HIGH COURT CASES

2019-TIOL-2532-HC-KERALA-GST

KP Namboodiris Ayurvedics Vs State Tax Officer

GST - Petitioner challenges the confirmation of demand of tax and penalty pursuant to detention of vehicle that was carrying goods belonging to petitioner - Petitioner submits that in response to the notice received, they had clearly indicated that substantial part of the turnover pertained to goods that were meant for export and hence were not liable to tax under the GST Act but the said contention was not examined by respondent and which indicates non-application of mind.

Held: It is evident that the submission made by the petitioner was not considered by respondent, therefore, order is quashed and respondent is directed to pass fresh orders in lieu thereof after hearing petitioner and considering the submissions - petitioner to appear before respondent on 15.11.2019 and order is to be passed within one month thereafter: High Court [para 3]

- Petition disposed of: KERALA HIGH COURT

2019-TIOL-2525-HC-DEL-GST

Sales Tax Bar Association Vs UoI

GST - Whole purpose of directing the holding the meetings between the representatives of the trade and the concerned Senior officers, who are involved in the process of implementation of the GST system, was to enable the representatives of trade to put across the day-to-day practical difficulties being faced by them, face to face to the policy makers, so that they are able to address all such issues with the ultimate objective of achieving smooth operation of the GST system - before the Bench takes a decision on the aforesaid aspect, it considers it appropriate to hold a meeting on 16.11.2019 at 11.30 am the Court Chamber with the CEO of the GSTN and a member of the CBIC who is a part of the GST Policy Wing dealing with GST system - In the meantime, Bench directs Respondents to take steps to implement all the decisions which have been taken in the aforesaid two meetings by issuing necessary circulars and notifications or carrying out appropriate changes in the portal without any further delay- Respondents to take steps to comply with the direction contained in para 7 and 8 of the order of this Court dated 18.09.2019 = 2019-TIOL-2197-HC-DEL-GST - Matter to be listed on 20.11.2019: High Court

- Matter listed: DELHI HIGH COURT

2019-TIOL-2524-HC-KERALA-GST

Pact Machines Pvt Ltd Vs Assistant State Tax Officer

GST - There was no opportunity granted to the petitioner to rebut the inferences drawn by the authorities while detaining the goods, through a hearing afforded to the petitioner before passing adjudication order confirming the demand of tax and penalty on the petitioner - Order quashed with a direction to respondent to pass fresh orders within a week after hearing petitioner - if the petitioner seeks to get the goods released pending the adjudication before the 1st respondent, he may do so by furnishing a bank guarantee for the amounts covered by detention notice: High Court [para 3]

- Petition disposed of: KERALA HIGH COURT

2019-TIOL-2520-HC-DEL-GST

GST -  Respondent Revenue states that 593 refund claims are pending in the State of Delhi and about 95 applications are pending for more than sixty days - Bench directs the respondent to file an affidavit disclosing the status in this regard within a period of two weeks - Affidavit to also indicate the reasons for the cases remaining pending and furthermore it should also disclose the status with regard to provisional refund payable in terms of rule 91(2) of the CGST and DGST Rules as the petitioner has submitted that provisional refund is not being granted on time - Although the petitioner has been granted refund, the claim for interest has been rejected - Petitioner to place on record the communication in this regard and such other documents within two weeks - reply to additional affidavit be filed by respondents two weeks thereafter - Matter to be listed on 20.11.2019: High Court [para 1, 2]

- Matter listed : DELHI HIGH COURT

2019-TIOL-2519-HC-P&H-GST

Adfert Technologies Pvt Ltd Vs UoI

India to Respondents to permit carry forward of unutilized CENVAT credit of duty paid under Central Excise Act, 1944 and Input Tax Credit (for short 'ITC') of VAT paid under PVAT Act, 2005 or HVAT Act, 2003 which could not be carry forwarded on account of non-filing or incorrect filing of prescribed statutory Form i.e. TRAN-1 by the stipulated last date i.e. 27.12.2017 - it was further contended that Respondent permitted registered persons to file TRAN-1 by extending time upto 31.03.2019 who submitted evidence of attempt to load TRAN-1 by 27.12.2017 and, thus there is no reason to deny same opportunity to those persons who filed incorrect TRAN-1; that the department is entitled to raise demand in case any person has carry forwarded ITC in excess of its entitlement and, therefore, there seems no reason to deny registered person to revise its TRAN-1 if he has succeeded to carry forward less amount of credit - Petitioners in the alternative contended that no Section or Rule of CGST Act, 2017 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, 2017 if it is held that Petitioners are not entitled to carry forward ITC because they failed to file TRAN-1 by 27.12.2017 - Respondent contended that Government from time to time had extended period to load TRAN-1 and it was mistake on the part of Petitioners who did not attempt to load by 27.12.2017; that there would be no end if Petitioners are permitted to load TRAN-1 at this stage and the Petitioners cannot take excuse of technical glitches because they did not attempt to load TRAN-1 by 27.12.2017.

Held: Introduction of Rule 117(1A) & Rule 120A and absence of any time period prescribed under Section 140 of the Act indicates that there is no intention of government to deny carry forward of unutilized credit of duty/tax already paid on the ground of time limit - GST is an electronic based tax regime and most of people of India are not well conversant with electronic mechanism - Most of us are not able to load simple forms electronically whereas there were a number of steps and columns in TRAN-1 forms thus possibility of mistake cannot be ruled out - Various reasons assigned by Petitioners seem to be plausible and Bench finds itself in agreement with the argument of Petitioners that unutilized credit arising on account of duty/tax paid under erstwhile Acts is vested right which cannot be taken away on procedural or technical grounds - The Petitioners who were registered under Central Excise Act or VAT Act must be filing their returns and it is one of the requirements of Section 140 of CGST Act, 2017 to carry forward unutilized credit - The Respondent authorities were having complete record of already registered persons and at present they are free to verify fact and figures of any Petitioner thus inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit - Division Bench of Gujrat High Court in the case of Siddharth Enterprises - 2019-TIOL-2068-HC-AHM-GST has dealt with issue involved at length and it has been held that denial of credit of tax/duty paid under existing Acts would amount to violation of Article 14 and 300A of Constitution of India; that unutilized credit has been recognized as vested right and property in terms of Article 300A of the Constitution of India - Delhi High Court in a series of cases [ Krish Authomotors Pvt. Ltd. Vs UOI and others - 2019-TIOL-2153-HC-DEL-GST ] has expressed similar view as taken by Gujarat High Court – Bench is full agreement with findings of Hon'ble Gujarat and Delhi High Court noticed hereinabove and finds no reason to take any contrary view - Accordingly, Bench directs the Respondents to permit the Petitioners to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019 - Respondents are at liberty to verify genuineness of claim of Petitioners but nobody shall be denied to carry forward legitimate claim of CENVAT/ITC on the ground of non-filing of TRAN-1 by 27.12.2017: High Court [para 8, 9, 10, 11, 12]

- Petitions allowed : PUNJAB AND HARYANA HIGH COURT

2019-TIOL-2516-HC-MAD-GST

Sutherland Global Services Pvt Ltd Vs ACCGST & CE

GST - Petition filed praying for issuance of a Writ of Certiorari to quash the letter issued by AC of GST and CEX directing respondents to enable the petitioner to avail and utilise the credit pertaining to Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess - Request to carry forward and utilise the credit was rejected vide impugned order dated 09.02.2018 on the ground that credit could be set-off only against specific duties and taxes enumerated in the Explanation to Section 140(1) of the CGST Act r/w rule 117 of the CGST Rules; that since the explanation does not cover cesses such as EC, SHE Cess and KKC, the same could not be carried forward.

Held: Issue can be clinched in favour of the petitioners for two reasons - impugned order proceeds on the basis that the petitioner has no entitlement to claim set off of credit and thus denies it - however, such credit continues to be available till such time it is expressly stated to have lapsed - lapsing of credit is not a concept unknown to the respondent Revenue and there are multiple instances where the Board/Government provides for specified credits to lapse mentioning the exact point in time when the lapsing would commence and/or stipulating other conditions in this regard - in the present case, there is no notification/circular/instruction that has expressly provided that the credit accumulated would lapse - not only this, the credit has been carried forward manually and reflected in the returns from time to time and such accumulated credits stare the Revenue in the face - having permitted the assessee to carry forward the credit, the authorities cannot now take a stand that such credit is unavailable for use - provisions of sub-section (1) r/w sub-section (8) of section 140 and the Explanation thereunder make it more than clear that all available credit as on the date of transition would be available to an assessee for set off - Instructions issued by the CBEC dated 07.12.2015 reveal a policy decision not to allow utilisation of accumulated credit of EC and SHEC but nowhere states that the credit has lapsed - Board only says that the cesses have been phased out and since there is no new liability to pay these cesses, no vested right can be said to exist in relation to the past accumulated credit in the light of rule 3(7)(b) of CCR - Board could have very well stated even at that juncture that the credit lapsed, but did not choose to do so - even after the decision of the Division Bench in Cellular Operators Association of India 2018-TIOL-310-HC-DEL-ST  there has been no instructions/notification/circular from the Board till date to state that the accumulated credit has lapsed - Thus, though there were a good many occasions that presented themselves to the Board to clearly stipulate that the accumulated credit had lapsed, this was not done - petitioner had been permitted to carry forward the cesses in question without any move whatsoever to state that the credits could not be so carried forward, since they had lapsed - not having done so, the provisions of s.140 should be given full effect and meaning - In strategising and conducting its business, the assessee would  certainly have taken into account that credit was available for set-off against output tax liability - the impugned action of the assessing authority in rejecting the claim has, however, the consequence of insertion of a Rule/Regulation to this effect, which is impermissible - A fiscal statute has to be read and understood as seen - the interpretation should be on the basis of what is apparent, apart from being strict - if one were to apply these propositions to the case on hand, the provisions of section 140(1) provide for transfer of all credits and levies, barring those set out in the proviso - There are only three conditions/embargoes that bar the transfer of accumulated credit - language of section 140(1) and (8) both make it clear that an assessee is entitled to transition of “the amount of CENVAT credit carried forward in the return relating to the period ending with the date preceding the appointed date” and this, in the present case, includes accumulated credit of EC, SHEC and KKC - Revenue has not made out any bar for the transitioning of EC, SHEC and KKC into the GST regime and the petitioner satisfies all conditions, both under sub-section (1) and (8) of section 140 - embargo placed by rule 3(7)(b) of CCR is long gone with the introduction of GST and certainly the powers-that-be are conscious of these factors in drafting the new legislation and the specific provision s.140 - At the risk of repetition, accumulated credit cannot be said to have been wiped out unless there is a specific order under which it lapses - section 28 of the CGST Amendment Act, 2018 proposes the amendment and significantly, explanation (3) clarifies that the expression ‘eligible duties and taxes' excludes any cess not specified in Explanation (1) or (2) has not been notified - In view of the above, impugned order is set aside and the writ petition is allowed: High Court     [para 22, 23, 24, 35, 37, 41, 42, 44, 47, 48, 49, 50]

- Petition Allowed: MADRAS HIGH COURT

2019-TIOL-2515-HC-MP-GST

Shailesh Rajpal Vs Commissioner

GST - Offences punishable under Sections 132(1)(d) of Central Goods and Service Tax Act, 2017 and Sections 471 and 120-B of the IPC - Petitioner has been arresed on 17/09/2019 and by this application filed u/s 439 of CrPC seeks bail - Case of the Revenue is that Turnover of the applicant in respect of his company M/s Sai Sun Outsourcing Services Private Limited during the period July 2017 to March 2018 was Rs. 51,57,01,823/- but he disclosed only Rs. 10,80,11,848/- in his GST returns - Similarly, during the financial year, 2018-19 turnover of the applicant was Rs. 174,26,61,455/- but he has declared only Rs.79,01,25,667/- in his GST returns - Furthermore, the applicant has completely suppressed the turnover of his proprietary firm M/s Sai Sun and has neither filed any GST return nor made any payment - Inasmuch as the Applicant by way of suppressing turnover pocketed the GST amount collected by him from their clients and the total recoverable amount from the applicant and one of his firm M/s Sai Sun Outsourcing Services Private Limited is Rs. 62,08,48,907/-; that exact GST liability of the company M/s Sai Sun Outsourcing Services Private Limited and M/s Sai Sun Private Limited has to be determined for the period 2019-20 and the investigation is currently on; that some other companies namely M/s Seven Eye IT Solutions Private Limited, M/s Happiest Job Consultants Limited etc. were also found to be operating from the same premises and liability of service tax, and GST of these firms, also needs to be determined; that the applicant has a history of forgery and submission of fake documents to the public authorities and, therefore, if the applicant is released on bail, he may affect the investigation.

Held: Looking to the alleged huge tax evasion by the applicant and the contention of the counsel of the respondent and keeping in view that the investigation is going on and apprehensions of applicant tampering with the evidence cannot be ruled out, the Court is not inclined to grant bail to the applicant at this stage - bail application is rejected: High Court [para 6, 7]

- Application rejected: MADHYA PRADESH HIGH COURT

2019-TIOL-2502-HC-MAD-GST

Helvetica Lifestyle Boutique Pvt Ltd Vs GSTN

GST - Petitioners are the retailers of Watches and Leather Accessories of various types - Products sold by the petitioners suffered additional duty of customs - Petitions filed seeking for mandamus directing the first respondent to credit the ITC amounts to the Electronic credit ledger of the petitioners - Petitioners were unaware of filing TRAN-2 and thus failed to file the same by the due date viz. 30.06.2018, however, the monthly returns filed disclosed the details of the stock on which the invoice did not indicate the quantum of CVD paid on such stock - petitioners made representations requesting that they be allowed the credits but since the same have not been considered, the present writ petitions.

Held: Additional Government Pleader appearing for the third respondent submitted that the said representations will be considered on merits and appropriate orders will be passed, provided the third respondent is in a position to have access to the Goods and Services Tax Network (GSTN) - Counsel for the first respondent submitted that only when the Nodal Officer finds prima facie case in favour of the Assessees and gives his reasons, access to GST Network will be provided - Court, at this stage, is not expressing any view on the merits of the claim made by both parties, as it is inclined only to direct the third respondent to consider the representations filed by the petitioners on 13.11.2018 and to pass necessary orders on merits and in accordance with law - petitions disposed of: High Court [para 8, 9]

- Petitions disposed of: MADRAS HIGH COURT

AAR CASE

2019-TIOL-442-AAR-GST

RS Development And Constructions India Pvt Ltd

GST - Rate of 6% under Sl. no. 3(iii) or 3(vi) of 11/2017-CTR is not applicable for the works contract services supplied by applicant to Kerala State Electricity Board Ltd. as the work awarded is in respect of civil works of a small hydro electric project in the existing dam of Pazhassi Irrigation project and hence cannot be considered as a civil work for canal, dam or other irrigation works - supply of works contract service in terms of the instant work order cannot be considered as meant predominantly for use other than for commerce, industry or any other business or profession inasmuch as KSEB Ltd. has been established for carrying out the business of generation, transmission and distribution of electricity in the state of Kerala on commercial principles as evident from provisions of s.61 and 62 of the Electricity Act, 2003 regarding tariff regulation and determination of tariff: AAR

CGST CIRCULAR

cgst_circular_122

Generation and quoting of Document Identification Number (DIN) on any communication issued by the officers of the Central Board of Indirect Taxes and Customs (CBIC) to tax payers and other concerned persons

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A retrospective amendment under GST law - A dead claim of interest, coming alive?

Analysis of AAR Decision in Santosh Distributors - Dimensions of Additional Consideration

Inadvertent errors in not claiming benefits under concessional notifications while importing goods

The Cob(Web) by Shailendra Kumar

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The Saga Of a Non-Adversarial Litigation

The Raid

SGST

DELHI NOTIFICATIONS

ORDER _06/2019

RULES

27/2019

RATES

06/2019

05/2019