notification No.35/2020-Central Tax, dated April 3, 2020 and Notification No.55/2020-Central Tax, dated June 27, 2020, whereby on account of lockdown due outbreak of corona virus pandemic, time limit/due date for various compliances was extended upto August 31, 2020. The explanation on delay by the Petitioner was accepted and accordingly, the refund application of the Petitioner was processed.

However, the Respondent without serving further SCN upon the Petitioner, passed the refund rejection order dated December 2, 2020 (“Refund rejection order”) on the grounds that were not proposed in the SCN and no opportunity of hearing was provided regarding the same.

Being aggrieved by Refund rejection order, the Petitioner has filed this petition.

ISSUE OF THE CASE

Whether the Refund rejection order can be passed without giving an opportunity of being heard?
57 GIB/KR/KUN Motors/06-12-2018/HC-163 M/s. KUN Motor Co. Pvt. Ltd. & Others v. The Asst . State Tax Officer & Others Place of Supply Facts & Issue Involved:

To determine the place of supply of goods, what is relevant is that the movement of goods should be occasioned by the transaction of supply, as evident from the words “where the supply involves movement of goods”. It is in such circumstances that the location of supply would be the location of the goods, at the time at which the movement of goods terminates for delivery to the recipient. What is discernible is that, we repeat, the transaction of supply itself, should occasion the movement of the goods. Then the location of the supply would be fixed as the place where the goods are delivered, so as to apply Section 7 or Section 8.       

A transaction which terminates with the supply within a State is an intra-State supply. However, when a dealer or manufacturer within the State of Kerala purchases goods for the purpose of further sale or manufacture within the State of Kerala, from an outside State dealer and transports it to their manufacturing unit or dealership, then the transaction occasions the movement of goods. Though the sale occurs in that outside State, the place of supply of goods is in this State since the transaction of sale occasions the movement of goods from one State to another and the supply is terminated in this State; whether the movement is by the supplier or the recipient himself. But, when a person residing in one State goes to another State and purchase goods for his own use, the supply with respect to the transaction terminates on the individual taking possession of the goods in that other State. The movement of the goods, after such sale is terminated and delivery is effected, whether it be inside the State or to outside that State, would be the prerogative of the purchaser, who owns the goods, in whom the property in such goods vests and such movement would not be that occasioned by the sale transaction or the supply thereon.

 
58 GIB/GJ/INOX INDIA/12.03.2021/HC-219 INOX INDIA PVT LTD REWARD UNDER MEIS SCHEME FACTS AND ISSUE OF THE CASE:

In this case the petitioners are engaged in the manufacture and export of Cryogenic Tanks and Vessels and such other specially manufactured items as per the Special Economic Act and its allied rules and regulations.

The challenge in this petition is to the denial of rewards under the Merchandise Exports from India Scheme based on technical objections and procedural infractions when the substantial benefits had accrued and available in favour of the petitioner. It is further the say of the petitioner that in Foreign Trade Policy and in Export Import Policy 2015-2020 there are certain rewards as this was a specific scheme by the Government of India introduced for the benefits of exporters and to encourage them since the same is meant for contributing to the earnings of the country.

The petitioner was granted the MEIS License for an amount of Rs. 21.34 lakhs against their exports already from their unit located at KASEZ against the shipping bill. Accordingly, under the license, reward under the MEIS at the rate of 2% from FOB value of export was the entitlement of the petitioner. It is also under the shipping bill exported two numbers of cryogenic tanks for liquefied gases.

The petitioner applied for the registration of license to the KASEZ on 22.04.2016, however, no positive response was received for a long time in this regard and eventually on 08.06.2016, the petitioners met the Development Commissioner of Kandla Special Economic Zone and apprise him of lapse of seven months where the benefits were not made available.

According to the petitioner, he received a letter suggesting that their authorization has been suspended until further clarification is received from the office of DGFT, New Delhi, on the aspect, whether such SEZ units which are non- Electronic Data Interface (EDI) ports can also receive such benefits on the shipping bills prior to June 1.06.2015 and that too, without declaration of the intent on the shipping bills.
59 GIB/RJ/VV ENTERPRISES/11.03.2021/HC-195 M/S VV ENTERPRISES REFUND FACTS AND ISSUE OF THE CASE:

In this case the appellant is engaged in the manufacture of gear shaft, gear bevel etc. The appellant exported the goods to UAE/USA. The exported goods were manufactured out of tax paid on raw material. As such tax involved in the raw material amounting to Rs.16,78,832/- (Rs.12,12,989/- +Rs.4,65,843/-) was debited on 23.11.2018 and accordingly appellant has filed refund claims under Section 54 of CGST Act, 2017.

The adjudicating authority has observed that however, the appellant physically not submitted the supporting documents in spite of requests and reminders. As per Telephonic conversation with the assessee he was requested to submit the records, still no records have been submitted by them. The adjudicating Authority has rejected the refund claims of the appellant as they have not submitted the supporting documents in respect of the refunds filed under Rule 92(3) of CGST Rules, 2017 and Circular No.79/53/2018- GST dated 31.12.2018.
60 GIB/MH/DHARMESH GANDHI/10.03.2021/HC-166 DHARMESH GANDHI PROVISIONAL ATTACHMENT TO PROTECT REVENUE FACT OF THE CASE:

The division bench of Bombay High court in the above case was dealing with attachment of nine bank account held in the name of appellant, his proprietorship firm and family members in pursuance of Section 83 of CGST Act. The court noted that the property including the bank account liable to or which has been provisionally attached must belong to the taxable person. ‘Taxable person’ has been defined in section 2(107) of the CGST Act to mean a person who is registered or is liable to be registered under sections 22 or 24 of the CGST Act. The court also noted that the joint account with the minor son and wife were also attached and there was no allegation in the petition that the said joint account has been funded with the money belonging to the appellant or his proprietorship firm.

ISSUE:

Whether bank account of family member and/or Joint can be attached under the CGST Act
61 GIB/MH/BA CONTINUUM/08.03.2021/HC-165 BA CONTINUUM INDIA PVT. LTD Refund of Unutilized ITC FACTS OF THE CASE

In the above case the petitioner (BA Continuum India Pvt. Ltd.) is engaged in the business of providing information technology and information technology enabled services to customers located outside India.

Due to technical error on the GSTN portal, the BA Continuum India Pvt. Ltd, in the beginning, was not able to file its replies on the web portal. Consequently, the replies were filed through several emails that denied the allegations and contentions that were mentioned in the show-cause notices. Therefore, the representative of “BA Continuum India Pvt. Ltd.” (Petitioner) personally met GST authority (respondent) and requested for personal hearing post-filing of reply

“The GST Authority while justifying the impugned orders put forth the reason that those have been passed within the framework of the GST statute by accompanying the principles of natural justice.” Impugned orders are based on the rationale and not arbitrary. Petitioner was issued a show-cause notice along with notice of being heard. However, it is worth mentioning that the petitioner had submitted written submissions through e-mail and the aforesaid submissions were taken into consideration. Adding further, the petitioner further made submissions to the adjudicating officer on the telephone. The allegation of the petitioner that personal hearing was not granted has been denied.

ISSUE OF THE CASE

Whether Telephone and E-mail replace personal hearing?
62 GIB/TN/M/S D.Y.BEATHEL/24.02.2021/HC-174 M/S D.Y.BEATHEL ENTERPRISES Input Tax Credit FACTS AND ISSUE OF THE CASE

In the above case the petitioners' herein are dealers, registered with Nagercoil Assessment Circle 3.The petitioners are traders in Raw Rubber Sheets.According to them, they had purchased goods from Charles (seller) and his wife Shanthi.

The specific case of the petitioners is that a substantial portion of the sale consideration was paid only through banking channels. The payments made by the petitioners to the seller, included the tax component also. Seller are also said to be dealers registered with the very same assessment circle.

Based on the returns filed by the sellers, the petitioners herein availed input tax credit. Later, during inspection by the respondent herein, it came to light that seller, did not pay any tax to the Government. That necessitated initiation of the impugned proceedings. There is no doubt that the respondent had issued shows cause notices to the petitioners herein. The petitioners submitted their replies specifically taking the stand that all the amounts payable by them had been paid to the seller and therefore, they will have to be necessarily confronted during enquiry.

Unfortunately, without involving the sellers, the impugned orders came to be passed levying the entire liability on the petitioners herein. The said orders are under challenge in these writ petitions.

The respondent has filed a detailed counter affidavit and contended that the impugned orders do not warrant any interference.

The learned Government Advocate would point out that the petitioners had availed input tax credit on the premise that tax had already been remitted to the Government, by their sellers. When it turned out that the sellers have not paid any tax and the petitioners could not furnish any proof for the same, the department was entirely justified in proceeding to recover the same from the petitioners herein. The respondent cannot be faulted for having reversed whatever ITC that was already availed by the petitioners herein.
63 GIB/TN/PENTACLE PLANT MACHINERIES/23.02.2021/HC-167 PENTACLE PLANT MACHINERIES PVT. LTD. ERROR RECTIFICATION FACTS AND ISSUE OF THE CASE:

 

Assesse while filling its GSTR-1 return, mentioned the GST number of the purchaser in Uttar Pradesh instead of the GST number of the purchaser in Andhra Pradesh and realized its mistake only when the recipient notified it of the rejection of the credit, seeking amendment of the return, and threatening legal action.

 

Since the requisite statutory Forms (GSTR-2 & GSTR-1A) are not yet notified to mitigate such manual errors. If these forms are in system, such error would have been captured in the GSTR-2 return, wherein the details of transactions contained in the GSTR-1A return would be auto-populated and any mismatch might be noted or the mismatch might have been noticed at the end of the purchaser/recipient.
64 GIB/TR/DAYAMAY ENTERPRISE/22.02.2021/HC-193 DAYAMAY ENTERPRISE PRINCIPLES OF NATURAL JUSTICE FACTS AND ISSUE OF THE CASE:

In this case the petitioner is a proprietor, engaged in purchase and sale of consumables and other taxable goods for which purpose the petitioner enjoys registration under the State as well as Central GST Acts. On 16th December 2020, the Superintendent of Taxes issued a show cause notice to the petitioner for cancellation of such registration The petitioner did not reply to the said show cause notice within 7 days permitted however replied on or around 1st January, 2021. Thereafter, the Superintendent of Taxes has so far not passed any order in connection with the said show cause notice. The petitioner finds that his GST account is blocked on the GST portal. Thereupon the petitioner has filed this petition.
65 GIB/PB/GENPACT INDIA/29.01.2021/HC-170 GENPACT INDIA PVT. LTD. REJECTION OF REFUND CLAIM FACTS AND ISSUE OF THE CASE:

This order, propose to dispose three writ petitions i.e. CWP Nos. 10302, 18876, and 16305-2020.

In CWP Nos. 10302 and 16305-2020, the challenge is to the orders dated 27.05.2020 and 05.08.2020 (Annexures P-9 and Annexure P-1, respectively) passed by the Appellate Authority, whereby the refund claimed by the petitioners has been rejected.

In CWP-18876-2020, the petitioner has straightway approached this Court, challenging the order dated 11.09.2020 (Annexure P-1) of the Adjudicating Authority, vide which the refund claimed by the petitioner has been rejected

Having heard the counsel for the parties and ongoing through the pleadings as well as the impugned orders passed by the Adjudicating Authority/Appellate Authority, are cryptic and non-speaking and the reasons assigned for holding the petitioners to be intermediaries, do not sustain as they do not pass the test of law as has been laid down in the judgments.
66 GIB/CH/RAKESH ARORA/28.01.2021/HC-176 RAKESH ARORA AVAILMENT OF ITC In the above case the petitioner, having been arrested under Section 132 of the Central Goods and Services Tax Act, 2017 [for brevity ‘the Act’]

The Goods and Services Tax Department had information that three firms by the name of M/s La Mode Fashions, M/s Decent Fashions and M/s Murari Enterprises [hereinafter referred to as ‘firms’] were engaged in availing and passing bogus Input Tax Credits [‘ITC’].

The firms had issued bills worth ₹ 158 crores involving ₹ 13.39 crores of tax. Firms had availed fake ITC of ₹ 21.60 crores and claimed refund of ₹ 5.02 crores.

The mechanism adopted by these firms was of procuring bills from Delhi based firms who had no purchases and further billing was done to export units for utilizing the ITC.

The argument is that petitioner has not issued any bill or invoice for availing ITC; moreover the assessment is not complete.
67 GIB/BR/VIDYARTHI CONSTRUCTION/22.01.2021/HC-185 VIDYARTHI CONSTRUCTION PRIVATE LIMITED PRINCIPLES OF NATURAL JUSTICE FACTS AND ISSUE OF THE CASE:

Vidyarthi Construction Private Limited a company registered under the provisions of Companies Act, 1956, having its registered office at Nand Vihar Colony, Mithanpura, Muzaffarpur, Bihar.

Quashing the ex-parte assessment orders dated 29.10.2018, 31.07.2019, 07.08.2019, 24.07.2019 and 20.08.2019 in Fom ASMT-13, passed by the respondent no. 3 namely the Joint Commissioner, State Taxes, East Circle, Muzafarpur, Bihar under Section 62 of the Bihar Goods and Service Tax Act, 2017, for the period March, 2018, March, 2019 to June, 2019 by which on failure of the petitioner to furnish monthly  returns under Section 39 of GST Act, the tax liability of the petitioner has been determined on the basis of materials available on record exercising his power of best judgment assessment
68 GIB/KL/SHEETAL JAIN/19.01.2021/HC-186 SR.SHEETAL JAIN CONFISCATION OF GOODS FACTS AND ISSUE OF THE CASE:

In this case petitioner drew attention to Ext.P2 notice and argued that the respondent department has not followed the provisions of Section 129 of the Central Goods and Services Tax Act, 2017. He contended that Ext.P2 notice reflects that the goods viz-a-viz jewellery items were seized and detained by the respondent authorities and as such, the respondent authority was duty bound to issue notice as envisaged under Section 129(3) of the GST Act, specifying the tax and penalty payable and then to proceed to pass the order after hearing the petitioner.

In case of the adverse order, if any, the respondent authority was duty bound to grant time of 14 days to the petitioner to pay the amount of tax and penalty as per the provisions under Section 129(6) of the GST Act. In submission of the learned counsel appearing for the petitioner, in order to impose huge amount of the tax and penalty apart from confiscation of goods, the respondent authority resorted to the provisions of Section 130 of the GST Act and there is no basis for coming to prima facie conclusion that there was an attempt on the part of the petitioner to evade payment of tax under the GST Act. He argued that seized articles were in fact, samples meant for showing the same to the wholesalers for the purpose of soliciting business. According to the petitioner, Ext.P5 impugned order, no where points out as to which provision of the GST Act were contravened by the petitioner. Therefore, according to the learned counsel for the petitioner, the petition needs to be admitted with interim stay as prayed.

 
69 GIB/KL/PETRONET LNG/15.01.2021/HC-230 PETRONET LNG LIMITED DETENTION OF GOODS FACTS AND ISSUE OF THE CASE:

In this case the Learned counsel for the petitioner submitted that the petitioner has filed the instant writ petition for quashing orders at Exts.P10 and P11 by which goods were detained and seized and the petitioner was given show cause notice for assessment. Learned Government Pleader submits that now the matter has travelled upto passing of final order under Section 129 of the CGST Act and that order is appealable under Section 107 of the said Act.
70 GIB/GJ/VINODKUMAR MURLIDHAR/04.01.2021/HC-220 VINODKUMAR MURLIDHAR CHECHANI PROVISIONAL ATTACHMENT OF BANK ACCOUNTS FACTS AND ISSUE OF THE CASE:

In this case the applicant is engaged in the business of trading of ferrous and non-ferrous metal scrap. It held a valid registration certificate under the provisions of the CGST Act and the GGST Act respectively

A spot visit was carried out by the flying squad of the revenue department at the premises of the applicant. The department was prima facie of the view that the purchases made by the applicant from the JSK and UM were not genuine. In the course of the search carried out by the department, the registers, documents and books of account for the period between 1-7-2017 and 11-8-2020 were collected and taken into possession.

The Additional Commissioner passed an order under section 83 of provisional attachment of cash credit/current bank account and one savings bank account held by the applicant with the HDFC Bank Ltd. Being dissatisfied with the order of provisional attachment, the applicant filed the instant writ-application.
71 GIB/GJ/TRUST FOR REACHING/22.12.2020/HC-234 TRUST FOR REACHING THE UNREACHED THROUGH TRUSTEE Exemption FACTS OF THE CASE:

In this case the applicant is a public charitable trust and its books of accounts are audited and return of income is filed regularly. The auditor of the Applicant filed the Audit Report in the Form No. 10B under Section 12A(b) of the IT Act on September 1, 2014. The Applicant had also filed the return of income for the Assessment Year 2014-15 on September 27, 2014.

However, a revised return of income for the AY 2014-15 was filed on November 22, 2014, declaring the total income as NIL and claiming refund of Rs. 1,92,850/. The document was required to be confirmed by the Applicant using the online account. Unfortunately, the trustees of the Applicant failed to confirm the same and, as a result, the Audit Report did not get e-filed along with the return of income.

The return of income was then processed under Section 143(1) of the IT Act and the benefit of exemption to the Applicant was rejected and a demand notice for INR 2,17,210/- was issued, due to non e-filing of the claiming exemption in Form No. 10 along with the return of income. On receiving the demand notice, the Applicant e-filed the Form No. 10 claiming exemption and requested to condone the delay in filing the Form No. 10 vide a letter.

Subsequently, the Commissioner of Income Tax (“the Respondent”) issued a Show Cause Notice dated April 2, 2019 as to why the application for condonation under Section 119(2)(b) of the IT Act filed by the Applicant should not be rejected as no genuine hardship had been shown which prevented it from filing the Form No. 10. The Applicant replied to the SCN issued by the Respondent explaining the chain of events and requested to condone the delay but the application was rejected vide order dated August 26, 2019 (“Impugned Order”). Being aggrieved by the Impugned Order, the Applicant has filed the present writ-application.

ISSUE OF THE CASE:

Whether exemption under Section 11 of the IT Act can be disallowed merely on the grounds that there was a delay in filing of Audit Report under Form No. 10?
72 GIB/GUJ/Comsol Energy Private Limited/21.12.2020/HC-248 Comsol Energy Private Limited Taxability
73 GIB/UP/M/S METENERE LTD./17.12.2020/HC-182 M/S METENERE LTD. SEIZURE AND DETENTION OF GOODS FACTS ISSUE OF THE CASE:

The petitioner is engaged in manufacture of lead ingots falling under GST Tariff Chapter Heading No. 7804. They are duly registered under the GST Act. On 6.1.2018 Anti Evasion Department of GST, Greater Noida visited the factory premises of the petitioner for verification of the records. The petitioner claimed that petitioner had produced all the Returns of TRANS-1. It is alleged that on 10.1.2018 another team from the same department visited the factory premises and passed an order of detention detaining 12,979 metric tonnes of entire stock of the petitioner. It is alleged that the said stock included the stock manufactured prior to enforcement of GST. The petitioner claimed that it produced all the records; however, the records of GST were not available in the factory premises as the same were kept at head office of the petitioner situated at Ghazipur.
74 GIB/UP/G.K. TRADING/02.12.2020/HC-194 M/S G.K. TRADING COMPANY GST ACT FACTS OF THE CASE:

In this case the Petitioner G. K. Trading Company is engaged in the trading of Iron Bars, Rods and Non-Alloy Steel etc. On May 30, 2018, a survey was conducted by the Deputy Commissioner, S.I.B. (“Respondent No. 1”) at the business premises of the Petitioner in which no business activity was found. Consequently, a summon was issued to the Petitioner on June 2, 2018 requiring him to submit details of purchases and sales, list of buyers and sellers and certain other documents.

Another summon dated September 14, 2020 was issued by the Assistant Commissioner S.I.B. (“Respondent No. 2”) to the Petitioner asking him to submit explanation with respect to certain Input Tax Credits availed by him including the ITC taken on the basis of invoices of M/s Glider Traders Private Ltd., whose registration was cancelled several months prior to the date of the alleged invoice.

Further, some inquiry was being conducted by the Directorate General of Goods and Services Tax Intelligence who issued summon dated July 24, 2019 to the Petitioner, requiring the Petitioner to appear in person, to tender statement in person, but the Petitioner did not respond to the same. Another summon dated August 26, 2019 was issued to the Petitioner by the Respondent No. 2 requiring the Petitioner to submit copies of invoices issued along with other documents since July, 2017 till date. However, the Petitioner did not submit any information. Therefore, once again a summon dated August 26, 2020 was issued to the Petitioner requiring him to tender statement, give evidence and produce copies of purchase and sales ledgers since July, 2017 till date. The Petitioner neither appeared before the Respondent No. 1 nor submitted any details and instead merely wrote a letter dated September 11, 2020 stating that detailed inquiry is being conducted by the Respondent No.2.

ISSUE OF THE CASE:

Whether inquiry can be initiated by State Tax Authorities i.e., DGGSTI, Meerut where inquiry has already been initiated by the proper officer under CGST Act?
75 GIB/TN/INDRIYA CONSTRUCTION /20.11.2020/HC-238 INDRIYA CONSTRUCTION COMPANY PRINCIPLES OF NATURAL JUSTICE FACTS AND ISSUE OF THE CASE:

In this case the writ petition was filed by the petitioner-Assessee on the ground that there was non-compliance on the part of the Adjudicating Authority with the Board's Instruction No.1053/2/2017-CX dated 10.03.2017, paragraph 5.0 which provided for pre-consultation before issuance of Show Cause Notice where the demand against the Assessee is likely to be above Rs.50.00 Lakhs (except for preventive/offence related SCN's).

The Assessee in the present case, by invoking the writ jurisdiction of this Court, has defeated the very purpose of issuance of Show Cause Notice and has successfully delayed the same for about one year now and even though a post-Show Cause Notice opportunity in terms of the said Circular para 5 was given to the Assessee by the agreement of both the counsel by the learned Single Judge by the order dated 16.12.2019, still the Assessee is not satisfied despite an order passed on 09.01.2020 by the Adjudicating Authority, after giving an opportunity and pre-consultation meeting held with the Assessee. She therefore submitted that the Assessee should now be called upon to file his objections to the Show Cause Notice itself and let the adjudication proceedings take place.

Since reasons for reassessment have to be recorded by the Assessing Authority under Section 148 of the Income Tax Act and objections thereto, if any filed by the Assessee, have to be decided by the Assessing Authority, before the reassessment proceedings in pursuance of Notice under Section 148 of the Income Tax Act are taken, paragraph 5 of the Board's Circular in the present case is something akin to that and if the Adjudicating Authority comes to the conclusion, like it has done in the present case, that Show Cause Notice is proper and justified and the Assessee should now show cause before the Adjudicating Authority by raising his objections by filing reply thereto, the Adjudicating Authority should be permitted and allowed to undertake the adjudication proceedings now and the Assessee has further remedial measures by way of further appeal under the statute itself, if he still feels aggrieved against the adjudication order. Therefore, she submitted that the present Writ Appeal is misconceived and deserves to be dismissed.
76 GIB/MP/Akash Garg vs. State of Madhya Pradesh/19-11-2020/HC-161 Akash Garg vs. State of Madhya Pradesh show-cause notice Fact & Issues Involved:

 

The petitioner who was an individual registered under GST filed writ petition. It was submitted that while raising the demand of tax, the foundational show-cause notice was never communicated by the department. The department submitted that show-cause notice was communicated to the petitioner on his E-mail address and despite receiving the same the petitioner failed to file any response. The Hon’ble High Court observed that as per the GST Provisions, the only mode prescribed for communicating the show-cause notice/order is by way of uploading the same on website of the revenue. The show-cause notice/orders were communicated to assessee by Email and were not uploaded on website of the revenue.
77 GIB/DL/Vianaar/03.11.2020/HC-147 M/s Vianaar Homes Pvt. Ltd Service Tax Facts & Issue Involved:

The petitioner M/s Vianaar Homes Pvt. Ltd. is a company engaged in the business of construction of residential complexes since its incorporation. The officers of Central Goods and Service Tax, Audit-II (“Respondents”) visited the business premises of the Petitioner, directed the production of certain documents and sought information in relation to the disputed period i.e. 2014-15 to 2016-17 (upto June, 2017)

In addition, thereto, the officers also demanded information pertaining to several group companies of the Petitioner. Despite Petitioner’s compliance with the above and submission of the requisite information, the officers visited the business premises again. Their conduct exhibited the intention to continue with the visits, conduct audit/verification proceedings, and give further directions for production of documents and information.

The Petitioner has challenged the letter dated November 11, 2019 by virtue of which the Respondents have commenced the audit/verification, on the ground that the same is void ab initio, being wholly without jurisdiction as well as without any statutory or legal authority.

The issued involved :

 "whether the audit/verification by revenue, contemplated under Rule 5A of Service Tax Rules, is saved despite the repeal of Chapter V of the Finance Act".  

                                                     
78 GIB/MD/Southerland/16.10.2020/HC-152 Assistant commissioner of CGST and central excise vs. Sutherland Global service Pvt. Ltd. Taxability Facts  & Issue Of The Case :

The petitioner Assistant Commissioner of CGST and Central Excise Vs Sutherland Global Services Private Limited prays for a writ of Certiorari quashing letter dated 14.02.2018 issued by the 1st respondent Assessing Officer. As a consequence thereof the petitioner would be entitled to avail and utilise accumulated credit pertaining to Education Cess (in short ‘EC’), Secondary and Higher Education Cess (in short ‘SHEC’) and Krishi Kalyan Cess (in short KKC’).

.
79 GIB/TN/SUN DYE CHEM/06.10.2020/HC-164 SUN DYE CHEM  ERROR RECTIFICATION FACTS AND ISSUE OF THE CASE:

Assessee while filling its GSTR-1 return, mentioned the GST number of the purchaser in Uttar Pradesh instead of the GST number of the purchaser in Andhra Pradesh and realized its mistake only when the recipient notified it of the rejection of the credit, seeking amendment of the return, and threatening legal action.

Since the requisite statutory Forms (GSTR-2 & GSTR-1A) are not yet notified to mitigate such manual errors. If these forms are in system, such error would have been captured in the GSTR-2 return, wherein the details of transactions contained in the GSTR-1A return would be auto-populated and any mismatch might be noted or the mismatch might have been noticed at the end of the purchaser/recipient.
80 GIB/SK/SUN PHARMA/02.10.2020/HC-171 M/S. SUN PHARMA LABORATORIES LIMITED SCOPE OF AMENDMENTS FACTS OF THE CASE

M/s. Sun Pharma Laboratories Ltd. (“the Petitioner”) has filed an Interlocutory Application (“I.A.”) No. 03 of 2020 on June 06, 2020, seeking to insert amendments in the Writ Petition and by the proposed amendments, the Petitioner seeks to challenge the vires of Section 174(2)(c) of the Central Goods and Services Tax Act, 2017 (“CGST Act”) and Notification No.21/2017-C.E., dated July 18, 2017 vide which the exemption notifications were issued under the erstwhile(former) regime, on the ground that it takes away the vested rights of the Petitioner by reducing the exemption/benefits to the Petitioner.

The Petition prayed to issue an appropriate Writ reading down Clause 5.1 & 5.2 of the Notification F.No.10(1)/2017-DBA-II/NER dated October 5, 2017, notifying ‘Scheme of Budgetary support under Goods and Services Tax regime to the units located in the States of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North-East including Sikkim’ (“BSS”) so as to enable the Petitioner to claim full refund of the CGST and 50% of IGST paid through the electronic cash ledger or in alternative to fix a special rate of refund eligible to the Petitioner so that under the BSS, the Petitioner is entitled to refund equivalent to that under the erstwhile(former) regime. Writ Petition was finally heard on September 3, 2019 and judgment was reserved.

ISSUE OF THE CASE

Whether amendment by way of I.A. No. 03 of 2020 dated June 06, 2020 can be allowed.
81 GIB/KR/Cial Duty Free /22.09.2020/HC-153 Cial Duty Free and Retail Services Ltd vs. Union of India Refund of Unutilized ITC Fact & Issues Involved:  

 

The Hon’ble Kerala High Court observed that invoices issued by DFSs at the time of sale of goods to the outgoing passengers are duly signed by both the passengers and the cashier which envisages a condition that the passenger will not consume the goods until he lands at the final destination outside India. In other words, the passenger shall become owner of the goods only upon reaching of final destination. All the goods which are sold at the DFSs are either imported or purchased from Indian market and are stored in a customs bonded warehouses. Such goods are removed from such warehouses only under the supervision of the Jurisdictional Commissioner and are not sold for domestic purposes. The goods which are brought from customs warehouses do not cross customs frontiers as before the goods are imported in the country, they had been sold at DFSs.

 
82 GIB/TN/Transtonnelstroy Afcons/21.09.2020/HC-148 Tvl. Transtonnelstroy Afcons Joint venture Vs Union of India Inverted Duty Structure Facts & Issue Involved:

At the heart of this batch of writ petitions is the question whether the Petitioners are entitled to a refund of the entire unutilised input tax credit that each of them has accumulated on account of being subjected to an inverted duty structure. In certain cases, the constitutional validity of Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017(the CGST Act) is impugned, whereas, in others, a declaration is prayed for that the amended Rule 89(5) of the Central Goods and Services Tax Rules, 2017 (the CGST Rules) is ultra vires Section 54 of the CGST Act and the Constitution of India. As a corollary, a declaration of entitlement to refund is also prayed for in some cases.

One of the issues that takes centre-stage in these cases is the correct meaning to be ascribed to the word “inputs” in Section 54(3)(ii) of the CGST Act and in the definition of “Net ITC” in the amended Rule 89(5) of the CGST Rules. Therefore, except while dealing with the text of Section 54 and Rule 89 where the word “inputs” is used, for the sake of clarity, the words ‘input goods’ is used while dealing with goods that are used as inputs, and ‘input services’ is used while dealing with services that are used as inputs. All the Petitioners are engaged in businesses wherein the rate of tax on input goods and/or input services exceeds the rate of tax on output supplies. This contingency is referred to as an inverted duty structure. As a result, the registered person is unable to adjust the available input tax credit fully against the tax payable on output supplies; consequently, there is an accumulation of unutilised input tax credit. The case of the Petitioners is that they are entitled to a refund of the entire unutilised input tax credit, irrespective of whether such credit accumulated on account of procurement of input goods and/or input services by paying tax at a higher rate than that paid on output supplies. On the contrary, the case of the Union of India and the Tax Department, both at the Central and State level, is that refund of unutilised input tax credit is permissible only in respect of the quantum of credit that has accumulated due to the procurement of input goods at a higher rate than that paid on output supplies, and that credit accumulation on account of procuring input services at a rate of tax higher than that paid on output supplies is liable to be disregarded for refund purposes.
83 GIB/TN/SARASPATHY SUNDARAJ/21.09.2020/HC-205 SARASPATHY SUNDARAJ ATTACHMENT OF PROPERTY FACT AND ISSUE OF THE CASE:

In this case petitioner is a bona fide purchaser, who had purchased the property prior to the encumbrance being created and therefore is entitled to protection from the charge created over the subject property.
84 GIB/DL/Insitel Services Pvt. Ltd/16-09-2020/HC-158 Insitel Services Pvt. Ltd v. Union of India Rectified refund application Fact & Issues Involved:

 

The writ petition was filed challenging Rule 90(3) of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) to the extent wherein rectification of deficiencies are treated as submission of fresh application for the purpose of computing limitation period for refund claim and grant of interest on delayed refund under the Central Goods and Services Tax Act, 2017 (‘CGST Act’).
85 GIB/KA/RETAIL PRIVATE/07.09.2020/HC-211 M.S.RETAIL PRIVATE LIMITED CANCELLATION OF REGISTRATION  

FACTS AND ISSUE OF THE CASE:

The petitioner is a private limited company engaged in the business of trading in bath fittings and sanitary ware. It is the contention of the petitioner that it has been regularly filing its monthly returns disclosing the trading transactions and also paying the GST tax liability within the due dates. On the ground that the petitioner had violated certain provisions of the CGST Act and the Rules, a show cause notice dated 18.03.2020 in Form GST-REG 17 read with Rule 22(1) of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as 'the CGST Rules') was issued to the petitioner by respondent no.3. The notice directed the petitioner to appear before respondent no.3 on 23.03.2020.

It is stated that due to COVID situation, the petitioner was unaware of the notice and there was a complete lock down of the business from 22.03.2020. Consequently, the petitioner could not appear before the authorities as stipulated in the notice. The authorities passed an order for cancellation of the registration of the petitioner with effect from 06.06.2020. On realizing that its registration was cancelled, the petitioner submitted a request to respondent no.3 on 09.06.2020 to revoke the order of cancellation.
86 GIB/GJ/Kalpsutra/04.09.2020/HC-146 M/s Kalpsutra Gujarat Vs The Union of India ITC Blockage Facts&Issue of The Case:

In case M/s Kalpsutra Gujarat Vs The Union of India (Gujarat High Court) whereby the writ application, the writ applicant, a partnership firm through one of its partners had prayed for:-

Issue of an appropriate writ, direction or order, striking down Rule 86A of CGST Rules, 2017 in so far as it gives power to block the ITC at no fault of the registered recipient and declare it ultra vires of Section 16 of the CGST Act, 2017.

Issue an appropriate writ, direction or order, to the respondents to allow petitioner to utilize the ITC until it is proved that the supplier did not pay the tax after following up the provisions of CGST Rules, 2017.
87 GIB/UP/JACKPOT EXIM/01.09.2020/HC-235 JACKPOT EXIM PRIVATE LIMITED PROVISIONAL ATTACHMENT OF PROPERTY FACTS AND ISSUE OF THE CASE:

The petitioner is aggrieved by the order dated 06.09.2019 of provisional attachment of the property under Section 83 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "Act of 2017"). The submission is that on a spot inspection of the business premises of the petitioner, some dispute was raised by the department with regard to the registration of the place of business which was changed during the course of time. In order to protect the interest of revenue and in exercise of powers under Section 83 of the Act of 2017 the competent authority had ordered for provisional attachment of the business account of the petitioner firm.

It appears that after registration of the changed premises, on an application moved by the petitioner the competent officer namely Office of the Principal Commissioner, Central Goods & Services Tax, Meerut had passed an order dated 24.12.2019 revoking the cancellation of registration of the firm under the Act of 2017.
88 GIB/MP/Kanishka Matta /26.08.2020/HC-155 Smt. Kanishka Matta v. Union of India GST Authorities Fact & Issues Involved:

 

The petitioner is the wife of the proprietor of the firm functioning in the name and style of M/s. S. S. Enterprises. The firm is in the business of Confectionery and Pan Masala items. Search operation was carried out at the business premises as well as residential premises by the Department and cash of around Rs. 66 lakhs were seized. She contended that the department is not competent to seize the cash under Section 67(2) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’) since cash cannot be treated as document, book or things. Therefore, the department should be directed to release the cash seized by it. The Hon’ble Madras High Court on going through the provisions of Section 67(2) of the CGST Act observed that the said section provides that confiscation of any documents or books or things, secreted in any place, which in the opinion of proper officer shall be useful for or relevant to any proceedings under CGST Act.
89 GIB/TN/Revenue Bar/17.08.2020/HC-131 Revenue Bar Association Others ️The Madras High Court on Monday vide Order dated August 17, 2020:️effectively restrained the Central Government from appointing technical members to the Goods and Services Tax Appellate Tribunals (GSTAT) until further orders (RBA v. Union of India).

This order was passed on a plea filed by the Revenue Bar Association (RBA) challenging the rules concerning the appointment and the terms of service governing the President and Members of the GSTAT i.e. the GSTAT (Appointment and Conditions of Service of President and Members) Rules, 2019.

The Court had initially passed an interim order imposing the restriction on the Central Government in October last year.

Madras High Court

Madras High Court restrains Government from appointing Technical Members to GSTAT

However, the case was adjourned twice since in view of the Centre's submission that the GST Council was yet to meet and finalise its decisions on the issues raised in the case i.e. the qualifications, tenure and selection procedure, as well as other conditions relating to the constitution of the GSTAT.

On Monday, the Centre, through its counsel, K Srinivasamurthy, again sought for more time, urging that the matter be posted after two months.

Appearing for the Revenue Bar Association, Advocate Rahul Unnikrishnan re-asserted that a notification being challenged in the case cannot stand the scrutiny of law in view of the Supreme Court's verdict in Union of India v. R. Gandhi.

The Court, in turn, directed that its 2019 interim order restraining the Centre from making any appointment of technical members to the Tribunal would continue to operate until further orders.

"Since the matter continues to be adjourned on account of the respondent, let the matter be listed as prayed for by the learned counsel for the Union of India after two months and in the light of the above, we continue the interim order dated 03.10.2019 until further orders."

Madras High Court

The case has been posted to be taken up next on October 28.

Monday's order was passed by a Bench of Chief Justice AP Sahi and Justice Senthil Ramamoorthy. The 2019 order had been passed by a Bench of M Sathyanarayanan and Justice N Seshasayee.

The RBA has posed two broad challenges. The first concerns the constitution of selection committees which appoints technical members of the GSTAT Benches. In this regard, Rule 3 of the 2019 Rules is relevant. The second concerns the powers vested in the Government to dictate the service conditions of GSTAT members, in which regard Rule 8 is relevant.

Under the present regime, the technical members to the GSTAT Benches (National and/or State) are appointed by the Central Government on the recommendations of a selection committee, composed entirely of members from the Executive, with no representation from the higher judiciary.

The RBA has pointed out that the selection committee comprises entirely of members from the Executive. Relying on the law laid down in the cases of SP Sampath Kumar v Union of India, Union of India v R Gandhi, Madras Bar Association v Union of India and Shamnad Basheer v Union India, the Association has contended that the manner in which technical members are appointed to the GSTAT under the 2019 rules is unconstitutional.

The RBA has also challenged the validity of Rule 8 of the 2019 Rules. This rule requires the President to apply to the Central Government for sanction of leave.

Another issue raised is that the service conditions of Members – such as salaries, leave, pay, TA, HRA, and other benefits – has been made equivalent to Group ‘A’ officers of the Government of India of corresponding status. The RBA has argued that this scheme of things would be detrimental to the independence of the tribunal.

The Court had earlier deferred hearing in the matter to peruse the judgment passed by the Bench of Justices S Manikumar and Subramonium Prasad in September 2019, which had concluded that the the constitution of the GSTAT under the prevailing GST regime is unconstitutional, in so far as it allows the number of technical members appointed to the tribunal to exceed the number of judicial members.

Read the order passed on August 17, 2020.
90 GIB/KR/PEE BEE/17.08.2020/HC-132 PEE BEE ENTERPRISES Assessment & Audit Facts & Issue of The Case:

The petitioner Pee Bee Enterprises has approached this Court aggrieved by the assessment orders and consequential demand notices issued him under the GST Act.

In the writ petition it is the case of the petitioner that the assessments pertaining to the months April and May 2019 were completed under Section 62 of the SGST Act on best judgment basis, taking note of the non-filing of returns by the petitioner assessee for the said month.

While the assessment orders are dated 20.8.2019, it is the case of the petitioner that these orders were not served on him till much later and within 30 days after the from the date of receipt of the orders, he filed the returns as permitted under Section 62 of the SGST Act. He contends, therefore, that the assessment orders have to be treated as withdrawn by virtue of the provisions of Section 62 of the Act.

 

As per the respondent ASMT 13 has been issued dated 20-08-2019 through common portal. Also, a copy of ASMT-13 emailed to the petitioner at once. However, petitioner filed the returns for the period April and May 2019 in GSTR.3B only on 30.10.2019 ie., with a delay of 71 days. Since the filing is not within 30 days. ASMT.13 cannot be withdrawn and the petitioner is liable to pay the amount as per ASMT. 13 and that was followed with a demand notice in DRC.07.



91 GIB/GUJ/Udaipur Cement Works Ltd./31.07.2020/HC-154 Udaipur Cement Works Ltd. v. State of Gujarat REFUND Fact & Issues Involved:  

 

The Hon’ble Gujarat High Court relied upon other judgments pronounced on the similar matter. In those judgements it was held that there is no bar that the petitioners cannot be granted the refund for being the buyers. The diesel has been purchased by the petitioners from the seller in the course of inter-State trade for use in mining activities and they are the ultimate consumers thereof and hence, the question of passing on the tax burden to anyone would not arise. Consequently, the question of unjust enrichment would also not arise. The Courts have also relied on the judgment of the Rajasthan High Court wherein the authorities are duty bound to refund the amount to the petitioners as per the directions given by the Court.
92 GIB/KR/Pazhayidom Food Ventures (P.) Ltd./24.07.2020/HC-159 Pazhayidom Food Ventures (P.) Ltd. v. Superintendent Commercial Taxes COVID-19 Fact & Issues Involved:

 

The Hon’ble High Court observed that the assessee is not disputing his liability and also there is no demand against the assessee for the unpaid tax amount. Considering the above and in view of the financial difficulties faced by the assessee during the COVID pandemic situation, instalment facility to pay admitted tax liability has been allowed to the assessee. The authorities were also directed to accept the belated return filed by the petitioner for the period November 2018 to March 2019, without insisting on payment of the admitted tax declared.
93 GIB/GUJ/MATERIAL RECYCLING/24-07-2020/HC-123 Material Recycling Association of India Vs. Union of India Intermediary Services Facts & Issue of The Case:


The petitioner has challenged the constitutional validity of Section 13(8)(b) of the Integrated Goods Service Tax Act,2017. It was submitted that Section 13(8)(b) of the IGST Act, 2017 contributes to tax cascading and double taxation contrary to the objectives of the GST.
The petitioner is an association comprising of recycling industry engaged in manufacture of metals and casting etc., for various upstream industries in India. also act as an agent for scrape, recycling companies based outside India engaged in providing business promotion and marketing services for principals located outside India. Also facilitate sale of recycled scrap goods for their foreign principals in India and other countries.
member of the petitioner association receives only the commission upon receipt of sale proceeds by its foreign client in convertible foreign exchange.
according to the petitioner, the transaction entered into by the members of the petitioner association is one of export of service from India and earning valuable convertible foreign exchange for the same.

94 GIB/DL/ Brand Equity Treaties Limited /05.05.2020/HC-152 Union of India v. Brand Equity Treaties Limited TRAN-1 Fact & Issues Involved:  

 

The Hon’ble Delhi High Court in the case of Brand Equity Treaties Ltd. pronounced on 5-5-2020 held that Rule 117 of the CGST Rules is directory in nature, as far as it prescribes the time-limit for transitioning of credit. In case the credit is not availed within the period prescribed, it would not result in the forfeiture of the rights. However, it does not imply that the availing of CENVAT credit can be in perpetuity. In absence of any specific provisions under the GST Act, the residuary provisions of the Limitation Act, the period of 3 years should be the guiding principle. Therefore, period of 3 years from the appointed date would be the maximum period for availing of transitional credit.

 
95 GIB/JK/MAHADEO/21-04-2020/HC-123 Mahadeo Construction Co. GSTN-Portal Facts & Issue of the case

The petitioner, “Mahadeo Construction Co.” is a partnership firm, registered under the provisions of the CGST Act. It is the case of the petitioner that in GSTN Portal, due date for filing of GSTR 3B Return for the month of February, 2018 and March, 2018 was reflecting as 31st March 2019 and the petitioner reasonably believed that due date of filing of GSTR-3B Return for the months of February and March, 2018 has been extended up to 31st March, 2019 and in the said background, the petitioner filed its monthly return for the month of February, 2018 and March, 2018 within the due date as reflected in GSTN Portal. The petitioner was served with a letter by Superintendent of Goods and Services Tax and Central Excise directing the petitioner to make payment of interest amounting to Rs.19,59,721/- on the ground of delay in filing of GSTR-3B Return for the months of February and March, 2018.

The respondent-Authorities further exercised powers under Section 79 of the CGST Act by initiating garnishee proceedings for recovery of aforesaid amount of interest by issuing notice to the petitioner’s Banker. The petitioner has submitted that the impugned letter dated 08.03.2019 issued by authority demanding interest amount of Rs.19,59,721/- on the ground of delay in submitting GSTR-3B Return for the months of February and March, 2018, is not sustainable in the eyes of law, as the said amount of interest has been determined without initiating any adjudication process under Sections 73 or 74 of the CGST Act. It is the specific case of the petitioner that the petitioner is not liable to pay interest as there has been no delay on its part in furnishing of GSTR-3B Return and, consequentially, there is no delay on its part in depositing the tax with the respondent Authority, as in GSTN Portal, due date for furnishing of return for the months of February and March, 2018 was shown as 31st March, 2019. It has been further argued by petitioner that if the amount of interest is not admitted by an assessee, the same requires determination through an adjudication process to be initiated as per the detailed provisions contained under Section 73 of the CGST Act.

The respondent authority submitted that the present dispute pertains to recovery of interest not on the ground of delay in filing of GSTR-3B Return, but on the ground of delayed payment of tax beyond the stipulated date as prescribed under Section 39(1) read with Section 39(7) of the CGST Act. It is submitted by revenue that, once there is a delay in payment of tax, the liability to pay interest on the same becomes automatic, for which no separate proceedings is required to be initiated for determining such interest liability. Further, while referring to Section 73 or 74 of the CGST Act, it has been contended that said Sections are not applicable in the instant case, as it relates only to demand and recovery of tax not paid or short paid either on account of fraud or willful misstatement or suppression of facts, or otherwise. It has been further contended by the respondents that due date as reflected in GSTN Portal as “31st March, 2019” for furnishing of GSTR-3B monthly return for the months of February and March, 2018 was reflecting owning to the fact that Central Government, through Central Board of Indirect Taxes and Customs, vide Notification No. 76/2018-Central Tax dated 31st December, 2018 has waived the levy of late fee for furnishing returns for the months of July, 2017 to September, 2018, if the said returns were furnished between the period 22nd December, 2018 to 31st March, 2019, and the said Notification cannot be interpreted to mean that the last date of filing of GSTR-3B Return has been extended up to 31st March, 2019. Learned counsel for the revenue, in support of his contention that liability for payment of interest is automatic and does not require any adjudication process has relied upon the following two decisions, namely, U.P. Cooperative Cane Unions Federations vs. West U.P. Sugar Mills Association & ors. and Commissioner of Central Excise vs. International Auto Limited
96 GIB/KN/ATRIA/28-03-2019/HC-81 Atria convergence technologies TRAN-1 Issue & Facts  of The Case :

The petitioner is a public limited company registered under the Companies Act, 1956 and is registered under Central Goods and Service Tax Act, 2017, filed TRAN-1 subsequently realized that the person having same PAN number and should be place a registration obtained under Finance Act ,1994, credit could be transferred only to them by a centralized registered person.

Section 140 of the Central Goods and Service Tax Act, 2017 confers a right to a registered dealer to take credit of ‘eligible duties’ of the amount lying unutilized on the day immediately preceding the appointed day.

Further every registered person entitled to take credit of input tax under Section 140 of the act will be required to file a declaration electronically in form GST-TRAN-1, Within ninety days of the appointed . However registered person could not submit the said declaration by the due date on account of technical difficulties on the common portal.
97 GIB/GJ/KRUPA/20-03-2020/HC-113 Krupa Trading Company Input Tax Credit Facts & Issue of the case

Krupa Trading Company (“the Appellant”) is a company who filed appeal on the ground that whether the denial of Cenvat Credit by the Adjudicating Authority for the reason that invoices of input service bear handwritten serial number is correct or otherwise.

Further they submit that the identical case in the appellant’s own case in appeal no. E/11069/2015 was heard by this bench on 03/10/2019 and order was reserved. He prays that the order in that appeal may be followed for deciding the present appeal in which the Tribunal vide order no. A/10424/2019 dated 07/02/2019 decided the matter in appellant’s favour.
98 GIB/UP/DARPAN SAHU/18-03-2020/HC-78 DARPAN SAHU COVID-19 Issue & Fact of the Case:

In view of pandemic Corona Virus (COVID-19), honorable Allahabad High Court gave an important order advising all competent authorities both administrative and non-administrative under the State Government from restraining them to take any Coercive measures against any Individual or body of Individuals till 6-4-2020.
99 GIB/KR/KERALA HC COVID-19/16-03-2020/HC-79 KERALA HIGH COURT CORONA VIRUS (COVID-19) COVID-19 Issue & Fact of the Case:

Kerala HC, taking suo moto note of the prevailing 'precarious' scenario of "outburst of deadly corona virus", directed the Income tax authorities, authorities dealing with GST, erstwhile Kerala VAT, financial institutions, banks, etc. to defer the recovery proceedings or coercive measures till April 6, 2020.
100 GIB/CH/K.P. Sugandh /16-03-2020/HC-115 K.P. Sugandh Ltd. Vs. State of Chhattisgarh Search & Seizure Facts  & Issue Of The Case :

The petitioner herein are the manufacturers of ‘Pan Masala and Tobacco Products’. The said vehicle through which they had dispatched their goods, has been seized by the respondent authorities on the ground of discrepancies in the valuation of the goods. The petitioner has contented that the in charge of the vehicle is required to keep the documents along with him required as per section 68 of CGST Act, 2017 and the respondent authorities can’t seized the goods on the ground of discrepancy in the valuation of goods.

The item so seized by the petitioners have its own shelf life, and the goods if not soon released by the respondent authorities, petitioner will have to suffer with a irrecoverable loss with no fault of theirs. According to the respondents ,they immediately have issued a notice under section 129(3) ,to which the petitioner have submitted their reply which is not satisfactory.

It has later been found that ,the price at which the product has been sold to the customer, was not matching the MRP of the product, but the driver with him had the invoice bill duly issued which matched the quantity found in the vehicle.
101 GIB/TN/DAEJUNG/19-12-2019/HC-75 DAEJUNG MOPARTS PVT LTD Input Tax Credit Issue & Fact of the Case:

Daejung Moparts (P.) Ltd. (“the Petitioner” or “assessee”) has received a notice issued by Competent Authority for payment of a certain amount as interest under Section 50 of Central Goods and Services Tax Act, 2017 (“CGST Act”) for delayed payment of tax and as per communication dated May 21, 2019, The Madras HC directed assessee’s banker (Indian Overseas Bank, Maraimalai Nagar) under Section 79 of CGST Act, to make payment in pursuance of aforesaid demand of interest, In effect it is a bank attachment proceedings.

Whether the HC can direct the assessee’s banker to make payment of his admitted interest liability of Rs. 9.15 lakhs out of aforesaid balance of Rs. 33.77 lakhs to department on or before June 20, 2019?
102 GIB/DL/Aargus Global Logistics (P.) Ltd./06.03.2020/HC-160 Aargus Global Logistics (P.) Ltd. v. Union of India audit & seek information Fact & Issues Involved:

 

The Honourable High Court observed that the Rule 5A empowers officer authorised by the Commissioner who shall have access to taxpayer’s premises registered under the erstwhile Service tax Act for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. Also, it obliges every taxpayer to furnish the information and documents for the same. Further, under GST law, it was provided that the repeal of the Finance Act, 1994 does not affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears under the erstwhile Act.
103 GIB/KN/SOBHA Developer/04.03.2020/HC-145 COMMISSIONER OF SERVICE-TAX VERSUS SOBHA DEVELOPERS LTD. Others Fact  Issue of Case:

Respondent “Sobha Developers”  is engaged in the business of construction of complex and roads under the category “construction of complex services and works contract service” under the Finance Act, 1994. On the ground that respondent was rendering taxable service under the category of “Club or Association Service” as definedunder Section 65(105)(zzze) of the Finance Act, 1994 and liable for payment of service tax, which is said to have come to limelight during the course of audit and observations having been made that agreements entered into by the respondent with their customers for the purpose of residential apartments and certain amounts are collected as non-refundable deposits towards “Club House and Swimming Pool”.

 
104 GIB/GJ/REAL PRINCE/04.03.2020/HC-212 REAL PRINCE SPINTEX PVT. LTD. REFUND OF IGST FACTS OF THE CASE:

The petitioner named M/s Prince Spintex Pvt. Ltd. was engaged in the business of manufacturing of cotton yarn through the spinning process, after processing the finished goods are supplied to India as well as exported outside India. As per the Export Promotion Capital Goods (EPCG) Scheme import of capital goods for pre-production, production and post-production are allowed at zero customs duty subject to a specified condition. The petitioner as per the Export Promotion Capital Goods (EPCG) Scheme entered into a contract with the M/s Itema, Italy. However, the machine for which the contact was made is taxable @5%, which is the basic tax rate under the Customs Tariff Act. The petitioner was authorized and on the basis of this, he claimed the exemption of Integrated Goods and Service Tax (IGST) on which the exemption was not granted.

The issue raised in this case was whether the petitioner is liable for the exemption or not
105 GIB/GJ/REAL PRINCE/04-03-2020/HC-117 REAL PRINCE SPINTEX PVT. LTD. VERSUS UNION OF INDIA REFUND Fact of the Case :

The writ applicant is a private limited company engaged in the business of trading of cotton yarn and cotton waste. The writ applicants are registered under the Central/Gujarat/Integrated Goods and Services Tax Act, 2017 (for short ‘the GST Act’).

They are the exporters of the cotton Yarn and waste and doing export without payment of IGST under Letter of Undertaking.

According to the writ applicants, under a misconception of law, they selected the option of export without payment of tax while filing the shipping bills though the writ applicants, at the relevant point of time, had no letter of undertaking, and simultaneously, also claimed higher rate of duty drawback under the Customs Act, 1962.

It is the case of the writ-applicants that since the clearing and forwarding agent had erroneously selected the option of export without payment of tax while filing the shipping bill, the amount of the IGST paid was shown as ‘Nil’ in the shipping bill. In such circumstances, the customs authorities denied to grant refund of the IGST paid on exports by the writ-applicants

Refer Case:- M/s.Amit Cotton Industries v/s PrincipalCommissioner of Customs

(GIB/GUJ/AMIT COTTON/27-06-2019/HC-80)
106 GIB/KN/LC INFRA PROJECTS/03-03-2020/HC-121 LC INFRA PROJECTS PVT. LTD. INTEREST Facts & Issue of the case

This Writ Appeal is filed under Section 4 of the Karnataka High Court Act, 1961, praying to set aside the order passed by the learned single judge in writ petition no.28876 of 2019 dated 22.07.2019.

The Judgement passed by single bench on 22.07.2019 is available on following link

GIB/KN/LC INFRA/22-07-2019/HC-59

In the case before the single bench, the learned single judge has held that issuance of a show cause notice is sine qua non to proceed with the recovery of interest payable under sec 50 of the GST Act and penalty leviable under the provisions of the GST Act and the Rules.

As per authority, a demand for interest in accordance with sub section (1) of Section 50 of Central Goods and Service Tax Act 2017 was made. On the basis of the said demand, consequential action was taken by the tax authorities on 7th March 2019 by which the account of the assessee was attached on account of nonpayment of interest.

The appellant (authority) has accepted before the court that no notice as contemplated under Section 73 of the GST Act was issued to the assessee before quantifying interest amount and attaching Bank account of the assessee. In its favour, the authority invited the attention of court to sub section (1) of Section 50 of the GST Act and submitted that the tax was payable as per the self-assessment made by the assesse and it was not necessary to issue a show cause notice to the assessee as the demand was only as regards to payment of interest under Sub Section (1) of Section 50 of the GST Act. So as per authority, the demand was not for tax and only for interest, so, a notice under Sub Section (1) of Section 73 of the GST Act was not at all necessary and as a consequence of failure to pay interest, consequential action of attachment of the bank account has been taken. Thus the appellant authority contends that, their submissions could not have been held to be illegal on the ground of breach of the principles of natural justice.

 
107 GIB/GJ/GOKUL AGRO/26-02-2020/HC-118 GOKUL AGRO RESOURCES LTD. VERSUS UNION OF INDIA REFUND Fact of the Case:

In this Writ petition petitioner is pointing towards Refund of GST paid under RCM on ocean freight/Constitutional validity of Entry No.10 of Notification No.10/2017-IGST(Rate) dated 28.6.2017 /vires of Section 5(3) of the IGST Act as well as Article 14 of the Constitution of India

Petitioner through this petition praying for reliefs on following grounds:


To issue a writ striking down and declaring Entry No.10 of Notification No.10/2017-IGST(Rate) dated 28.6.2017 as being ultra-vires Sectin 5(3) of the IGST Act as well as Article 14 of the Constitution of India.
To issue a writ of mandamus directing the learned respondents to grant refund of the amount of IGST already paid by the petitioner pursuant to the impugned Entry No.10 of Notification No.10/2017-IGST (Rate) dated 28.6.2017 (as per statement at Annexure D) along with appropriate interest on such refund.
To restrain the learned respondents from taking coercive steps against the petitioner on the basis of the impugned Entry No.10 of Notification No.10/2017-IGST(Rate) dated 28.6.2017;


Refer Case MOHIT MINERALS

GIB/GJ/MOHIT MINERALS/23-01-2020/HC-44
108 GIB/WB/MAGMA HOUSING/19-02-2020/HC-51 MAGMA HOUSING FINANCE LIMITED Others Issues Involved:

The Petitioner has challenged impugned notices dated December 13, 2018, and April 25, 2019, which demands the details for Service Tax Audits.



Fact of the Case:

There are two interim orders passed by the Hon’ble High Courts of Gujarat and Delhi. In the case of OWS Warehouse Services LLP Versus Union of India [R/Special Civil Application No. 16226 of 2018], in a similar situation, the order impugned therein has been stayed at ad interim stage. The Hon’ble Delhi High Court in the case of M/s T.R. Sawhney Motors Pvt. Ltd. Versus Union of India and another [W.P.(C) 2138/2019 & CM Appl. No. 10002/2019 (stay)] has also passed an interim order in favor of writ petitioner in a similar situation.
109 GIB/GUJ/AMAR CAR P. LTD./13-02-2020/HC-52 AMAR CAR PVT LTD. INTEREST Issues Involved:

In this ca se in which GST department has raised Interest Demand on Gross GST without considering the Input Tax Credit, Hon’ble Court has directed the department to not to take any coercive steps for the purpose of recovery of the interest.
110 GIB/KR/Akay Flavours/12.02.2020/HC-128 Akay Flavours & Aromatics (P) Ltd. Others Facts & Issue of The Case:

The petitioner AKAY FLAVOURS AND AROMATICS PVT LTD has approached this Court with a prayer of

1. quashing the demand raised vide Ext.P5, for returning the appeal preferred against the assessment order to be deficient of court fees, i.e., 1% of the disputed amount and

 

2. declaring imposition of levy of additional court fee by the State Authority in exercise of powers under Section 76(1) of the Kerala Court Fees Act vide notification dated 7.4.2016 (Ext.P2) extending powers under Section 76 of the Kerala Court Fees and Suit Valuation Act, 1959 fixing the court fees to be levied by civil courts, tribunals and the appellate authorities constituted by or under any special or local law, at the rate of 1% of the amount involved in the dispute.would not apply in the field of GST

It is contended by petitioner that the aforementioned additional court fees of 1% should not be leviable in the appeals filed under Section 108 of the Kerala Sales Goods Service Tax/ Central GST Act arising out of decisions or orders passed under the Act. Reliance has been laid to the provisions of Section 108 dealing with the filing of the appeal. Section 108 do not contemplate remittance of any additional court fees or other fees and thus the objection of the authorities in not entertaining the appeals being not accompanied by 1% additional fee is wholly falacious and arbitrary,

 

 

 
111 GIB/HP/GODREJ/11-02-2020/HC-88 Godrej Consumer Product Ltd. E-way Bill Facts & Issue of the case

The supplier had issued invoice No. PY0322001529 and handed over said goods to Transporter for transporting the same from Puducherry to Himachal Pradesh by truck no. TN29BV9831 by generating  E way Bill No. PY0322001529.

The inspection team intercepted and detained the vehicle by alleging  expired e-way Bill. The appellant explained that due to typographical error while generating the E-way bill distance 20KM instead of 2000 KM.
112 GIB/HP/BHUSHAN/11-02-2020/HC-14 Bhushan Power & Steel Ltd. E-way Bill Issue Involved:

Expiry of E Way Bill due to wrong details mentioned in Part B

 

Fact of the Case:

Purchaser generated the Invoice and accordingly delivery at Anni, The goods reached at Chandigarh on 20-11-2018. The Respondent Authority on 21-11-2018 checked vehicle at Khalini examined the documents and found the E-way Bill with expired validity.

 
113 GIB/RJ/PERFECT TURNERS/06-02-2020/HC-58 PERFECT TURNERS INTEREST
114 GIB/ASM/TAX BAR /04-02-2020/HC-46 TAX BAR ASSOCIATION (GUWAHATI) ANNUAL RETURN Issues Involved:

Extension of date for filing of 9 and 9C due to technical glitch.

Facts of the case:

Traders are unable to file GSTR 9 and 9C return on time because of non-functioning of GST portal. They have all intention of filing returns and paying taxes, however they are unable to pay taxes on time due to such technical issues. The taxpayers who access the system are informed by the portal that a number of other persons are in the process and therefore, the tax payers are required to wait.
115 GIB/KR/SUTHERLAND/03-02-2020/HC-77 SUTHERLAND MORTGAGE SERVICES INC Export Issue & Fact of the Case:

Issue a writ of certiorari or any other appropriate writ, order or direction as this Hon'ble Court deems fit and proper in the circumstances of the case, calling for the records leading to the issue of Exhibit P-2 Order and after scrutinizing the same, to strike down and quash the same and to hold that in the given set of facts available before the AAR, the transaction in question would not attract GST since the subject transaction would quality for “Export of Services” in terms of Section 2(6) of IGST Act, 2017.

Issue such other appropriate writ, direction or order as deemed fit by this Honourable court, considering the facts and circumstances of the case, in the interest of justice.”

Whether supply of services by India Branch of the petitioner to the customers located outside India shall be liable to GST in the light of the intra-company agreement entered into by the Indian branch with its principal incorporated in USA - Petition challenging refusal of Authority of Advance Ruling to entertain the question as the same is intrinsically related to “determination of place of supply” and not subject matter of Advance Ruling as envisaged in Section 97(2) - Appealability of Order passed by Authority of Advance Ruling under of Section 98(2) of the CGST Act 
116 GIB/KA/M.R.TRADERS/31.01.2020/HC-199 M.R.TRADERS E-way Bill FACTS AND ISSUE OF THE CASE:

The petitioner namely M.R. Traders generated a Tax Invoice & E-way Bill pertaining to the supply of timber from Karnataka to Kerala. The petitioner opened a new branch, which was in the process to be updated, and the site was showing that it was ‘processing’. While the e-way bill was generated, the petitioner was under the assumption that the address would automatically appear in the e-way bill, and on the basis of assumption, the bill was handed to the driver of the vehicle. When the authority noted that there was a difference in the address shown in the Invoice and E-way bill, they seized the vehicle

Seizure of the consignment that imposes extra tax and penalty for the release of the same, for the reason that the tax invoice and E Way bill are addressed to Erattupetta, Kottayam address and there is no document seen accompanied to unload the goods at Kizhissery.

The petitioner's firm has clarified the reason as to why there is no document seen accompanied to unload the goods at Kizhissery. As a matter of fact, there is no evasion of tax from the part of petitioner and for a trivial clerical error the vehicles as well as the goods are detained stating that vehicle will be released only on payment of amount as per the demand notice.
117 GIB/GJ/MOHIT MINERALS/23-01-2020/HC-44 Mohit Minerals Pvt. Ltd. Taxability Issue Involved:

Levy of IGST on importer of goodsthe estimated component of Ocean Freight paid for transportation of the goods by Foreign seller.

Relevant Notifications:


IGST R 8/2017 Dated 28 June 2017-Entry no. 9-IGST @5% on ocean freight- services provided by a person located in non-taxable territory to a person located in a non-taxable territory.
IGST R 10/2017 Dated 28 June2017- Entry no.10 – RCM to be paid by importer of the goods located in taxable territory.


Grounds:


Impugned notifications are contrary to the provisions of Article 265 of the Constitution of India. Article 265 of the Constitution provides that: “No tax shall be levied or collected except by authority of law.” Thus, both the levy and collection of tax shall be provided by a statute enacted by a competent legislature. A delegated legislation, i.e. a rule, regulation or notification, cannot provide for levy or collection of tax which is not authorized by the parent statute.
Supply of ocean freight service is not covered either by Section 7 (inter-state supply) or Section 8 (intra-state supply) of the IGST Act.IGST does not contemplate levy and collection of tax from a person who is neither the supplier nor the recipient of supply.
Time of supply of services in case where the tax is payable under the reverse charge basis is the earliest of the date of payment entered in the books of accounts of the recipient or the date of debit in the bank account or sixty days from the date of issue of invoice by the supplier. Thus, a person other than a recipient of supply cannot determine the time of supply as per the provisions of Section 13(3) of the IGST Act.
Value of the ocean freight service cannot be determined by the importer of goods.
Input tax credit can only be availed by the recipient of the supply.

Section 16 of the CGST Act provides that every registered person shall be entitled to take input tax credit on any supply of goods or services or both to him, which are used or intended to be used in the course or furtherance of business.
Provisions relating to the returns apply where either the person is a supplier or a recipient of the supply. If the person is neither a supplier nor a recipient of supply, such provisions do not apply.
IGST is leviable on a transaction treated as an import of goods under the IGST Act read with the Customs Tariff Act, 1975. Once the freight has already suffered the IGST as a part of the value of the goods being imported, the dual levy of the IGST cannot be imposed on the same freight amount by treating it as supply of service.
Input tax credit can only be availed by the recipient of the supply.

Section 16 of the CGST Act provides that every registered person shall be entitled to take
Input tax credit on any supply of goods or services or both to him, which are used or intended to be used in the course or furtherance of business.


 

 
118 GIB/DL/SALES TAX BAR/23-01-2020/HC-47 SALES TAX BAR ASSOCIATION ANNUAL RETURN Issue Involved:

HC issues notice to Infosys and Tech Mahindra (IT Support contractors of GSTN Portal) in writ petition challenging various issues relating to technical flaws, glitches and limitations in the online portal system evolved by GSTN; Considers their presence necessary "with a view to better appreciate the intricacies, and to ensure that the grievances raised by the taxpayers and our orders are understood and implemented in true perspective";

Fact of the Case:

The Delhi High Court has issued notices to Infosys and Tech Mahendra on a petition regarding technical flaws in the online portal system evolved by the Goods and Services Tax Network (GSTN).

The two firms are IT support contractors for the portal. The court said their presence was needed “to better appreciate the intricacies, and to ensure the grievances raised by the taxpayers and our orders are understood and implemented in true perspective”. Harpreet Singh, partner at consultancy KPMG, said the petitioner had raised the issues of non-availability of annual forms under the GST system for 2018-19, among others.

 
119 GIB/WB/CEAT LTD./22-01-2020/HC-116 CEAT LTD. VERSUS UNION OF INDIA & ORS REFUND Fact of the Case:

This is an application under Article 226 of the Constitution of India, wherein the writ petitioner has complained of inaction on the part of the respondents authorities for granting it refund of IGST levy for exports made to Bhutan under section 54 of the CGST Act. Counsel appearing on behalf of the respondents submits that requisite application has not been made before the concerned officer and accordingly the same should be made to the Assistant Commissioner(Preventive), Dinhata.
120 GIB/DL/PITAMBRA/21-01-2020/HC-119 PITAMBRA BOOKS PVT. LTD. VERSUS UNION OF INDIA & OTHERS REFUND Fact of the Case:

 

The petitioner is engaged in the business of manufacturing and trading of books, is registered under the Goods and Service Tax Act . The business involves procuring raw materials and allied goods from the domestic market for manufacture of final product through its in-house manufacturing facility, which is then exported to markets in Sudan, Russia, Ethiopia, Guinea and other African/Asian countries etc. The export activity of the petitioner is categorised as zero-rated supplies as defined under Section 16(1)(a) of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as “the IGST Act”).

 

The petition is filed on the following grounds:

 

The restrictions imposed in the Circular No.37/11/2018-GST dated 15.03. 2018 and Circular No. 125/44/19-GST dated 18.11.2019 Petitioner has been deprived of the benefit of availing refund claim of the unutilised input tax credit for the period from April, 2018 to June, 2018. This is causing serious financial hardship as more than Rs.30 crores of accrued and unutilised input tax credit, that is eligible for refund is now lying stuck. The implementation of the aforesaid circulars on the GSTN portal has occasioned the disablement of the option for filing the refund of tax.

 

REFER CASE:-PIONEER INDIA ELECTRONICS (P) LTD. VERSUS UNION OF INDIA

                            (GIB/DL/PIONEER INDIA/13-09-2013/HC-120)

 

                                                       &

 

                             RATAN MELTING & WIRE INDUSTRIES

                             (GIB/DL/RATAN MELTING/14-10-2008/SC-8)

 
121 GIB/MH/KAISH IMPEX/17-01-2020/HC-74 Kaish Impex Pvt. Ltd. Input Tax Credit Issue & Fact of the case:

 

The Petitioner-Kaish Impex Private Limited is a Company incorporated under the Companies Act, 1956. The Petitioner Company is engaged in the export of perfumes and compound fragrance oil. The Petitioner is registered under the Goods and Service Tax Act, 2017. The Petitioner, in pursuant of its activity of export, had carried out various transactions with different entities.

 

The Respondent-Authorities under the Act initiated an inquiry against an export firm in Delhi - Maps Global. The Respondent-authorities suspected that Maps Global was involved in fraudulent availing of Input Tax Credit, and this Input Tax Credit was utilized for payment of export goods, and later a refund was sought. The Respondent-authorities scrutinized the bank account of Maps Global and noticed that an amount of Rs.28,50,000/- was transferred to one Balajee Enterprises, on 19 June 2019 and 12 July 2019. The Respondent-authorities suspected these transactions were fictitious and no material was supplied to Maps Global. Further, according to Respondent-authorities Balajee Enterprises transferred an amount of Rs.1,63,00,000/- to the account of the Petitioner on 17 October 2019.

 

The Petitioner was summoned under section 70 of the CGST Act to give evidence and produce documents in the office of the Directorate General of GST Intelligence. On the same day, the Directorate General issued a communication to the State Bank of India informing the Bank Manager of proceedings being initiated against the petitioner and a provisional attachment of a bank account is necessary under section 83 of the CGST Act. Accordingly, the Bank Manager was directed that no debit be allowed to be made from the said account or any other account operated by the Petitioner. The Petitioner received a communication from the State Bank of India on 5 November 2019 regarding attachment by the Respondent-Authorities. Challenging this action of attachment under Section 83 of the Act, the Petitioner has moved the present Petition.
122 GIB/GUJ/Linde Engineering/16-01-2020/HC-125 Linde Engineering India Pvt. Ltd. Export of Services Facts & Issue of The Case:

The petitioner LINDE ENGINEERING INDIA PVT. LTD. is a Private Limited Company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of providing taxable output services under the category of consulting engineer services, erection, commissioning and installation service, construction services other than residential complex, including commercial/industrial buildings or civil structures and works contract services etc. to various entities located in and outside India. The Petitioner is subsidiary of Linde AG, Germany.

 

The petitioners received a communication dated 25-02-2016 from the Superintendent (R-II), Service Tax Division-II, Vadodara on the basis of the letter of Assistant Audit Officer/CERA-(iv), directing the petitioner to submit various documents.

 

The audit objections were on the following issues:


The Petitioner which was a 100% subsidiary of Linde AG, Germany, and which was rendering consulting engineering services outside India and claiming the benefit of export of service, without the payment of Service tax;
That during the scrutiny of records of the Petitioner for the period 2012-13 to 2014-15, it was found that the Petitioner was rendering services to other establishments of the Linde Group, more particularly Linde Engineering Gmbh and was raising an invoice in foreign currency
That the Linde Group Companies, including Linde AG, Germany would be establishments of the Petitioner, and therefore the provision of service by the Petitioner  would not fall within the ambit of 'Export of Service' under Rule 6A of STR and would therefore be and 'exempted service' in terms of the provisions of Rule 2(e) of the Cenvat Rules.”


 

The petitioner submitted its reply dated 13-05-2016 as under:


The transaction of provision of service by the Petitioner to the recipient outside India would clearly fall within the ambit of Rule 3 of the Place of Provision of Service Rules, 2012 (hereinafter referred to as “the PPSR”)
The petitioner would not be covered by any of the exceptions, namely Rule 4 to rule 12 of the PPSR
The provision of the service by the Petitioner  would qualify as 'Export of Service' in terms of the provisions of Rule 6A of the STR, and all conditions mandatorily required to be satisfied under the said Rule, stand satisfied by the Petitioner


 


The place of provision of the service, admittedly, was outside India, and the payment in relation to the same was also received in convertible foreign exchange
The Petitioner and the recipient of service, i.e. Linde AG, Germany are independent legal entities and that the latter are not an establishment of the Petitioner


 

The petitioner again received communication dated 18.08.2017, which was replied by the petitioner vide its reply dated 28.08.2017.

 

Thereafter, the petitioner was served with the show cause Notice dated 10.11.2017 based upon the observations of the Audit Officer and the petitioner was directed to show cause as to why an amount of Rs. 62,51,39,050/-, inter alia, should not be recovered for the period from 2012-13 to 2016-17.

Allegations as per SCN are:


Whether in terms of Explanation 3 to Section 65B (44) of the Act, a holding company of the Petitioner being Linde AG, incorporated in Germany, or any other subsidiary of Linde AG, can be construed as 'establishments of the Petitioner?

 
Whether in the facts and circumstances of the present case and on a reading of the provisions of Rule 6A of the Service Tax Rules, 1994 (hereinafter referred to as ”STR”)read with the provisions of Section 65B(44) of the Act, the constituting engineering services rendered outside India by the Petitioner to any other subsidiary of Linde AG or holding company would qualify as 'Export of Services' as contended by the Petitioner, or Exempted Service under Rule 2(e) of the Cenvat Rules, thereby requiring proportionate reversal of Credit under Rule 6A of the STR as is contended by the Department”?”


 
123 GIB/GJ/LINDE ENGINEERING/16-01-2020/HC-146 LINDE ENGINEERING INDIA PVT. LTD. & 1 other(s) Versus UNION OF INDIA Export Issue & Fact Of The Case-

The export of service requires fulfilment of certain conditions and if any one of the conditions is not satisfied, the transaction is not considered as export of service. The provisions in the erstwhile service tax regime and the GST regime regarding export of service are same and so in the present update, we wish to discuss the landmark decision delivered by hon’ble Gujarat High Court in the case of LINDE ENGINEERING INDIA PVT. LTD. & OTHERS VERSUS UNION OF INDIA [CIVIL APPLICATION NO. 12626 OF 2018] wherein the question raised was regarding provision of consulting engineering service by Indian company to its holding company situated in Germany was to be considered as export of service or not.

Before proceeding further, it is pertinent to refer to the relevant provisions in the erstwhile service tax regime in this regard as follows:-

Rule 6A of Service Tax Rules, 1994defined export of service as follows:-

6A. Export of services.-(1) The provision of any service provided or agreed to be provided shall be treated as export of service when,-

(a) the provider of service is located in the taxable territory,

(b) the recipient of service is located outside India,

(c) the service is not a service specified in the section 66D of the Act,

(d) the place of provision of the service is outside India,

(e) the payment for such service has been received by the provider of service in convertible foreign exchange, and

(f) the provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 3 of clause (44) of section 65B of the Act

Furthermore, explanation 3(b) of Section 65B(44) of the Act, 1994 reads as :

“an establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct persons”.

The petitioner was issued show cause notice alleging that the consulting engineering services provided by them to their holding company situated in Germany is not export of service and is to be considered as exempted service attracting provisions of credit reversal as per Rule 6(3) of Cenvat Credit Rules, 2004. Consequently, the petitioner filed writ petition challenging the show cause notice as contrary to the provisions contained in Rule 6A of Service Tax Rules, 1994 read with explanation 3(b) of section 65B(44) of the Act, 1994.

The revenue authorities contested the writ petition on the grounds of alternate remedy available to the petitioner after adjudication of show cause notice. However, the Hon’ble Court relied upon the decision of Apex Court in the case of Whirlpool Corpn. V. Registrar of Trade Marksreported in (1998)8 SCC page 1 and held that the writ petition is maintainable even in case of availability of alternate remedy in the following circumstances:-

where the writ petition has been filed for the enforcement of any of the Fundamental Rights or

where there has been a violation of the principle of natural justice or

where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged.
124 GIB/JK/NUVOCO/09-01-2020/HC-111 Nuvoco Vistas Corporation Ltd Classification Facts & Issue of the case

The petitioner “Nuvoco Vistas Corporation Ltd” is engaged in manufacturing and mining activities and they are bulk purchasers of 'high speed diesel', which they require for their manufacturing and mining activities. Admittedly, their end products do not come within the definition of 'goods' as defined under Section 2(d) of the Central Sales Tax Act, whereas 'high speed diesel', which they require in their manufacturing process, comes within the definition of 'goods' as defined under the CST Act. A Circular dated 11.10.2017 was issued by the State of Jharkhand, in its Commercial Taxes Department, denying the issuance of Form-'C' for all the items included in the definition of 'goods' given under Section 2(d) of the CST Act, including the 'high speed diesel',

The Circular had been issued on the pretext that after coming into force of the Goods and Services Tax regime in the State, w.e.f. 01.07.2017, all the six items, which were excluded in the Jharkhand Goods and Services Tax Act, 2017, and on which the liability to pay tax under the State GST Act was deferred till the notification issued under Section 9(2) of the said Act, were still governed by Jharkhand Value Added tax Act.

The dealers dealing in the goods, expect those six items were no more liable to pay tax under the JVAT Act, and as such, their registration under the JVAT Act had come to an automatic end w.e.f. 01.07.2017.

 
125 GIB/KR/ABBOTT/07-01-2020/HC-39 Abbott Healthcare (P.) Ltd. Others Issue Involved:

Whether the provision of specified medical instruments to unrelated parties like hospital(s), Lab (s), for use without any consideration, constitutes a "supply" or whether it constitutes "movement of goods otherwise than by way of supply" as per provisions of the CGST/SGST Act, 2017?

Fact of the Case:


Applicant is engaged in provision of diagnostic instruments at the premises of hospitals, laboratories etc. for their use for a specified period without any consideration and supply of specified quantities of reagents, calibrators, disposables etc. through its distributors on payment of applicable GST.
The applicant primarily thought to obtain an Advance Ruling on whether provision of specified medical instruments by the applicant to unrelated parties like hospital(s), Lab(s), for use without any consideration, constitutes a 'supply'. The AAR held that the placement of specified medical instruments to unrelated customers for their use without any consideration for a specified period constituted a 'composite supply' and AAAR also confirmed said order.
The applicant aggrieved from the ruling AAAR file this writ petition before the Hon’ble Court challenging the ruling of AAAR.

126 GIB/KL/ABBOTT HEALTHCARE/07.01.2020/HC-206 ABBOTT HEALTHCARE PRIVATE LIMITED Classification of Supply FACTS OF THE CASE:

In this case petitioner is engaged in the sale of pharmaceutical products, diagnostic kits etc. and it is registered under the Goods and Services Tax Act in the State of Kerala. It places its diagnostic instruments at the premises of unrelated hospitals, laboratories etc. for their use for a specified period without any consideration. The petitioner also enters into Reagent Supply and Instrument Use Agreements with various hospitals, laboratories etc, where under, the arrangement between the parties is for the supply of medical instruments to the hospital/laboratory concerned, for their use, without any consideration for a specified period and for the supply of specified quantities of reagents, calibrators, disposables etc. at the prices specified in the agreement, through its distributors on payment of applicable GST.

It is stated that, as per the agreement, while the supply of instruments is by the petitioner, the supply of reagents, calibrators and disposables are effected by its distributor, who purchases the said products from the petitioner on principal to principal basis. When the distributor supplies the reagents, calibrators and disposables to the hospitals/laboratories concerned, the distributor discharges the applicable GST on the price charged for supply of the said products. It is also stated that the value of instruments placed at the premises of the hospitals/laboratories compared to the total turnover of supply of reagents, calibrators and disposables by the distributor over the contract period, is small and would only be around 20% of the turnover of supply of reagents, calibrators etc. The agreement entered into between the parties also contains a clause which provides that if the hospital fails to purchase specified minimum quantum of reagents, calibrators etc., then the petitioner is entitled to recover from the hospital an amount equal to the deficit in the actual purchases, vis-a-vis, the minimum purchase stipulated under the contract.

It would appear that when a consignment of instruments was being transported to a laboratory without any consideration, pursuant to the agreement entered into between the parties, the same was seized by the Assistant State Tax Officer, Kozhikode, on the ground that the goods were not accompanied with a tax invoice but were being transported under a delivery challan.

ISSUE OF THE CASE:

Whether in the facts of the present case, the provision of specified medical instruments by the Applicant to unrelated parties like hospital(s), Lab (s), for use without any consideration, constitutes a “supply” or whether it constitutes “movement of goods otherwise than by way of supply” as per provisions of the CGST/SGST Act, 2017?
127 GIB/TN/REFEX/06-01-2020/HC-50 REFEX INDUSTRIES LIMITED INTEREST Facts & Issue Involved:

The Petitioners are registered and have admittedly filed Returns of Income belatedly for the period 2017-2018. The Respondent have issued two Communications dated May 7th, 2019 (in W.P .No. 23360 of 2019) and May 15th, 2019 (in W.P.No.23361 of 2019) computing the delay in filing of Returns and consequently the interest to be remitted on the tax amount shown in the Returns. 

Demand notices were issued to the Banks of the Petitioners seeking to recover the arrears of interest from the balances in their accounts. The petitioners objected stating that they had sufficient Input Tax Credit (ITC) available with the Department and thus interest could be demanded, if at all, only on the cash component of the tax remitted belatedly. This amounted to a sum of ₹ 1,21,701/- (in W.P.No.23360 of 2019) and ₹ 1,25,751/-(in W.P.No.23361 of 2019) and the amounts have been remitted on 14.06.2019.

Though the petitioners have raised other grounds as well, including one of the violation of principles of natural justice, the only issue agitated is the legal issue as to whether interest would at all be payable on the component of ITC that was, admittedly, available with the Department throughout and that has been adjusted towards the tax demands for the period August, 2017 to March, 2018.

Whether Interest Liability in GST arises only on net tax liability, which was paid in cash?
128 GIB/GJ/Anmol Traders/27-12-2019/HC-17 M/s Anmol Traders Inquiry & Investigation Issues Involved:

Who can conduct valid Inquiry under GST-Center or State, if jurisdiction is under State. Whether both authorities can conduct parallel investigations.  

  

Fact of the Case:

Investigation had been commenced by the officer under the CGST Act. Summons also issued by SGST authority later. Further State Authorities was also asked to the petitioner that what was the status of search carried out by the CGST Department also asked about seizure of books by the CGST Department. It means SGST Department was aware of the fact that another inquiry had been carried by CGST Department. Petitioner submitted that there cannot be two parallel investigations under the State Act as well as the Central Act. 
129 GIB/Guj/Paresh Nathalal Chauhan/24-12-2019/HC-156 Paresh Nathalal Chauhan v. State of Gujarat Search & Seizure Fact & Issues Involved:

 

The Hon’ble High Court observed that as per the panchnama, the family members of the assessee were under house arrest for 8 days. There is no provision under the GST Act which empower the authorized officer to confine family members in this manner and to interrogate them day and night. In the given case, the authorization was for search and seizure of goods liable for confiscation, documents, books or things. Continuous stay of the officers for so many days was not for search of the premises but to search the assessee to obtain information of the place where the documents could have been secreted by him, was totally unauthorized as it was not backed by any statutory provision. Hence, the concerned officer converted it into a search for a person and investigation, which was not backed by any statutory provision.
130 GIB/GUJ/SYNERGY/23-12-2019/HC-69 Synergy Fertichem Pvt Ltd E-way Bill Issues Involved :

Non Availability of E – Waybill when demanded.

Fact of the Case:


Petitioner is a Private Limited Company engaged in import and sale of ceramic pigment ink which is used as colouring substance in the tiles manufacturing industry.
The transporter duly produced all documents relating to goods including bill of entry for home consumption evidencing payment of IGST on the transaction.
The truck with the goods were detained by the learned officer on the ground of absence of e-way bill in respect of the goods.
Whether proceedings for confiscation can be initiated without first following the procedure laid down under Section 129 of the CGST Act?
Whether procedure and proceedings for confiscation are permissible even after the procedure of Section 129 of the Act was followed i.e., the amount was paid by the concerned person?
Whether it is permissible in law to order confiscation once they are released under Section 129 of the Act on payment of the amount of tax and penalty i.e. when the authority was not in physical possession of both?




 
131 GIB/KR/KALPAKA/20-12-2019/HC-91 Kalpaka Distributors Pvt. Ltd TRAN-1 Facts  & Issue Of The Case :

The petitioner is an assessee under the Kerala value added tax act, 2003, for the purpose of migrating the credit to the GST, the petitioner had to file a declaration in form GST TRAN-1 on or before 27.12.2017. Due to technical glitch, the petitioner was unable to upload the necessary details in the GST web portal. His request didn’t got any success made by him before the respondent authorities.  

As petitioner didn’t compiled with the required proceedings before the prescribed cut off date. In the communications received by him from the respondents have denied them to facilitate transferring of credit on account of a technical lapse that was occasioned at the instance of the respondents. The petitioner case is stated as no technical error or issue has been observed in GST logs, TRAN-1 is successfully save by the petitioner and did not saved the filing of TRAN-1.
132 GIB/PN/ADHUNIK/19-12-2019/HC-112 Adhunik Crop Care Private Limited Search & Seizure Facts & Issue of the case

The Petitioner, “Adhunik Crop Care Private Limited” is a manufacturer of insecticides. The Petitioner through this writ petition is seeking disposal of goods lying seized in its factory and direction to DGCEI to pay value of goods, which have expired and could not be sold due to seizure.

On 01.10.2015 a team of officers of Directorate General of Central Excise Intelligence (for short ‘DGCEI’) searched various premises of Petitioner and on 17.11.2015 seized stock worth MRP Rs.3.60 Crore which was lying in different godowns as well Ambala Factory of Petitioner. The Petitioner time and again requested Respondent to release seized stock and DGCEI ordered to provisionally release goods subject to payment of duty, furnishing of bond of Rs.2.52 Crore i.e. 70% of MRP and bank guarantee of 63,00,688/- i.e. 25% of bond value. Petitioner contended that on account of seizure and delayed release, the goods in question expired. There was expiry date of seized goods and on account of seizure, the season for sale was over and before the next season goods became unfit for sale.

The Petitioner to avoid rent after seeking permission from Respondent shifted seized goods from godown to factory and as on today are lying in the factory. The Petitioner contends that they could not sell goods worth MRP Rs.3.2 Crore and DGCEI is responsible for the loss of goods and thus prayer is for awarding market value of seized goods. Petitioner supported his contention with the judgment in the case of Grosons Marketing (P) Ltd. Vs Joint Director, D.G.C.E.I., Ludhiana.

DGCEI contended that there was no delay on the part of department. The goods were seized on 17.11.2015 and thereafter at the earliest ordered to be released on 13.04.2016. The Petitioner did not take release and filed writ before this Court and even after modification of conditions by this court did not avail release and sell goods. There is no lapse on the part of Respondent; and show cause notice dated 9.5.2016 qua confiscation is pending before Adjudicating Authority.
133 GIB/GJ/Synpol/19-12-2019/HC-8 M/s. Synpol Products Pvt Ltd SVLDR SCHEME Issues Involved:

Whether the Sabka Vishwas Legacy Dispute Resolution (SVLDR) Scheme 2019, would also be applicable to cases involving confiscation and redemption fine??

 

Fact of the Case:

Petitioners had submitted that under the Scheme declarant is not liable to pay further duty, interest or penalty but scheme is silent about fine. Petitioners had also submitted that the flyers issued by CBIC allows for total waiver of interest, penalty and fine and immunity from prosecution. Application of the petitioners rejected stating that the same involve confiscation and redemption fine.
134 GIB/KR/MCP ENTERPRISES/18-12-2019/HC-91 MCP Enterprises Vs State of kerela Section 25(1) of KVAT Act Facts & Issue of the case

In the writ petitions filed by the petitioner “M/S. MCP ENTERPRISES” claimed that the period envisaged for re-opening of assessments under Section 25 of the KVAT Act had expired by the time the notices for re-opening assessments, invoking Section 42(3) of the KVAT Act, were issued to them.

The petitioner holds that the retrospective operation of Section 42(3) would entail the re-opening of assessments that were completed years ago, and in relation to which assessment years they do not have the relevant Books of account and other records to defend their case against an allegation of escaped turnover. The said contention is based on the provisions of Rule 58(20) of the KVAT Rules, which obliges an assessee to keep his Books of account only for a period of five years from the end of the assessment year in question or two years from the date of disposal of the appeal or revision arising out of such assessments or from the date of completion of any other provision under the Act connected with such assessment, appeal or revisions whichever is later.

The power to assess escaped turnover under Section 25 has, however, to be exercised within the period stipulated under the Act for the exercise of such power. The said period was five years from the end of the assessment year concerned till 31.3.2017, and was extended to six years from the end of the assessment year concerned thereafter.
135 GIB/JK/TARAPORE/17-12-2019/HC-107 Tarapore & Company Input Tax Credit Facts & Issue of the case

The petitioner “M/S. Tarapore & Company” is aggrieved by order passed by the respondent Assistant Commissioner of Commercial Taxes, Urban Circle, Jamshedpur, whereby the claim of Input Tax Credit of the petitioner firm has been rejected and interest has been imposed upon the petitioner firm, as provided under Section 30 of the Jharkhand Value Added Tax Act, 2005. The petitioner has also challenged the demand notice and the garnishee orders issued by the Sales Tax Officer, Jamshedpur Circle, whereby the Banks, in which the petitioner firm is having their accounts, were asked by the respondent authority to recover the amount of Rs. 20,21,801/- from the account of the petitioner and deposit the same in the Government Treasury.  The amount has already been withdrawn from the account of the petitioner firm, and deposited in the Government Treasury.

The petitioner firm, which is engaged in the work contract, and Sanatan Enterprises, both are registered under the JVAT Act. For the purposes of carrying out its business, the petitioner firm made certain purchases in the financial Year 2015-16, from M/s Sanatan Enterprises, for the total amount of Rs.1,08,91,031.81, on which the petitioner also made the payment of VAT to the seller, amounting to Rs. 11,89,744.13, for which the tax invoices were also issued to the petitioner firm by the selling dealer, i.e., M/s Sanatan Enterprises. In the return filed by the petitioner firm, the said amount of Rs.11,89,744.13 was claimed as ITC. However, during the scrutiny of the returns, it was found that the said amount did not reflect in the MIS as regards the return filed by M/s Sanatan Enterprises, from which, purchases were made. Accordingly, the notice under Section 33 of the JVAT Act was issued to the petitioner firm on 21.08.2017. In reply to the notice, the petitioner produced all the necessary documents, including tax invoices W.P. (T) No. 773 of 2018 and connected matter supplied to it by the selling dealer, in order to the satisfy the Assessing Authority that while making the purchases, the petitioner had discharged all the tax liabilities, and it was the selling dealer, who had not deposited the tax in the Government Treasury, for which the petitioner firm was not at all at fault.

The Assistant Commissioner Commercial Taxes, Urban Circle, Jamshedpur, came to the conclusion that the petitioner firm had made the purchases from M/s Sanatan Enterprises for the amount showed in this return, and had also paid the amount of VAT to the selling dealer, and it was in fact the selling dealer, who had not filed its return and deposited the amount in the Government Treasury. As such, the Assessing Authority disallowed the claim of ITC of Rs. 11,89,744.13, made by the petitioner firm, and interest was imposed upon the petitioner.
136 GIB/TN/J.Sheikh Parith/13-12-2019/HC-109 J.Sheikh Parith Others Facts & Issue of the case

Petitioner “J.Sheikh Parith” has filed Writ petition calling for the records connected with impugned notice of Directorate of Revenue Intelligence , quash the same, holding the impugned notice to be unlawful and against the principles of natural justice and consequently direct the respondent to provide the documents and details as sought for by the petitioner. The said show cause notice was issued by the Directorate of Revenue Intelligence to the Petitioner, M/s.Majestic Impex and M/s.SSP Enterprises and two others.

The case against the petitioner was that he used the Import-Export Code of M/s.Majestic Impex and M/s.SSP Enterprises and had cleared several consignments of goods by resorting to mis-declaration in the value of the imported goods. The show cause notice called upon the petitioner and other notices to show cause as to why the classification adopted, the exemption claimed and the value declared should not be rejected and to show cause as to why differential duty should not be demanded and why penalty should not be imposed on the notice.

Petitioner further states that DRI had recorded statements from several officers of the customs department but has not furnished the same and therefore in absence of these documents, the petitioner is unable to effectively defend himself in the show cause notice. So, Petitioner had requested for 3 months to file a reply to the notice and requested the DRI to return the documents seized to enable it to prepare the reply.

It was also submitted by the Petitioner that during the interregnum Section 28 of the Customs Act, 1962 has been amended with effect from 28.3.2018 with the insertion/substitution of sub clause (9) to Section 28 of the Customs Act, 1962 and SCN is deemed to have abated in absence of adjudication and therefore the Petitioner has prayed for a declaration declaring the SCN proceedings as having been abated.
137 GIB/KR/Baiju A.A./06-12-2019/HC-83 Baiju A.A Vs State Tax Officer Section 25(1) of KVAT Act Facts & Issue of the case

The contention of writ petitioners is that, under the provisions of Section 25 (1) of the KVAT Act, as it stood prior to its amendment with effect from 01.04.2017, the limitation period for re-opening an assessment under the Act was five years from the end of the relevant assessment year, and no notices had been served on the assessees within the said period, the subsequent amendment that increased the period of limitation to six years would not confer a jurisdiction on the assessing authorities to re-open an assessment that had become final by 31.03.2017.

It is pointed out, with reference to the decisions in Garikapati Veeraya v. N.Subbiah Choudhry - [AIR 1957 SC 540], S.S. Gadgil v. Lal & Co. - [AIR 1965 SC 171], I.T.O., Ahmedabad v. Devshankar Bhatt – [AIR 1969 SC 778], State of Punjab and Others v. M/s. Shreyans Indus Ltd., etc. - [AIR 2016 SC 1185] and Commercial Tax Officer, Anchal and Others v. S. Najeem and Another - [2018 (4) KHC 666 (DB)], that an amendment in a taxing statute cannot be viewed as retrospective in its operation so as to revive assessments that had already attained finality prior to the date of amendment.

Per Contra, authority said that the amendment brought in with effect from 01.04.2017, conferred on the assessing authorities the power to re-open assessments for assessment years up to six years prior to 01.04.2017.They relies upon the judgment of a Constitution Bench of the Supreme Court in S.C. Prashar and another v. Vasantsen Dwarkadas and others - [AIR 1963 SC 1356] to fortify his submission. He also places reliance on the decisions of this Court in Binu Gopinath v. State of Kerala - [2018 (2) KLT 991] and Paul Varghese v. State of Kerala – [(2005) 13 KTR 29 (Ker)] to suggest that the amendments brought about through the Kerala Finance Act, 2017 are retrospective in their operation.
138 GIB/WB/ BANSAL/05-12-2019/HC-66 BANSAL EARTH MOVERS PVT. LTD. E-way Bill Facts & Issues involved:

The petitioner is a company trading in heavy machineries. In the course of its business the petitioner had bought one Soil Compactor machine from M/s. JCB India Limited, Maharashtra for the purpose of selling the same in the local market pursuant to an order placed by M/s. Akash Enterprise. As per the petitioner, the machinery was sold to M/s. Akash Enterprise upon raising valid sale documents as required under the CGST Act, 2017 and the corresponding State Act. The sale invoice and the delivery challan was raised and the insurance policy in favour of the buyer had also been taken out. The vehicle was loaded with the goods and was accompanied with the relevant sale documents and the insurance policy documents. However, as per the petitioner the waybill could not be generated as the server of the GST Portal remained continuously nonfunctional.  the vehicle had left the premises of the petitioner at 4.15 p.m. and the waybill was generated at 5.10 p.m. vehicle had been intercepted at Phool Bari and because of the lack of the waybill the vehicle was detained by the relevant authorities.

Competent Authority detained goods of assessee under transport on ground that no e-way bill was tendered for goods in question. Thereafter he served penalty notice under section 129(3) to driver of vehicle and imposed penalty upon assessee?
139 GIB/DL/ARORA/05-12-2019/HC-1  M/S Arora & Sons Input Tax Credit Issue involved:

Before the introduction of the GST Act, as on 30.06.2017, the petitioner had a closing stock of pipes purchased from M/s Avon Steel Industries Private ltd, Petitioner was entitled to transition of credit of the amount of Excise duty in terms of Section 140 (iii) of the GST Act. the petitioner Petitioner file GST TRAN 1 for transitional credit of inputs held in closing stock within time period of 90 days, due to the technical glitch the time period extended up to 27.12.2017.The assesse  is unable to log on into system due to large no of assesses on the same day. Whether the petitioner is allow to file declaration in form GST TRAN 1, to enable it to claim of transitional credit of excise duty in respect of inputs held in closing stock on the appointed day.

 

Facts of the case:

Petitioner also relies upon on CBIC Circular No.39/13/2018. Petitioner relies upon several decisions of this Court to urge that the Court has granted reliefs to several other parties who were in similar situation.
140 GIB/KR/DAIWIK/04-12-2019/HC-41 Daiwik Motors Others Issue Involved –

 

Whether the detention of goods and vehicle by the Competent Authority on ground that transaction between parties was supposedly a stock transfer and was not a sale, since there was no transfer of ownership of goods to consignee was justified?

Fact of the Case –

 


Competent Authority had detained goods of assessee under transport and also vehicle on ground that transaction between parties was supposedly a stock transfer and was not a sale, since there was no transfer of ownership of goods to consignee.
Assessee filed writ petition seeking relief in this regard on the ground that definition of supply under section 7 was not confined to transactions of sale but included transfer for other purposes also, therefore, detention of goods and vehicle was unjustified.

141 GIB/JK/Godavari/03-12-2019/HC-5 Godavari Commodities Ltd Others Issues Involved :

Whether SCN u/s 73(1) is required for arrear of interest due to not depositing of tax within time to Government Account.

 

Fact of the Case:

Petitioners had issued a letter of intimation for payment of interest on delayed payment of GST. The petitioner was also asked to make the payment within 3 days of the receipts of the letter. Pursuant to the issuance of this demand, the bank account of petitioner company was frozen and upon the payment of the aforesaid amount, the account had been defreezed. The Petitioner company had credited the amount of tax and interest thereon in their electronic credit ledger beyond the prescribed date of payment, but the actual payment in the Government Account was made even later, and the interest had been paid by the petitioner company, only till the date and the amount was credited in their electronic credit ledger.
142 GIB/KR/Banerji/29-11-2019/HC-2 M/S. Banerji Memorial Club Registration Issue Involved:

Petitioners had filed an application for migration. Instead of mentioning the provisional GSTIN that was earlier granted to the petitioner, the petitioner inadvertently showed the new GSTIN that had been allotted to him in July 2018. This led to the respondents (revenue) taking a stand that the migration to the GST to cover the period from July 2017 onwards could not be accepted. Whether it is valid under the Law??

Fact of the Case :

Petitioner had service tax registration during the pre-GST period and transitional accumulated credit of service tax on the date of migration. He applied to migrate in GST Regime and allotted him provisional GSTIN. Due to non-completion of registration process within given time limit, GST Authority had cancelled the GSTIN. Further on request of petitioner, GST Authority had allotted a regular GSTIN in July’ 2018. Further, through a notification, GST Department extend the due date for complete the migration process till 31.08.2018. Refereeing the above notification, petitioner had made application for migration to GST but in place of provisional GSTIN, petitioner mentioned regular GSTIN allotted in Jul’ 2018. Due to this erroneous mistake, GST Authority did not accept to migrate the GSTIN w.e.f. July’ 2017 by communicating that the application for migration was belated i.e. not completed within extended time limit.
143 GIB/KR/Haier/28-11-2019/HC-3  M/S. Haier Appliances India Pvt Ltd E-way Bill Issues Involved :

Due to discrepancy in value of commodity in Invoice and E-way Bill, the GST Officers had detained the goods and vehicle considering undervaluation of goods by heavy discounts??

Fact of the Case :

Petitioner were transporting goods through various invoices and copy of E-way Bill. There was discrepancy in value of commodity as shown in Invoice and E-way Bill. In Invoices the value of the Commodity was showing Rs. 25.60, whereas in the E-way bill, it was shown as Rs. 25.66. The GST Authority detain the commodity by questioning that the commodity in question was undervalued by the vendor by offering excessive discounts to the purchaser. Accordingly issued MOV-07 and MOV-09. 
144 GIB/DL/Sales Tax Bar/28-11-2019/HC-4  M/s. Sales Tax Bar Association GSTN-Portal Issues Involved:

Responsibility of the Chairman and the CEO, GSTIN till the constitution of Public Grievance Committees (PGC)

 

Fact of the Case :

Petitioners had submitted that “IT Grievances Redressal Mechanism”, was required to deal with all kind of grievances, including individual grievances relating to the working of the GSTN. The respondents are in process of constituting Public Grievance Committees (PGC) at the local and Commissionerate level. Petitioner had also submitted that the respondents should clearly state that how and when the PGC would be constituted, what would be the structure and qualifications of the persons who would be part of the said PGC and also the mechanism that these committees would adopt to ensure that the grievances are adequately addressed and do not remain unaddressed. Petitioners had also submitted that various persons are raising tickets from time to time on issues with which they are confronted.
145 GIB/KR/Polycab/27-11-2019/HC-7 M/s. Polycab India Limited E-way Bill Issues Involved:

E-way Bill in nature of Bill to/Ship to Model.

 

Fact of the Case:

Petitioner were transported goods through invoices and copy of E-way Bill. The transactions in question involved a sale from the vendor in Gujrat, to the purchaser in Uttarakhand and the goods were consigned to a destination in Trivandrum. The tax invoice and E-way Bill issued for this transaction is correct. The invoice and E-Way bill is prepared based on the concept of Bill to Ship Model as issued by GST Department. The E-way Bill that was prepared for covering the transportation also indicated the same details. As mentioned in the invoices, the consignee of the Kerala was indicated as an unregistered dealer at the time of detention of goods, however in actual the consignee was registered and produced the copy of RC after the detention of goods.
146 GIB/KR/AMM Aquapure/27-11-2019/HC-6 M/S. AMM Aquapure Systems E-way Bill Issues Involved:

Will detention on the ground that E-way bill did not indicate the correct number of the vehicle that was carrying the goods fall under non-compliance with the provisions of Section 129 of the CGST/SGST Act.

Fact of the Case:

The Petitioner had carrying the goods were detained along with the vehicles on ground that the E-way Bill did not indicate the correct number of the vehicle that was carrying the goods. Petitioner subsequently filed E-way Bill with correct number of vehicle but the same was not available at the time of detention but produced before the authority immediately thereafter.
147 GIB/KN/Arvind Lifestyle/27-11-2019/HC-11 M/s Arvind Lifestyle Brand Ltd TRAN-1 Issue Involved:

Non uploading of TRAN-2 due to bonafide mistake or inadvertence in filed Form GST TRAN-1.

 

Fact of the Case:

The petitioner - Company is engaged in trading and supply of branded clothing and holding a plethora of fashion brands under their aegis. The petitioner filed Form GST TRAN - 1 on 30.11.2017 to avail credit of the eligible duties in respect of inputs held in stock on the appointment day in respect of which duty paying documents were available. The petitioner attempted to file FORM GST TRAN - 2 on 28.03.2018 so as to carry forward credit to the extent of Rs.76,63,789/- but could not upload the Form due to technical error in not filling the details of inputs held in stock in table 7B of FORM GST TRAN – 1. Firstly, the petitioner made complaints to CBIC seeking redressal of the technical glitch. Further approached to Assistant Commissioner seeking redressal of the technical glitch and to enable the petitioner to file FORM GST TRAN – 2. Also submit before the judge that at the time of filing FORM GST TRAN - 1, the portal of FORM GST TRAN - 2 was not yet opened. The petitioner by inadvertence has not mentioned the quantity of the goods held in stock in column 7B of FORM GST TRAN -1.
148 GIB/ASM/Md. Tajal Hussain/25-11-2019/HC-94 MD Tajal Hussain Vs. State Of Assam And ORS Others Facts & Issue of the case

The petitioner Md. Tajal carrying on the business of areca nuts. On 21.08.2019, the police officials of the Jalukbari Police Station upon receiving certain information that trucks carrying areca nuts from Cachar district were moving without proper documents, had detained 25 Nos. of trucks. Subsequently one more truck was detained.

 

On 22.08.2019, a team of police officials proceeded to Cachar and Karimganj districts to enquire about the details of the trucks. But upon enquiry, the identity of the consignors could not be ascertained and some of the consignor firms were also found to be fictitious. According to the police officials, their investigation revealed certain manipulation of records and forgery of documents in the entire process.

 

In the resultant situation, the ejahar dated 03.09.2019 was lodged by Sanjit Kumar Roy, Inspector and Officer-in-Charge of the Jalukbari Police Station. The ejahar stated in detail as regards the particulars of the various owners of the seized trucks and centered around the aspect that in respect of most of the truck owners’ certain discrepancies were found. One of the core allegations made in the ejahar was that the documents pertaining to payment of goods and service tax (GST) were not found in order and, therefore a view was formed that the appellants were involved in evasion of GST dues. Another allegation in the ejahar was that the documents submitted by them were not genuine and were forged with fake signatures. The allegations made in the ejahar dated 03.09.2019 if taken at its face value, would entail a proceeding against the appellants under the GST laws for the purported evasion of the GST dues and with regard to the allegation that the documents were not genuine and were forged with fake signatures, it would entail a prosecution under the Code of Criminal Procedure (for short CrPC) for having committed an offence under the Indian Penal Code (for short IPC

 

The petitioner took the stand that under Section 67 of the Assam Goods and Services Tax Act, 2017 (for short, AGST Act 2017), the search and seizure can be made only upon the proper officer, being not below the rank of Joint Commissioner, having reason to believe that tax input credit has been claimed in excess of the entitlement under the Act or there has been an evasion of tax payable under the Act. Accordingly, it was the contention that the search and seizure made by the police officials of the Jalukbari Police Station and then go ahead with the investigation and thereafter lodge an ejahar alleging evasion of GST dues, would be an aberration of the established procedure of law.
149 GIB/WB/Mrinal Ghosh/21-11-2019/HC-10 Mrinal Ghosh TRAN-1 Issue Involved:

Non filing of TRAN-1 within the specified time limit due to the system of Taxpayer was down.

 

Fact of the Case :

Petitioner had eligible duty on stock as on 30/06/2017 and he was also wanting to carry forward the same by filing Form GST TRAN-1. Petitioner could not file Form GST TRAN-1 on GST Portal because of his own system was down i.e. crashed. The matter was conveyed by petitioner to the Revenue on 9th Jan’ 2018, where the deadline for filing GST TRAN-1 was expired on 27th Dec’ 2017. Further petitioner has obtained a report, upon forensic examination of his system, which report confirms petitioner’s contention and also opined that the attempt of furnishing return of TRAN-1 of GST was attempted before the specified deadline.
150 GIB/TN/Precot Meridian/19-11-2019/HC-37 PRECOT MERIDIAN LIMITED REFUND Issues Involved:

Petitioner has filed writ Petition for eligibility of IGST Refund of Rs. 4,80,355/- for the goods Exported from India i.e. “Zero Rated Supply”?

 

Fact of the Case:

Petitioner exported zero rated supply after paying IGST & claims refund under section 16(3) of IGST Act. The petitioner wrongly availed higher duty drawback initially. Then he rectified the mistake by repaying it along with interest. based on Circular No. 37/2018-Customs, dt. 09.10.2018 “Contended that a person, who makes a conscious request for refund of duty drawback, is not entitled of IGST/ITC claims. Since the entire refund is system managed, once the exporter draws a higher duty drawback, the system automatically scrolls out IGST refund.
151 GIB/KR/Alfa Group/18.11.2019/HC-140 Alfa Group Vs. The Assistant State Tax Officer Others Facts & Issue of The Case:

The challenge in the Writ Petition is against Ext.P2 notice by which, goods belonging to the petitioner were detained in a parcel godown, on the ground that the value quoted in the invoice that accompanied the goods was low when compared to the Maximum Retail Price (MRP) of the goods. There is a further averment therein that the HSN code of the goods was wrongly entered. It is the contention of the learned counsel for the petitioner that the reasons given in Ext.P2 order of detention do not justify the detention of the goods under Section 129 or under Section 130, and therefore, a direction ought to be issued to the respondents to immediately release the goods belonging to the petitioner.

It was held that there is no provision under the GST Act which mandates that the goods shall not be sold at prices below the MRP declared thereon. Further, there is nothing in Ext.P2 order that shows that, on account of the alleged wrong classification of the goods there was any difference in the rate of tax that was adopted by the assessee. the statutory scheme of the GST Act is such as to facilitate a free movement of goods, after self assessment by the assessees concerned, the respondents cannot resort to an arbitrary and statutorily unwarranted detention of goods in the course of transportation. Such action on the part of department officers can erode public confidence in the system of tax administration in our country and, as a consequence, the country’s economy itself.

 
152 GIB/HR/AKHIL MAGGU/15-11-2019/HC-114 Akhil Krishan Maggu & Anr. Others Facts & Issue of the case

“Akhil Krishan Maggu” - Petitioner No.1 son of “Sanjeev Maggu”- Petitioner No. 2 as an Advocate, on behalf of four exporters filed Writ Petitions before Delhi High Court against DGGI seeking quashing of summons issued by Senior Intelligence Officer, Directorate General of GST Intelligence.

As per Respondent the exporters had availed huge amount of refund of IGST and they are dummy owners. Petitioner No. 2 was interrogated on 11.9.2019 & 12.9.2019 by DGGI and thereafter handed over to DRI, who arrested him. There is nothing on record showing admission by Petitioner No. 2 and no further statement has been recorded in jail though he is in judicial custody since 13.9.2019. Petitioner No. 1 has already put appearance on various occasions and there is nothing in file to show which indicates that Petitioner No. 1 was connected with alleged illegal refund sought by Exporters. The DGGI Respondent searched residence of Ramesh Wadhera-alleged owner of dummy export firms who happens to be neighbour of Petitioners. On the request of Ramesh Wadhera, Petitioners came to his residence and some commotion took place between Petitioners and official of DGGI. At the behest of DGGI, Police registered FIR dated u/s 186, 353 IPC against both the Petitioners and arrested them on the same day. Both were released on bail after a week incarceration. The DGGI lodged another FIR against Petitioner No. 2 under Section 186, 34 & 353 IPC alleging that petitioner called police at the time of search of his residence which amounts to obstruction in performance of official duty. The DGGI-Respondent directed Petitioners to appear before SIO to tender their statement in connection with export made by dummy export firms. Apprehending coercive action, the Petitioners approached this Court by way of present writ petition.

Petitioners claims that the Respondents want that Petitioner No. 1 should accept that he is involved in refund scam and that the Intention of Respondent is just to arrest which is evident from the fact that Respondent/DGGI remained silent when Petitioner No. 2 was in custody in FIR case and thereafter in DRI matter.

The Respondent contended that Petitioner No. 1 is neither cooperating nor answering questions asked by SIO. He is involved in the fraud and deserves no sympathy of this court. The exporters are not real owners of exporting firm and it is Petitioners who in connivance with Ramesh Wadhera and one Mukesh Kumar had created bogus/dummy firms and availed refund of IGST. The Petitioner No. 1 who earlier was customs clearing agent is mis-using his professional position and needs to be interrogated without cover of protection of this court.
153 GIB/TN/V.N Mehta/08-11-2019 /HC-104 V.N Mehta & Company Others Facts & Issue of the case

V.N Mehta & Company (“the Petitioner”) is a company who filed petition on the ground that proceedings was issued straightaway, even before making an assessment or at least initiating proceedings for making the assessment. It is the specific case of the petitioner that no proceedings whatsoever, was issued against the petitioner for determining either the tax, cess or interest or penalty totally amounting to Rs.53,28,645/- as claimed in the impugned proceedings. Therefore, it is contended that Section 79 of the Central Goods and Services Tax Act, 2017, cannot be invoked by the AC GST (Chennai) to recover the said sum as if, such sum is an arrear payable by the petitioner.

Hence, This writ petition was filed challenging the proceedings of the first respondent i.e  AC GST (Chennai)  dated 07.08.2019 addressed to the fourth respondent i.e The Manager (Indian Overseas Bank) through which, the fourth respondent was directed to recover a sum of Rs.53,28,645/- from the account maintained by the petitioner on the reason that the said sum on account of tax, cess, interest and penalty is payable by the petitioner under the provisions of the GST Act and that the petitioner had failed to make such payment.
154 GIB/TN/GE T & D INDIA LIMITED/07.11.2019/HC-207 GE T & D INDIA LIMITED Classification of Services FACTS AND ISSUE OF THE CASE:

In this case the petitioner is a dealer assessed to service tax by the respondent. The terms of employment of the petitioner company include a stipulation for a notice period prior to quitting from employment, ranging from two to three months. An option is provided to the employees to the effect that if they are not in a position to stay and serve out the notice period, then in lieu of the same, the employee will be required to pay the equivalent pay of salary for the period for which notice was not served.

The petitioner in this case had received certain amounts in lieu of notice period from outgoing employees. The Assessing Officer was of the view that this amount would attract service tax since the petitioner is deemed to have facilitated the termination of employment and thus a category of service entitled and described as 'facilitation of termination of employment' was carved out by the Assessing Officer.
155 GIB/DL/ Sudhir/06-11-2019/HC-38 Sudhir Kumar Aggarwal Others Issue involved :

 

Whether presence of a lawyer could be allowed to assessee at time of questioning or examination by officers of GST?

 

 

Fact of the Case:


The petition is filed by applicant under Article 226 of the Constitution of India for issuance of a writ of Mandamus directing the respondents not to cause any physical, mental or verbal harassment to the petitioner during the interrogation.
In this writ petition applicant prayed presence of lawyer at time of recording of statement by GST Authorities.
Learned standing counsel for the respondent submitted petitioner in the present case does not have clean antecedents.
It was further submitted by respondent that petitioner was being called for the purpose of questioning. It was, therefore, prayed that order dated 20.09.2019 be modified wherein the prayer of petitioner seeking presence of lawyer during examination by the respondent was allowed as this will frustrate the very purpose of the inquiry.

156 GIB/PN/ADFERT/04-11-2019/HC-67 ADFERT TECHNOLOGIES PVT. LTD. TRAN-1 ISSUE INVOLVED :

In many cases where TRAN-1 could not be filed or wrongly filed by Dec-27-2017 , would be allowed to carry forward their unutilized credits or not ?

FACT OF THE CASE :


Writ petition were filed by Various Taxpayers who are not being able to carry forward their unutilized credit of Duty Paid under (“CEA,1944) and Input Tax Credit of VAT Paid under Punjab VAT Act, 2005 (“PVAT Act”) or Haryana VAT Act ,2003 (“HVAT Act”)
Writ Petitions in 102 different cases were filed .


THE PETITIONER HAS MENTIONED THE FOLLOWING REASONS FOR WHICH THE WRIT HAS BEEN FILED :


(Reason for not filing or wrongly filing the form) – Press release showing last date Dec-31-2017 , Lack of proper Knowledge of computer System ,Complexity In filing different columns of TRAN-1, System Glitches ,Etc.
They also have contented that unutilized credits are vested rights of the taxpayers Which cannot be washed away ,and no section or rule of CGST Act provides that unutilized ITC would lapse, if TRAN-1 is not filed by Due Date .
Thus, refund in cash may be sanctioned in terms of proviso to Section 142(3) of CGST Act if it is held that petitioners are not entitled to carry forward unutilized ITC because they failed to file TRAN-1 by December 27,2017.

157 GIB/DL/Jian International /04.11.2019/HC-157 Jian International v. Commissioner of Delhi Goods and Services Tax Deficiency in refund application Fact & Issues Involved:

 

The Hon’ble High Court observed that as per Rules 90(2) and (3) of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) the department has to either point out discrepancy/deficiency in FORM RFD-03 or acknowledge the refund application in FORM RFD-02, within fifteen days from the date of filing of the refund application. In case deficiencies are found, then the same are communicated to the assessee, requiring the assessee to file a fresh refund application after rectifying those deficiencies. In the present case, the petitioner’s refund application is pending for processing. Neither acknowledgment nor deficiency memo has been issued within timeline of 15 days. Hence, refund application would be presumed to be complete in all respects as per Rule 89 of CGST Rules.
158 GIB/MP/Shailesh Rajpal/31-10-2019/HC-36 Shailesh Rajpal Others Issues Involved:

Whether looking to alleged huge tax evasion by assessee and keeping in view that investigation was going on, bail application deserved to rejected?

 

Fact of the Case:


The Applicant runs M/s Sai Sun, a Proprietorship Firm engaged in supply of services of recruitment and supply of Manpower services, cleaning services, housekeeping services etc. to its various clients.
The Applicant has not paid GST since 1st July 2017 against the payments received by the firm in accordance to the GST law and procedure and also not paid service tax before applicability of GST.
The Applicant was arrested on 17/9/2019 in connection with Crime No.01/2019 registered at Commissioner, for the offences punishable under Sections 132(1)(d) of Central Goods and Service Tax Act, 2017 and Sections 471 and 120-B of the IPC.
The Learned Counsel of respondent argued that even after knowing tax liability the applicant has deliberately suppressed their turnover to evade the GST amount collected by him from his clients.
The Learned Counsel of respondent further argued that the applicant has the history of forgery and submission of fake documents to the public authorities.

159 GIB/ GJ/Paresh /25-10-2019/HC-98 Paresh Nathalan Chauhan Others Facts & Issue of the case

The case pertains to search and seizure operations conducted by GST officials on the residential premises of the petitioner. Applicant Paresh Nathalan Chauhan filed the petition on following grounds:

 

The concerned officers authorised to carry out the search at the residential premises of the petitioner had stayed there from 11.10.2019 to 18.10.2019. A perusal of the record of the proceedings of the case reveals that on 11.10.2019 at 2:15, it has been recorded that after searching of the rooms in the premises, the records of the accounts were brought to the main room and gathered there which included the bank passbooks of the family members as well as cheque books and that verification thereof is continuing.

 

The proceedings thereafter do not reveal any further search carried out at the premises but reveal that the officers had stayed at the premises and had examined the phone calls that were received by the family members and had recorded their phone calls. They had also recorded statements of the family members of the petitioner on 11.10.2019.

 

The record further reveals that the officers who had arrived on the previous day as well as the panchas were relieved by new set of officers and panchas and this cycle continued till 18.10.2019. It appears that thereafter they have been questioning the family members of the petitioner on a day to day basis till 18.10.2019.

 

The Gujarat HC was displeased by the manner in which the search and seizure operations were conducted by the officials and recorded the following order.
160 GIB/GUJ/BHARATBHAI/10-10-2019/HC-57 BHARAT BHAI MANILAL PATEL INTEREST Fact & Issued Involved:

Petitioner Referring to the provisions of section 83 of the CGST Act, it was pointed out that the same can be invoked during the pendency of any proceedings under sections 62, 63, 64, 67, 73 or 74 of the said Act, however, in the present case, the C/SCA/17642/2019 ORDER impugned order of provisional attachment is totally silent as regards the section under which the proceedings have been launched. It was submitted that, therefore, the attachment of the bank account of the petitioner by the respondent is without any authority of law.

Reference was made to the impugned notice for attachment and sale of immovable/movable goods/shares under section 79 of the CGST Act, issued by the respondent whereby, goods worth Rs.85,73,002/- as well as the Shed of the petitioner have been attached, to submit that section 79 of the CGST Act, relates to recovery of tax which can be made provided there is only assessed liability. It was submitted that, without any assessed liability, the respondent has resorted to attachment of the goods of the petitioner under section 79 of the CGST Act, which is also without authority of law.
161 GIB/GJ/INDIA LOGISTICS /24-09-2019/HC-85 INDIA LOGISTICS AND CARGO MOVERS E-way Bill Facts & Issue of the case :

The petitioner INDIA LOGISTICS AND CARGO MOVERS a sole proprietorship firm, which is engaged in the business of transport, files a petition under Article 226 of the Constitution of India, challenging the notice issued in Form GST MOV-10 as well as the detention/confiscation order issued in Form GST MOV-11 and seeks a direction to forthwith release truck No.GJ-27-X-3752 along with the goods contained therein.

While goods were in transit in vehicle No.GJ-27-X-3752, goods were stopped by Mobile Squad and it was found that E-Way bill of 3 parties out of 61 Parties of which goods were being transported was not generated. The goods for which valid E-way bills presented were released and the vehicle with goods of the 3 invoices came to be detained on the spot by issuing notice in Form GST MOV 10 under section 130 of CGST Act, 2017 as well as GGST Act, 2017.The petitioner claimed that despite having agreed to pay tax and penalty as stipulated under section 129 there is continued detention /seizure of goods and vehicle and the same is wholly without jurisdiction, arbitrary and illegal. It was further submitted that the confiscation notice has directly been issued in under section 130 of the GST Acts without completing the procedure under section 129.

Opposing the petition, authority stated that the vehicle in question was confiscated in exercise of powers under section 130 of the Goods and Services Tax Act, 2017. The ground for confiscation was that E-Way bill was not traceable of 3 Invoices. It is further submitted by the authorities that out of 61 Invoices 14 invoices were not properly authorized. The authorities have, therefore, presumed that the said invoices are fake and are drawn with an intention to evade tax as neither the purchaser nor the suppliers have given any explanation in respect of the 14 invoices which do not bear any signature. So, on this basis the value of the goods has been increased by 20% for calculation of tax, penalty and fine u/s130.
162 GIB/GUJ/Mohd. Sahil Jakir/19-09-2019/HC-9 Mohd. Sahil Jakir E-way Bill Issue Involved:

Whether undervaluation of an Invoice can be a ground for detention of goods u/s 129 of CGST Act??

 

Fact of the Case:

Petitioner was transported goods. The person in-charge of the conveyance was carrying with him the documents and invoice as described under rule 138(A) of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the rules‘). The goods were detained by the GST Authority on ground that there is undervaluation of goods based on valuation of Stock prepared by Value Team Professional (Government Registered Valuer).
163 GIB/GUJ/SIDDHARTH/06-09-2019/HC-68 SIDDHARTH ENTERPRISES TRAN-1 ISSUE INVOLVED :

whether the petitioner is entitled to carry forward CENVAT credit balance as on 30th June 2017 under section 140 of the CGST Act 2017, in the absence of form TRAN-1 which is not filed.

FACT OF THE CASE :


 The Writ applicant is a partnership firm registered under CGST Act having its registered office at Bharuch ,state of Gujrat having the business of import and export and housewares.
Due to some reasons the petitioner was unable to file form GST TRAN-1. However the nodal officer has been informed that applicant can’t be permitted to file form GST TRAN-1 ,because as per the GST system logs the tax payer has neither tried for saving/ submitting or filing the form GST-TRAN 1.


THE PETITIONER HAS MENTIONED THE FOLLOWING REASONS FOR WHICH THE WRIT HAS BEEN FILED :


Form GST TRAN-1 could not be filed on account of the technical glitches in terms of poor connectivity and other technical difficulties of common portal.
The right to carry forward the CENVAT credit is a constitutional right.
The liability to pay GST on sale of stock carry forward from the previous tax regime  without corresponding input tax credit would lead to double taxation on the same subject matter and therefore it is irrational.

164 GIB/TN/SUTHERLAND GLOBAL/05-09-2019 /HC-103 Sutherland Global Services Pvt. Ltd. Input Tax Credit Facts & Issue of the case

M/s Sutherland Global Services Private Limited (“the Petitioner”) is a company providing Information Technology enabled services to customers worldwide. Prior to GST, the Petitioner was centralized registered in-service tax and was availing CENVAT credit on inputs, capital goods, and input services, utilizing the same against payment of service tax liability.

The Petitioner followed the procedure for carrying forward CENVAT credit availed under the erstwhile regime, set out in terms of Rule 117 of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”). The Rules provide that every person entitled to the input tax credit (“ITC”) under Section 140 shall submit a declaration electronically in Form GST Tran-1 within 90 days of the appointed date, being July 1, 2017, for carrying forward such credit to be utilized against turnover from taxable services.

The provisions of Section 140(8) of the CGST Act, 2017 (“CGST Act”) provide for Centralised Registration in respect of all the Petitioners’ units, pan India, and this was reflected in the Tran-1 return filed by it.

The request of the Petitioner for carry forward and utilisation of credit was rejected vide impugned order dated February 9, 2018 on the ground that credit could be set-off only as against the specific duties and taxes enumerated in the Explanation to Section 140(1) of the CGST Act read with Rule 117 of the CGST Rules. According to the Assessing Officer, since the explanation did not cover cesses such as EC, SHEC, and KKC, the same could not be carried forward. The Petitioner was thus directed to reverse the aforesaid credits. The Petitioner challenged the order dated February 9, 2018.

Petitioner’s contentions:


Section 140(8) of the CGST Act entitle it to avail utilization of the credits carried forward in a return relating to the period ending with the day immediately preceding the appointed day.
For the purpose of the Central Excise Act, 1944 and Rules framed therein, EC, SHEC as well as KKC are ‘credits’ and thus, in the light of the explanation to Section 140 of the CGST Act, such credits would also be eligible to be credited, transitioned and utilized.
The proviso to Section 140(1) of the CGST Act specifically delineates those circumstances/conditions under which credit availed may not be utilized and there is nothing thereunder, to militate against the availment in question.
The term used in Section 140(8) of the CGST Act is ‘CENVAT credit’ and not ‘eligible duties and taxes’. Therefore, even though Rule 117 of the CGST Rules refers to Section 140 of the CGST Act as a whole, on a conjoint reading, it becomes evident that the term ‘eligible duties and taxes’ is applicable only to credit sought to be transitioned under Section 140(5) of the CGST Act and not to other sub-sections.

165 GIB/KR/LALITHA/03-09-2019/HC-122 LALITHA MURALEEDHARAN Place of Supply Facts & Issue


The petitioner “LALITHA MURALEEDHARAN” is engaged in the manufacturing of natural and essential oils, food supplements, aromatic chemicals, etc. from an industrial unit located in the Madras Export Processing Zone. The said industrial unit is a notified Special Economic Zone (SEZ), i.e., 100% export-oriented unit.
The petitioner had participated in the e-auction of sandalwood conducted by the Government Sandal Depot, Marayoor (Kerala). Upon successful bidding, the taxpayer was asked to comply with the conditions of sale and pay the sale consideration, forest development tax, and IGST.
The petitioner filed a letter with the Forest Officer to obtain clarification regarding payment of IGST on the sale consideration. In response, the Forest Officer highlighted the relevant provisions of the IGST Act, 2017, and asked for payment of IGST on the goods purchased by the petitioner.
The taxpayer, being aggrieved by the IGST demand, filed a writ petition before the Kerala High Court. The petitioner contends that the demand of IGST is illegal and unauthorized.

166 GIB/GUJ/SAL STEEL/ 29.08.2019/HC-45 Sal Steel Limited REVERSE CHARGE MECHANISM
R/SPECIAL CIVIL APPLICATION NO. 14683 of 2019

Facts of the case:

• The petitioner is a manufacturer who imported various raw materials on CIF basis from overseas for the purposes of manufacture of finished products wherein the overseas supplier would incur costs towards ocean freight by engaging a shipping line.

• The Central Government issued two Notifications Notification No. 15/2017 – ST and 16/2017 – ST which casted responsibility to pay Service tax on reverse charge basis (RCM) on the importer. with effect from April 23, 2017. 

• The petitioners being importers did not pay Service tax under RCM. Department issued SCN for demand  of Service tax along with interest and penalty.

 

Ground:

 


The service for which tax is proposed to be collected under the impugned provisions is admittedly rendered and consumed outside India because the service is that of transportation of goods by a vessel from a place outside India upto the Customs station of clearance in India. 
• Section 94 does not confer any power on the Central Government to make rules for extra territorial events and hence the impugned provisions are also ultra vires the rule making power. • The importers in CIF contracts i.e. the writ applicants herein are neither service providers nor service receivers in respect of transportation of goods by a vessel from a place outside India upto the Customs station of clearance in India.
Section 68(1) and also the reverse charge Notification under Section 68(2) permit the Central Government to collect and recover service tax only from the person providing the service or from the person receiving the service, and not from a third party. The rule making power of section 94 also does not permit the Central Government to make rules in this regard.
Charging section has to be strictly interpreted, and not by way of inferences or presumptions about any indirect benefit to a person.
There are no machinery provisions in the Act. Section 67 provides that tax is to be paid on the value of service. In the present case since the value of ocean freight is not available on CIF contract, rule which provides an option to pay ST at 1.4% is ultra vires the machinery provisions of Section 67 and also rule making power under Section 94.

167 GIB/GUJ/VALERIUS IND/28-08-2019/HC-76 VALERIUS INDUSTRIES Input Tax Credit Issue & Fact of the Case:

Petitioner is engaged in the business of purchasing and selling the material of copper whereby the scrap material of copper is purchased and the being is melted and converted into the copper pipes before selling it into the market.

 

On 23.11.2018 a raid has been conducted in the premises of the petitioner.  The Revenue was of the view that there was a huge conspiracy and creation of bogus bills by the sellers and therefore the Revenue was to investigate the entire case.  The State Tax Officer issued the provisional attachment of the bank accounts of the petitioner and the properties.  Again on 27.11.2018 the raid was conducted in the premises of the petitioner and seized the sales and purchase register and files and bank/RTGS files.  On the same day the petitioner was issued with summons under section 70 of the CGST Act whereby the legal representative of the petitioner was directed to remain present on 18.12.2018.  The legal representative was not allowed to explain anything to the officers.  The Revenue informed that the petitioner would receive show cause notice to give the petitioner an opportunity of bearing heard. On 13.02.2019 the legal representative received an email from the Department in which it was informed that the input tax credit to the tune of  30,55,680/- has been blocked.   On 17.06.2019 the Commercial Tax Officer issued an order confirming the demand of  1.60 crores including tax, interest and penalty.  The petitioner challenged the said order, the blockage of the input tax credit and attachment of bank accounts before the High Court.

 

Grounds of Appeal:

 

The order of provisional attachment of property and under section 83 is without jurisdiction and not tenable in law.

The power to order provisional attachment with a view to protect the interest of revenue under section 83 has been conferred upon the Commissioner.

The action on the part of the Department in blocking the credit balance of  30,55,680/- by a computer entry could also be absolutely illegal and not tenable in law.

The order passed by the Department on 17.06.2019 is also illegal, arbitrary, unjust and contrary to the provisions of section 74 of the Act.

The impugned order dated 17.06.2019 has been passed without affording an opportunity of hearing to the petitioner, which is violative of the principles of natural justice.

 
168 GIB/GUJ/A A P & CO./28-08-2019/HC-56 A A P & CO. INTEREST Fact & Issues Involved: 

Whether the return in Form GSTR-3B is a return required to be filed under Section 39 of the CGST Act/GGST Act?

Whether the Press release is valid and in consonance with Section 16(4) of the CGST Act/GGST Act only if Form GSTR-3B is a return required to be filed under Section 39 of the CGST Act/GGST Act.

 


As per Section 16(4) of the CGST Act/GGST Act states that the last date for taking the ITC by a registered person in respect of any invoice or debit note pertaining to a financial year is due date of furnishing of the return under Section 39 for the month of September following the end of financial year or furnishing of the relevant annual return, whichever is earlier.
That Rule 61(1) of the CGST/GGST Rules provides that every registered person except a few categories of registered persons shall furnish a return specified under sub-section (1) of Section 39 of the CGST/GGST Act in Form GSTR-3. Further, 61(5) of the CGST/GGST Rules provides if the circumstances so warrant, the Commissioner may, by notification, specify the manner and conditions subject to which the return shall be furnished in Form GSTR-3B. It indicates that return prescribed in terms of Section 39 is a return required to be furnished in Form GSTR-3 and not GSTR-3B.
That Rule 61(5) of the CGST Rules was retrospectively amended with effect from July 1, 2017 vide Notification No.17/2017 – Central Tax dated July 27, 2017 to omit the wordings return in Form GSTR-3B being in lieu of Form GSTR-3.
That it would be obvious from a conjoint reading of Rule 61(1) and Rule 61(5) of the CGST/GGST Rules and the aforesaid Notification that the return required to be furnished in Form GSTR-3B is not the return in lieu of a return specified in Form GSTR-3.
That Rule 61(6)(c) of the CGST/GGST Rule states that if any ITC is taken after filing of the Form GSTR-3B return and it is reflected in return filed in Form GSTR-3 then the same will have to be credited to the electronic credit ledger of the registered person. Further, the discrepancies, if any, in discharge of his tax and other liabilities can also be rectified through the return filed in Form GSTR-3.
That the decision to add return in form GSTR-3B was taken to shorter return for the first two months of roll out. It has not been introduced as a return in substitute of return to be filed in form GSTR-3. Therefore, it is quite obvious that return in form GSTR-3B is only a temporary stop gap arrangement till the due date of filing return in form GSTR-3 is notified in the GSTN portal. Further, it is quite obvious that the return to be filed in form GSTR-3 is the final return for taking additional ITC as well as discharging of additional tax liabilities after filing of return in form GSTR-3B. Therefore, the last date for availing the ITC relating to the invoices issued during the period from July 2017 to March 2018 is the last date for filing of the return in form GSTR-3 and not GSTR-3B.
That the impugned Press Release is without the authority of law, unreasonable, illegal and void.


 
169 GIB/MP/Om Trading/27-08-2019/HC-15 M/s Om Trading Co. Registration Issues Involved:

Cancellation of GST Registration in case assessee had purchased certain items from a dealer and failed to prove that items were physically transferred from One location to another location.

 

Fact of the Case:

Petitioner, a dealer registered under the Central Goods and Services Tax Act, 2017 had purchased 8100Kg clarified Butter (Ghee) through bill No. 53 on 31/07/2018 amounting to Rs.23,49,000/- and 1000 Tin of Clarified Butter through bill No. 54 amounting to Rs. 40,50,000/- from one M/s Marco International, Kachari Ghat, Agra, who had issued e-way bill. Show cause notice was issued on 05/10/2018 as it was found that the E-way bill was issued without supply of goods. Further petitioner had failed to prove his e-way bill transaction details. Due to this issue his registration had been cancelled by order dated 09/01/2019 after issuance of opportunity of being heard.
170 GIB/GJ/VIMAL YASHWANTGIRI/07-08-2019/HC-105 VIMAL YASHWANTGIRI GOSWAMI Others Facts & Issue of the case:

The petitioner, Vimal Yashwantgiri Goswami is a proprietor of a firm called Heugo Metal deals in steel goods, approached the High Court apprehending an arrest by the GST authorities invoking powers under section 69 without following due procedure of law of assessment and adjudication of alleged evasion of GST as contemplated under Section 61, Section 73 of under Section 74 of Central GST Act. Goswami approached the HC through advocate Chetan Pandya, who argued before the HC that there is a laid down procedure in the law for the department to determine tax liability of a trader.

The applicant has placed strong reliance on the decision of the Delhi High Court in the case of MAKEMYTRIP (INDIA) PVT. LTD. vs. Union of India, well as on the decision of the Madras High Court in the case of M/s. Jayachandran Alloys (P) Ltd. vs. The Superintendent of GST and Central Excise

In the two decisions referred above, emphasis has been laid on the mandate that no person shall be deprived of his life and liberty for the authority of law. The two High Courts have extensively relied upon the decision of the Supreme Court in the case of D.K. Basu vs. State of West Bengal.
171 GIB/UK/TIMBER/06-08-2019/HC-64 AGARWAL TIMBER SUPPLIES E-way Bill Issues Involved:

Instead of raising two separate e-way bills for two separate consignments, had raised one e-way bill for the total amount on both the consignments.

Facts of the case:

Petitioner purchased timber from the Uttarakhand Forest Development Corporation, the invoice raised by the said authority. Both CGST and SGST were charged on the sale price of the goods. While the goods of the appellant-writ petitioner were in transit, they were seized and, on the ground that only one e-way bill was issued instead of two, a penalty of Rs. 1,70,688/- was sought to be levied on the appellant-writ petitioner. Penalty should have been paid by the corporation.
172 GIB/KN/LC INFRA/22-07-2019/HC-59 LC Infra Projects Pvt. Ltd. INTEREST Fact & Issue Involved:

The petitioner is a dealer registered under the provisions of the Goods and Service Tax (GST) Act, 2017 (hereinafter referred to as the ‘Act for short). The petitioner was entitled to claim the Input Tax Credit for the GST paid by the sub-contractors while filing its GST returns. Since some of the sub-contractors had not uploaded the invoices and filed their returns as a result of which ITC to which the petitioner was entitled to was not being tallied.

The third respondent addressed an e-mail seeking clarification of availments of ITC. The third respondent contended that there was an excess availment of ITC to the tune of Rs.2,62,48,383/-. The petitioner pointed out that the ITC differential credit is not pertaining to the petitioner, relating to the tax period in question. The petitioner has been levied tax on the unpaid tax without issuing Show Cause Notice and thereafter, the Demand Notice has been issued claiming the tax amount of Rs.13,63,864/- and interest amount of Rs.81,29,684/- payable by the petitioner. The third respondent vide its letter dated 07.05.2019 has sought for attachment of the bank.

 

 

 
173 GIB/KR/West Bengal Lottery/19-07-2019/HC-12 M/s West Bengal Lottery Stockists Syndicate Pvt Ltd Registration Issues Involved:

Where assessee had applied for registration under GST Act and Competent Authority rejected application stating that it was not in accordance with provisions of Act, assessee was directed to file a fresh application for registration before Competent Authority, who would take a fresh decision on it in accordance with law??

Fact of the Case:

The petitioner applied for registration under the Act and KGST Act. The petitioner uploaded the application on 16.01.2019. The petitioner received a notice on 31.01.2019 seeking additional information for registration stating the following reasons: -


Documents to prove the ownership of the business premises and bank details of the directors are not uploaded;
The application is for registration to deal lottery services but the documents enclosed are to prove that the petitioner is authorized to deal the lottery services under various provisions of law for which authorization to deal with the lottery service is sought.


The petitioner was directed to submit their reply by 08.02.2019. The Registering Authority issued an order rejecting the petitioner’s application stating that reply has not been found satisfactory and also the application is not in accordance with the provisions of the Act.

The petitioner challenged the said order in the High Court through this writ petition
174 GIB/GUJ/AMIT COTTON/27-06-2019/HC-80 Amit Cotton Industries Export Issue & Fact of the Case:

 

The petitioner M/s Amit Cotton Industries is a Cotton Ginning Mill registered under GST. They are engaged in a business Of procuring raw cotton from farmers, ginning the same, pressing the same, carrying out necessary process, converting it into bales and then exporting these cotton bales out of India. Since the goods are exported out of India, the same are to be termed as ‘Zero Rated Supply’ in accordance with Section 16 of the IGST Act. The petitioner has filed a writ-application to seek refund of the IGST as according to writ applicant, without any valid reason the refund of INR 19,05,121 has been withheld.

The petitioner had for the purpose of exporting goods out of India issued Commercial Invoice, Export Invoice and Shipping Bills. Export General Manifest and Bill of Lading were also generated by the shipping line. As provided in Section 54 of CGST Act ,2017 read with Section 16 of IGST Act,2017, immediately after the goods are exported, considering shipping bill as application for refund of IGST paid in regard to the export goods, the authorities are supposed to immediately refund the said amount of IGST to the petitioner.

In this case export of goods were made in July 2017 but till date, IGST is not refunded. The authority had informed the petitioner that only because the petitioner had claimed drawback @1% and not @0.15%, refund of IGST would not be sanctioned. Since the petitioner was suffering from cash crunch and was in dire need of the refund amount, they have given away the balance 0.85% (1%-0.15%) along with interest. The petitioner had also written a letter to the Deputy Commissioner of Customs informing about the same return of excess drawback claim and claiming for refund of IGST. The Authority in its emailed letter stated further that the only reason for withholding refund is that the petitioner had first claimed more rate of drawback. Authority quoted Circular No.37/2018-Customs, dated 9.10.2018 justifying no IGST refund after initialy claiming the benefit of higher drawback and  N.T. 131/2016-Cus dated 31.10.2016 as amended by Notification 59/2017 dated 29.06.2017 in its reference.

The applicant gave reference of Section 16 of IGST Act, 2017, Section 54 of the CGST Act, 2017 and Rule 96 of the CGST Rule, 2017 for which the petitioner has fulfilled all the conditions and stated that IGST refund can be withheld only as per provisions of Sub Rule (4) of Rule 96.
175 GIB/KN/ONXY/17-06-2019/HC-93 Onyx Designs vs. The assistant commissioner of Commercial taxes Input Tax Credit Facts  & Issue Of The Case :

The petitioner is a registered dealer Under the provisions of Section 10(2) of Karnataka Value Added Tax Act,2003 ,dealing in a trading business of bags and gifts items. Many arguments are going there to claim the input tax credit as from where the petitioner made his purchase ,some of the dealers are de-registered and not filed VAT returns or paid taxes . The prescribed authority states that if they disallow the Input Tax Credit it might ruin the whole purpose and object of the KVAT Act. The assessee also contented that the cancellation can only have prospective effect not retrospective effect , and purchases so made prior to the date of de registration the ITC so claimed on them cannot be disallowed.

The reply which was filed by the assessee clearly shows that those dealers which are de registered were still filing returns during the assessment year , and the dealers who have not remitted the taxes collected from the assessee would lead to a substantial loss of the revenue of the state.
176 GIB/MH/JSW ENERGY/07-06-2019/HC-122 JSW Energy Limited Taxability Facts & Issue of the case

The petitioner, JSW Energy Limited (JEL), is engaged in the business of generation and sale of electricity, proposed to enter into an arrangement with JSW Steel Limited (JSL) involving conversion of coal and other inputs into electricity and conversion of electricity into Steel on job work basis. In order to ascertain whether, the proposed arrangement, indeed qualifies as “job work” as defined under section 2(68) of the Central Goods and Services Tax Act, 2017 (CGST Act) and consequently whether the petitioner is entitled to benefits under the CGST and MGST, the petitioner, applied to the Advance Ruling Authority seeking Advance Ruling on the applicability of GST to the proposed arrangement.

The Advance Ruling Authority vide order dated 5 March 2018 ruled that the proposed arrangement did not qualify as 'job work' primarily because the same amounted to 'manufacture' as defined under Section 2(72) of the CGST Act. On this basis, the Advance Ruling Authority ruled that the proposed arrangement attracted GST. The Ruling of Advance Authority can be found on GIB/MH/ JSW ENERGY/05.03.18/AAR-132.

Aggrieved, the petitioner appealed to the Appellate Authority. The Appellate Authority, vide its order dated 2nd July 2018 disagreed with the reasoning of Advance Ruling Authority that the proposed arrangement did not amount to 'job work' because the same amounted to 'manufacture'. However, the Appellate Authority upheld the ultimate conclusion of Advance Ruling Authority relying upon two different and distinct grounds. The Ruling of Appellate Authority can be found on GIB/MH/JSW ENERGY/02.07.2018/AAAR-17

The challenge in this petition is to the orders dated 5 March 2018 and 2 July 2018 made by the (Advance Ruling Authority) and the (Appellate Authority). The petitioner now submits that, since the Statute has provided for no further appeal against the orders of Appellate Authority, the Court should examine the impugned orders on the basis of substantive merits. It was further submitted that at no stage was the petitioner put to notice regards the 'new grounds' and also the petitioner was not offered any opportunity to place documentary evidences with regard to the 'new grounds'. The petitioner relies on the decision of the Supreme Court in Reckitt & Colman of India Ltd. vs. Collector of Central Excise 1996 (88) ELT641 (SC), in support of this proposition and contends that Appellate Authority's impugned order dated 2nd July 2018 is required to be set aside and the matter remanded to Appellate Authority for reconsideration by adherence to the principles of natural justice.
177 GIB/KN/Banyan Projects/06-06-2019/HC-20 M/s Banyan Projects India Pvt Ltd Registration Issues Involved:

Whether the cancellation of registration be revoked if the Petitioner furnishes the unfurnished returns? 

 

Fact of the Case:

The petitioner had filed a writ petition before the Hon’ble Karnataka High Court challenging the order passed by the Local GST officer whereby the registration of the Petitioner under the provisions of Karnataka Goods and Services Tax Act, 2017 has been cancelled on the grounds of non-furnishing of returns well within time from October 2018 to April 2019.

 

The grievance of the Petitioner is that no adequate opportunity was provided to put forth its explanation for not furnishing the returns well within time, the reason for which the Registration Certificate has been cancelled by the Respondent.

 

The Respondent submitted that it is empowered to revoke the cancellation of registration under Section 30 of the KGST Act, if such returns for the aforesaid periods are submitted by the Petitioner within a time frame to be fixed by this Court.
178 GIB/UP/GOVIND/30-05-2019/HC-87 Govind Enterprises Others Facts & Issue of the case

The petitioner Govind Enterprises applied for registration under the U.P. Goods and Services Tax Act, 2017 (for short U.P. Act) to conduct business in packing material, by showing its place of business on the First Floor, N.H.-2, in front of Gate No.1, Anaj Mandi, Kosi Kalan, District Mathura. Upon which, on 09.03.2018, GST No.09CBIPA0305H1Z7 was provided to it.

The allegations made in the impugned FIR is that the dealer fraudulently, with a dishonest intention, by submitting false documents, with an intention to evade taxes, obtained registration, thereafter, took inward supply and passed on the goods to end users, without generating outward supply bills, received money in cash and deposited the same in bank account which was not declared at the time of seeking registration.

The contention of the petitioner is that has been emphasized by the learned counsel for the applicant is because no proper notice has been served upon the applicant demanding outstanding amount of GST, therefore, there was no necessity of the accused being arrested.
179 GIB/DL/LANDMARK/27-05-2019/HC-53 LANDMARK LIFESTYLE INTEREST Issues Involved:

Petitioner points out that the calculation of the interest payable for the delayed payment of GST as determined by Respondent Revenue is erroneous inasmuch as the interest has been calculated even on the amount constituting the Input Tax credit (ITC) which is, in fact, to be adjusted against the tax liability; that on the actual tax liability, interest has been paid by the petitioner; that against the total tax liability of Rs.3.31 crores, the interest liability works out to Rs.8.19 crores which makes it unreasonable and erroneous.
180 GIB/GUJ/KUSH TRADERS/09-05-2019/HC-73 KUSH TRADERS E-way Bill Issues Involved:

Non Generation of E-way Bill for exempted goods.

Fact of the Case:

As per Rule 138 (14) of the CGST Rules’2017, No E - Way bill is required to be generated where the goods being transported are specified in the annexure.

It was submitted that, the goods and the conveyance of the petitioner have been detained on the ground that e-way bill has not been tendered and further notice for confiscation under section 130 of the CGST Act, 2017.

 
181 GIB/DL/AMADEUS INDIA/08.05.2019/HC-242 AMADEUS INDIA PVT. LTD. PRE SCN CONSULTATION FACTS AND ISSUE OF THE CASE:

In this case the Petitioner provides computer data processing software, which is used by travel agents and ticket booking entities in the Airline industry. The question whether the services provided by the Petitioner is amenable to service tax engaged the attention of the Customs Excise Services Tax Appellate Tribunal („CESTAT‟) Principal Bench in Acquired Services Pvt. Ltd. v. Commissioner of Service Tax (2014) 36 STR 1148 (TRI-10). The CESTAT held that the services provided by AIPL to overseas entities did not constitute either business auxilliary services or export of services. The said decision is stated to be pending in appeal before the Supreme Court of India.

The present writ petition by Amadeus India Pvt. Ltd.(AIPL) is in a narrow compass. The question that arises is whether prior to issuing the impugned show cause notice (SCN) dated 4 th September 2018, the Office of the Principal Commissioner, Central Excise, Service Tax and Central Tax Commissionerate, Delhi South (the Respondent herein) ought to have held a pre-notice consultation with the Petitioner in terms of para 5.0 of „Master Circular‟ dated 10 th March, 2017 issued by the Central Board of Excise and Customs („CBEC‟)?

 
182 GIB/DL/Amadeus India/08-05-2019/HC-18 M/s Amadeus India Pvt Ltd Others Issues Involved:

Whether prior to issuing the SCN demand exceeding Rs. 50 Lakh ought to have a pre-notice consultation with the petitioner in terms of para 5.0 of “Master Circular” dated 10th March 2017 issued by CBEC.

 

Fact of the Case:

The Petitioner provides computer data processing software, which is used by travel agents and ticket booking entities in the Airline industry. The Anti-evasion Unit of the Service Tax Commissionerate undertook a search of the registered premises of the Petitioner. During search statement of petitioner had been recorded and the petitioner had also submitted response of the queries raised by Tax Authority. After nearly 2 years, fresh summons was issued to the Petitioner seeking the audited balance sheets, reconciliation statements of taxable value declared in ST-3 returns, month wise invoices copies of agreements between the Amadeus IT Group etc. According to the Petitioner, it submitted the requisite information on various dates. Thereafter SCN was issued by the Tax Authority to the Petitioner alleging that tax was not paid on taxable services rendered by the Petitioner. The Petitioner was also asked to show cause why penalty under Section 76 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017 (CGST Act) should not be levied, in addition to the recovery of interest under Section 75 of the Finance Act, 1994. The Petitioner drew the attention of the Respondent to the Master Circular dated 10th March 2017 read with an instruction dated 21st December 2015 issued by the CBEC in terms of which a pre-show cause notice consultation was mandatory in cases involving demand of duty above Rs. 50 Lakhs.    
183 GIB/UP/ATIN KRISHNA/03-05-2019/HC-82 Atin Krishna Vs. Union Of India Taxability Facts  & Issue of The Case :

DFS (Duty free shops) are supplying warehouse goods to the international arriving passengers before its clearance for home consumption .The Petitioner contented that due to mis-interpretation of the provision of CGST/SGST/IGST act, the public exchequer is being made to suffer financial loss. The petition has been filed as public interest (PIL). Through the petition so filed it has been claimed that the operator of DFS are liable to pay IGST on imported goods, which was not paid yet. The authority which was looking forward to the functioning of shops incorrectly claimed refund of ITC accumulated of GST paid .

The invoice which was issued to international passengers was incorrect as a proof of export of goods. It has also been submitted that In accordance with the section 8(1) of the IGST Act, the supply made to international passengers at the arrival terminal DFS should be considered as intra state supply ,which attract CGST and SGST under Section 9(1) of the CGST and SGST act upto 31st January,2019.
184 GIB/GUJ/BHARAT VIJAY/03-05-2019/HC-71 BHARAT VIJAY TRANSPORT CO. E-way Bill Issues Involved:

GSTIN obtained on the basis of fake documents.

Fact of the Case:

When the conveyance in question was apprehended it was carrying goods under 31 bills and lorry receipts:


Out of which in case of 22: - Bill and lorry receipts the goods were released immediately.
in case of 9 defective bills and lorry receipts: - 7 of the concerned taxpayers had paid the tax and penalty, pursuant to which the goods were released.
In case of 2 lorry receipts viz. No. 155609 and 155616 issued to M/s Standard Sales Corporation, the owner of the goods has not turned up for getting the goods released and upon inquiry it is found that the GSTN stated in the e-way bill etc. have been obtained on the basis of the Aadhar card, PAN and mobile number of one Mahendra bhai Venilal Solanki who had permitted one Vipul bhai to use such documents for obtaining GST registration upon payment of some amount to him.
The goods were being transported under an invoice and e-way bill bearing a valid GSTN. It appears that such GSTN has been given without proper inquiry as contemplated under the Act and the rules, which is on account of default on the part of the concerned authorities.
it is evident that the authority concerned has not applied its mind to the objections raised by the petitioner and has passed the impugned order confiscating the conveyance of the petitioner.

185 GIB/TN/MEGHA ENG./18-04-2019/HC-54 MEGHA ENGINEERING & INFRASTRUCTURE LTD. INTEREST Fact & Issues Involved:

The petitioner is engaged in the manufacture of MS Pipes and in the execution of infrastructure projects. After the enactment of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act, 2017’), the petitioner registered themselves as a dealer under the Act and they claim to be regularly filing returns and paying taxes.

The case of the petitioner is that the GST Portal is designed in such a manner that unless the entire tax liability is charged by the assessee, the system will not accept the return in GSTR - 3B Form. As a result, even if an Assessee was entitled to set off, to the extent of 95%, by utilizing the ITC, the return cannot be filed unless the remaining 5% is also paid.

According to the petitioner, the total tax liability of the petitioner for the period from July, 2017 to May, 2018 was Rs.1014,02,89,385/- and the ITC available to the credit of the petitioner during this period was Rs.968,58,86,133/-.

In response, the petitioner sent a letter dated 15.10.2018, pointing out that interest is to be calculated only on the net tax liability after deducting ITC from the total tax liability. The petitioner also paid an amount of Rs.30,92,522/- towards interest on their net tax liability, the Department demanded interest on the total tax liability and hence the petitioner has come up with the above writ petition.

Aggrieved by a demand made by the respondent for payment of interest on the ITC portion of the tax paid for the months of July, 2017 to May, 2018, the petitioner has come up with the above writ petition?
186 GIB/TG/P.V.RAMAN/18-04-2019/HC-108 P.V. Ramana Reddy Input Tax Credit Facts & Issue of the case

The petition has been filed Challenging the summons issued by the Superintendent (Anti Evasion) of the Hyderabad GST Commissionerate, under Section 70 of the Central Goods and Services Tax Act, 2017 and the invocation of the penal provisions under Section 69 of the Act.

The claim of the authority is that the petitioners floated/incorporated several Proprietary concerns/ Partnership Firms/ Limited Companies and such Proprietary concerns/Partnership Firms/Limited Companies claimed input tax credit on the basis of certain invoices, without there being any actual physical receipt of goods. These entities also issued many such invoices from July 2017 onwards charging GST without supply of goods against the invoices. These bogus/fake invoices were used to avail and utilise fraudulent ITC of GST by the recipients of such invoice.

The very same premises of some of these entities were used by all others to do circular trading/bill trading and the petitioners were thus guilty of defrauding the revenue to the tune of Rs.225 crores.

The authority further mentioned that, petitioners have committed offences under clauses (b), (c) and (f) of sub-section (1) of Section 132 of CGST Act, 2017, all of which may be punishable with imprisonment which may extend to 5 years apart from a fine that the offences committed by the petitioners are cognizable and non-bailable in terms of Section 132(5) of the CGST Act.

Further, the main contentions of petitioners are that the maximum punishment that could be imposed under Section 132 of the CGST Act, 2017 is only an imprisonment for 5 years, apart from fine and therefore, under sections 41 and 41-A of the Code of Criminal Procedure, after its amendment, a person cannot be arrested so long as such person complies and continues to comply with the notice for his appearance. Since, it is always open to the respondents to scrutinise the books of accounts and pass orders of assessment reversing the input tax credits availed by the dealers under the Act, there is no necessity to arrest the petitioners, especially when no adjudication has taken place under the Act. So, in any case, all the offences under the Act are compoundable under section 138 of the CGST Act and hence arrest is wholly unnecessary.
187 GIB/GUJ/OCTAGON/18-04-2019/HC-49 Octagon Communication Pvt. Ltd. INTEREST Facts & Issue Involved:

Petitioner submits that there is no condition for making payment of tax as a pre-condition for filing return of Form GSTR-3B; that in the absence of any such provision, the online system of the respondents which does not allow filing of returns without payment of tax liability admitted as per such returns is contrary to legal provisions; that if the petitioner is not able to file return in Form GSTR-3B by 20th April, 2019 the petitioner would be deprived of input tax credit.

 
188 GIB/GUJ/NEUVERA/18-04-2019/HC-63 NEUVERA WELLNESS VENTURES PVT. LTD. E-way Bill Issues Involved :

Part B of E – Waybill not Generated.

Fact of the Case:

The petitioner was engaged in import and sale of dietary food products such as protein powder of different flavours. The petitioner while importing such goods had stored such goods in custom bonded warehouse.

The goods were cleared from custom warehouse by filing ex-bond bill of entry and on payment of Basic custom duty and Integrated Goods and Service Tax to petitioner own warehouse with E-Way bill without completing Part B as the goods was perishable nature.

Goods were detained on the way by the authorities for verification. The petitioner expressed that the tax had already been paid on such transaction and the transaction (custom warehouse to own warehouse) is not a supply as per GST. Hence, GST is not applicable on such transaction. The authorities order and section – 129 (3) and directed to pay tax and penalty by the petitioner otherwise proceedings u/s 130 would be initiated. Petitioner has filed the writ before the honorable High Court.
189 GIB/OD/SAFARI/17-04-2019/HC-95 Safari Retreats private limited Input Tax Credit Facts  & Issue Of The Case :

The petitioner are mainly carrying on business activity of constructing shopping malls for the purposes of renting and letting out to the tenants ,goods and services which the petitioner has purchased for the construction of the malls like- cement, steel, paints, air conditions ,hiring legal and professional services etc., are taxable under the CGST and OGST act . The mall which the petitioner so let out attracts CGST and OGST on the amount received under this act.

By the activity of letting out, petitioner had accumulated input credit worth Rs. 34,40,18,028/- , which he want to use in construction of shopping mall ,but as per Section 17(5) it was blocked. The petitioner as been given advise to pay in cash and not to use ITC. As per section 17(5) the provision- “ goods or services or both received by a taxable person for construction of an immovable property (other than plant and machinery) on his own account including when such goods or services or both are used in course or furtherance of business”, is under block credit.
190 GIB/OD/SAFARI RETREATS/17.04.2019/HC-244 SAFARI RETREATS PRIVATE LIMITED Input Tax Credit FACTS AND ISSUE OF THE CASE:

In this case the petitioners were mainly carrying on business activity of constructing shopping malls for the purpose of letting out of the same to numerous tenants and lessees. Huge quantities of materials and other inputs in the form of Cement, Sand, Steel, Aluminium, Wires, plywood, paint, Lifts, Escalators, Air-Conditioning plant, Chillers, electrical equipments, special facade, DG sets, transformers, building automation systems etc. and also services in the form of consultancy service, architectural service, legal and professional service, engineering service and other services including services of special team of international designers in every sphere of construction of Mall were required for the aforesaid construction purpose and therefore the petitioner company had to purchase/receive these goods and services for carrying out the said construction.

All the goods and services which were purchased/received for such construction were taxable under the CGST Act and OGST Act and as such the petitioner had to pay very huge amounts of Central Goods and Services Tax and Odisha Goods and Services Tax on such purchases.One of the large shopping mall constructed by the petitioner-company at Esplanade had been completed recently and the petitioner had made necessary arrangement for letting out different units of the said shopping mall to different persons on rental basis.

The activity of letting out the units of the shopping mall attracted CGST and OGST on the amount of rent received by the petitioner because the activity of letting out the Units in the said Mall amounted to supply of service under the CGST Act/OGST Act.

The petitioner having accumulated input Credit of GST in respect of purchases of inputs in the form of goods and services was desirous of availing of the credit of input tax charged on the purchase/supply of goods and services which were consumed and used in the construction of the said shopping mall in order to utilise the said input credits to discharge and pay the CGST and OGST payable on the rentals received by the petitioner from the tenants of the said shopping mall and approached the revenue authorities in this regard. However, the petitioner was advised to deposit the CGST and OGST collected without taking input credit in view of restrictions placed as per section 17(5)(d) and was warned of penal consequences if it did not do so.

The petitioner had been informed by the authorities under the CGST Act and OGST Act that in view of the aforesaid section 17(5)(d) of both the aforesaid Acts the petitioner could not avail the benefit of credit of tax input paid by the petitioner on the purchases of input materials and services which had been used in the construction of the shopping mall for set off, against the CGST and OGST payable on rent received from the tenants of the shopping mall. The petitioner had, thus, to pay very large amounts of CGST and OGST.

The petitioners filed instant writ petition challenging the action of the opposite parties whereby the opposite parties without considering the provisions under section 17(5)(d) held that the provisions of the CGST Act was not applicable in the case of construction of immovable property intending for letting out for rent.
191 GIB/TN/Jayachandran/04-04-2019/HC-110 Jayachandran Alloys (P) Ltd. Inquiry & Investigation Facts & Issue of the case

The Petitioner “M/s. Jayachandran Alloys (P) Ltd.” praying for the issuance of a Writ of Mandamus directing the respondents to provide all the documents and records seized from the petitioner's premises during the inspection conducted, including the statements recorded from the Petitioner's staff, its Managing Director and also the statement recorded from the Managing Director of the Petitioner and thereafter grant opportunity to the petitioner and pass assessment order in accordance with law.

Regular monthly returns have been filed by the petitioner and this is not disputed. There has been an investigation initiated in the premises of the petitioner and seizures of documents and records have been effected. The petitioner has also been called upon to furnish various records and has done so. While the process of investigation is ongoing; the petitioner sought copies of the statements recorded from it as well other materials seized, with no response forthcoming from the department. A Miscellaneous Petition has been filed seeking the grant of an interim injunction restraining the respondents from proceeding coercively against the petitioner and their staff including arresting them by invoking the provisions of Section 69 of the Act, pending disposal of the writ petition.

The allegation of the revenue in the present case is that the petitioner has contravened the provisions of Section 16(2) of the Act and availed excess ITC so far as there has been no movement of the goods in the present case as against the supplier and the petitioner and the transactions are bogus and fictitious, created only on paper, solely to avail ITC. The petitioner cites the decision of the Division Bench of the Delhi High Court in the case of Make My Trip (India) Pvt. Ltd. V. Union of India & Ors that has been confirmed by the Supreme Court, in support of its arguments.

Department is of the view that the petitioner is a defaulter and various details have been found in the premises in the course of investigation in support of the aforesaid factual position. The Department accepts that the investigation is on and no assessment has been framed. The department also alleged that the assessee did not co-operate with the investigation and didn’t attend hearings. The tabulation of the summons issued and attendance details of the assessee indicated otherwise than the allegation of department.
192 GIB/KN/SRI SAI BALAJI/21-03-2019/HC-60 SRI SAI BALAJI E-way Bill Fact & Issues Involved:

The petitioner is engaged in the business of providing earth moving services in the name and style of 'Sri Sai Balaji Diggers'. It is contended that an e-way bill bearing No.1910 8302 4307 was generated by the petitioner for the work order issued by M/s Damodar & Co. from 20.11.2018 to 31.01.2019 and the excavator was transported by vehicle bearing Registration No. KA 01 AG 6219 of M/s God’s Gift Transportation.

It transpires that, at 11.20 p.m. on 4.2.2019 the said vehicle was intercepted by the competent Authority and it was noticed that the e-way bill was not matching and accordingly the respondent No.4 issued FORM GST MOV-06, the order of detention under Section 129(1) of the Act and thereafter notice under Section 129(3) wherein, the petitioner was directed to pay the penalty amount of Rs.5,76,000/- (Rupees five lakhs seventy six thousand only). Subsequently, an order was passed quantifying the tax/penalty amount of Rs.5,18,400/- (Rupees five lakhs eighteen thousand four hundred only).

The petitioner has challenged the seizure order passed by the respondent No.4 dated 13.2.2019 under Section 129(3) of the Central Goods and Services Tax Act, 2017.

 
193 GIB/KR/JILMON JOHN/20-03-2019/HC-90 Jilmon John Vs. State of Kerela Rate Facts & Issue of the case

This writ petition is filed by the petitioner Jilmon John, Government Contractor, seeking to quash Exts .P2, P5, P8 and P10 and pass orders on Ext.P12 for release and refund of EMD of INR.2,00,000 /- furnished by the petitioner along with the tender submitted on 3.6.2017 and to re-notify the tender for the work incorporating GST to afford an opportunity to petitioner to participate in it and for other consequential reliefs.

In response to e-tender notice issued by the respondent for “Improvements to Thodupuzha Pappootty Hall Vellangallor Road”, petitioner submitted a tender taking into account the rate of works tax at the rate of 4% stipulated in section 8 of the Kerala Value Added Tax Act, 2003 (VAT) as per the special conditions contained in the notice inviting tender. The respondent accepted the tender submitted by the petitioner with a probable amount of contract and directing him to execute an agreement for carrying out the works. According to the petitioner, by the introduction of the CGST Act, 2017, GST was imposing at 18% on the value of works. The Petitioner contended that they submitted representations requesting either to reimburse the additional tax imposed at 14% over the 4% specified in the notice inviting tender or cancel the notice and release and refund the EMD of Rs.2,00,000/-furnished by him. 

The respondent sent a letter to the petitioner without considering the request either to reimburse differential tax imposed by the GST or to release the EMD of Rs.2,00,000/- furnished by him along with the tender. The respondent directed to execute an agreement for carrying out the works with GST, which according to the petitioner, is not incorporated in the notice and therefore, the action is without jurisdiction and illegal and therefore liable to be interfered with by this court.
194 GIB/UP/RIMJHIM/15-03-2019 /HC-100 Rimjhim Ispat Limited Others Facts & Issue of the case

The petitioner-Rimjhim Ispat Limited situated at Sumerpur, District Hamirpur, Uttar Pradesh filed the petition challenging the respondent – State of UP & Others on that the power of inspection, search and seizure on the proper officer has been conferred when he has ‘reasons to believe’ that a taxable person has suppressed any transaction relating to supply of goods and service or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under the UPGST Act, 2017.

Hence, the entire search and seizure was done in complete disregard of the provisions of search under the UPGST Act, 2017.

The petitioner, thus, prays for the following reliefs:

(i) issue a suitable writ, order or direction in the nature of certiorari calling for the records of the case and to quash the impugned Seizure Order and Panchnama dated 14.3.2018 (Annexure-1 to this writ petition).

(ii) issue a suitable writ, order or direction in the nature of mandamus restraining the respondents from taking any action on the basis of the impugned Seizure Order and Panchnama dated 14.3.2018 (Annexure-1 to this writ petition.)

(iii) issue a suitable writ, order or direction in the nature of mandamus commanding the respondents to release/return all the documents and goods seized vide the impugned Seizure Order and Panchnama dated 14.3.2018.

(iv) issue a suitable writ order or direction in the nature of mandamus directing the respondents, to return back the sale and purchase invoices which are yet to be incorporated in the stock register, seized during the course of search, to find out actual figure of purchases and sales.

(v) issue any other writ, order or direction which this Hon’ble Court may deem fit and proper in facts of the instant case.
195 GIB/TN/ASEAN AEROMATICS/22-02-2019/HC-55 ASEAN AEROMATIC PVT. LTD. INTEREST Fact & Issues Involved:

M/s. Asean Aromatics Private Limited (“The petitioner”) filed petition against order dated November 08, 2018 regarding cancellation of registration on the ground that Form GSTR-3B return have not been filed upto 11 December 2017 and Form GSTR-1 only up to August 2018.

In response to a show cause notice received on dated October 14, 2018 for cancellation of registration, petitioner contented that delay was on account of severe working capital shortage and the enhancement of working capital was awaited and the dues would be settled at the earliest.

The petitioner further contended to pay pending GST dues in six monthly instalments, a sum of Rs.10,00,000/- having been paid as first instalment on December 14, 2018.

 
196 GIB/GUJ/SRI KRISHNA/29-01-2019/HC-70 SRI KRISHNA TRADERS E-way Bill Issues Involved :

Non-availability of E-way Bill when demanded.

Fact of the Case:


Applicant is engaged in the business of betel nuts operating from the State of Tamil Nadu.
The vehicle was intercepted on the ground that E-Way Bill was not produced when demanded at the time of transportation from State of Tamil Nadu to Delhi. While the goods were in transit and passing through the State of Gujarat.
In such circumstances, the vehicle along with the goods came to be seized.
On a query by the Court, the learned Assistant Government pleader is not in a position to point out that the procedure. Thus, it appears that the show-cause notice u/s 130 of the CGST Act has been issued without complying with the requirements of section 129 of the CGST Act. It is also an admitted position that the goods in question are perishable in nature.
By an ad-interim order, this Court directed that the goods to be released upon the writ applicant on depositing an amount of Rs. 2,08,250/-


 



197 GIB/TN/JEYYAM/23-01-2019/HC-89 Jeyyam Global Foods (P) Ltd. HSN Facts & Issue of the case:

The petitioner M/s. Jeyyam Global Foods (P) Ltd. is a manufacturer of dried chick peas, gram flour, pulses and grams. They purchase chick peas, dry them by heating them to a certain degree and the resultant product is known as “Dried Chick Peas”. The petitioner filed a petition to get the impugned detention order dated 21.12.2018 quashed and to get the rate of tax/classification/HSN Code of the product in question decided.

The order is under challenge in this writ petition principally on the ground that when a bonafide dispute as to classification had arisen, it is only the jurisdictional assessing officer, who could have ruled on the classification and that it was not open to the Squad Officer to have done so. According to the petitioner, “Dried Chick Peas” would have to be classified only under Chapter 0713 of HSN. The petitioner had transported the dried chick peas from Salem to Dindigul without filing an E-Way bill in view of the exemption statutorily granted. While so, the consignment of the dried chick peas sent by the petitioner was intercepted by the fourth respondent on 21.12.2018. The goods were seized and detained with the vehicle in which the goods were being transported. The fourth respondent took the view that what was transported by the petitioner comes under the classification (fried or roasted grams) falling under Chapter 2106 of HSN.

In this view of the matter, he issued a detention notice and levied tax with equal penalty. The petitioner paid the said amount as demanded by the fourth respondent under protest and he also obtained release of the goods as well as the vehicle.
198 GIB/MD/Jeyyam Global/23.01.2019/HC-144 M/s. Jeyyam Global Foods (P) Ltd. Vs Union of India  HSN Fact & Issue of Case:

The petitioner is a manufacturer of dried chick peas, gram flour, pulses and grams. They claim to purchase chick peas, dry them by heating them to a certain degree and the resultant product is known as “Dried Chick Peas”.

According to the petitioner, this would have to be classified only under Chapter 0713 of HSN. The petitioner had transported the dried chick peas from Salem to Dindigul. The petitioner had not filed any E-Way bill in view of the exemption statutorily granted. 

Madras High Court has  directed Commissioner of commercial tax in this case to instruct his officers not to detain goods / conveyances for classification disputes.
199 GIB/KR/SANJOSE/18-01-2019 /HC-101 Sanjose Parish Hospital Supply Facts & Issue of the case

Sanjose Parish Hospital had raised question before the Division bench of Kerala High court by virtue of a reference order dated 13.04.2018 that whether the medicines supplied, implants carried out, the consumables used and surgical tools exclusively used in a particular procedure, as part of treatment of patients in a hospital, the price of which is recovered by way of bills from the patients are ' sale of goods' as contemplated by the legislation levying such tax; herein the Kerala Value Added Tax Act, 2003 ["KVAT Act"].
200 GIB/KR/SHEEN GOLDEN/11-01-2019/HC-96 Sheen Golden Jewels (India) Pvt.Ltd Others Facts  & Issue of the case

The petitioner, a Private Limited Company, is a dealer under the Kerala Value Added Tax Act and Central Sales Tax Act has opted to pay the tax at the compounded rates under Section 8 of the KVAT Act. for the assessment years (AY) and 2011-2012 and thereafter, too, the petitioner filed returns in terms of the compounding scheme-in Form 10DA.

Petitioner’s question is, does the State have the legislative competence to enact section 174 and save the past taxation events—comprising levy, assessment, and recovery—when Entry 54, List II, which is the field of legislation empowering the State, stood omitted permanently with effect from 16.09.2017. The petitioner in writ petitions stated the issue of the legality of the notices and assessment orders issued to the petitioner in connection with the assessment under the Kerala Value Added Tax Act for the assessment years 2010-11 and 2011-12.The petitioner claimed that the notices and orders are impugned, inter alia, on the ground that the authorities concerned did not have the jurisdiction to issue them since the amendments introduced to Section 25 (1) of the KVAT Act, through the Kerala Finance Acts of 2017 and 2018, notified through gazette notifications dated 19.06.2017 and 31.03.2018 respectively, did not contemplate a retrospective operation of the amended provisions. In the petition filed, the petitioner has questioned the constitutional validity of Section 174 of the Kerala State Goods and Service Tax Act, 2017. According to the petitioner, the Savings & Repeals Provisions under the said section is volatile of clauses 2, 17 & 19 of the 101st Constitutional Amendment Act, 2016. The petition further stated that Section 174 is deprived of any power and therefore any penalty proceedings initiated under it is invalid. Based on these, the petitioner submits that the Revenue cannot impose penalties for the AY 2010-11, 2011-12 in February 2018.
201 GIB/MH/SHAIFI/21-12-2018 /HC-102 Shaifi Khan Khokhar Registration Facts & Issue of the case

The contention of the petitioner is that he is being subjected to enquiry by CGST Authorities at Jaipur who have issued him a summons dated 7.9.2017. On 28-09-2018, The Superintendent of CGST & Central Excise (AE) Mumbai issued summons to him under Section 14 of the Central Excise Act, 1944 and Section 70 of the Central Goods & Services Tax Act, 2017.The petition was filed under Article 226 of the Constitution of India seeks to challenge an enquiry initiated by The Superintendent of CGST & Central Excise (AE) Mumbai.

It was petitioner’s contention that two parallel proceedings / enquiries under the same subject are without jurisdiction. Thus, the enquiry by Superintendent in Mumbai being later in point of time be quashed.
202 GIB/AP/Shiridi Sainath Industries /17-12-2018/HC-162 Shiridi Sainath Industries v. Deputy Commissioner of Services Tax No GST Fact & Issues Involved:

 

The assessee, a Rice Miller, entered into an agreement with Andhra Pradesh Civil Supplies Corporation (Corporation) for milling of Paddy. The Corporation permitted assessee to retain broken rice, bran and husk obtained in course of milling of paddy. The assessee sold those broken rice, bran and husk and no GST was paid as he believed that it would be exempt from tax. The department passed Assessment Order levying GST on value of byproducts i.e., broken rice, bran and husk treating them as part of consideration paid to assessee for milling of paddy under agreement with Corporation. It filed writ petition against the order.
203 GIB/All/R.K/05.12.2018/HC-135 R.K. Distributors Others Facts  & Issue Of The Case :

Assessee purchased SIM cards of value Rs. 3,57,379 was liable to pay tax Rs. 17,868.95. Tata Teleservices Ltd., Lucknow had charged tax @ 5% on the total invoice amount including the discount availed by the assessee on such purchase. The amount of discount is Rs. 17,99,385/-, the total sale price on which the tax @ 5% was charged by that seller came to Rs. 21,56,764/-. Thus, the assessee had been charged and he had paid tax of Rs. 1,07,838.41/. Assessee sold goods giving rise to a sale turnover of Rs. 4,83,815. In view of the fact that against 5% tax payable on the sale turnover of Rs. 4,83,815/- is Rs. 17,868.95/-, the assessee had claimed I.T.C. of Rs. 1,07,838.41/-, resulting in the refundable amount to the assessee. The amount of Rs. 1,07,838.41/- represents a 30% tax on the goods purchased by the assessee. The language of Section 13(1)(a) [table entry 1(1)] read with Section 2(p) of the Act, is sufficiently clear and provides that the input tax credit would be preferable to the entire amount of tax i.e. the aggregate amount of tax paid or payable, in respect of the purchase of goods. The reasoning offered by the authorities based solely on the excess realization of tax made by the seller cannot be sustained

 
204 GIB/TN/TUBE INVESTMENTS/25.10.2018/HC-241 TUBE INVESTMENTS OF INDIA STATUS HOLDER INCENTIVE SCHEME FACTS AND ISSUE OF THE CASE:

The petitioner is engaged in the manufacture of precision steel tubes, steel trips, bi-cycles, motor vehicle parts, automotive and industrial chains etc., in their various factories located across the country. For the purpose of manufacturing the said products, the writ petitioner is engaged in the business of importing capital goods. Admittedly, the petitioner is importing goods from ICD, Arakkonam wherein the storage point is available. 

The grievances of the writ petitioner is that almost majority of the ports across the Country are named in the notification. However, the Port at ICD, Arakkonam, has not been included in the list of Ports. Thus, the benefit of incentives introduced by the Government of India had not been extended to the writ petitioner, while importing capital goods.
205 GIB/KR/N.V.K/16.10.2018/HC-141 N V K Mohammed Sulthan Rawther And Sons Classification Issue And Fact Of The Case -

N V K Mohammed Sulthan Rawther And Sons the, (“first petitioner”) is a manufacturer of “Ground Betel Nuts (Arecanuts) with the registered brand name “Roja”. The first petitioner consigned a load of Roja betel nut to Roja Agencies (“the second petitioner”), through the Exhibit P9 tax invoice dated 22.09.2018, under HSN 0802 with 5% rate of tax. 

The Assistant State Tax Officer (ASTO), intercepted the lorry and detained the goods, alleging that the first petitioner’s product fits the description “HSN 2106” and attracts 18% tax-not 5%. In other words, the ASTO detained the goods because the petitioners had allegedly been trying to evade tax by misdescribing the product. Therefore, the aggrieved, the petitioners filed a Writ petition
206 GIB/TN/Revenue Bar/20-09-2018/HC-99 Revenue Bar Association Others Facts & Issue of the case

Writ Petition is filed under Article 226 of the Constitution of India, for issuance of a writ of declaration, to declare Chapter XVIII of the Tamil Nadu Goods and Services Tax Act, 2017, more particularly, Sections 109 and 110 of the Tamil Nadu Goods and Services Tax Act, 2017 relating to constitution of the Appellate Tribunal and qualification, appointment and condition of services of its members as void, defective and unconstitutional, being violative of Articles 14, 21, 50 of the Constitution of India, and doctrines of separation of powers and independence of judiciary, which are parts of the basic structure of the Constitution and further contrary to the principles laid down by the Hon’ble Supreme Court in Union of India Vs. R.Gandhi (2010) 11 SCC 1.

Issues which arose for consideration before the Hon’ble High Court

(i) whether the exclusion of advocates from being considered for appointment as a Judicial Member in GST Appellate Tribunal, is violative of Article 14 of the Constitution of India.

(ii) Whether Section 110 (b)(iii) which makes a member of the Indian Legal Service, eligible to be appointed as a Judicial Member of the appellate tribunal, contrary to the law laid down by the Hon’ble Supreme Court in Union of India Vs. R.Gandhi reported in 2010(11) SCC 1.

(iii) whether the composition of the National Bench, Regional Benches, State Bench and Area Benches of the GST Appellate Tribunal, which consists of one Judicial Member, one Technical Member (Centre) and one Technical Member (State), by which the administrative members outnumber the judicial member is violative of Articles 14 and 50 of the Constitution of India and the judgments of the Hon’ble Supreme Court of India
207 GIB/KR/Fashion Marble/06-07-2018/HC-16 M/s Fashion Marble and Granite Company Pvt Ltd E-way Bill Issues Involved:

Revenue Department can not insist to pay tax on detained goods through Cash/DD, when payment is made through Portal.

 

Fact of the Case:

The petitioner, dealing in Marble and Granite registered under Kerala GST Act. When he supplied a consignment of goods to another dealer, the 1st respondent intercepted the goods and begin detention proceedings. Later, he issued SCN U/S 129(3) of the GST Act. Eventually,1st respondent demanded tax and penalty of Rs.22,880/-.

Petitioner faced proceedings under Section 129 and it decided to pay the tax and penalty as demanded under show cause notice. Therefore, it invoked Section 49 and paid the tax and penalty in the portal of GST maintained by the Central Government. According to him, Section 129 itself does not indicate the manner of payment. he has also drawn attention to the Circular No.41/15/2018 - GST dated 13th April 2018, issued by the Government of India. Under these circumstances, the learned counsel contends that the 1st respondent's stand cannot be sustained and there shall be a judicial direction for the release of the detained goods. The learned Government Pleader, on the other hand, has submitted that Section 17(5) of the Act is categoric that any payment paid under Section 129 will not entail input tax credit. Therefore, in the end, he has contended that as the 1st respondent has insisted to get the goods released, the petitioner ought to pay either in cash or through a demand draft.
208 GIB/Cul/Gati Kintetsu/08-06-2018/HC-127 Gati-Kintetsu Express (P) Ltd Search & Seizure Facts & Issue of The Case:

The petitioner Gati-Kintetsu Express (P) Ltd challenged an order of seizure passed under Section 129(1) of the Central Goods and Services Tax Act and the order is appealable under Section 107 of the Act of 2017

In support of such contention petitioner relies upon a judgment and order No. GIB/All/RK Overseas/01-02-2018/HC-126 by the Allahabad High court.

 

 
209 GIB/ALL/New Shiva/06.06.2018/HC-151 New Shiva Transport Service vs State of UP E-way Bill Facts of Case:

The goods under transportation along with vehicle were seized vide seizure memo order dated 25.05.2018, under Section 129(1) of the U.P. Goods and Services Tax Act, 2017 on account of non filing of Part-B of E-way Bill. The petitioner has supplied and filled the aforesaid details on 25.05.2018.



.
210 GIB/UP/MODERN TRADERS/09-05-2018/HC-62 MODERN TRADERS E-way Bill Fact & Issues Involved:

The Assessee is a registered firm and is engaged in business of Iron and Steel goods. Certain goods of the aforesaid nature were sold to one M/s Arjun Dev & Company, Delhi, who is also a registered company against the invoice No. 0003 dated 5.4.2018 after charging IGST @ 18%.

The goods were handed over to the transporter who has loaded the same in a vehicle No. UP 13 AT 1153 on 4.5.2018. It is an admitted case of the petitioner that though the E-way bill post 1.4.2018 was not clear and the notification issued under CGST/UPGST Act were silent with regard to requirement of E-way bill for inter-state transactions, the petitioner dispatched the goods without generating the E-way bill.

While movement of the vehicle and when the vehicle crossed Yamuna Express Way it was intercepted by the respondent no.3 Assistant Commissioner, State Tax, Mobile Squad, Unit-II, Noida at 1.30 a.m. on 5.5.2018 solely on the ground that the goods were not accompanied with E-way bill.


Issue a writ, order or direction in the nature of certiorari quashing the impugned seizure order and consequential order under Section 129(3) (Annexure 1 and 2) passed y respondent no.3 on the same i.e. 5.5.2018.
 Issue a writ, order or direction in the nature of mandamus commanding respondent no.3 and his agents, to release the Vehicle No. UP13AT-1153, without insisting for deposit of any amount of tax/penalty.”


 
211 GIB/ALL/KL Industries/01.05.2018/HC-150 MS KL Industries Vs State of UP E-way Bill Facts of Case:

The petitioner sold MT of Iron Scrap to M/s Siani Alloys Ltd., Muzaffar Nagar, after charging CGST & SGST at the rate of 9% each. Goods were then handed over to transporter, who loaded the goods in Vehicle. There was confusion with regard to requirement of E-way bill for intra-State transaction in view of the order passed by Respondent. Commissioner of State Tax, U.P. Goods & Service Tax, Lucknow under Section 138 (14) of CGST Rules, hence petitioner was under the impression that there is no requirement of E-way bill for the transaction in question. When the vehicle was crossing Khatauli, the same was intercepted/detained by Respondent Muzaffar Nagar at 7:07 AM on 23.04.2018 solely on the ground that the goods were not accompanied with E-way bill. Immediately after receiving the information about detention, petitioner generated E-way bill prescribed under Rule 138 of the CGST Rules at 10:03 AM and furnished the same before Respondent. Learned counsel for the petitioner has placed the Eway bill, which has been issued on 23.04.2018 under the CGST as well as E-way bill-01, which has been downloaded on 23.04.2018 before the seizure of the vehicle. The goods are ultimately seized under Section 129(1) of UPGST Act.
212 GIB/UP/ ANKUR CARRIER/23-04-2018/HC-65 ANKUR CARRIER EXPRESS CARGO SERVICE E-way Bill Facts & Issues Involved:

The Assessee is a proprietor and is engaged to transport the goods belongs to one M/s Ahuja Radio. The said consignment having total 131 boxes was to be delivered at M/s R.B. Electronics, Harsh Vardhan Arcade Head Ofiice at Patna and another consignment of 81 boxes was to be delivered at the branch office situated at Ranchi, Jharkhand. The consignor M/s Ahuja Radio has issued two invoices bearing Invoices no.2652 and Invoice no. 2653 dated 27.03.2018 with 18% GST.     

The goods were transported from New Delhi and at the office/godown of the petitioner situated at Ghaziabad, U.P., the same were loaded in two vehicles being vehicle Nos.U.P.13-T-9197 and HR 38W-2581.

The Assessee is that due to mistake by the office at Ghaziabad , the bill and invoice of M/s Ahuja Radio for delivery at Ranchi, Jharkhand of branch M/s R.B. Electronics has been enclosed with the documents related to the goods to be delivered at Patna, Bihar. The petitioner is that it is nothing but bonafide mistake at the hands of the office personnel of the petitioner's company and due to the said error/mistake in the Transit Declaration Form-I (TDF-I) the details are similarly mentioned.

The respondent no.4 has detained the goods of M/s Ahuja Radio and has passed the seizure order on 30.03.2018, under Section 129(1) of UPGST Act (hereinafter referred as 'the Act') on the ground that the goods against the bilty no. 226158 dated 27.03.2018 related to 131 boxes also accompanying the documents related to 81 boxes of the same party M/s Ahuja Radio which are to be delivered at Ranchi, Jharkhand and that the e-way bill has been generated on 27.02.2018 for delivery through other vehicle no. HR-38W-2581.
213 GIB/UP/AXPRESS/09-04-2018/HC-72 AXPRESS LOGISTICS INDIA PVT. LTD. E-way Bill Issues Involved:

Non Availability of E waybill.

Fact of the Case:


The goods were being booked and transported from Panvel Raigarh, Maharashtra to M/s. Bosch Ltd. Local Distribution Centre Khasra No. 1482 NH 56 B Jaiti Kheda, Lucknow, which is a registered dealer.
The same was intercepted/detained by respondent no. 4 at Kanpur. The objection of respondent no. 4 while detaining the goods was that the goods were not accompanied by the E-way bill-01.
which has been issued on 24.03.2018 under the CGST as well as E-way bill-01, which has been downloaded on 28.03.2018 before the detention of the vehicle. The goods are ultimately seized under Section 129(1) of UPGST Act.

214 GIB/KR/Alukka Gold/06-04-2018/HC-13 M/s Alukka Gold Palace Registration Issues Involved :

Where registration of petitioner under GST statutes was delayed due to quoting of wrong PAN in VAT returns, authorities were directed to grant registration to petitioner from date i.e., 1-7-2017 when GST statute came into force however GST Certificate has been allotted w.e.f. 12.08.2017.

 

Fact of the Case:

 On account of a mistake committed by the petitioner during 2009 in providing the PAN number of another firm for the purpose of obtaining registration under the Kerala Value Added Tax Act ('the Act'), the request of the petitioner for registration under the GST statutes were delayed and were granted only with effect from 12.08.2017. The grievance of the petitioner is that since the GST statutes came into being from 01.07.2017, the petitioner is unable to comply with the statutory requirements in relation to the business for the period from 01.07.2017 to 12.08.2017. The petitioner, therefore, seeks appropriate directions in this regard, in the writ petition.
215 GIB/GJ/TORRENT/05-04-2018/HC-97 Torrent Power Ltd V.s Union India Exemption Facts  & Issue Of The Case :

The petitioner is a public limited company in the state of Gujrat engaged in business of generation ,transmission and distribution of electricity. Also having registration under goods and service tax Act .The petitioner company is following rules under Section 43(2) of the electricity act ,like no person can demand or continue to receive the supply of electricity for any separate premises unless he had agreed with the licensee to pay to him such price as determined by Appropriate Commission. Notification No. 32/2010-service Tax was issued on 22.6.2010, exempting taxable services provided by transmission and distribution companies.

The petitioner wants to avail the tax on the transmission services provided by him. The liability of tax of group of services has to be determined under sub-section (3) of section 66F of the Finance Act. If the services are naturally bundled in the ordinary course of business, the bundle of services shall be treated as provision of the single service which gives the bundle its essential character and where the services are not naturally bundled in the ordinary course of business, the same is required to be treated as provision of the single service which gives such bundle its essential character is exempt from tax.
216 GIB/UP/Bhumika Enterprises/03-04-2018/HC-21 M/s Bhumika Enterprises E-way Bill Issues Involved:

Petitioner has challenged the seizure order dated 27.03.2018 passed under Section 129(1) of the UPGST Act, 2017 as well as the show cause notice issued under Section 129(3) of the said Act dated 27.03.2018 respectively. Aggrieved, the petitioner has filed this writ petition.

 

Fact of the Case:

Petitioner is a registered dealer and has been allotted TIN by the Assessing Authority for carrying on the business for purchase and sale of Iron and Steel. The petitioner has affected the sale of Iron and Steel weighing 20 M. Ton for a sum of Rs. 6,00,000/-. The purchaser raised tax invoice No. 60 dated 25.3.2018. The invoice aforesaid indicates that the goods worth of Rs.6,00,000/- and has charged the CGST @ 9% of Rs. 54,000/- and SGST @ 9% of Rs. 54,000/-. The said goods were being transported from Varanasi to Bindki, Fatehpur. Goods intercepted and has detained the vehicle for verification of the goods and documents accompanying the goods. the goods were being transported without E-way bill-02, the GSTIN number written on the tax invoice belongs to another dealer situates at Allahabad and not the consignee situated at Bindki, Fatehpur as also the mobile number. The contention of the learned counsel for the petitioner is that that due to technical fault of the State Web-site E-way bill-02 could not be generated on 25.3.2018 before the movement of the goods from Varanasi to Fatehpur, however, the same was generated on 26.3.2018 in the morning which was much before the date of seizure order which has been admittedly passed on 27.3.2018 at 6 p.m. The counsel for the petitioner has also submitted that since both the consignor and consignee are registered with the respective Assessing Authority and are allotted requisite GSTIN number therefore there was no reason to disbelieve the contention of the petitioner.
217 GIB/MH/BUILDERS ASSOCIATION/28.03.2018/HC-243 BUILDERS ASSOCIATION OF NAVI MUMBAI LEVY OF GST FACTS AND ISSUE OF THE CASE:

In this case the first assessee was a registered public charitable trust and the second assessee was a partnership firm carrying on business as Builder and Developer. The members of the assessees were reputed Builders and Developers of Navi Mumbai and areas surrounding it. They had contributed to the growth and development of Navi Mumbai by constructing and developing several residential and commercial properties.

The City Industrial and Development Corporation of Maharashtra Limited (CIDCO) was a special planning authority for the areas of Navi Mumbai and was incorporated with the specific aim for creating a new planned, self-sufficient and sustainable city on the mainland across Thane Creek adjoining the Mumbai City. The assessees won the bid for securing lease of such land from CIDCO in areas of Navi Mumbai and Panvel. However, the assessees questioned the levying of GST separately on the one-time lease premium amount at the time when allotment letter was issued.

The assessee contended that GST could not be levied, assessed and recovered. A long-term lease of 60 years tantamounts to the sale of the immovable property since the lessor is deprived of, by the allotment of the right to use, enjoy and possess the property. The assessees also contended that the whole transaction is akin to the sale. If that is the position, then, section 7 of the GST Act cannot have any application. Once the position in law is understood in this perspective, then, there is no warrant for the imposition of the GST.

The revenue however contended that the law does not make any distinction between governmental and non-governmental agencies and supply of goods or services attracts GST. Once the legal provisions are clear, unambiguous and plain, then, regardless of the consequences, the tax is leviable.
218 GIB/KR/St. Josephs/28-03-2018/HC-19 M/s St. Josephs Tea Company Limited Registration Issues Involved:

Registration granted from a date other that appointed date of GST Act in case of Migration from KVAT to GST. 

 

Fact of the Case:

Petitioner migrated from KVAT to GST and applied for registration under the Goods and Services Tax statutes, but they have not been granted registration. However, in pursuance of an interim order of the High Court, they were granted registration w.e.f. 09-03-2018. Grievance of the petitioner concerns their inability to comply with the requirements in terms of the statutes for the period from 01-07-2017 to 09-03-2018.
219 GIB/GJ/BIPSON/27-03-2018/HC-84 BIPSON SURGICAL(INDIA) PVT. LTD Others Facts & Issue of the case

The petitioner M/s Bipson Surgical (India) Pvt. Ltd is engaged in the business of manufacture and distribution of surgical Dressing items such as Bandages, Gauge. Petitioners have prayed for an appropriate writ, direction and order quashing and setting aside the impugned decisions/order of the respondent No.2 Gujarat Medical Services Corporation Limited (GMSCL) as well as give effect to the change in Tax Structure whereby 12% GST has been introduced on goods that are supplied by the petitioners to respondent No.2-GMSCL. GMSCL is a procuring agency of Government of Gujarat which procures the drugs, surgical items etc. from different manufacturers and distributors for the supply of the same to the Government Hospitals throughout the State of Gujarat. The GMSCL invited the tenders from the eligible suppliers to supply different items. The petitioners awarded the contracts and were asked to supply 5 different items.  It is the case on behalf of the petitioners that at the relevant time when they submitted the bids and quoted the rates which came to be accepted, the GST / CGST was not in existence which came to be introduced subsequently and therefore, in view of the above, they may be permitted to change the rates. So, whether the respondents are required to be directed to accept the request of the petitioner of price revision in view of the introduction of the GST?
220 GIB/All/RK Overseas/01-02-2018/HC-126 RK Overseas Search & Seizure Facts & Issue of The Case:

The petitioner RK Overseas filed the petition against seizure of goods in transit vide order dated 18-1-2018 passed under section 129(1) of the U.P. Goods and Service Tax Act, 2017 

The order of seizure has been passed on two grounds that:

1. the goods were being transported from New Delhi and not from Ghaziabad as alleged.

2. Secondly, the value of the goods has been suppressed and according to Kaccha bill found with the consignment, the value of the goods is much higher.

 
221 GIB/MH/COMMISSIONER/25.01.2018/HC-240 THE COMMISSIONER OF SERVICE TAX LEVY OF SERVICE TAX FACTS OF THE CASE:

In this case the assessee was engaged in providing works contract service during the period October, 2008 to March, 2013 and was not discharging the service tax liability. The service tax of ₹ 9,57,98,251/- under the category of works contract service, ₹ 25,77,710/- under the category of management, maintenance or repair Service, totally amounting to ₹ 9,83,75,962/- was due and payable by the assessee for the aforesaid period. The assessee applied for service tax registration on 28-11-2011, for construction of residential complex service and after the visit of the Officers of the Anti-Evasion Cell. The assessee was granted registration.

A Show Cause Notice dated 28-2-2014, alleging as above, was issued and the demand was raised on the basis that the service tax amount collected from customers during the period 1-7-2010 to 31-3-2011 but not paid in the Government treasury, is the subject matter and that was quantified at ₹ 1,23,68,420/-The assessee admitted that it had not applied for service tax registration even though it provided taxable service since 2009-10.

ISSUE OF THE CASE :

Whether the CESTAT was right in holding that the assessee was not providing Management, Maintenance or Repair Service by collecting amount from prospective flat buyers, for maintaining the building, in the guise of deposits which is not returnable?

Whether the CESTAT has erred in holding that assessee is providing statutory service and has rendered definition provided under Section 65(105)(zzg) of Finance Act as null and void by accepting that he is not providing Management, Maintenance or repair service by maintaining the building and collecting amount for that or not?
222 GIB/UP/Shanti Eat /18-01-2018/HC-106 Shanti Eat Udyog Surir Kala Others Facts  & Issue Of The Case :

The first appeal filed by the petitioner against the order dated 03.12.2018 was beyond the period for which delay may have been condoned, by about nine days. As per the section 107 of U.P Goods and service tax Act 2017, the period of limitation to file first appeal is three months. The period for which the delay may be condoned is thirty days from the expiry of normal period of limitation. The first appeal which was filed by the petitioner against the order dated 03/12/2018,was beyond the period for which delay may have been condoned by about nine days.                  

As per the findings of the court , the applicant is engaged in the activity of running a brick Klin and the entire bricks was of first quality. The legal authorities on the behalf of the respondents had accepted notices, and sought for four weeks’ time to file counter affidavit.
223 GIB/KR/Indus tower Ltd./17.01.2020/HC-151 Indus tower ltd. Vs Assistant state tax officer Detention Facts  & Issue Of The Case :

 

 Indus Towers Ltd. Vs. Assistant tax officer is a public limited company engaged in the establishment and maintenance of towers for telecom service providers.

 They are registered under the Central Goods and Services Tax Act (the CGST Act) and the Kerala State Goods and Services Tax Act (the SGST Act).
224 GIB/ALL/Jai Maa Traders/16.11.2017/HC-149 M/s Jai Maa Traders E-way Bill Facts of the Case:

The petitioner was transporting wall putti from Alwar, Rajasthan. The Vehicle was intercepted by the authorities. The grounds for interception and subsequent seizure was that the consignment of goods was not accompanied by 'e-way' bill which is a necessary requirement. Before the seizure could be made, the dealer had already downloaded and produced the e-way bill before the authority.

 
225 GIB/DL/ON QUEST/26-10-2017/HC-42 ON QUEST MERCHANDISING INDIA PVT. LTD. Input Tax Credit The Delhi High Court (‘HC’) in case of Quest Merchandising India Pvt. Ltd v. Government of NCT of Delhi & Ors.1 and batch, including W.P. (c) 2106/2015 filed by Arise India Ltd., quashed demands against Petitioner purchasing dealers. • The Revenue preferred an SLP in case of Arise India Ltd.

For the other matters of the batch, the Revenue pleaded that the purchase transactions were not bona fide unlike in case of Arise India Ltd. and ought to be remitted back to the competent authority.

The decision of the High Court against which the Revenue preferred SLP before the Supreme Court is discussed hereunder.

The appellant, being a registered dealer, availed the ITC of the VAT paid on inputs procured from registered selling dealers. The VAT officer issued a default assessment order invoking Section 9(2)(g) of the DVAT Act.

The issue before the court was whether Section 9(2)(g) of the DVAT Act violates Articles 14 of the Constitution of India.

Section 9 (2) of the DVAT Act sets out the conditions under which ITC would not be allowed. Clauses (a) to (g) specify certain kinds of purchases which would not be eligible for the claim of ITC.

As per Section 9(2) No tax credit shall be allowed:

(a) in the case of the purchase of goods for goods purchased from a person who is not a registered dealer;

(b) for the purchase of non-creditable goods;

(c) for the purchase of goods which are to be incorporated into the structure of a building owned or occupied by the person;

 Explanation.- This sub-section does not prevent a tax credit arising for goods and building materials that are purchased either for the purpose of re-sale in an unmodified form, or for the performance of a works contract on a building owned or occupied by another;

(d) for goods purchased from a dealer who has elected to pay tax under section 16 of this Act;

(e) for goods purchased from a casual trader;

(f) to the dealers or class of dealers specified in the Fifth Schedule except the entry no.1 of the said Schedule.

(g) to the dealers or class of dealers unless the tax paid by the purchasing dealer has actually been deposited by the selling dealer with the Government or has been lawfully adjusted against output tax liability and correctly reflected in the return filed for the respective tax period.

 

The Delhi HC read down the expression ‘dealer or class of dealers’ in Section 9(2)(g) of the DVAT Act to not include a purchasing dealer who has bona fide entered into purchase transactions with validly registered selling dealers issuing tax invoices reflecting TIN numbers.

 

Department relied upon M/s. Mahalaxmi Cotton Ginning Pressing & Oil Industries v. State of Maharashtra the Bombay High Court was concerned with interpreting Section 48 (5) of the MVAT Act, which reads as under:

“(5) For the removal of doubt it is hereby declared that, in no case the amount of set off or refund on any purchase of goods shall exceed the amount of tax in respect of the same goods, actually paid, if any, under this Act or any earlier law, into the Government Treasury except to the extent where purchase tax is payable by the Claimant dealer on the purchase of the said goods effected by him:

Provided that, where tax levied or leviable under this Act or in earlier law is deferred or is deferrable under any Package Scheme of Incentives implemented by the State Government, then the tax shall be deemed to have been received in the government treasury for the purposes of this sub-section.”

 

However, Delhi HC observed that Bombay High Court was concerned with a situation where the purchase transactions disclosed by the purchasing dealer did not match the sale transactions disclosed by the selling dealer. In contrast, in the cases before this Court there is no instance where Annexures 2A and 2B have not matched.

 

Delhi HC further observed that there is no provision in the MVAT Act similar to Section 40A of the DVAT Act. Section 40A of the DVAT Act takes care of a situation where the selling dealer and the purchasing dealer act in collusion with a view to defrauding the Revenue

 

The fact situation where the transactions disclosed by the purchasing dealer and the selling dealer did not match does not exist in the Delhi Case. Consequently, the Delhi Court did not consider the decision of the Bombay High Court in Mahalaxmi Cotton Ginning Pressing and Oil Industries.

 

The purchasing dealer is being asked to do the impossible, i.e. to anticipate a selling dealer who will not deposit the tax collected by him with the Government and therefore avoid transacting with such selling dealers.

 

While denial of ITC could be justified where the purchasing dealer has acted without due diligence, i.e. by proceeding with the transaction without first ascertaining if the selling dealer is a registered dealer having a valid registration, provisions denying ITC to a purchasing dealer who has taken all the necessary precautions fails to distinguish such a diligent purchasing dealer from the one that has not acted bona fide.

This failure to distinguish bona fide purchasing dealers from those that are not results in Section 9(2)(g) applying equally to both the classes of purchasing dealers. This failure to make a reasonable classification attracts invalidation under Article 14 of the Constitution.

Against the Order of the Delhi HC, the Revenue preferred a SLP which was dismissed by the Supreme Court. The SLP in case of Arise India Ltd preferred by the Revenue was subsequently dismissed by the Supreme Court stating that it was not inclined to interfere with the HC order.
226 GIB/MH/ Kross Television /23-03-2017/HC-40 Kross Television India Pvt Ltd Vs Vikhyat Chitra Production Others Facts & Issue of the case

The Suit seeks an injunction in respect of the Kannada film Pushpaka Vimana, one that has already been released. The case of the Plaintiff is that the Kannada film is a plagiarised copy of the Korean film called Miracle In Cell No. 7 released on 23rd January 2013 first in Korean and then in English on YouTube in 2014. The 2nd Plaintiff approached the original producers of Korean film for rights to a Hindi remake, and obtained an assignment on 10th June2016. The 2nd Plaintiff obtained an exclusive license on 1st December 2016 to produce a theatrical motion picture. The 2nd Plaintiff then assigned its rights to the 1st Plaintiff. The 1st Plaintiff started researching the remake. In February 2017, the 1st Plaintiff found the infringing Kannada film. On checking with their assignors, the Plaintiffs learnt that the original producers had not assigned or transferred any rights to the Defendants. The Plaintiffs submits that all further exhibition, distribution and telecasts must be prevented as a prima facie case has been made out. He submits that the balance of convenience is with the Plaintiffs and that if an injunction as sought is not granted the Plaintiffs will suffer irreparable injury. It is in these circumstances that various injunctive orders are sought.

In the case, the Plaintiffs obtained addresses of the Defendant from the Central Board of Film Certification (“CBFC”). The Plaintiffs then attempted to serve the Defendants at those addresses by courier and hand delivery. The courier was told that the address of the Defendant was changed solely with an intention to evade or avoid service. The Plaintiffs’ Advocates attempted to contact the 1st Defendant, AR Vikhyat, on his mobile number. Copies of the plaint, Notice of Motion and the order of 17th March 2017 were served on Defendant No.1, Vikhyat, and Defendant No. 5, Deepak Krishna, by WhatsApp, which was received by the defendant. Then the Plaintiff’s Advocates tried to contact Krishna, Defendant No. 5 on E-Mail and attached the same as proof before court.
227 GIB/TN/Jayam/05.08.2016/HC-136 Jayam & Co. Others Facts  & Issue Of The Case :

In this case after issuance of  the original tax invoice and availing ITC, the vendor had given a discount and purchase credit note was issued for a lesser price. The dealer took into account the price it paid to M/s. LG Electronics after adjusting the discount that was subsequently given to the dealer to arrive at a net cost and adding VAT which was limited to the vendors by the dealer, the goods were resold at a lesser price. On August 19, 2010, By the Tamil Nadu Value Added Tax (Second Amendment) Act 2010, an amendment was inserted by way of Section 19 (20) in the TNVAT Act to provide for reversal of the amount of ITC for the goods over and above the output tax in those cases where a registered dealer has sold the goods at a price less than the price of the goods purchased by him.

 
228 GIB/DL/SURESH BANSAL/03-06-2016/HC-48 SURESH KUMAR BANSAL INTEREST Fact & Issues Involved:

The Petitioners are individuals who have entered into separate agreements with a builder (M/s Sethi Buildwell Pvt. Ltd.The builder has in addition to the consideration for the flats also recovered service tax from the Petitioners, which is payable by him for services in relation to construction of complex and on preferential location charges.

The Petitioners state that their agreement with the builder is a composite contract for purchase of immovable property and contend that in absence of specific provisions fo ascertaining the service component of the said agreement, the levy would be beyond the legislative competence of the Parliament.

The Petitioners further claim that the Act and the rules made thereunder do not provide any machinery for computation of value of services, if any, involved in construction of a complex and, therefore, no such tax can be

imposed.

Being aggrieved, the Petitioners filed Petitions before the Hon’ble High Court of Delhi challenging the levy of Service tax collected by the Builder on the services ‘in relation to construction of complex’ as defined under Section 65(105)(zzzh) of the Finance Act, 1994 (“the Finance Act”) read with the explanation introduced by virtue of the Finance Act 2010, as being ultra vires of the Constitution of India. The Petitioners also challenged Section 65(105) (zzzzu) of the Finance Act, which seeks to subject preferential location charges charged by a builder to Service tax.

Whether Service tax is eligible on the consideration paid by flat buyers to a builder/ developer, for purchasing a flat in a complex, which was under construction/ development?
229 GIB/DL/Challenger Computer/21.08.2015/HC-139 Challenger Computer Ltd Others Facts  & Issue Of The Case :

10(5) inserted in the DVAT Act with effect from 1st April 2010 As per Section 10 [(5) Where the goods which have been purchased by a dealer are sold at a price lower than the price at which it was purchased by the dealer, the tax credit on such purchases shall be reduced proportionately in the tax period during which the goods are sold. Revenue submitted that it was incumbent on the assessee to claim ITC only to a proportionate extent after accounting of discount received from selling dealer and, consequently, the assessee had to adjust input tax and reverse ITC claimed by it against discount received from selling dealer.
230 GIB/MD/Rupa & Co./13.08.2015/HC-143 M/s. Rupa & Co. Limited Vs The Commissioner of Central Excise Input Tax Credit Fact & Issue of Case:

The appellant M/s. Rupa & Co. Limited  is a manufacturer of cotton knitted garments and cotton knitted fabrics, falling under Sub-Heading Nos.6101.00 and 6002.92 respectively under the First Schedule to the Tariff Act, 1985.

The appellant had wrongly availed CENVAT credit on the stock declared on 1.4.2003 and utilized the same for payment of duty towards clearance of knitted garments manufactured by them, a show cause notice dated 8.7.2004 was issued. The appellant gave a reply on 29.7.2004.
231 GIB/MB/Rjay Bharat/06.07.2015/HC-137 Jay bharat Automobiles Limited Others Facts  & Issue Of The Case :

It was held that only because some incentives/ discounts are received by the appellant under various schemes of the manufacturer cannot lead to the conclusion that the incentive is received for promotion and marketing of goods. It is not material under what head the incentives are shown in the Ledgers, what is relevant is the nature of the transaction which is of sale. All manufacturers provide discount schemes to dealers. Such transactions cannot fall under the service category of Business Auxiliary Service when it is a normal market practice to offer discounts/ institutions to the dealers.
232 GIB/CHAN/Indian Oil/19.03.2015/HC-148 M/s Indian Oil Corporation Ltd. Panipat Others In Commissioner Central Excise Commissionerate Vs M/s Indian Oil Corporation Ltd (Punjab and Haryana High Court) Appeal Number: CEA No. 44 of 2014 (O&M), Date of Judgement/Order: 19/03/2015

“it was held by Punjab and Haryana High Court that substantive benefits provided by a notification cannot be denied on account of procedural lapses by the assessee.”
233 GIB/RJ/Commercial Tax/18.03.2015/HC-134 Commercial Tax Officer Others Facts  & Issue Of The Case :

It was held that an assessee could claim input tax credit based on invoice value even though the goods were subsequently sold to the consumers at a price lower than the invoice price. The HC observed that there was no restriction under the VAT law to sell goods below the invoice value. Assessee sold goods to the ultimate consumers on discounted amount and it was none of the business of the Revenue to interfere in the affairs of the assessee. Even if the assessee sells goods at a loss at least revenue should not have grudge or concern. It is also not debarred under the sales tax law and/or VAT law to sell the goods below the invoice value.

Once a whole seller has issued an invoice, then Input Tax Credit is allowable as per VAT invoice alone and the same requires to be allowed to the assessee - Sales tax law does not debar if the assessee chooses to sell the goods keeping in view the prospective discount or rebate which may be received by the assessee and in passing the same to the consumer on account of the business expediency or otherwise - Revenue petition dismissed
234 GIB/DL/PIONEER INDIA/13-09-2013/HC-120 PIONEER INDIA ELECTRONICS (P) LTD. VERSUS UNION OF INDIA REFUND Fact of the Case:

The petitioner M/s Pioneer India Electronics Private Limited was incorporated in the year 2008 and is subsidiary of Pioneer Corporation, Japan. The petitioner is engaged in the import and marketing of Pioneer branded products in India.

The petitioner imported several electrical goods falling under the first schedule of the Customs Tariff Act, 1975 (hereinafter referred to as, the Act). The goods were cleared after payment of provisional duty.

The petition was filed on the grounds:

Refund of 4% SAD - Circular No. 23/2010 - whether ulta virus – Refund of Provisional Duty Paid – Notification No. 102/2007 - Period of Limitation - Whether the Central Government while imposing conditions for grant of exemption u/s 25(1) of the Act could lay down conditions in derogation to the specific statutory provisions and stipulations contained in Section 27 of the Act - The problem had arisen largely due to failure of the respondents to pass final adjudication orders which were belatedly made - There was no explanation for this delay and the cause 
235 GIB/MH/Mahalaxmi Cotton/11-05-2012/HC-43 Mahalaxmi Cotton Ginning Input Tax Credit As per provisions of MVAT every dealer is liable to pay tax on a sale transaction with a purchasing dealer. The dealer is also entitled to claim by way of a set off under Section 48 the tax paid on his purchases as ITC. Section 86 prescribes a tax invoice which is issued, by a selling dealer, indicating the amount of tax recovered. The tax invoice has to contain a certification that the registration of the selling dealer under the MVAT Act, 2002 is in force on the date on which the sale of the goods specified in the tax invoice took place; that the transaction of sale has been effected by the selling dealer and shall be accounted for in the turnover of sales while filing the return and that the due tax, if any, payable on the sale has been paid or shall be paid

As per section 48 of the MVAT Act :

For the removal of doubt it is hereby declared that, in no case the amount of setoff or refund on any purchase of goods shall exceed the amount of tax in respect of the same goods, actually paid, if any, under this Act or any earlier law, into the Government treasury except to the extent where purchase tax is payable by the the claimant dealer on the purchase of the said goods effected by him.

In this case the Petitioner was partnership firm and a dealer registered under the MVAT Act, 2002, carries on business as a reseller in cotton bales. For 2009-10, the Petitioner filed its returns and, based on the purchases effected by it, claimed Input Tax Credit (ITC) by way of a set off under Section 48. The Petitioner was called upon to submit ledger copies and proof of the filing of returns by the dealer in those cases where the data was unmatched. ITC was not allowed for mismatched data and claim of refund reduced accordingly.

Petitioner challenged to the constitutional validity of the provisions of Section 48(5) is on the ground that it violates Article 14 of the Constitution.

 
236 GIB/BM/Malaysian Airlines/09.08.2010/HC-129 Malaysian Airlines vs The Union Of India Others
IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL JURISDICTION

 

 

 

WRIT PETITION NO. 17 OF 2004

 

 

 

(ORIGINAL SIDE MATTER)

 

M/s.Malaysian Airlines............................................................................. Petitioner.

 

V/s.

 

 

 


The Union of India.
The Joint Secretary (Camp Mumbai) Government of India.


 

 

 


The Commissioner of Customs (Appeals).
Deputy Commissioner of Customs.


ig...................................................................... Respondents.

 

WITH

WRIT PETITION NO. 3269 OF 2004 (ORIGINAL SIDE MATTER)

M/s.Saudi Arabian Airlines....................................................................... Petitioner.

 

V/s.

 

 


The Union of India.



 


 

 

 


The Joint Secretary (Camp Mumbai) Government of India.


 


The Commissioner of Customs (Appeals).
Deputy Commissioner of Customs............................................ Respondents.


 

 

 

WITH

WRIT PETITION NO. 3918 OF 2005 (APPELLATE SIDE)

 

 

 

M/s.North West Airlines.......................................................................... Petitioner.

 

V/s.

 


The Union of India.
The Joint Secretary (Camp Mumbai) Government of India.


 


The Commissioner of Customs.
Deputy Commissioner of Customs................................................... Respondents.


 

 

 

::: Downloaded on - 09/06/2013 16:15:24 ::: 2      wp-17.04--

 

WITH

WRIT PETITION NO. 2552 OF 2006

 

 

 

(ORIGINAL SIDE MATTER)

 

Kenya Airways Ltd......................................................................................... Petitioner.


 


V/s.

 


Union of India.
Mr.K.P.P.Nair,


 

 

 

Deputy Commissioner of Customs.


Mr.D.S.Negi,


The Commissioner of Customs (Appeals)


Dinesh Thakkar, Joint Secretary,


 

 

 

Government of India................................................................. Respondents.

 

D.P.Merchant, senior counsel i/b. Shah & Sanghi for the petitioner (in W.P.No.17/04)

 

Vikram Nankani with Madhur Baya i/b. N.S.Thacker for the petitioner (in W.P.No.3269/04)

 

 

V.Sridharan with Prakash Shah i/b. PDS Legal

 

 

 

for the petitioner (in W.P.No.3918/05).

 

Manoj Sanklecha with Sandeep Goyal and Ms.Khushanama Gazdar i/b. Mulla & Mulla & Craigie Blunt & Caroe  for the petitioner (in W.P.No.2552/06).

 

 

 

Vijay Kantharia with J.B.Mishra and Rutuja Ambekar for the respondents (in W.P.No.2552/06).

 

Vijay Kantharia with Suresh Kumar for the


 


 

respondents (in W.P.Nos.17/04).

 

A.S.Rao with Rutuja Ambekar for the respondents (in W.P.Nos.3269/04 and AS-W.P.No.3918/05).

 

 

CORAM :       V.C.DAGA AND K.K.TATED, JJ.

 

DATED : 9th August 2010. 3 wp-17.04--

JUDGMENT : (Per V.C.Daga, J.) All these petitions filed by the petitioners under Article 226 of the Constitution of India are challenging imposition of penalty under section 38(3) of the Finance Act, 1979 ("Finance Act" or "Act" for short) for delay in payment of Foreign Travel Tax ("FTT" for short) to the Government. The facts involved in all these petitions are more or less common and issues involved are identical. Hence all these petitions were heard together and are being disposed of by this common judgment.

 

Facts of W.P.No.17/2004 :

 

2. The petitioner in this petition is a Airline Company engaged in the business of carrying passengers between various locations in India and abroad. The petitioner in the course of its business collected FTT from passengers going abroad in accordance with the Finance Act and Foreign Travel Tax Rules, 1979 framed thereunder ("FTT Rules" for short). The petitioner for the months of April, August, September and December, 2001 failed to pay the FTT within the stipulated period.

 

In  view  of  its  failure,  four  separate  show-cause  notices  were  issued  to  the  petitioner.  The adjudicating authority vide its order dated 29th May, 2002 imposed penalty of Rs.4,19,700/- on the petitioner for late payment of FTT for the months of April, August and September, 2001, whereas vide order dated 18th July, 2002 imposed penalty for the month of December, 2001.

 

4 wp-17.04--

 

3. Aggrieved by the aforesaid order, petitioner filed two separate appeals before the Commissioner (Appeals). Pursuant to the interim order dated 16 th September, 2002, passed by the Commissioner (Appeals), the petitioner furnished bank guarantees for the amounts involved. The Commissioner (Appeals), vide his order dated 15th January, 2003, dismissed these appeals of the petitioner and upheld the order-in-original.

 

4.Aggrieved by the order-in-appeal, the petitioner invoked revisional jurisdiction; wherein the revisional authority dismissed the revision applications and upheld the order-in-appeal.


5. Being aggrieved by the said order, the petitioner has invoked writ jurisdiction of this Court.


 

Facts of W.P.No.3269/2004 :

 

6. The petitioner in this petition is also carrying on business as Carriers through Airlines under the name and style M/s.Audi Arabian Airlines. They have a licence to operate flights to and from India. As required under the Finance Act, the petitioner has paid FTT in the Government treasury. For the months of July, 1995; December, 1996; and November, 1997, there was delay in payment of FTT of only one day. The total tax involved for these three months was approximately Rs. 1,95,00,000/-. There was a delay of eleven days in case of April, 199 Also, there was a delay of two months and three days in making payment of FTT for the month of 5 wp-17.04--

 

December, 1995. However, in five out of these six instances of delay in delivering the payment by demand drafts purchased by the petitioner through the concerned bank well before the due date for making the payment, but there was a delay in depositing the subject demand drafts as mentioned above. The total short payment of tax in these seven cases was an aggregate amount of Rs.

 

14,000/-, out of which Rs.12,000/- was held to be barred by limitation as such only Rs.2,000/- was payable by the petitioner. Fourteen separate show-cause-notices were issued on different dates to the petitioner after receipt of monthly returns and they were called upon to show cause why the FTT short/late paid by them should not be recovered from them and why penalty should not be imposed on them under section 38 of the Finance Act. The petitioner by their reply dated 22nd July, 1998, replied said show-cause-notices, inter alia; submitting that on account inordinate delay in issuing the notices, the petitioner is handicapped in not being able to defend their case for want of records and documents.

 

7. The adjudicating authority, vide its order dated 31st August, 1999 confirmed the demand of FTT of Rs.87,700/- and further ordered the petitioner to pay interest @ 20% on the amount late paid, which worked out to Rs.2,58,630 and Rs.45,632/- on the amount which was short paid. The adjudicating authority also imposed penalty of Rs.24,000/- on the petitioner for late and short payment under section 38(3) of the Finance Act and separate penalty of Rs.6,000/- under rule 10A of the Rule of 1979 for late submission of the monthly return.

 

6 wp-17.04--

 

8. Aggrieved by the said order, petitioner filed appeal before the Commissioners (Appeal), who, vide his order dated 24th November, 1999 set aside the said order dated 31st August, 1999 and remanded case for de-novo consideration.

 

9. On remand, the adjudicating authority vide its order dated 8th August, 2001 reduced the demand of Rs. 14,000/- and confirmed the amount of interest as held payable earlier and imposed penalty of Rs.71,29,140/- in respect of six case of late payment of FTT and Rs.

 

2,800/- in respect of seventh case of short payment of FTT.


10. Aggrieved by the said order, petitioner filed appeal before the Commissioner (Appeals); wherein the Commissioner (Appeals), vide his order dated 17th January, 2001 directed the petitioner to deposit the entire amount of interest/ short payment and penalty which was reduced by the second respondent vide his order dated 12th July, 2002 to Rs.17,00,000/-. The petitioner has since then deposited the amount of Rs. 17,00,000/- as per the above order. On 9 th January, 2003, Commissioner (Appeals) heard the case on merits and dismissed the appeal upholding the order-in-original in toto.


11. Aggrieved by the said order, petitioner invoked revisional jurisdiction by preferring revision application before the Joint Secretary, Government of India, Ministry of Finance. During the pendency of the revision application, a show-cause-notice was served on 7 wp-17.04--

 

the petitioner calling upon them to show cause as to why penalty should not be enhanced under sub-rule (4) of rule 15 of the FTT Rules.

 

12. The petitioner replied to the above show cause notice vide its reply dated 2nd December, 2003. The revisional authority vide its order dated 29th October, 2004 held that the demand for FTT in five out of seven cases was barred by limitation and that only an amount of Rs.2,000/- was payable by the petitioner. It was also held that the issue regarding limitation for demand of interest on the late payment of FTT needed reconsideration. Accordingly matter was remitted back to the original authority for the limited purpose of ascertaining whether the show-cause-notice demanding interest on the delayed payment of FTT amount to Rs. 3,56,45,700/- was issued within the prescribed time limit under rule 7 of the said FTT Rules. The revisional authority, however, upheld the penalty of Rs. 71,29,140/-. The said order is a subject matter of challenge in this petition.

 

Facts of W.P.No.3918/2005 :

 

13. The petitioner is carrier engaged in the business of carrying passengers on international routes by air from India and into India. In terms of the Finance Act, the petitioner was required to collect and pay into the treasury within the specified period of 15 days, the amount of FTT collected by the petitioner from the passengers flying outside India in their flights pursuant to the provisions of the FTT Rules. The 8 wp-17.04--

 

petitioner was regularly collecting the FTT from the passengers and paying the same to the treasury. In respect of FTT collected during the month of July, 2002 amounting to Rs.48,11,500/-, the petitioner was required to pay the same to the treasury by 15 th August, 2002. The last date being the Independence Day of India was a national holiday. The petitioner's office at Mumbai received the cheque from its Delhi office in the evening of 16th August, 2002 and, thereafter, petitioner duly paid the tax collected, to the treasury in the early hours on the next day i.e. 17th August, 2002. In the circumstances, there was a delay of about two days in payment of FTT. On 2nd September, 2002, a show-cause- notice was issued to the petitioner proposing to levy interest of Rs.5,273/- under section 35A and penalty under section 38(3) of the Finance Act. They replied the same vide their reply dated 16th September, 2002 and explained the reasons for delayed payment. The Deputy Commissioner of Customs, the adjudicating authority, after offering opportunity of hearing to the petitioner, vide its order-in-original dated 12th November 2002 confirmed interest of Rs.5,273/- under section 35A and imposed penalty of Rs.9,62,300/- on the petitioner under section 38(3) read with Notification No.2/94 of the Finance Act.



 

14. Not satisfied with the aforesaid order, petitioner filed appeal before the Commissioner of Customs (Appeals) on 27th January, 2003 and paid an amount of Rs.4,81,150/- towards interest and penalty on 4th September, 2003. The Commissioner (Appeals) vide his order dated 28th October, 2003 dismissed appeal of the 9 wp-17.04--

 

petitioner and upheld the order-in-original. Aggrieved by the aforesaid order dated 28th October, 2003, petitioner invoked revision jurisdiction under section 129DD of the Customs Act, 1962 ("Customs Act" for short) before the Joint Secretary to the Government of India, Department of Revenue, New Delhi on 31st December, 2003, which came to be dismissed vide order dated 30th November, 2004.

 

15. Being aggrieved by the aforesaid, petitioner has invoked writ jurisdiction of this Court.

 

Facts of W.P.No.2552/2006 :

 

16. The petitioner in this petition is engaged in the business of transporting people by air on international routs, inter alia; from and to Mumbai.

 

The petitioner was required to collect FTT from every passengers and deposit the same with Government treasury. For the months of January, April and May, 2002, the petitioner though collected FTT from the passengers, however, committed delay in making deposit in the Government treasury. Three different show-cause notices were issued to the petitioner to which the petitioner filed their three separate replies. The adjudicating authority vide its order dated 18th July, 2002 confirmed the show cause notices and imposed an aggregate penalty of Rs.11,71,100/- as also interest of Rs.14,809/- on delayed deposit of FTT.

 

17. Aggrieved by the aforesaid order, petitioner filed appeal before the respondent No.3- Commissioner 10 wp-04--

 

(Appeals) along with application for dispensing with pre-deposit of penalty. Respondent No.3 vide its order dated 20th April, 2003 directed pre-deposit of entire amount of penalty. The petitioner did not make payment of the pre-deposit. According, respondent No.3, vide its order dated 2nd July, 2003 dismissed the appeal for non-compliance of order dated 20th April, 2003.

 

18. Aggrieved by the aforesaid order, petitioner invoked revisional jurisdiction before respondent No.4.

 

The respondent No.4 set aside the order dated 2nd July, 2003 passed by respondent No.3 and directed the petitioner to deposit Rs.5,50,000/- towards the penalty and remanded the matter to respondent No.3 for decision on merits. The petitioner deposited Rs.5,50,000/- as directed by

 



respondent No.4.

 

19. On remand, vide its order dated 14th June, 2005, the respondent No.2 set aside the order-in- original passed by respondent dated 18th July, 2002 and remanded the matter for re-adjudication of show cause notices in terms of the amendment made to rule 11 of the FTT Rules.

 

20. Aggrieved by the said order petitioner filed revision application before respondent No.4. The respondent No.4 vide his order dated 31st July, 2006 upheld the imposition of penalty of Rs.11,71,100/- as imposed by respondent No.2 on the basis of retrospective effect given to the amendment made to rule 11 of the FTT Rules.

 

11 wp-17.04--

 

21. Aggrieved by the said order, the petitioner has invoked writ jurisdiction of this Court.

 

22. All these petitions as stated hereinbefore were heard together involving common issues.

 

Rival Submissions :

 

23. Mr.Nankani, learned counsel for the petitioners through his oral and reiterated in the written submissions dated 7th July, 2010 would submit that the impugned orders are liable to be set aside being ex-facie illegal and arbitrary. That the Power to impose the penalty under section 38(3) of the Finance Act is exercisable only in case of "failure to pay the tax" and not where there is only a delay in the payment of the tax. That a "failure to pay" arises only where no payment has at all been made prior to the issuance of the demand notice and not where a payment has been made, albeit belatedly. He submits that the Act provides for the consequences of a belated payment separately in the form of a liability to pay interest under section 35A of the Act. According to him, a mere delay does not attract penalty.

 

24. Without prejudice to the above, he would, alternatively, submit that even assuming that a penalty is attracted for delayed payment, the same could only be adjudicated and imposed under proviso to rule 11 of the FTT Rules, wherein the maximum prescribed amount of penalty is Rs.5,000/-. No penalty in excess of the said amount could be imposed by the Respondents. That the provisions of section 38(3) will have to be read down to 12 wp-17.04--

 

cover only those cases where there is an absolute failure to pay, otherwise it would amount to conferring arbitrary, uncontrolled, unguided and unchecked powers in favour of the respondents in violation of Article 14 of the Constitution of India.

 

25. Mr.Nankani would, alternatively, submit that, in any event, the provision of section 38(3) was never invoked in the show-cause notices. No penalty under section 38(3) could, therefore, be imposed in relation to the subject show cause notices. He further submits that the scope of adjudication by the adjudicating authority was limited only to the aspect of determining the true and correct liability, after considering the legality of the notices issued to the petitioners.


26. Mr.Nankani would submit that in the appeal filed by the petitioner, the order in original dated 14th June, 1999 was set aside and the order under which the case was remanded to the adjudicating authority was not an "open remand" or "a full remand". As a corollary, the order of the respondent No.4, dated 14th June, 1999 imposing penalty of Rs.24,000/- on the petitioners (in W.P.No.3269/2004), for want of challenge at the instance of Revenue has become final and binding. Therefore, higher penalty of Rs.71,29,140/- could not have been imposed by the respondent No.4, as such it is liable to be set aside.


27. Mr.Nankani submits that in 5 cases, the demand drafts in favour of the Respondents had been ready prior to the due date for the payment of tax but the 13 wp-17.04--

 

same could not be deposited within prescribed time on account of reasons beyond the control of the petitioner.

 

That there was no intention on the part of the petitioner to cause delay in depositing the amount of tax which is apparent from the very fact that the demand drafts were got prepared well before the due date. Thus, having already parted with the amounts towards the value of the demand drafts, the petitioner did not stand to gain by a delayed deposit of the demand drafts with the respondents, unlike cases where a cheque may be issued but not paid. According to him, the said 5 cases cover a tax liability of Rs.2,94,83,400. In the 6th case, the notice had been issued after almost 2 years, much beyond the prescribed limitation, as such, no penalty under section 38(3) was warranted in respect of the said show cause notice.

 

28. According to Mr.Nankani, seven other notices covered a short payment of FTT foreign amounting to Rs.14,000/-. Of the said short paid tax, the demand in respect of a sum of Rs.12,000/- was barred by limitation and that the amount short paid was only Rs. 2,000/-. He, thus, submits that the impugned order suffers from non-application of mind and perverse approach.

 

29. Mr.Sridharan, learned counsel for the petitioners submits that failure to delete proviso to rule 11 after amendment of section 38(3) is an instance of legislative casus omissus which cannot be filled by the Court. That sub-section (1) of section 38 as originally introduced by Finance Act provided for imposition of penalty on the passenger who embarks or 14 wp-17.04--

 

attempts to embark on an international journey without paying the tax payable by him a penalty not exceeding Rs.200.00. Sub-section (2) of section 38 provided for penalty on every carrier or other person in charge of ship or aircraft, who in contravention of section 37, allows any passenger to board a ship or aircraft not exceeding three times the amount or aggregate of the amount of the tax payable by passenger(s) so allowed to board the ship or aircraft. Sub-section (3) of section 38 provided that any penalty under this section may be adjudged by such authority and in such manner as may be specified. Proviso to Rule 11 provided for ceiling of Rs. 5,000/-. It is, thus, obvious that having regard to language of section 38(1) and 38(2), penalty was unlikely to be substantial amount and because of this perhaps, proviso to Rule 11 put a ceiling of Rs.5,000/-. Sub-section (3) of section 38, in effect, provided for penalty on the Carrier who fails to pay the foreign travel tax to the credit of Central Government under section 35(2) not less than one-fifth, which may extend to three times the amount of tax not paid to Central Government. This penalty under new sub-section (3) is apart from sub-section (1) and (2). Also, quantum of penalty now proposed by new sub-section (3) can be much higher than section 38(1) and section 38(2). Old sub- section (3) is practically repeated in new sub-section (5). However, simultaneously, with the insertion of new sub-section (3) of section 38, proviso to rule 11 was not amended. Proviso to rule 11 continued as it is. It provided that no customs officers shall be competent to impose penalty exceeding Rs.5,000/-. He, thus, submits that this is a clear case of legislative casus omissus.



 

15 wp-17.04--

 

30. Mr.Sridharan pressed into service Apex Court judgment in the case of Smt. Hiradevi & Others v.

 

District Board Shajahanpur District Collector, AIR 1952 SC 362. (page 69 to 74 of Volume I at page 73 before para 12) to urge that it is, no doubt, the duty of the court to try to harmonize various provisions of the Act passed by the legislature, but it is certainly not the duty of the court to stretch the words used by the legislature to fill-in-the gaps or omissions in the provisions of the Act. According to Mr.Sridharan, the case of Smt.Hiradevi & others (supra) applies to the present case. The failure to amend proviso to Rule 11 is a clear case of casus omissus by legislature which cannot be filled up or supplied by court through a process of interpretation or otherwise.

 

31. Mr.Sridharan further submits that the respondents cannot challenge proviso to rule 11. Proviso to Rule 11, as it stood on the date of default by the Petitioners, did not allow the customs officer to impose penalty in excess of Rs. 5,000/-. That the Respondents are bound by the Rule. It is not open for them to challenge the validity of Rule either on the ground of being inconsistent with section 38(3) or otherwise. That privilege is available to the assessee and not to the State itself. Admittedly, the custom officer exercised the power of imposition of penalty under Rule 11. It is not open to the officer to challenge the validity of Rule under which he exercised the jurisdiction. In support of his submissions he relied upon (i) Indian Leaf Tobacco v. UIO, 1984 (16) 16 wp-17.04--

 

ELT 234; (ii) Asstt. Commr. v. Dharmendra Trading, (1988) 3 SCC 570; (iii) JK Synthetics v. Commercial Tax Officer, (1997) 3 SCC 161.

 

32. Mr.Sridharan further submitted that subsequent deletion of proviso to rule 11 is of no consequence for the past period. That the revisional authority erroneously sustained the penalty on the ground that inconsistency between rule 11 and section 38(3) is removed later on 13th October, 2003 by deleting proviso and amended rule 11 will apply. He submits that it is settled position in law that the provision, as in force on the date of alleged contravention, can only be applied. In Varkey Chacko v. C.I.T., 1994 supp (1) SCC 264, Supreme Court held as under:-

 

"11.         A penalty proceeding, therefore, can be initiated only after an assessment order has been made which finds such concealment or furnishing of inaccurate particulars. Who at this point of time has the authority to impose the penalty is what is relevant. Whoever this authority may be, he is obliged to impose such penalty as was permissible under the law in that behalf on the date on which the offence of concealment of income was committed, that is to say, on the date of offending return. The two aspects must firmly be borne in mind, namely, who may impose the penalty and in what measure."



 

33. Mr.Sridharan while adopting submission made by Mr.Nankani submits that section 38(3) is not applicable for delay in payment of tax by due date and went on to develop the very same contention and urged that the 17 wp-17.04--

 

Parliament/ Legislature can certainly provide for penalty for non payment of tax by due date by employing appropriate language in the concerned stature. That in many taxing Statues penalty for non payment of tax on due date is expressly provided. However, language of section 38(3) does not cover the contingency of a delay in payment of tax. It is submitted that section 38(3) is a charging section by which penalty is imposed. Section 38(3) is not a machinery provision. He submits that it is a settled position in law that provisions of taxing statue are to be construed strictly. Charging provision providing for imposition of penalty is to be construed even more strictly. Therefore, section 38(3) is to be strictly constructed. This is more so when Act provides for payment of interest @ 20 per cent, which rate itself has inbuilt with element of penalty in it. He placed reliance on the judgment of the Supreme Court in the case of Maruti Wire Industries (P) Ltd. v.

 

Sales Tax Officer, 2001 (3) SCC 735; wherein the assessee did not even file a return as provided in the Rules and did not therefore pay any tax at all. Rule 27 (7A) of Kerala General Sales Tax Rules, 1963 mandates filing of return along with proof of payment of tax within 20 days of the close of the quarter. Section 23(3) provided for penalty if tax assessed is not paid within time prescribed. The Supreme  Court,  thus  held  that  a  legislative  casus  omissus  cannot  be  supplied  by  judicial interpretative process. He submits that the ratio of this decision applies to the present case.

 

34. Mr.Sanklecha while adopting the submissions advanced by Mr.Nankani and Mr.Sridharan went on to 18 wp-17.04--

 

submit that section 38(3) of the Act is not applicable to the facts of the cases in hand, which, according to him, appears to be more particularly governed by section 38(4) of the Act. He while relying on the proviso to rule 11 of the Rules urged that the court should not declare the said rule ultra vires the parent Act and should try to reconcile the rule with the parent Act adopting rule of harmonious construction which, according to him, applies to the cases in hand. Reliance is placed on the Supreme Court judgment in the case of J.K.Cotton Spng. & Wvg. Mills v. State of U.P., AIR 1961 SC 1170 and UCO Bank v. Rajinder Lal Capoor, (2008) 5 SCC 257 (para-28).

 

35. Mr.Sanklecha further submits that if two or more provisions of the statue appear to carry different meaning, a construction which would give effect to all of them should be preferred. In support of this submission, he placed reliance on the judgment of the Supreme Court in the case of Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd., (2008) 4 SCC 755; wherein the Apex Court relied upon Mimansa principles of interpretation and advocated that wherever the harmonious construction is possible and reconciliation is obtainable, the same must be obtained. He, therefore, submits that if the said principles of reconciliation are applied, there will be no conflict between section 38(3) of the Act and proviso to rule 11 of the said Rules as existed at the relevant time.



 

36. Mr.Sanklecha further submits that when the executive by way of subordinate legislation chose to 19 wp-17.04--

 

limit or cap the maximum penalty imposable under the proviso to rule 11 of the FTT Rules, it is not for the writ Court to decide whether or not the same is appropriate, particularly, when the same is reconcilable with the parent Act. He submits that if reconciliation is not possible, then the provision which is more beneficial to the subject should be adopted. He, thus, submits that the maximum penalty which could be imposed on the petitioners was only Rs. 5,000/- each in case of delayed payment. In alternative, without prejudice to this contention, he further submits that in view of section 38(4) of the Act, penalty in excess of Rs.50,000/- cannot be imposed. While, in case in hand, the penalty imposed by the respondents is in excess of Rs.50,000/- as such the same is liable to be quashed and set aside.

 

37. Mr.Merchant adopted the submissions advanced by Mr.Nankani; Mr.Sridharan and Mr.Sanklecha and prayed that the impugned order be quashed and set aside and the rule be made absolute.

 

Per Contra :

 

38. Mr.Rao and Mr.Kantharia, learned advocates appearing for the Revenue pressed into service the scheme of the Finance Act, 1979 in particular engrafted in sections 33 to 41. In their submission, sub-section (1) of section 35 is a charging section and, inter alia; provides for levy of FTT on all passengers embarking all international journey. Sub-section (2) of section 35 provides that in accordance with the FTT Rules, FTT 20 wp-17.04--

 

shall be collected by the officers of the Customs appointed under the Customs Act or such officers of the Central or State Government or the Airport Authority of India or such carriers, as may be authorised in this behalf by the Central Government by notification in the official gazette and credit the same to the Central Government. Rule 4 of the FTT Rules, inter alia provides that the FTT collected in any month by any carrier shall be paid before the expiry of 15 days from the end of that month into the treasury. Therefore, according to them, combined reading of section 35(2) with rule 4 makes it amply clear that the FTT has to be collected as per the rates prescribed under section 35(1) and the same has to be paid into the credit of the Central Government within 15 days from the end of the month, during which the tax has been collected. It is, thus, submitted that the charging section also lays down the time limit for payment of FTT into the credit of the Central Government.

 

39. The learned counsel for the Revenue while relying upon the provisions of the Finance Act, 1979 submit that the sub-section (3) of section 38 of the Act would be applicable immediately upon failure to pay tax as envisaged under section 35(2) of the said Act read with rule 4 of the FTT Rules. They, thus, submit that the contention of the petitioners that section 38(3) would be applicable only in case of total failure to pay FTT to the credit of the Central Government is misconceived and legally not tenable. 21 wp-17.04--



40. Mr.Rao relying upon section 38(3) submits that the said section makes it clear that minimum penalty that can be imposed is 1/5 of the amount of tax unpaid tax and that can extend to three times of the amount of tax not paid to the credit of the Central Government. According to him, the adjudicating authority has no discretion in the matter of levy of minimum penalty. It is mandatory for it to levy minimum penalty which cannot be less than 1/5 of the amount of tax not paid. He submits that proviso to rule 11 of the FTT Rules is inconsistent with the substantive statutory provision and hence the substantive statutory provisions shall prevail. He relied on ITW Signode India Ltd. v. Collector of Central Excise, 2003 (158) ELT 403 (SC) in support of his submission. He further relied upon the judgment of this Court in the case of Iran National Airlines v. Union of India, 2006 (202) ELT 588 (Bom.) followed in North West Airlines v. Union of India, 2007 (214) ELT 278 (Bom); wherein Division Bench of this Court upheld the minimum penalty imposed upon the carrier/airlines under section 38(3) of the Finance Act.

 

That in these cases, admittedly, the carrier/airlines had failed to make payment of FTT collected within the specified period, as such imposition of minimum penalty was in accordance with law. Reliance is also placed on the judgment of the Delhi High Court in the case of Combatta Aviation Ltd. v. Union of India, 2000 (115) ELT 622 (Del.).

 

41. Learned counsel for the Revenue, lastly, submitted that this Court under Article 226 of the Constitution of India is having wide powers and is 22 wp-17.04--

 

empowered to uphold the rule of law and cannot allow any illegality or any inconsistency in law to operate. He, therefore, submits that the revisional authority was perfectly justified in upholding the penalty imposed by the adjudicating authority and it was rightly confirmed by the appellate authority.

 

Statutory Provisions :

 

42. Before we deal with the rival contentions and the case-laws on the point, it would be proper if we notice relevant statutory provisions of the Finance Act, 1979 and Foreign Travel Tax Rules, 1979.

 

Finance Act, 1979 :

 

1. Short title and commencement.-

 


This Act may be called the Finance Act, 1979.


 


Save as otherwise provided in this Act, sections 2 to 27 and sections 44, 45 and 46 shall be deemed to have come into force on the 1st day of April, 1979.



 



Definitions.- In this Chapter, unless the context otherwise requires.-- (a) .... ..... .....


(b) "carrier" means the person or authority undertaking the carriage of a passenger on an international journey and includes any agent, representative or other person acting on behalf of such person or authority;

 

..... ..... .....

 


Foreign travel tax.- (1) With effect from the date of commencement of this 23 wp-17.04--


 

Chapter, there shall be levied on all passengers embarking on international journeys a tax (hereafter in this Chapter referred to as the foreign travel tax)--

 




at the rate of one hundred rupees for every such journey to any place outside India other than a place in a neighbouring country;




 




at the rate of fifty rupees for every such journey, where such journey is to any place in a neighbouring country.




 

Explanation.-                .....                                     .....                                     .....

 




In         accordance              with          the         rules            made




 

under this Chapter, the foreign travel tax shall be collected by the officers of customs appointed under the Customs Act, 1962, or such officers of the Central Government or the State Government or the International Airports Authority of India constituted under the International Airports Authority Act, 1971, or such carriers, as may be, considered in this behalf by the Central Government by notificati8on in the Official Gazette and paid to the credit of the Central Government.

 

38. Penalties.-

 

(1)                 .....                      .....

(2)                 .....                      .....

 

 

 




Every           carrier              or         other           person           who




 

fails to pay the foreign travel tax to the credit of the Central Government under sub- section (2) of section 35 shall, in addition to the payment of such tax and the interest leviable thereon, be liable to pay penalty which shall not be less than one- fifth but which may extend to three times of the


 


amount of the tax not so paid to the credit of the Central Government.

 

24                                                                                     wp-17.04--

 




Any         rule           made        under          this           Chapter            may




 

provide that in case of breach thereof by the carrier or other person, he shall be liable to penalty which shall not be less than five hundred rupees but which may extend to fifty thousand rupees, and where the breach is continuing one, with further penalty which may extend to five hundred rupees for every day after the first during which such breach continues.

 




Any penalty under this section may be adjudged, collected and paid to the credit of the Central Government by such authority and in such manner as may be specified in the rules made under this Chapter.




 

Provided that no order for imposing a penalty shall be passed by such authority unless the carrier or other person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.

 

Foreign Travel Tax Rules, 1979 :

 

11. Adjudication of penalties.- In every case in which any person is liable to penalty under Sec.38 of the Act, such penalty may be adjudged by an officer of customs mentioned in Sec.3(c) or Sec.3(d) of the Customs Act:

 

Provided that no officer of customs mentioned in Sec.3 of the Customs Act shall be competent to impose a penalty exceeding five thousand rupees in any such case.

 

43. The Finance Act, 1979, which received assent of the President on 10th May, 1979 contains Chapter V which provides for provisions of levy of FTT under section 35 of the Act on all passengers embarking on the 25 wp-17.04--

 

international journey and created liability on the carriers to collect and pay it to the Central Government.

 

44. Section 35A thereof created liability on the carrier to pay interest for default in payment of FTT, whereas section 38 in general provides for penalty and sub-section (3) thereof, in particular, provides for penalty on the carrier or other person who fails to pay FTT to the Central Government under sub-section (2) of section 35. In addition to the payment of such tax and the interest leviable thereon, the carrier is also held liable to pay minimum penalty not less than one-fifth, which may extend to three times of the amount of tax not so paid to the credit of the Central Government. Sub- section (4) of section 38 provides that in case of breach of any rules by the carrier or other person, he shall be liable to pay penalty which shall not be less than five hundred rupees, which may extend to fifty thousand rupees, and where the breach is a continuing one, with further penalty which may extend to five hundred rupees for every day after the first during which such breach continues.

 



Proviso to section 38 provides that no order for imposing a penalty shall be passed by such authority unless the carrier or other person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.

 

45. With the above understanding of the provisions of the Act, if one turns to the provisions of Rules in general and rule 11 thereof in particular, one may find 26 wp-17.04--

 

that proviso to rule 11 provides that no officer of customs mentioned in Sec.3 of the Customs Act shall be competent to impose a penalty exceeding five thousand rupees in any such case.

 

46. With the above preface of statutory provisions, we propose to consider the rival contentions.

 

Consideration :

 

47. All the advocates appearing for the petitioners in one voice urged that under proviso to rule 11 of the FTT Rules, no officer of Customs mentioned in section 3 of the Customs Act is competent to impose penalty under section 38(3) of the Act more than Rs.5,000/-. According to them, rule 11 is a part of the statute and it provides for lesser penalty than provided in section 38(3) of the Act. Proviso to rule 11 of the FTT Rules being beneficial to the assessees, it should be given effect to rather than section 38(3) of the Act. In other words, no penalty in excess of Rs. 5,000/- could be imposed by the respondents is the unequivocal submission advanced by the advocates appearing for the petitioners. In addition to this, it is further submitted that rule 11 of the FTT Rules existed on the statute right from 11th June, 1979, whereas sub-sections (3), (4) and (5) of section 38 were substituted for the original sub-section (3) by the Finance Act (32 of 1994). At that time it was expected on the part of the legislature to amend rule 11 of the FTT Rules. Since there is omission to amend rule 11, a 27 wp-17.04--

 

legislative casus omissus cannot be supplied by process of judicial interpretation. It is, thus, urged that sub-section (3) of section 38 cannot be used against the petitioners to impose penalty for late payment of FTT.

 

48. The proper construction of legislative provisions as regards rules and regulations made under the Act fell for consideration in several English and Indian decisions. One of the leading judgment delivered by the Constitution Bench of the Hon'ble Supreme Court in case of Chief Inspector of Minkes v. Karam Chand Thapar, AIR 1961 SC 838 can conveniently be referred to repel the construction put on the statutory provision by the advocates appearing for the petitioners. In the said judgment, the Hon'ble Supreme Court has referred to an earlier decision in the case of Institute of Patent Agents v. Lockwood, 1894 AC 347; wherein similar question was considered. Hon'ble Supreme Court relied upon the observations of the Lord Chancellor while considering the question as to how far, if at all, the courts could consider the question of validity of the rules running contrary to the provisions of the Act. The observations made are:-

 

" "No doubt", said he, "there might be some conflict between a rule and a provision of the Act. Well, there is a conflict sometimes between two sections to be found in the same Act. You have to try and reconcile them as best as you may. If you cannot, you have to determine which is the leading provision and which is the subordinate provision, and which must give way to the other. That would be so with regard to enactments  and  with  regard  to  rules  which  are  to  be  treated  as  if  within  28 wp-17.04--



 

the enactment. In that case probably the enactment itself would be treated as the governing consideration and the rule as subordinate to it."

 

(emphasis supplied)

 

49. From the above observations, it is clear that a delegated legislation would have to be read in the context of the primary statute under which it is made and, in case of any conflict, it is primary legislation that will prevail. The Hon'ble Supreme Court in the case of ITW Signode India Ltd. v. Collector of Central Excise (supra) held as under:

 

"it is well settled principle of law that in case of a conflict between a substantive act and delegated legislation, the former shall prevail in as much as delegated legislation must be read in the context of the primary/legislative act and not the vice-

 

versa."

 

50. Apart from the above judgment, the aforesaid principle is also recognised by the Hon'ble Supreme Court in Union of India v. Somasundram Viswanath, 1989 (1) SCC 175; wherein the Court ruled that the Act will prevail over the Rules. The rule which travels beyond the scope of Act cannot be given effect to. [also see Bimal Chandra Banerjee v. State of Madhya Pradesh, 81 ITR 105 (SC); Lohia Machines Ltd. v. Union of India, 152 ITR 308 (SC); Chowgule & Co. v. C.I.T., 195 ITR 810 (Bom)] 29 wp-17.04--

 

51. Keeping in mind the aforesaid well settled principles of rule of interpretation, if one turns to section 38(3) of the Act, in contrast to rule 11 of the FTT Rules, it is not difficult to notice that the said rule runs contrary to the provision of the Act. There is a clear conflict between the proviso to rule 11 and section 38(3), the substantive provision of the Act.

 

Reconciliation thereof is not possible. Sub-section (3) of section 38 of the Act is a leading provision which by no stretch of imagination can be said to be or treated as subordinate provision. The sub-ordinate provision must give way to the leading provision of the Act. Rule being sub-ordinate legislation cannot override the provision of primary legislation. In this view of the matter, the submission advanced on behalf of the petitioners that the penalty must be in consonance with proviso to rule 11 of the FTT Rules and not in line with section 38(3) of the Act is without any substance. The submission advanced by Mr.Sridharan that legislative casus omissus cannot be supplied by the Court is misplaced since this court is only giving primacy to primary provision of the primary legislation while upholding minimum penalty imposed.



 

52. The provision of Chapter-V of the Act in general and section 38(3) in particular provides that every carrier or other person, who fails to pay the FTT to the credit of the Central Government under sub- section (2) of section 35, in addition to payment of such tax and the interest leviable thereon, is made liable to pay penalty. The said provision shows the mandatory nature of payment of liability. The use of 30 wp-17.04--

 

the word "shall" in the statute, ordinarily speaking, means the statutory provision is mandatory. It is construed as such, unless there is something in the context in which the word is used, which would justify departure from that meaning. There is nothing in the language of the provision of section 38(3) which would justify any departure. On the other hand, section 38(3) makes it abundantly clear that if the carrier or any other person fails to pay the FTT to the credit of the Central Government within fifteen days as specified, the penalty must follow, which shall not be less than one-

 

fifth of the amount of FTT. It is well settled that when the consequences of the failure to comply with the prescribed requirement is provided by the statute itself, there can be no manner of doubt that such statutory requirement must be interpreted as mandatory.

 

53. If we turn to the statutory provisions and the scheme of the foreign travel tax and collection thereof, section 35 of the Act creates liability to collect tax and payment thereof to the credit of the Central Government. Section 35A provides for payment of interest for default in payment of FTT, whereas section 38 provides for penalty in case of non-payment of FTT within a prescribed time frame, subject to compliance of the principles of natural justice. Both sections operate in different contingencies.

 

54. Further more, the question as to whether mens rea is essential ingredient or not depends upon the nature of the right of the parties and the purpose of penalty for which penalty is sought to be imposed.

 

31 wp-17.04--

 

Section 38 of the Act nowhere fastens criminal liability. The default or failure to pay is nothing, but failure or default to comply with the statutory civil obligations provided under the Act and the rules made thereunder. The penalty leviable under Chapter-V or under section 38 is penalty in case of default or failure of statutory obligation or in other words for breach of civil obligation. In the provisions engrafted under Chapter-V of the Act, there is no element of any criminal aspect as is generally contemplated under criminal proceedings. Therefore, there is no need to establish proof of criminal motive or any mens rea on the part of the defaulter. It is not an essential element for imposing penalty under the Act and rules framed thereunder.

 

55. In Chairman, S.E.B.I. v. Shriram Mutual Fund, AIR 2006 SC 2287, the Hon'ble Supreme Court had an occasion to consider more or less similar provision; wherein the Apex Court referred to the case of Director of Enforcement v. MCTM Corporation Pvt.Ltd., (1996) 2 SCC 471 and extracted observations made therein reading as under:



 

"It is thus the breach of a "civil obligation" which attracts "penalty" under Section 23(1)(a) FERA, 1947 and a finding that the delinquent has contravened the provisions of Section 10 FERA 1947 that would immediately attract the levy of "penalty" under Section 23, irrespective of the fact whether the contravention was made by the defaulter with any "guilty intention" or not. Therefore, unlike in a criminal case, where it is essential for the 'prosecution' to establish that the 32 wp-17.04--

 

'accused' had the necessary guilty intention or in other words the requisite 'mens rea' to  commit  the  alleged  offence  with  which  he  is  charged  before  recording  his conviction, the obligation on the part of the Directorate of Enforcement, in cases of contravention of the provisions of Section 10 of FERA, would be discharged where it is shown that the "blameworthy conduct" of the delinquent had been established by wilful contravention by him of the provisions of Section 10, FERA 1947. It is the delinquency of the defaulter itself which establishes his 'blameworthy' conduct, attracting the provisions of Section 23(1)(a) of FERA, 1947, without any further proof of the existence of "mens rea". Even after an adjudication by the authorities and levy of penalty under Section 23(1)(a) of FERA, 1947, the defaulter can still be tried and punished for the commission of an offence under the penal law ............................................................................................................... "

 

In Corpus Juris Secundrum. Vol.85 at page 580, para 1023, it is stated thus:

 

"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws."

 

"We are in agreement with the aforesaid view and in our opinion what applies to "tax delinquency" equally holds good for the 'blameworthy' conduct for contravention of the provisions of FERA, 1947. We, therefore, hold that mens area (as is understood in criminal law) is not an essential ingredient for holding a delinquent liable to pay penalty under Section 23(1)(a) of FERA, 1947 for contravention of the provisions of Section 10 of FERA, 1947 and that penalty is 33 wp-17.04--

 

attracted under Section 23(1)(a) as soon as contravention of the statutory obligation contemplated by Section 10(1)(a) is established. The High Court apparently fell in error in treating the "blameworthy conduct" under the Act as equivalent to the commission of a "criminal offence", overlooking the position that the "blameworthy conduct" in the adjudicatory proceedings is established by proof only of the breach of a civil obligation under the Act, for which the defaulter is obliged to make amends by payment of the penalty imposed under Section 23(1)(a) of the Act irrespective of the fact whether he committed the breach, with or without any guilty intention."


 


In J.K. Industries Ltd. & Ors. v. Chief Inspector of Factories and Boilers & Ors., (1996) 6 SCC 665 the Hon'ble Supreme Court made following observations:

 

"The offences under the Act are not a part of general penal law but arise from the breach of a duty provided in a special beneficial social defence legislation, which creates absolute or strict liability without proof of any mens rea. The offences are strict statutory offences for which establishment of mens rea is not an essential ingredient. The omission or commission of the statutory breach is itself the offence. Similar type of offences based on the principle of strict liability, which means liability without fault or mens rea, exist in many statutes relating to economic crimes as well as in laws concerning the industry, food adulteration, prevention of pollution etc. in India and abroad. "Absolute offences" are not criminal offences in any real sense but acts which are prohibited in the interest of welfare of the public and the prohibition is backed by sanction of penalty. "

 

34 wp-17.04--

 

In R.S. Joshi Sales Tax Officer, Gujarat & Ors. v. Ajit Mills Ltd. & anr.etc. , (1977) 4 SCC 98, the Hon'ble Supreme Court observed as under:

 

". Even here we may reject the notion that a penalty or a punishment cannot be

cast in the form of an absolute or no-fault liability but must be preceded by mens rea. The classical view that 'no mens rea, no crime' has long ago been eroded and several laws in India and abroad, especially regarding economic crimes and departmental penalties, have created severe punishments even where the offences have been defined to exclude mens rea. Therefore, the contention that Section 37(1) fastens a heavy liability regardless of fault has no force in depriving the forfeiture of the character of penalty."

 

In M/s Gujarat Travancore Agency, Cochin v. C.I.T., (1989) 3 SCC 52, the Hon'ble Supreme Court observed as under:

 

".          It is sufficient for us to refer to Section 271(1)(a), which provides that a penalty

may be imposed if the Income Tax Officer is satisfied that any person has without reasonable cause failed to furnish the return of total income, and to Section 276-C which provides that if a person wilfully fails to furnish in due time the return of income  required  under  Section  139(1), he  shall  be  punishable  with  rigorous imprisonment for a term which may extend to one year or with fine. It is clear that in the former case what is intended is a civil obligation while in the latter what is imposed is a criminal sentence. There can be no dispute that 35 wp-17.04--

 

having regard to the provisions of Section 276-C, which speaks of wilful failure on the part of the defaulter and taking into consideration the nature of the penalty, which is punitive, no sentence can be imposed under that provision unless the element of mens rea is established. In most cases of criminal liability, the intention of the legislature is that the penalty should serve as a deterrent. The creation of an offence by statute proceeds on the assumption that society suffers injury by the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. In the case of a proceeding under Section 271(1)(a), however, it seems that the intention of the legislature is to emphasise the fact of loss of revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection, the terms in which the penalty falls to be measured is significant. Unless there is something in the language of the statute indicating the need to establish the element of mens rea it is generally sufficient to prove that a default in complying with the statute has occurred. In our opinion, there is nothing in Section 271(1)(a) which requires that mens rea must be proved before penalty can be levied under that provision."



 

The Hon'ble Supreme Court in another judgment in Swedish Match AB v. S.E.B.I., (2004) 11 SCC 641 observed as under:

 

".           The provisions of Section 15-H of the Act mandate that a penalty of rupees

twenty five crores may be imposed. The Board does not have any discretion in the matter and, thus the adjudication proceeding is a mere formality. Imposition 36 wp-17.04--

 

of penalty upon the appellant would, thus, be a forgone conclusion. Only in the criminal proceedings initiated against the appellants, existence of mens rea on the part of the appellants will come up for consideration."

 

56. The case of Hindustan Steel Ltd. v. State of Orissa, AIR 1970 SC 253 relied upon was a case under the Orissa Sales Tax Act, 1947 which dealt with the imposition of a minimum penalty for failure to carry out statutory obligation. The Court held that such an order imposing penalty is the result of quasi-criminal proceeding and penalty will not ordinarily be imposed unless party obliged either acted deliberately in defiance of law or acted in conscious disregard of its obligation. Because of its quasi-criminal character, the Court held that the element of mens rea or bonafiders was to be imported which would justify the authority which was competent to impose or refuse to impose penalty even when the statute provided for a fixed minimum penalty on proof of default. This case has no application to the facts of the cases in hand. Section 38(3) merely provides consequences of the failure to comply with the provisions of section 35(2) of the Act.

 

57. As already noticed, each petitioner was served with the show cause notice. They were given opportunity of hearing. The adverse circumstances were brought to their notice. They were heard and thereafter, by reasoned order imposing penalty is passed against on each of the petitioners. The petitioners have availed 37 wp-17.04--

 

opportunity of appeal and revision before the competent authorities provided under the Act. All the three different authorities have passed reasoned orders in consonance with the provisions of the Act following principles of natural justice.



 

58. The sole question that arises for consideration in the present petitions, is: whether the authorities below were justified in imposing and sustaining penalty in consonance with sub-section

(3) of section 38 of the Act ignoring proviso to rule 11 of the FTT Rules. The breach of civil obligation against each petitioner has been established, which was sufficient to attract penalty in the nature of fine under the provisions of the Act irrespective of the fact whether or not the contravention made by the defaulter was with any guilty intention.

 

59. Learned counsel appearing for the parties took us through the order passed by the adjudicating authority. It is seen that the respondents, in all cases, have admitted violation of the provisions of the Act by making late deposits. Sub-section (3) of section 38 of the Act provides that every carrier or other persons who fails to pay FTT to the Central Government under section 35(2) shall be in addition to payment of such tax and interest leviable thereon be liable to pay penalty which shall not be less than one-fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government. The factual matrix in the cases in hand demonstrate several instances of delayed payment, short or nonpayment of the 38 wp-17.04--

 

FTT apart from the lapses committed by the carriers in filing returns. It is, thus, clear that the delayed payment or rather nonpayment of the part of the FTT within the prescribed period is an admitted fact in all these petitions.

 

60. One more submission advanced by the advocates appearing for the petitioners is that power to impose penalty under section 38(3) of the Act is exercisable only in case of "failure to pay the tax" and not where there is only a delay in the payment of tax. According to them, "failure to pay" arises only where no payment has at all been made prior to the issuance of the demand notice and does not arise where a payment has been made, albeit belatedly. In other words, mere delay in payment cannot be within the sweep of "failure to pay". Hence delayed payment does not attract penalty. The said submission is also devoid of any substance.

 

61. Let us find out the meaning of the concept "failure to pay". The said concept has not been defined under the Act or Rules. "Failure to pay" means non- payment. The meaning of non-payment, as given in the Black's Law Dictionary, is:

 

"Failure to deliver money or other valuables, esp. when due in discharge of an obligation.

 

The concept of failure to pay can be quoted with non- payment. Non-payment is nothing but failure to pay when due. As per the provisions of the Act, amount of FTT 39 wp-17.04--

 

collected becomes due within fifteen days from the date of collection thereof. Failure to pay within this prescribed time frame would mean non-payment or failure to pay. If any person fails to pay within the statutory period of fifteen days, then such person is well within the sweep of the words "failure to pay". Once the period of fifteen days is over and breach in payment of tax is committed, then it is immaterial when the defaulter in future is making the payment. Had there been no minimum penalty prescribed under sub-section (3) of section 38 of the Act, it would have been open for the adjudicating authority to consider the conduct of the defaulter and the extent of delay taking into account the extenuating circumstances while imposing penalty. But once the statute prescribes the minimum penalty without giving any discretion in favour of the adjudicating authority, then one has to go by the provisions of the Act.



 

62. This Court while exercising writ jurisdiction has only to consider whether or not power to impose penalty has been exercised in accordance with the provisions of the Act and that the decision making process is in accordance with law. Once the Court comes to the conclusion that there is no fault on the part of the adjudicating authority either in complying with the provisions of the Act or in the decision making process, then this Court would be justified in refusing to interfere with the impugned orders.

 

63. The view which we have taken herein is in consonance with the view taken by this Court in the case 40 wp-17.04--

 

of Iran National Airlines v. Union of India (supra) and Delhi High Court judgment in Combatta Aviation Ltd. v. Union of India (supra); wherein while upholding the penalty imposed upon the carrier under sub-section (3) of section 38 of the Finance Act, the Court held as under:

 

"The language of Section 38(3) shows that the provision is in absolute terms and in the matter of imposition of penalty the discretion of the authorities is limited to it being not less than one fifth of the amount of tax not so paid and the upper limit extends upto three times of the amount of tax involved."

 

64. Having disposed of common arguments advanced by the advocates appearing for the petitioners, one more submission specific to the case of Saudi Arabia Airlines advanced by Mr.Nankani needs consideration.

 

65. Mr.Nankani, in his submission, has urged that it was not open for the adjudicating authority to enhance the quantum of penalty while considering the show cause notice after its remand by the appellate authority to the adjudicating authority. The submission made is without any merit. If one goes through the order of remand, one would find that it was not a limited remand. The remand was to enable the adjudicating authority to consider all the issues after affording opportunity of personal hearing to the petitioner. The first order-in-original dated 14th June, 1999 was in breach of principles of natural justice. Consequently, it was set aside, that too, at the request 41 wp-17.04--

 

of the petitioner. The show cause notices were restored to the file of the adjudicating authority for consideration afresh. It was not a limited remand. In that view of the matter, it was open for the adjudicating authority to enhance the amount of penalty in consonance with the provision of sub-section (3) of section 38 of the Act. Thus, submission made in this behalf holds no water.


66. In the result, all these petitions are dismissed. Rule in all petitions stands discharged with no order as to costs.

 

(K.K.TATED, J.)                                                                             (V.C.DAGA, J.)
237 GIB/DL/BOC India/24-05-2007/HC-142 CCE v BOC India Ltd. Credit Reversal Facts & Issue of Case:

The Assessee uses Nitrogen and liquid argon as inputs in its manufacturing process. It appears that because of the nature of the gas, some of it evaporates in the atmosphere. A show-cause notice was issued to the Assessee as to why MODVAT credit should not be disallowed in respect of the gas which gets in the atmosphere. The Assessee gave its reply and the Assistant Commissioner adjudicated against the Assessee by an order dated 31st May, 1999.

Feeling aggrieved, the Assessee preferred an appeal before the Commissioner (Appeals) to set aside the order of the Assistant Commissioner on the ground that the nitrogen/liquid argon which has evaporated cannot be said to have been used in the manufacture of the goods.

It was held that the evaporation does not amount to waste and, therefore, disallowance under Rule 57D of the Central Excise Rules, 1944 was incorrect.
238 GIB/MB/Brown Kraft/7.11.2006/HC-133 Brown Kraft Inds Others Facts  & Issue Of The Case :

It was held that discounts are commercial aspects of business, if the discounts are not a reason for short payment or for refund of excise duty payable by the manufacturer / supplier, such discounts cannot be a ground to reduce CENVAT credit which is allowed based on excise duty paid invoices. So long there is no loss to the revenue as far as the payment of duty is concerned by the assessee i.e. supplier of the goods on the proper correct assessable value. The Tribunal held on the following lines:


1. If there is a short payment of duty or refund claimed by the assessee supplier or reduction of sale price of the goods, there is some meaning in the action of the department to demand the appellants to reduce or reverse the credit equal to short payment of duty or refund claim. 
 
2. There is no such exercise by the authorities concerned at the suppliers end.
 
3. Duty is paid on the basis of regular practice which is as per trade practice or on mutual agreement.
 
4. the trade discounts/cash discounts and other discount are the normal practice, which cannot be quashed by the department as long as they receive the correct quantum of duty, on correct assessable value.
 
5. Therefore, the department cannot direct the appellant to reverse the credit or to disallow the credit as the Appellants had paid the duty and taken credit which is equivalent to duty shown in the invoice issued by the supplier.
 
6. Therefore, the confirmation of the demand for excess credit is not sustainable and penalty imposed thereof along with interest is not sustainable.
 
7.  Both the authorities had erred in demanding reversal of credit.
 
8. Therefore, both the impugned orders were  set aside and the appeal was allowed with consequential relief, if any.


 
239 GIB/GUJ/TRINETRA/03.12.2003/HC-138 Commissioner Of C. EX., SURAT Vs Trinetra Texturisers Others  Facts  & Issue Of The Case :

Respondents had taken Modvat credit on the basis of duty paying documents received from their suppliers. Subsequently, the suppliers had issued credit notes in favour of the respondents. Departmental authorities have coerced the respondents to debit the input credit amount equivalent to the duty reduction consequent to value reduction on the inputs, which occurred consequent to such credit notes. The respondents reverse the corresponding amounts, as directed. The respondent’s suo moto took credit for the reversed amount. The issue involved is whether, by the issue of a credit note, the assessable value gets scale down, and the corresponding input tax also gets scaled-down. Held the entire exercise at the end of the purchaser factory for cutting down the credit, was without the authority of law. The illegal and coercive reversal of credit on one hand, at the same time claiming that the respondents lack the authority to suo moto claim back the said credit, on the other hand, tantamounts to adding insult to injury.
240 GIB/RAJ/HINDUSTAN ZINC/17-12-1990/HC-164 Hindustan Zinc Limited vs Commercial Taxes Officer Input Tax Credit Facts & Issues Involoved:

The question that arises for the determination is : whether the sales effected during the Assessment Years 1978-79, 1979-80 and 1980-81 by the assessee M/s. Hindustan Zinc. Limited, Udaipur, in respect of tender-forms would be exigible for the sales tax?

The petitioner-assessee is a registered dealer under the Rajasthan Sales Tax Act and deals in the nonferrous items. It is, also, a manufacturer of these items. For the purpose of purchase of different items, the assessee under to give advertisement in the papers with the statement that desirous suppliers may submit their tenders. The tender-forms were given by the assessee-petitioner at the cost ranging between Rs. 25/-to Rs. 1000/-to the desirous suppliers.
241 GIB/KN/UNITED INDIA/25-03-1986/HC-165 United India Insurance Co. Ltd. vs Commissioner Of Commercial Input Tax Credit Facts & Issues Involved:

Petitioner is a company registered under the Companies Act, 1956 ("the Act"), and carries on business in general insurance. On the nationalisation of the petitioner-company, it is now a subsidiary of the General Insurance Corporation of India and is a Government company, as defined in section 617 of the Act.

The business of the petitioner-company is to insure motor vehicles, goods, machinery against damage, risk or theft, personal accidents, injuries and the like.

The petitioner was carrying its business in General Insurance and was selling used goods received against settlement of claim. The activity of selling used goods was held to be ancillary to its main business.