GST - The petitioner was unable to file the TRAN-1 due to technical glitches - In writ, the High Court relied on the decisions in UNINAV DEVELOPERS PVT. LTD. - 2019-TIOL-1661-HC-DEL-GST , Bhargava Motors - 2019-TIOL-1060-HC-DEL-GST , Kusum Enterprises Pvt.Ltd. - 2019-TIOL-1509-HC-DEL-GST to hold that the petitioner's request merits consideration - Hence the authorities concerned were directed to either open the portal to enable the petitioner to again file the Form GST TRAN-1 electronically or in the alternative accept the Form GST TRAN-1 presented manually, on or before 31.08.2019.

Held - Delay condoned - Issue notice: SC

- Notice issued: SUPREME COURT OF INDIA

HIGH COURT CASES

2020-TIOL-127-HC-KERALA-GST

Exide Industries Ltd Vs Assistant State Tax Officer

GST - The grievance raised by the petitioner in the present petition pertains to the detention of goods belonging to the petitioner, on grounds that the vehicle number as shown in the e-way bill did not match the actual vehicle number - Notice was issued detaining the goods and raising duty demand - The petitioner challenged the vires of such notice.

Held - The Govt Pleader had been requested to obtain specific instruction in this matter and also as to if the detained goods could be released to the petitioner, subject to the petitioner furnishing bank guarantee of appropriate value and to the satisfaction of the officials concerned - Apparently, the Revenue did not seriously object to such course of action, as this court consistently passed such orders in similar cases - The Revenue raised two duty demands on account of a scenario involving the owner of the goods whilst the other scenario involves a person other than the owner - As per mandate of Section 129(1)(c), only one of the two amounts can be demanded - The petitioner is prepared to offer bank guarantee of the higher of the two amounts - Hence the Revenue authorities concerned are directed to release the detained goods where such bank guarantee is furnished by the petitioner: HC

- Writ petition disposed of: KERALA HIGH COURT

2020-TIOL-126-HC-AHM-GST

Rajkumar Maheshwari Vs UoI

GST - The petitioner is the owner of a vehicle which was used for transportation of certain goods - The vehicle commenced its journey from Gwalior and was headed to Surat to pick up the goods for transportation - It did not have any loaded goods in the conveyance, except for a second hand motor bike - The documents for the same were with the vehicle driver - The vehicle was intercepted by the Revenue officials concerned whereupon it was found that the conveyance was loaded with Pan Masala and Tobacco - There was no document as per the requirement u/s 68 of the CGST Act - Notice for detention of the goods was issued by the Revenue in Form GST MOV-06 - Later, Form No GST MOV-10 was issued for confiscation of the goods u/s 130 of the Act - The petitioner filed the present petition seeking that the notices be quashed and the vehicle be released along with the goods in it.

Held - The petitioner is directed to deposit a sum of about Rs 7.5 lakhs before the Revenue officials within two weeks' time - Upon making such deposit, the petitioner's vehicle be released - The Revenue authorities are at liberty to continue the proceedings for confiscation u/s 130 of the CGST Act, keeping in mind the decision in the case of Synergy Fertichem Pvt. Ltd. 2019-TIOL-2950-HC-AHM-GST - Notice be issued to the parties: HC

- Writ petition disposed of: GUJARAT HIGH COURT

2020-TIOL-125-HC-AHM-GST

Bombay Veraval Transport Company Vs State Of Gujarat

GST - During the relevant period, a vehicle carrying some goods was intercepted - Examination of the boxes revealed that out of 300 boxes loaded in the vehicle, Part B of the e-Way bill was not available for 40 boxes - The Revenue officials concerned and proceeded to impose tax and penalty in respect of the boxes for Part B of the E-way bill was unavailable - The petitioner had approached the writ court, claiming that the goods were medicines and were of perishable nature - Hence it sought that those goods be released in respect of which the invoice and e-way bill was valid - Hence the court had directed the Revenue authorities concerned to release the vehicle and the remaining 260 boxes in respect of which there was no discrepancy.

Held - It is seen from the record that upon issuance of notice u/s 129 of the CGST Act, the petitioner did not file any reply and no order was passed by the authority u/s 129(3) of the Act - When the petitioner files reply to the notice u/s 129(3), the Revenue authorities may consider the same upon giving opportunity of personal hearing to the petitioner and pass an appropriate order: HC

- Writ petition disposed of: GUJARAT HIGH COURT

2020-TIOL-115-HC-AHM-GST

Enprocon Enterprise Ltd Vs Assistant Commissioner of State Tax

GST - Question is whether the order of provisional attachment passed by the Assistant Commissioner in exercise of powers under Section 83 of the GGST Act, 2017, is sustainable in law - Order dated 20th September, 2019 of the Co-ordinate Bench in the matter also refers.

Held: Issue is no longer res integra inasmuch as in the case of Valerius Industries - 2019-TIOL-2094-HC-AHM-GST , a Co-ordinate Bench of this Court, had the occasion to consider two questions, (i) the power of Commissioner of State Tax to delegate his powers under Section 83 of the Act to the Assistant Commissioner, and (ii) assuming for the moment that it is permissible for the Commissioner to delegate his powers to the Assistant Commissioner, what is expected of the Assistant Commissioner while exercising his delegated powers under Section 83 of the Act, for the purpose of provisional attachment - Bench had inter alia held that the power conferred upon the Commissioner by the legislature could not have been delegated to the subordinate officers by virtue of the order dated 15th January 2018 passed in exercise of power u/ss (3) of s.5 r/w clause 19 of s.2 of the Act and the Rules framed thereunder; that in the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment u/s 83 of the Act, then such action amounts to malice in law; that any use of discretionary power exercised for any unauthorised purpose amounts to malice in law; that subjective satisfaction which is required for the purpose of s.83 of the Act is not dependent upon s.67 of the Act or to put it in other words, just because, a search has been undertaken resulting in seizure of goods, by itself, may not be sufficient to arrive at the subjective satisfaction that it is necessary to pass an order of provisional attachment to protect government revenue; that the provisional attachment of stock of goods as well as bank accounts is quashed and set aside and blockage of input tax credit by way of computer entry is also held to be illegal - What is lacking in the present case is the credible material, in its true sense, for the purpose of arriving at the subjective satisfaction that the order of provisional attachment is necessary for the purpose of protecting the interest of the Revenue - in the case on hand, the order of provisional attachment as well as the order of prohibition are not sustainable on two counts, i.e. (i) the order has been passed by the Assistant Commissioner, and (ii) the order has been passed without any credible materials, available for the purpose of passing such order of provisional attachment - Writ Application succeeds and is hereby allowed - order of provisional attachment passed by the Assistant Commissioner, so far as the immovable property is concerned, is hereby quashed and set aside and so also the order of provisional attachment of the bank accounts is also quashed and set aside - order of prohibition dated 30th July, 2019, passed under Rule 139(4) of the Rules, 2017 , is also quashed and set aside [para 5, 9, 10]

GST - Attachment of immovable property/bank accounts - Bench clarifies that as the proceedings under Section 73 of the said Act are pending as on date, the writ applicant shall not destroy or secrete any books of account or any other documents relating to the same till the conclusion of the inquiry initiated under the provisions of the Act - In future, if the Authority is able to gather any credible material, on the basis of which it may arrive at the conclusion that it is necessary to order provisional attachment with a view to protect the interest of the Revenue, it shall be open for the Authority to do so, in accordance with law: High Court [para 11]

- Petition allowed: GUJARAT HIGH COURT

2020-TIOL-98-HC-KAR-GST

Pace Seating Systems Pvt Ltd Vs State of Karnataka

GST - Petitioner has assailed the validity of the order dated 19.09.2019 passed by respondent No.2 by which the goods have been released subject to levy of tax and penalty by an order subsequently passed on 20.09.2019 - incidentally, validity of the order dated 20.09.2019 is not under challenge - Counsel for Revenue submitted that the order dated 20.09.2019 is appealable under Section 107 of the CGST Act, 2017 - petitioner, therefore, seeks liberty to file an appeal accordingly.

Held : Writ petition is disposed of with a direction that if the petitioner files an appeal within a period of two weeks, the appellate authority shall decide the appeal expeditiously within a period of two months - petition is disposed of: High Court [para 5]

- Petition disposed of : KARNATAKA HIGH COURT

2020-TIOL-97-HC-KERALA-GST

Raju K Thomas Vs State Tax Officer

GST - 2nd respondent (Executive Engineer, PWD Roads Division, Pathanamthitta) has awarded two separate works to the petitioner and as against the said contracts Rs.8,11,206/- and Rs.2,98,848/- were deducted by the 2nd respondent herein under Sec.51 of the Act, but the petitioner was not extended credit against the above, by the respondents inspite of repeated reminders - Ultimately the petitioner had to file the returns for the respective periods by satisfying the tax due from out of his own resources - Petitioner requested before the 1st respondent (State Tax Officer) for refund of the tax deducted at source - Alleging that no positive steps are being taken in the matter, the present petition is filed praying inter alia that the first respondent be directed to refund the tax deducted at source u/s 51 of the Act - Petitioner informs that they have made an application for grant of refund in respect of the subject matter of his claims, which was not in the prescribed format and later on advice, the petitioner has now already submitted the requisite application in the prescribed form for claiming the benefit of the refund of the amounts as provided under Sec.51 (8) read with Sec.54 of the Central Goods and Services Tax Act, 2017 before the 1st respondent on 30.10.2019.

Held: It is ordered in the interest of justice that in case the petitioner has filed requisite application for grant of refund as abovestated before the 1st respondent and the same is pending consideration, then the said authority will take the said plea for consideration after affording a reasonable opportunity of being heard to the petitioner and will take a considered decision thereon in accordance with law, without much delay preferable within a period of three weeks - Petition is disposed of: High Court [para 3, 4]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-96-HC-AHM-GST

ABB India Ltd Vs UoI

GST - Goods and conveyances detained and seized - Applicant informs that in the order received in GST-MOV-09, the total liability towards the tax and penalty plus interest as fixed comes to around Rs.1,00,81,944/- - Legal issues would be heard and decided on the returnable date viz. 12.2.2020 - An interim order for release of the electrical goods and vehicles is passed by directing the applicant to deposit an amount of Rs.50,40,972/- towards the tax with respondent no.2 and balance amount of Rs.50,40,972/- towards the penalty shall be in the form of a bank guarantee of any nationalized bank - on deposit of the amount and bank guarantee, respondent authority concerned to release the goods and vehicles forthwith: High Court [para 5, 6]

- Interim order passed: GUJARAT HIGH COURT

2020-TIOL-95-HC-AHM-GST

Arya Traders Vs State of Gujarat

GST - Petitioner seeks quashing the MOV-11 being order passed u/s 130 of the act and directing the respondents to release the goods and vehicle without demanding any security.

Held: In view of the decision in Synergy Fertichem Pvt. Ltd. & Anr. - 2019-TIOL-2950-HC-AHM-GST , Bench had suggested to the AGP to recall the impugned order passed in MOV-11 and decide the matter afresh keeping in mind the principles of law as explained by the Court in the above referred decision - AGP makes a statement, after obtaining necessary instructions from the officer concerned, that the impugned order passed under Section 130 of the Act dated 19th July, 2019 shall be recalled and fresh proceedings shall be initiated in accordance with law and a fresh order shall be passed after giving an opportunity of hearing to the writ applicants, keeping in mind the principles as explained by the Court in the referred decision - in view thereof, Bench need not now adjudicate this application on merits - Since the Bench has directed the authorities to initiate fresh proceedings with regard to confiscation, the writ applicants are directed to deposit an amount of Rs.4,15,800/- towards the tax and penalty as determined under Section 129, 130 of the Act and on deposit of which amount, the goods and the conveyance shall be released forthwith subject to the final outcome of the confiscation proceedings - Writ Application disposed of: High Court [para 4, 6, 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-92-HC-P&H-GST

Bindal Smelting Pvt Ltd Vs Additional Director General

GST - Petitioner is seeking quashing of order dated 10.07.2019 and order dated 12.09.2019 whereby Respondent has provisionally attached bank account of the Petitioner - It has been further prayed that Respondent may be restrained from taking coercive steps against the Petitioner and its Directors/employees - Facts are that Respondent during investigation found that Petitioner had purchased scrap batteries from different suppliers which included 16 suppliers, who are not traceable - The Petitioner during July' 2017 to March' 2018 had availed Input Tax Credit amounting to Rs.13.38 Crore on the basis of invoices of 16 suppliers, who are not traceable; that Respondent time to time directed Petitioner to supply different documents which Petitioner supplied but failed to provide transporter bilty and weighment slips - Respondent, therefore, vide order dated 10.07.2019 provisionally attached Over Cash Credit (OCC) Account of the Petitioner, which they are maintaining with Lakshmi Vilas Bank, Karol Bagh, New Delhi - Petitioner in terms of Rule 159 of CGST Rules, 2017 made a representation to the Respondent, who vide communication dated 23.10.2019 declined to accede request of the Petitioner to lift attachment of bank account, therefore, the present petition.

Held: Only grievance of Petitioner is that their OCC account has been attached which amounts to closure of their business - conceded position as emerging from the record is that the Petitioner is a running manufacturing unit and account in question is a OCC account having debit balance of Rs.6.42 Crore - The investigation is going on and show cause notice under Section 73 or 74 would be issued after its completion - The Respondent in exercise of power under Section 83 of CGST Act, 2017 has attached bank account to safeguard interest of revenue - Bench finds that Respondent has power to attach property and bank account of any taxable person to protect interest of revenue; that the person aggrieved may make representation against attachment of property or bank account and Commissioner after affording opportunity of hearing is bound to decide representation in one or another way - From the order and record, it must come out that actually it was necessary to take drastic action of attachment - taking cue from judgment of Gujarat High Court in Valerius Industries Vs. Union of India - 2019-TIOL-2094-HC-AHM-GST , Bench finds that in the present case attached account is Over Cash Credit account and Petitioner had debit balance of Rs.6.42 Crore, thus question arises that whether continuation of attachment would protect interest of revenue or not - The Petitioner is running unit and more than 100 families are dependent upon Petitioner - Till date no proceedings under Section 74 of CGST Act are pending which would start as soon as show cause notice is issued - power of attachment under Section 83 is very clear - It is drastic and far-reaching power which must be used sparingly and only on substantive weighty grounds and reasons - The power should be exercised only to protect interest of revenue and not to ruin business of any taxable person - In the absence of record showing that interest of revenue is protected by attaching property or bank account, action deserves to be declared as taken without application of mind and formation of opinion on the basis of cogent material - Thus, attachment of current account having debit balance does not protect interest of revenue, instead merely ruins the business of a dealer - Such an action of attachment of "over cash credit" account for the sake of recovery of confirmed demand, may in some peculiar case, may be still permitted but not at the stage of pending investigation - Bench is of the opinion that impugned order dated 10.07.2019 and order dated 12.09.2019 in the teeth of intent and purpose of Section 83 of CGST Act, 2017 is bad and present petition deserves to succeed and accordingly allowed - The impugned orders dated 10.07.2019 and order dated 12.09.2019 are quashed and set aside: High Court [para 5, 6, 7, 10, 12]

- Petition allowed : PUNJAB AND HARYANA HIGH COURT

2020-TIOL-91-HC-P&H-GST

Etrade Marketing Pvt Ltd Vs CBIC

GST - Grievance of the petitioner is that it could not upload the details of un-utilized Input Tax Credit as per the accounts books to the electronically generated statutory Form "TRAN-1" - Petitioner submits that the issue raised herein already stands decided by this Court, in the case of Adfert Technologies Pvt. Ltd. - 2019-TIOL-2519-HC-P&H-GST " judgment dated 04.11.2019 , in favour of the Assessees, hence the petitioner-Company is also entitled to relief in the same terms - It is conveyed that the date for filing annual returns has been extended from 31.12.2019 to 31.1.2020 - present petition is allowed in terms of the said CWP No.30949 of 2018 decided on 04.11.2019 with permission/modification to file the said Statutory Form TRAN-1 by 31.01.2020 - It is clarified that in case the petitioner is hampered in any manner from availing the benefit of aforesaid judgment due to non-opening of the Portal by the Respondents, then the petitioner shall be permitted, in the alternative, to claim the benefit of unutilized credit in their GST-3B Forms to be filed for the month of February, 2020 either electronically or manually - Petition allowed: High Court

- Petition allowed : PUNJAB AND HARYANA HIGH COURT

2020-TIOL-90-HC-MAD-GST

Prime Gold International Ltd Vs ADG

GST - Petitioner has challenged the attachment of bank account in the State Bank of India, Electronic City, Branch Bangalore - Such attachment was made allegedly on the ground that proceedings had been launched against petitioner in terms of Section 67(2) of the CGST, 2017 to determine the tax or any other amount that may be due from it; that in order to protect the interests of the revenue, the respondent had proceeded to attach the bank account of the petitioner in exercise of powers conferred in terms of Section 83 of the Act - Petitioner had made a representation on 01.04.2019 in terms of rule 159(5) of the CGST Rules seeking lifting of attachment but the request came to be rejected by order dated 31.05.2019 - Petitioner has, therefore, filed a writ petition seeking a mandamus directing the respondents to initiate proceedings against the petitioner for determination of liability under CGST Act by issuing a show cause notice.

Held: The provisions of Section 83 mandate that the attachment of bank account be only during the pendency of proceedings in terms of Section 62/63/64/67/73/74 of the Act - In the counter filed by the respondents, they confirm at paragraph 5(ii), that the proceedings contemplated at the moment are in terms of Section 74 - Having stated so as early as in June 2019, no action has been taken till date by issuance of show cause notice - In the light of the mandate contained in Section 83, either the respondents should initiate proceedings by issuing a show cause notice forthwith or should proceed to lift the attachment in question, also forthwith - respondents submitted that they require the presence of the petitioner for verification of electronic gadgets, in the absence of which the respondents are unable to proceed with the investigation - Therefore, the Court orders that the petitioner will appear before the respondent on 21.01.2020 and co-operate in the completion of verification process to enable immediate issuance of show cause notice; that the show cause notice shall be issued within a period of two weeks, from 21.01.2020, i.e., on or before 04.02.2020 and if the show cause notice is not issued by the date as stipulated aforesaid, the attachment of the bank account will be lifted forthwith that is, on 05.02.2020 - Petitioner's request for a refund of a sum of Rs. 2.10 crores stated to have been collected from the petitioner in the course of inspection would be pre-mature in the light of the order passed to the effect that proceedings be initiated forthwith for assessment in terms of Section 74 - retention/adjustment of the amount of Rs.2.10 crores will be subject to determination to be made in assessment - Petitions disposed of: High Court [para 8 to 11]

- Petitions disposed: MADRAS HIGH COURT

2020-TIOL-81-HC-AHM-GST

Mono Steel India Ltd Vs State of Gujarat

GST - By an order dated 17th January, 2019, attachment of the bank accounts of the petitioner was ordered to be released subject to the writ applicant maintaining an amount of Rs.4 Crore in its Account with the Dena Bank, Ahmedabad - It has been almost one year since the order came to be passed by the Coordinate Bench, granting interim relief in favour of the writ applicant - Even, otherwise, the life of an order of provisional attachment under Section 83(2) of the CGST Act is one year - This period of one year has already come to an end on 27th December, 2019 - No fresh order of any provisional attachment of the bank accounts has been passed, more particularly, in view of the interim order passed by the Coordinate Bench dated 17th January, 2019 - Manifold contentions have been raised while challenging the action on the part of the respondents in passing the order of provisional attachment of the two bank accounts - In fact, there are many larger issues involved in this matter and have been resolved in the decision of this Court in the case of Valerius Industries - 2019-TIOL-2094-HC-AHM-GST - Keeping in mind the time period that has elapsed, the interim order passed by the Coordinate Bench and the fact that the life of the order of the provisional attachment has come to an end, it will be an exercise in futility now to adjudicate this writ application on merits - Balancing the equities Bench disposes of the writ application with a direction that the writ applicant shall maintain, at all time, a stock worth minimum sum of Rs.4 Crore till the final disposal of the adjudication proceedings arising out of the show-cause notices dated 21 & 26 December - Although, it is not necessary to clarify, still to avoid any confusion, Bench observes that the provisional attachment of the two bank accounts stands removed: High Court [para 5 to 8]

- Application disposed : GUJARAT HIGH COURT

2020-TIOL-64-HC-AHM-GST

Meghmani Organics Ltd Vs State of Gujarat

GST - On 23.06.2019, a consignment of CPC Blue valued at Rs.25,70,000/- was being transported from the factory of applicant situated at Panoli to one another factory of the applicant located at Vatva, Ahmedabad - It is the case of the writ applicant that this being an intra state branch transfer, there was no obligation on the writ applicant to discharge any GST liability - However, it seems that while the goods were in transit, the mobile squad of the respondent detained the conveyance along with the goods on 23.06.2019 and detention order was issued in the form GST MOV06 dated 23.06.2019 on the ground that Part-B of the eway bill was not generated - writ applicant immediately deposited an amount of Rs.9,25,200/- with the respondent and consequently the goods and the conveyance were released - On the very same day and date i.e. 23.06.2019, a notice under Section 129(3) of the Act in Form GST MOV07 was served upon the writ-applicant calling upon the writ-applicant to show cause as to why the applicable tax and also penalty equal to 100% of the tax payable should not be recovered - writ applicant filed a detailed reply in writing dated 05.07.2019 and the same was tendered on the date of hearing i.e. 08.07.2019 - The principal argument of the writ- applicant was that, as it was the case of branch transfer, not involving any GST liability, there would not be any "supply" as contemplated under Section 7 of the CGST Act, and therefore, there cannot be any levy of GST under Section 9 of the said Act for such branch transfer - without giving any opportunity of personal hearing, which was scheduled on 08.07.2019, the 2nd respondent proceeded to pass an order dated 02.07.2019 confirming imposition of tax and penalty - applicant is aggrieved and has filed the present Writ application.

Held: When the writ applicant was asked to remain present on 08.07.2019 for the purpose of personal hearing, Bench fails to understand how the adjudication could have been concluded and an order could have been passed on 02.07.2019 i.e. before the scheduled date of hearing - This is suggestive of the fact that the reply of the writ applicant in writing dated 08.07.2019 was also not taken into consideration - This is a case of gross violation of the principles of natural justice - There is no doubt that the writ applicant was not given any opportunity of hearing before concluding the proceedings for the purpose of Section 129(3) of the Act - To put it in another words, the case on hand is one of violation of sub-clause 4 of Section 129 of the Act, 2017 which provides that no tax, interest or penalty shall be determined under sub-section 3 without giving a person concerned an opportunity of being heard - The opportunity which the statute is talking about has to be meaningful opportunity and not just an eye wash - impugned order dated 02.07.2019 determining the tax and penalty is quashed and the matter is remitted to the respondent no.2 for fresh consideration of the entire issue after giving appropriate opportunity of hearing to the writ-applicant - Writ application stands disposed of: High Court [para 8 to 11]

- Application disposed of : GUJARAT HIGH COURT

2020-TIOL-58-HC-AHM-GST

AVH Corporation Vs State of Gujarat

GST - Alleging breach of the provisions of the Gujarat Goods and Services Tax Act, 2017, applicant's goods as well as the vehicle came to be seized by the G.S.T. Authorities on 05.11.2019 - Applicant is before the High Court and prays for the following reliefs inter alia, directing release of truck along with goods; grant any other appropriate relief and award cost of this petition.

Held: The position, as on date, is that the authority concerned has issued a notice under Section 130 of the Act, calling upon the writ applicant to show cause as to why the goods and the vehicle should not be confiscated and appropriate penalty should not be imposed - Bench had an occasion to consider the provisions of Sections 129 and 130 of the Act respectively, in detail, in the case of Synergy Fertichem Pvt. Ltd. - 2019-TIOL-2950-HC-AHM-GST and is of the view that as the notice for confiscation has been issued, it is expected of the writ applicant to file an appropriate detailed reply to the same, for the purpose of getting such notice discharged - Bench would not like to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India, however, directs the authority concerned to pass appropriate order, so far as the notice of confiscation is concerned, within a period of 15 days - writ applications are disposed of: High Court [para 6 to 8, 10]

- Applications disposed of: GUJARAT HIGH COURT

2020-TIOL-57-HC-KERALA-GST

Subham Freight Carriers India Pvt Ltd Vs ASST STO

GST - Petitioner challenges the order of detention passed u/s 129(1) of the CGST Act and the notice issued u/s 129(3) of the CGST as being illegal and without jurisdiction - inasmuch as the petitioner contends that they have fully complied with the requirements of the Act and the petitioner was in a position to demonstrate within the time given by the authorities that Part B/E-Way Bill was also generated and produced for inspection.

Held: Issues raised are at preliminary stage and this Court is not convinced to entertain the writ petition and adjudicate upon merits at this stage - however, the writ petition is disposed of by directing that the petitioner submits bank guarantee for the tax and penalty as shown in Ext.P12 and applies for release of goods by enclosing a copy of this order within two days; 1st respondent shall release the goods detained under Ext.P11 and subjected to enquiry in Ext.P12 within twelve hours from the date and time of receipt of bank guarantee; the bank guarantee shall be kept valid for six weeks; that the 1st respondent shall complete the enquiry, afford fair and reasonable opportunity as envisaged under the Act to petitioner and pass and communicate his order within four weeks; that the 1st respondent, if he fails to pass the order as directed by this Court, the petitioner is not under obligation to keep the bank guarantee alive beyond six weeks: High Court [para 5]

2020-TIOL-42-HC-KERALA-GST

Mozart Global Furniture Vs STO

SGST - The petitioners have been served with notices under Section 74 read with Section 122 (1) of CGST/SGST Act proposing the demand of a tax/penalty from estimated turnover for the assessment years 2017-2018 and 2018-2019 - It is their case that they were not permitted to take copies of documents seized from their premises, or provided an opportunity to comment upon the same and that the respondents are now proposing to proceed with the adjudication proceedings pursuant to the notices served on them - Inasmuch as the adjudication proceedings pursuant to Ext.P1 notice have not commenced and a denial of the request of the petitioners for copies of the documents seized from their premises would tantamount to a violation of the rules of natural justice, it is directed that on the petitioners approaching the 1st respondent within a period of two weeks, the 1st respondent shall furnish to them copies of documents seized from their premises and reliance on which is placed in Ext.P1 notice, within a week from the date of the petitioners approaching the 1st respondent: HC

- Writ petition dispose of: KERALA HIGH COURT

2020-TIOL-40-HC-KERALA-GST

Abbott Healthcare Pvt Ltd Vs CST

GST - It is the case of the petitioner that as per the business model operated by it 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, whereunder, 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 - In other words, there is no direct sale/supply of the reagents, calibrators and disposables by the petitioner to the hospitals/laboratories in question - 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 - Although the detained goods were subsequently released consequent to the petitioner furnishing a bank guarantee and a bond as provided under the CGST Act and Rules, the petitioner thought it appropriate to obtain an Advance Ruling from the Authority for Advance Ruling and which held that - 2018-TIOL-186-AAR-GST held that the placement of specified medical instruments to unrelated customers like hospitals, laboratories etc., for their use without any consideration, in the backdrop of an agreement containing minimum purchase obligation of products like reagents, calibrators, disposables etc. for a specified period constituted a "composite supply"; that the principal supply in the said composite supply was of the transfer of right to use goods for any purpose which was liable to GST under Sl.No.17(iii) – Heading 9973 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017; that supply of reagents, calibrators, disposables etc., became taxable at the rate of tax applicable to the instruments, namely, 18% [9% CGST + 9% SGST] – The appellate authority for Advance Ruling - 2019-TIOL-11-AAAR-GST upheld this order, hence the petitioner is before the High Court.

Held:

+ There was no occasion for the AAR to go into the issue of whether the supply effected was a composite supply or not and, therefore, its findings on the said issue are at any rate legally untenable - The concept of enhancement of utility of the instrument through the supply of reagents/calibrators/disposables, while relevant for the purposes of valuation of the supply of instruments, cannot be imported into the concept of composite supply under the GST Act - A distinction has to be drawn between the nature of a supply and the valuation thereof - While clubbing of two independent supplies may be resorted to for the purposes of valuation of each of those supplies, there is no scope of clubbing of two independent supplies so as to notionally alter the very nature of each of those supplies as they existed in fact, at the relevant point in time: High Court [para 8]

+ Transactions envisaged under the agreement entered into between the petitioner and its customer hospitals/laboratories militate against viewing them as a composite supply - Firstly, the supplies are made by two different taxable persons; the supply of instrument being by the petitioner and the supply of the reagents, calibrators and disposables being by his distributor, who purchases it from him on principal to principal basis - Although it could be argued that there is a relationship between the said persons that influences the valuation of the supply, the same does not take away from the fact that the supplies are, in reality, made by two different taxable persons - Secondly, the two supplies do not answer to the description of being "naturally bundled and supplied in conjunction with each other in the ordinary course of business" - In fact, the business model followed by the petitioner appears to have held the field for a considerable period of time and would show that in the ordinary course of business, the supplies are not bundled - a finding as regards composite supply must take into account supplies as effected at a given point in time on "as is where is" basis - where the same taxable person effects a continuous supply of services coupled with periodic supplies of goods/services to be used in conjunction therewith, one could possibly view the periodic supply of goods/services as composite supplies along with the service that is continuously supplied over a period of time - matters will have to be decided based on the facts in a given case and not in the abstract as was done by the AAR - matter remitted back to the AAR for a fresh decision on the query raised before it by the petitioner company - AAR shall pass fresh orders in the matter, after hearing the petitioner, within a period of six weeks: High Court [para 9, 10]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-39-HC-KAR-GST

K Ananthakrishna Shetty Vs Mangalore Mahanagara Palike

2020-TIOL-38-HC-RAJ-GST

Mohammed Yunus Vs State of Rajasthan

2020-TIOL-29-HC-MAD-GST

Precot Meridian Ltd Vs CC

GST - The assessee-company exports cotton - During the relevant period, the assessee exported cotton through seven shipping bills and paid an amount towards IGST - The assessee claimed to have paid such tax before making export, on account of which, it is liable to receive refund of input tax credit - The assessee wrongly availed higher duty drawback, but later rectified the mistake by repaying the same with interest and then sought refund of the IGST paid - The Revenue relied on Circular No.37/2018 -Customs and rejected the refund claim on grounds that the assessee wrongly claimed higher duty drawback and then suo motu reversed the same without sanction from the Department - Hence having relinquished the right to receive refund of IGST, the assessee was not entitled for it - The Revenue also claimed that the entire is computerised and cannot be operated manually - Thereby, once an exporter drew higher duty drawback, the system automatically scrolls out IGST refund - Hence the present petition was filed, seeking that directions be issued to disburse the refund amount.

Held - Considering the findings of the Apex Court in Commissioner of Central Excise, Bolpur v. Ratan Melting and Wire Industries it is clear that Circulars cannot prevail over the statute - Circulars are issued only to clarify the statutory provision and it cannot alter or prevail over the statutory provision - In such circumstances, it is clear that the explanation of provisions of drawback has nothing to do with the IGST refund - Hence, Circular No.37/18-Customs , dated 09.10.2018 is not applicable in the present case - Hence the Revenue is directed to refund the amount of IGST paid by the assessee for the goods exported from India which are zero rated supplies, within a period of six weeks from receipt of a copy of this order: HC

- Writ petition allowed : MADRAS HIGH COURT

 

AAR CASES

2020-TIOL-09-AAR-GST

T and D Electricals

GST - Applicant has been awarded order by Shree Cement, Rajasthan for electrical, instrumentation and IT jobs (Works Contract) at township, Karnataka Cement Project, Karnataka - Applicant has raised question as to whether separate registration is required in the State of Karnataka for the work contract awarded to him in the State of Karnataka - AAR is created under the SGST/UTGST Act and thus ruling pronounced are applicable within the particular state only - Therefore, since the question raised by applicant pertains to GST registration in State of Karnataka, which is beyond the purview of the AAR, Rajasthan, hence no ruling is given: AAR  

- Application disposed of: AAR

2020-TIOL-08-AAR-GST

Indag Rubber

GST - Issue is whether the applicant is eligible to take Input Tax Credit (ITC) on the goods and services supplied by M/s Akansha Contracts P Ltd. for carrying out the various activities for setting up of Maintenance, Repair and Overhaul (MRO) facility.

Held: Nature of work undertaken in the activity of MRO is for supply of goods and services leading to creation of immovable property - Section 16(1) of the Act specifically provides that every registered person shall be entitled to take credit of the Input Tax charged on any supply of goods or services or both made to him, which are used or intended to be used in the course or furtherance of his business - availability of credit is subject to the restrictions as prescribed u/s 17(5)(d) of the Act, 2017 and in terms of which ITC is not available for construction of an immovable property even when such goods or services or both are used in the course of furtherance of business - hence applicant is not eligible to claim credit of GST charged by vendor for supply of goods and services to it, which are used for carrying out the activities (Civil Work and External Developmental Works) for setting up of MRO facility: AAR

- Application disposed of: AAR

2020-TIOL-10-AAR-GST

Wonder Cement Ltd

GST - Applicant is a manufacturer of Ordinary Portland Cement /Portland Pozalana Cement - existing power transmission lines passing through the mining area of the applicant is required to be shifted to nearby safe proximity for the purpose of carrying out the mining activity with safety and without any hazard - Applicant has undertaken to execute the Work of shifting of EHV Power Transmission lines under supervision of RRVPNL - Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) has issued demand imposing 18% GST on total cost estimate stating that it is an 'asset transfer' based on clause 3.6 of the Cost Estimate - Applicant contends that the only supply which RRVPNL is providing to applicant is supervision service for shifting work of transmission lines and shut down service for which applicant is willing to pay the demanded consideration plus GST on the same, however, the remaining GST on the total cost estimate which is not even a consideration for RRVPNL is being objected by applicant and for which the application was filed.

Held: Superintending Engineer has issued a corrigendum letter in which the words ‘GST @18% applicable on asset transfer' is made to read as "GST @18% applicable on cost of Infrastructure for 'value of supply'" - as the contention of applicant that there is no asset transfer has been resolved by Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) by issuing the subject corrigendum on 24.09.2019, the question raised by the applicant has turned redundant and, therefore, no advance ruling is required to be given: AAR

- Application disposed of: AAR

2020-TIOL-07-AAR-GST

Goa Industrial Development Corporation

GST - Applicant, Goa Industrial Development Corporation (GIDC) is a government of Goa undertaking and had vide deed of lease allotted land to 7 parties for setting up Special Economic Zone (SEZ) - however, this could not materialise due to protest from people and as a result, deposit taken from parties had to be refunded - GIDC refused to pay compensation on this deposit as the original deed of lease never mentioned such clause - parties approached Supreme Court who intervened and directed GIDC to compensate parties with interest @8.25% - Govt. of Goa through the Council of Ministers resolved to approve the proposal of GIDC to take back all the land allotted to seven parties for setting up SEZ and refund the amount paid by SEZ parties along with interest earned on such amounts and which amounts to Rs.256,56,90,593/- - applicant seeks to know as to whether the above act is a supply of service and chargeable to GST.

Held: Applicant has agreed to do an act of vacating the claim by parties of setting up SEZ units for which GIDC has paid consideration - Original amount which is paid back along with compensation would clearly qualify as 'Supply of services' - Compensation paid by GIDC would clearly qualify as 'Supply' under cl ause 5(e) of Schedule II of the GST Act and, therefore, the amount would attract tax liability: AAR

- Application disposed of: AAR

2020-TIOL-06-AAR-GST

Chandmal Narayandas Consortium

GST -  Applicant has got contract of integrated operation, maintenance and management of recreational facilities and amenities within the boundary of Subhash Udhyan (Municipal Park), Ajmer from Municipal Corporation, Ajmer - They are charging Entry fee as authorised by Municipal Corporation for allowing entry of visitors into Subhash Udhyan - Applicant is also providing facilities of Toy train, Pedal Boat etc. on chargeable basis and has received an opinion that such charges collected are exempted from GST if charges are less than Rs.250/- per person - applicant seeks to know the applicable rate of GST on Entry fees collected as well as on the Toy train ticket charges as well as charges for Pedal boat facility.

Held:  Activity carried out by the applicant i.e. allowing entry into Subhash Udhyan and other facilities of Toy train, pedal boat are in the nature of recreational and amusement activities and said supply is covered under CH 9996 under 11/2017-CTR and attracts GST @18% - not exempted in terms of 12/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-05-AAR-GST

Chowgule Industries Pvt Ltd

GST - Every model of demo cars is used by applicant for demonstration only for a limited period viz. every two years or 40,000 kms whichever is earlier and, thereafter, the said vehicle is sold after paying applicable taxes on sale value at that point of time - since the applicant would be making further supplies of the Demo vehicles and there is no time limit prescribed in the GST Act for making such supplies, Authority is of the opinion that applicant is eligible to avail ITC - Held that Applicant is entitled to avail ITC charged on inward supply of capital goods viz. Motor Vehicles which are used for demonstration purpose in the course of business of Supply of Motor Vehicle - such ITC availed can be utilised for payment of output tax payable under the GST Act - Availability of credit is dealt with u/s 18 of the Act and the manner of utilisation is provided u/s 49 of the Act: AAR

- Application disposed of: AAR

2020-TIOL-04-AAR-GST

Joyville Shapoorji Housing Pvt Ltd

GST - Dwelling units measuring less than 60 sq.mtrs. qualify as low cost houses and concessional rate of 12% is available w.e.f 25.01.2018 - Benefit of concessional rate would be available only in respect of Society formation charges; Club house development charges; Water, Electricity, Drainage, Sewerage charges; Legal service charges and Documentation charges which are collected from buyers of houses having area less than 60 sq. Mtrs. - project Joyville, Virar qualifies as an ‘ongoing project' under 3/2019-CTR - units which do not qualify the criteria of ‘low cost houses' will be taxed @18% GST: AAR

- Application disposed of: AAR

2020-TIOL-03-AAR-GST

Shapoorji Pallonji and Company Pvt Ltd

GST - Definition of “affordable housing” is confined to dwelling units with carpet area of not more than 60 square meters, hence concessional rate will be available only in respect of low cost houses along with amenities constructed - applicant will, therefore, have to discharge GST @12% (after deducting value of land) on works contract services provided for the construction of the units and common areas and amenities which qualify the criteria of low cost houses - benefit of reduced rate would be available only in the cases of supply effected after 25.01.2018 i.e. date on which 1/2018-CTR was issued - Building completion and finishing services will not be regarded as separate services - such services will be a part of composite supply of Works Contract services with the principal supply of building construction, being covered under entry (v)(da) of 11/2017-CTR - Since concessional rate would be available only for construction services pertaining to dwelling units less than 60 sq. mtrs, including common areas and amenities on pro-rata basis, construction services including common areas and amenities on pro-rata basis, performed by the applicant in respect of the dwelling units exceeding 60 sq.mtrs. would be liable to full rate of GST i.e. @ 18%: AAR

- Application disposed of: AAR

 

AAAR CASES

2020-TIOL-05-AAAR-GST

Specsmakers Opticians Pvt Ltd

GST - The appellant-company is engaged in carrying out business activities in respect of spectacle frames, sun glass lenses, contact lenses as well as reading lenses - The appellant procures these items locally as well as by way of import - The appellant has its main office in Tamil Nadu as well as various branches in other States - The goods procured or imported were transferred to various branches for subsequent supply to customers of those branches - The appellant had approached the AAR seeking to determine the value to be adopted in respect of transfer to branches located outside the State - The AAR held that the value in respect of supply of goods by the applicant to branches outside the State, shall be the open market value of such supplies that is available as per Rule 28(a) and Explanation (a) to Chapter IV of CGST/TNGST Rules 2017 r/w Section 15 of the CGST/TNGST Act - It was also held that where the goods were intended for further supply as such by the recipient, the appellant had the option to adopt an amount equivalent to 90% of the price charged for the supply of goods of like kind and quantity by the recipient to customer not being a related person as the value of such supplies to the distinct recipient as per proviso to Rule 28 and Explanation (a) & (b) to Chapter IV of CGST/TNGST Rules 2017 r/w Section 15 of the CGST/TNGST Act - Hence the present appeal.

Held: The appellant is eligible to adopt the value as per the second proviso to Rule 28 of the CGST/TNGST Rules, 2017 at the time of supply of goods from the State of Tamil Nadu, in as much as the recipient, a distinct person, is eligible for full Input Tax Credit as required under the said proviso: AAAR

- Appeal allowed: AAAR

2020-TIOL-04-AAAR-GST

Sanghvi Movers Ltd

GST - The appellant-company is engaged in the business of providing medium-sized heavy duty cranes on rental/lease/hire basis to its clients without transferring the right to use - So as to comply with the provisions of GST, the appellant's branch at Maharashtra entered to an MoU with all other branch offices, wherein the Maharashtra unit agreed to provide cranes and crane components to all branches of the appellant-company on hire charges - As part of the arrangement, whenever the appellant received a final work order from its customers for providing cranes on hire charges, a work order would be raised on the Maharashtra unit for providing the cranes required - The Maharashtra unit discharged IGST on the value of hire charges recovered from the appellant by treating the same as inter-State supply of service - Consequently, the appellant would avail credit of IGST charged/paid by the Maharashtra unit on the value of hire charges charged on the invoice - The appellant approached the AAR, seeking to determine the admissibility of ITC of IGST paid by the Maharashtra unit in the hands of the appellant - The AAR held that on the supplies received from the Maharashtra unit, the Tamil Nadu unit (the appellant) is ineligible for full ITC but only to the extent specified in the restrictions as per second proviso to Section 16(2) of CGST Act and Rule 37 of the CGST Rules r/w Section 20(iv) of the IGST Act, subject to fulfilment of all other conditions u/s 16 of the CGST Act r/w Section 20(iv) of the IGST Act - Hence the present appeal.

Held: The appellant is eligible to avail full Input Tax Credit of tax paid by the Head Office of the appellant-company on lease/hire of cranes for furtherance of business, subject to other conditions of eligibility to such credit as per Section 16 of the CGST/TNGST Act 2017: AAAR

- Appeal allowed: AAAR

2020-TIOL-03-AAAR-GST

East Hooghly Agro Plantation Pvt Ltd

GST - Appellant is a manufacturer of tarpaulins made from High Density Polyethylene (HDPE) woven fabrics - appellant had sought advance ruling as to whether HDPE woven tarpaulins are classified as "Textiles and Textile articles" under Section XI of the First Schedule of the Customs Tariff Act and whether HDPE woven tarpaulin is classified under either of HSN 6306/6301/5903 of GST Tariff - AAR had held that HDPE Woven fabric coated with LDPE melt is not a textile fabric and tarpaulins made from the said laminated fabrics is not classifiable under either of  HSN 6306/6301/5903 of GST Tariff  - aggrieved, the appellant is before the AAAR.

Held: On examination of the samples produced by the appellant, it is clear that as the principal characteristic of tarpaulin is water proofing and unless the HDPE woven fabric is laminated it cannot be used to make tarpaulin; that the process of lamination cannot be ignored or treated in isolation and it is an integral and vital process in the manufacture of tarpaulin from HDPE fabric - therefore, in view of Note 1(h) of Section XI of the Tariff Act, tarpaulins of HDPE woven fabric, laminated as per specification of IS 7903:2017, being expressly excluded, do not merit classification under Chapter 63 - so also, in view of Chapter note 2 to Chapter 59, HDPE woven fabric is not a textile material and does not merit classification under HSN 5903 - no infirmity in the ruling pronounced by AAR, hence same is upheld - appeal is dismissed: AAAR

- Appeal dismissed : AAAR

2020-TIOL-02-AAAR-GST

TP Roy Chowdhury And Company Pvt Ltd

GST -  Appellant supplies the services of loading, unloading etc. after the cargo of yellow peas imported from a foreign land reaches the port of entry - produce has been procured from the farmers in foreign land and exported to India - CBIC Circular 16/16/2017-GST clarifies that the process of de-husking or selling of pulses is usually not carried out by farmers or at the farm level but by the pulse millers and, therefore, such products are not to be considered as 'agricultural produce ' ; that as soon as the goods leave the farmer's hand and the primary market, the services rendered thereafter are not to be considered related to cultivation of plants and classifiable under SAC 9986; that, therefore, exemption under Sl. No. 54(e) of 12/2017-CTR is not available - Appeal to the AAAR.

Held:  There is no dispute that raw whole yellow peas are agricultural produce covered under Sl. no. 45 of the Rate Notification and are exempted goods, however, this particular consignment of raw whole yellow peas was harvested in a foreign land and the primary market concerned or the farmers' market is located in that foreign land - From a combined reading of entry no. 54(e) of 12/2017-CTR and definition 2(d) of the exemption notification, all services and processes are excluded beyond the primary market - term ‘primary market' in common parlance refers to farmers' market like ‘Mandi' or ‘arhat' being a place where the farmers directly sell their product to the buyers like wholesalers, millers, food processing units etc. - spirit of the legislature is intended to boost the agricultural sector of the home country and not that of the foreign land - primary market in the instant case being located in foreign shores does not conform to the definition stated in 2(d) of the notification - further, there is no evidence that the grains have not undergone any type of treatment before leaving the foreign country from where they have been imported into India - no infirmity found in the order of the AAR - appeal is dismissed: WB AAAR

- Appeal dismissed: AAAR

2020-TIOL-01-AAAR-GST

Macro Media Digital Imaging Pvt Ltd

GST - Appellant is engaged in the business of printing of trade advertisement material (heading 4911) using printing ink and base material and the content of which is provided by the recipient - appellant sought to know from the Advance Ruling Authority the classification of the Trade advertisement material - AAR held that the s upply is a composite supply, where the service of printing is the principal supply, therefore, since the goods supplied having no use other than displaying the printed matter, same is ancillary to the principal supply of printing; that the service of printing is classifiable under SAC 9989 and taxable under Sl. No. 27(i) of 11/2017-CTR - Appellant is in appeal against this order before the AAAR.

Held: Both the appellant and AAR have taken recourse to the Circular 11/11/2017-GST dated 20.10.2017 on the subject ‘Clarification on taxability of printing contracts' - whereas appellant relies on paragraph 5 of the said Circular, the AAR has relied upon paragraph 4 of the same - On careful reading of the said paragraphs it is seen that the only difference between the two is that under para 4, the usage right is owned by the supplier of the content whereas in the case described in para 5, no such usage right is owned by the supplier of the design/logo - it can also be concluded that items mentioned in para 4 have no secondary use other than carrying the printed content whereas the articles mentioned in para 5 have secondary usage - inasmuch as although wallpaper displays designs printed or embossed on its body, it has another usage and that is of protecting the wall - in the instant case, the PVC sheet does not have any other usage other than displaying the advertisement content - moreover, in the present case, the advertisement materials carry specific messages meant for customers and the contents are very specific to the product for which the advertisements are made - for example, advertisement meant for Hyundai cannot be used by Hero or any other company, therefore, the content is exclusively the property of the client who entrusts the job to the appellant and the usage right of the content remains with the client of the appellant, but this is not the case as described in paragraph 5 of the Circular which the appellants seeks to rely upon - Authority is, therefore, of the considered opinion that the supply is a composite supply, supply of service being predominant and the case of the appellant is more akin to the case described in paragraph 4 of the Circular 11/11/2017-GST - it is clear beyond doubt that what the appellant supplies is nothing but ‘ ervice' and their argument that they supply ‘ oods' has no basis - no infirmity in the ruling pronounced by AAR - appeal dismissed: AAAR

- Appeal dismissed: AAAR

 

 

NAA CASES

2020-TIOL-03-NAA-GST

Director General Of Anti Profiteering Vs Pyramid Arcades Pvt Ltd

GST - Anti-profiteering - DGAP in its investigation has observed that the ITC as a percentage of the total turnover which was available to the respondent during the pre-GST period was 2.76% whereas during the post-GST period it was 7.28% which meant that the Respondent has benefited from additional ITC to the extent of 4.52% of the turnover during the period July 2017 to December 2018 and hence the provisions of s.171 of the Act have been contravened - Inasmuch as the respondent has not passed on the benefit of ITC to his customers and has profiteered by an amount of Rs.51,12,928/- including GST @12% on the base profiteered amount of Rs.45,65,114/- - contention of the respondent that the applicant had filed complaint only to blackmail them and that such activities should not be encouraged, Authority observes that the applicant is a homebuyer in respondent's project and hence a recipient of the service supplied by respondent and, therefore, he falls within the definition of ‘interested party' as per Explanation given under rule 137(c)(b) of the CGST Rules - moreover, ‘any other person' can file complaint for violation of the provisions of s.171 of the Act as per rule 128(1) of the Rules - insofar as the applicant is concerned, the respondent had realised an additional amount of Rs.1,33,503/- from him - since the buyers are identifiable as per the documents placed on record, the respondent is required to pass on the profiteered amount to them including the applicant along with an interest @18% per annum from the dates from which the above amount was collected by him from the buyers till the payment is made, within a period of three months - SCN to be issued for imposition of penalty in terms of s.171(3A) of the CGST Act r/w rule 133(3)(d) of the CGST Rules for the above contravention - Commissioners of CGST/SGST, Maharashtra to monitor this order under the supervision of the DGAP and submit a compliance report within four months: NAA

- Application allowed: NAA

2020-TIOL-02-NAA-GST

Director General of Anti-profiteering Vs Acme Housing India Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant has alleged profiteering by the respondent in the matter of purchase of flat in the respondent's project ‘Acme Ozone Herbelia' - Inasmuch as the applicant alleges that the respondent had not passed on the benefit of Input Tax credit by way of commensurate reduction in price w.e.f 01.07.2017 - DGAP in its report concluded that the ITC as a percentage of the turnover that was available to the respondent during the pre-GST period was 1.05% and during the post-GST period was 3.66% and which showed that the respondent had benefited from additional Input Tax credit to the tune of 2.61% of his turnover - accordingly, the DGAP computed the profiteering made by the respondent during the period July 2017 to 31st December 2018 as Rs.2,10,57,462/- which included the GST component of 12% i.e the base profiteered amount is Rs.1,88,01,305/- and the benefit to be passed on to the applicant was Rs.1,91,662/- - DGAP informed that the respondent had already passed on Rs.3,11,726/- to the applicant vide letter dated 27.04.2018 and so the extra benefit passed on to the applicant can be adjusted against the demand to be raised on the applicant or the benefit of ITC can be passed on to him for the post December 2018 period - insofar as other buyers are concerned, the DGAP observed that no evidence has been produced by the respondent that they have passed on similar benefits - the computation of profiteering has been done by DGAP in respect of 152 home buyers from whom payments have been received by the respondents during the post GST period; that the respondent has sold a total number of 176 flats till 31.12.2018 but in respect of 24 flats the customers have not paid any consideration during the impugned period.

Held:   Perusal of the letter of the respondent addressed to the DGAP in the matter of passing of ITC benefit of Rs.3,11,726/- reveals that this amount has been paid as a discount/rebate and which cannot be taken to be the benefit of ITC and hence no excess benefit of ITC has been passed on to the said buyer (applicant) - respondent has reiterated that they had passed on the ITC benefit of 3.16% to all the customers who have booked flats before 01.07.2017 - however, the respondent has not produced any reliable or cogent evidence either before the DGAP or the Authority in support of their contention that they had passed on the benefit of ITC by submitting the details of entries made in their books of account or cheques issued to the buyers or the copies of the tax invoices/demand letters or the acknowledgements made by their customers of having received the benefit of ITC due to implementation of GST - Granting of rebates/discounts is the most prevalent practice followed in the construction industry to increase sales and hence the said rebate/discount cannot be equated with passing on of the benefit of ITC - respondent has only claimed to have passed on the discount/rebate on account of GST which cannot amount to passing on the benefit of ITC as per the provisions of s.171(1) of the CGST Act, 2017, therefore, the claim of the respondent is frivolous and cannot be accepted - therefore, the applicant is also entitled to an amount of Rs.1,91,662/- (including GST) as benefit of ITC along with interest @18% - so also, the amount of profiteering of Rs.2,08,65,800/- arrived at by the DGAP is required to be returned to the eligible buyers along with interest - DGAP is directed to investigate the issue of passing on the benefit of additional ITC by the respondent in respect of the whole project ‘Acme Ozone' and also other projects being undertaken under the said RERA registration and submit his report in terms of s.171(2) of the Act read with rule 133(5) of the Rules - Commissioners of CGST/SGST, Maharashtra to monitor this order under supervision of DGAP by ensuring that the amount profiteered is passed on to all eligible buyers and a compliance report to be submitted within four months - SCN to be issued for imposition of penalty prescribed u/s 171(3A) of the Act r/w rules 133(3)(d) of the CGST Rules, 2017: NAA

- Application allowed :NATIONAL ANTI-PROFITEERING AUTHORITY

2020-TIOL-01-NAA-GST

Director General of Anti-profiteering Vs Revital Reality Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Reversal of the ITC of a total amount of Rs.1,77,94,573/- has been effected by the respondents even before the Occupancy Certificate/Completion Certificate was issued by the competent authority - above voluntary reversal of credit has been effected only in August 2019 i.e. much after the expiry of the period of investigation by the DGAP i.e from July 2017 to December 2018 - Rule 42 of the CGST Rules lays down the mode of computation of mandatory reversal of the unutilized input tax credits in respect of unsold flats/shops of a real estate project at the time of receipt of completion/occupancy certificate or on the date of first occupancy, whichever is earlier - since this is the only method prescribed for reversal of ITC under the CGST rules, the reversal affected by the respondent has to be viewed as an act which was carried out with malafide intention of denying the passage of benefit of ITC to his customers/homebuyers - it is also a fact that at the time of reversal of credit, a number of units were yet to be sold and occupancy certificate was not yet received which implied that this act of reversal was not only premature but apparently also an afterthought aimed at avoiding the passing on of the benefit of ITC to his customers/homebuyers - importantly, DGAP has calculated the profiteered amount only in respect of the sold units on which GST is being charged by the respondent - therefore, the reversal of ITC by the respondent on his own accord does not alter the computation of profiteering by the DGAP in any manner: NAA

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - DGAP report reveals that ITC as a percentage of the turnover that was available to the respondent during the pre-GST period (April 2016 to June 2017) was 0% and during the post-GST period July 2017 to December 2018 was 2.68% and which confirms that during the post-GST period the respondent has benefited from additional ITC to the tune of 2.68% of his turnover and the same was required to be passed to the applicants no. 1 to 8 and other flat buyers - DGAP has calculated this amount as Rs.3,32,61,809/- on the basis of information supplied by the respondent; which the respondent has not challenged and hence the amount of profiteering computed by the DGAP is accepted as correct - amount to be refunded to the applicants and other flat buyers along with interest @18% from the date when the above amount was profiteered till the date of payment as per provisions of rule 133(3)(b) of the Rules - such amount has to be paid within a period of three months failing which such amount shall be recovered by the Commissioner CGST/SGST concerned as per CGST Act under the supervision of DGAP; compliance to be submitted within four months - as respondent has denied benefit of ITC to buyers of flats being constructed by him in his project 'Supertech Basera', in contravention of s.171(1) of the Act, they have committed an offence for which a penalty is leviable u/s 171(3A) of the Act, notice to be issued in this regard: NAA

GST - Anti-Profiteering - Request of the respondent to adjust the ITC reversed of Rs.1,77,93,573/- against the profiteered amount is not tenable as the expression “profiteered” as explained u/s 171(1) of the Act, 2017 means the amount determined on account of not passing on the benefit of reduction in the rate of tax on supply of goods or services or both or the benefit of additional input tax credit to the recipients by way of commensurate reduction in the prices - what is relevant for the purpose of computation of profiteered amount is the additional availability of ITC in the pre-GST and the post-GST periods and not what is done subsequently which could either be discharging of output GST liability or reversal of ITC - reversal of ITC effected by the respondent on his own accord does not alter the computation of profiteering by the DGAP in any manner - it is apparent that the respondent by his act of reversal of ITC has attempted to deny his customers/homebuyers the benefit of ITC and accordingly the above amount cannot be adjusted as claimed by respondent: NAA

GST - Anti-Profiteering - Respondent has submitted details of the profiteered amount claimed to have been passed by him to all his customers along with sample copies of Journal vouchers issued to the customers to show that the respondent has allegedly passed on ITC benefit of Rs.3,30,91,398/- to his buyers; also furnished copies of 26 Journal Vouchers issued on 06.08.2019 in support - Perusal of the vouchers show that they have been issued on the same date which makes their genuineness doubtful - respondent has neither produced the acknowledgment receipts from recipients nor has furnished tax invoices to prove that he has passed on the above amounts as benefit of ITC - respondent has also not furnished the said details to the DGAP during the course of investigation, hence, there is hardly any doubt that the above records have been prepared by respondent subsequently to mislead the present proceedings: NAA

- Application allowed : NATIONAL ANTI-PROFITEERING AUTHORITY

 

CGST RULES NOTIFICATION

05/2020

Seeks to appoint Revisional Authority under CGST Act, 2017.

04/2020

Seeks to extend the one-time amnesty scheme to file all FORM GSTR-1 from July 2017 to November, 2019 till 17th January, 2020.

03/2020

Seeks to amend the notification No. 62/2019-CT dt. 26.11.2019 to amend the transition plan for the UTs of J&K and Ladakh

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