GST - Finance Act, 2010 with effect from 01.07.2010 levied Clean Energy Cess which was in the nature of a duty of excise on the production of coal and was being collected at the time of removal of raw coal, raw lignite and raw peat from the mine to the factory - Clean Energy Cess was repealed by Taxation Laws (Amendment) Act, 2017 - Section 18 of the Constitution (One Hundred and First Amendment) Act, 2016 enabled the Parliament to levy a cess for five years to compensate the States for the loss of revenue on account of GST- State compensation cess is "with respect to" goods and services tax, it is a tax -When Constitution provision empowers the Parliament to provide for Compensation to the States for loss of revenue by law , the expression "law" used therein is of wide import which includes levy of any cess - The Compensation to States Act, 2017 is not beyond the legislative competence of the Parliament -The Compensation to States Act, 2017 does not violate Constitution (One Hundred and First Amendment) Act, 2016 nor is against the objective of Constitution (One Hundred and First Amendment) Act, 2016 - The Compensation to States Act is not a colourable legislation -Principle is well settled that two taxes/imposts which are separate and distinct imposts and on two different aspects of a transaction are permissible as "in law there is no overlapping - Levy of Compensation to States Cess is an increment to goods and services tax which is permissible in law - Clean Energy Cess and States Compensation Cess are entirely different from each other, payment of Clean Energy Cess was for different purpose and has no bearing or connection with States Compensation Cess - Giving credit or set off in the payment is legislative policy which had to be reflected in the legislative scheme - Compensation to States Act, 2017 or Rules framed thereunder does not indicate giving of any credit or set off of the Clean Energy Cess already paid till 30.06.2017 - The Apex Court held that the petitioner is not entitled for any set off of payments made towards Clean Energy Cess in payment of Compensation to States Cess.
Held: Application for oral hearing is rejected - The present review petition is devoid of merits & so merits being dismissed: SC
- Review Petition dismissed: SUPREME COURT OF INDIA
AAR CASES
2020-TIOL-21-AAR-GST
VK Enterprises
GST - 'Rubber Pad' intended to be supplied to persons, other than the Railways, is classifiable under heading 4016 and attracts GST @18%: AAR
- Application disposed of: AAR
2020-TIOL-20-AAR-GST
SRS Enterprises
GST - Services provided by applicant by way of Pure labour contract for construction of flats under Pradhan Mantri Awas Yojana (PMAY) is covered under heading 9954, under Entry 10 of 12/2017-CTR and chargeable to Nil GST: AAR
- Application disposed of: AAR
2020-TIOL-19-AAR-GST
Pushpa Rani Pabbi
GST - Applicant seeks to know as to whether the parking lot services provided by the contractor appointed by the Market Committee, which is a government authority is exempted under 12/2017-CTR as the parking lot activity is covered under Article 243 of the Constitution.
Held: Market Committee (Mandi Board) is not a government authority and does not qualify under the definition provided in clause 2(zf) of notes appended to 12/2017-CTR - Activity of Parking services provided by applicant is classifiable under heading 9967 and attracts GST @18%: AAR
- Application disposed of: AAR
2020-TIOL-18-AAR-GST
MD Enterprises
GST - Exemption available to 'supply of farm labour' services [Heading 9986] under 12/2017-CTR, Sr. 54 is not available to Supply of Manpower services falling under SAC 99851: AAR
- Application disposed of: AAR
2020-TIOL-17-AAR-GST
Alisha Foods 24
GST - Ready to eat 'Fried Fryums' manufactured and supplied by the applicant is classifiable under TI 2106 90 99 of the First Schedule to the CTA, 1975 - attracts GST @18% in terms of Sr. no. 23 of Schedule III of 1/2017-CTR - claim of applicant for classification as Papad under the head 1905 9040/1905 9090 and exempted thereunder is untenable: AAR
- Application disposed of: AAR
2020-TIOL-16-AAR-GST
CMC Vellore Association
GST - Medicines, drugs, stents, consumables and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis or medical treatment or procedure is a 'composite supply' of in-patient healthcare service - supply of in-patient healthcare services is exempted in terms of Sr. no. 74 of 12/2017-CTR: AAR
- Application disposed of: AAR
2020-TIOL-15-AAR-GST
Crown Tours And Travels
GST - Ancillary services like Elephant Ride at Amber Fort, Guide charges, boat ride at Udaipur, Camel Ride at Jaisalmer, Saree/Turban tying etc. provided by the applicant to various Tour operators is classifiable under SAC heading 9985, Sr. 23(iii), Support services, 11/2017-CTR and attracts GST @18%: AAR
- Application disposed of: AAR
2020-TIOL-14-AAR-GST
JVS Foods Pvt Ltd
GST - Fortified rice kernels (FRK) manufactured and supplied by applicant is classifiable under HSN 1904 9090 and attracts GST @18% - contention of the applicant that the impugned goods are classifiable under Tariff Item 1006 1090 as Rice-Others and attract GST @ 0%/5% is rejected: AAR
- Application disposed of: AAR
2020-TIOL-12-AAR-GST
Asiatic Clinical Research Pvt Ltd
GST - Applicant is engaged in the activity relating to management of clinical trials on behalf of Asahi Kasei Pharma America Corporation, USA and has sought a ruling as to whether the services provided to the foreign client amounts to export of services and hence zero-rated under GST law and whether the applicant acts as a 'Pure agent' while receiving amounts from the foreign clients and passing it on to the local research institutions.
Held: As regards the first question on which ruling is sought by the applicant, the Authority cannot answer the same as section 97(2) of the CGST Act, 2017 does not empower the Authority to give a ruling on the Place of supply of goods or services - Insofar as the second question is concerned, the applicant qualifies to be a ‘Pure Agent' in receiving amounts from the foreign clients and passing it on to the local research institutions since upon examination of the agreement of Clinical Trials services it is apparent that the applicant satisfies all the conditions laid down in the Explanation to Rule 33 of the Rules: AAR
- Application disposed of: AAR
2020-TIOL-11-AAR-GST
SLN Tech Fabs Bengaluru Pvt Ltd
GST - Applicant is engaged in providing services in the area of Transport solutions, in the field of fabrication and truck body building area for transport equipments such as Tippers, Trailers, Containers and Tankers - at present they are charging GST @28% as per Sl. no. 169 of Schedule IV to 1/2017-CTR by treating their supply as “goods" - however, the CBIC by its Circular 52/26/2018-GST dated 09.08.2018 clarified that in the case as mentioned at paragraph 12.2(b), if the body is fabricated on chassis provided by the principal then the supply would merit classification as 'service' and attract GST @18% - applicant, therefore, desires to know the correct GST rate.
Held: Charging of GST @28% as per Sl. no. 169 of Schedule IV of 1/2017-CTR is correct if the activity of the applicant is treated as supply of goods falling under CH 8707; however, the activity of fabrication of body building on Tippers, Trailers etc. merits classification under SAC 998881 under ‘Motor vehicle and trailer manufacturing services' in terms of Sl. no. 535 of 11/2017-CTR and applicant can starting charging GST @18% as per Sl. No. 26(ic) of 11/2017-CTR in view of amendment by 20/2019-CTR r/w Explanation under 26/2019-CTR: AAR
- Application disposed of: AAR
HIGH COURT CASES
2020-TIOL-182-HC-KERALA-GST
AF Babu Vs UoI
GST - Grievance of the petitioners is essentially that they had come across a press release by the GST Council, which indicated that the last date for uploading the details in the GST portal for the purposes of carrying forward the accumulated credit from the erstwhile regime was extended up to 31.12.2017 - Relying on the said press release, the petitioners sought a clarification from the GST Network, on finding that the web portal had closed by 27.12.2017, as to when the portal would re-open again for them to upload the necessary details for migration of the credit to the GST regime - The respondents, however, clarified that inasmuch the petitioners had not made any attempt to log into the system before 27.12.2017 their request for migration of credit could not be accepted – Petitioners contend that the communications issued to them by the respondents denying them the facility of transfer of accrued credit are substantial rights available to them under the GST Act and cannot be deprived solely on account of a technical lapse that was occasioned at the instance of the respondents.
Held: Counsel for the respondents clarified that the press release itself was a mistaken one, in that there was no decision to extend the time limit till 31.12.2017 – Bench, however, is of the view that the petitioner assesee cannot be deprived of the substantive benefit under the GST Act merely on account of a technical procedure insisted upon by the respondents - This is more so when they had valid reason to assume that the facility to upload the necessary TRAN-1 Form was available till 31.12.2017 – in view of the Delhi High Court decision in Aman Motors = 2019-TIOL-2681-HC-DEL-GST, Writ petitions are allowed by quashing the impugned communications and directing the respondents to either open the online portal so as to enable the petitioners to file the Form TRAN-1 electronically or to accept the same manually on or before 31.12.2019 - respondents are at liberty to verify the genuineness of the claim of the petitioners and the claim shall not be denied only on the ground that the same was not filed before 27.12.2017 – Petitions allowed: High Court [para 5]
- Petitions allowed: KERALA HIGH COURT
2020-TIOL-181-HC-DEL-GST
Teneron Ltd Vs STO
GST - Petitioner has assailed the show cause notice dated 21.11.2019 and the demand of tax with interest and penalty of the same date - The grievance of the petitioner is that the impugned show cause notice is vague and does not contain any specific allegation against the petitioner and does not disclose as to on what basis the respondents are claiming the amount as demanded; all that emerges is that the petitioner's registration under the GST Act has been cancelled and consequently, notice has been issued - Counsel for Respondent submitted that they would issue fresh SCN with proper particulars - impugned SCN stands withdrawn with liberty to issue a fresh one - Petition disposed of: High Court [para 5, 6]
- Petition disposed of: DELHI HIGH COURT
2020-TIOL-165-HC-ALL-GST
Dabur India Ltd Vs Commissioner of CGST
GST - Appellate Authority has upheld the ruling of the Authority for Advance Ruling classifying Odomos, under HSN 3808 9191 of Chapter 38 of the Customs Tariff Act, 1975 Aggrieved, the Petitioner has prayed that a writ in the nature of mandamus be issued for classification of the product Odomos as medicine under heading no. 3004 of the Customs Tariff Act, 1975.
Held: Courts have consistently adopted the "common parlance test" as the most reliable standard for interpreting terms and entries in taxing statutes - This is of course subject to various exceptions where the statutory text is completely contrary to the "common parlance" context - The common parlance test is also considered an extension of the established canons of statutory interpretation of taxing statutes - materials in the records before the authorities below corroborate the fact that the petitioners pitched the product in their sale material and advertisements as a mosquito repellent - product is not normally prescribed as a medicine by medical practitioner as a drug - There is no restriction on sales and the product is sold on demand at the counters in shops and establishments inasmuch as sales are not restricted to chemists/druggists alone - product is a mosquito repellent by virtue of its mosquito repelling characteristics and is so understood in common parlance - The dealers identify and sell the product as a mosquito repellent and the customers purchase the same and use it in the like manner - In the wake of the said findings the common parlance test or the market identity test for classification of the product was satisfied - The conclusion that the product is a mosquito repellent is a logical sequitor of the above process of reasoning - holding of the Appellate Authority that the active component of the product is DEET and that NNDB is its improved version cannot be called perverse - The chemical composition test created by the Supreme Court has been correctly applied by the Appellate Authority to construe the product as a mosquito repellent - For like reasons, contention of the respondent / assessee cannot be viewed with favour by this Court - Under rule 3 of the general interpretation rules, resort cannot be had to a general entry called "others" or any other heading when the product clearly falls under a specific classification heading - A perusal of the classification heading no. 3808 9191 shows that the product in question is a neat fit into the description of products laid down therein - No laboured process of reasoning is required since the heading no.3808 9191, is clear as daylight - invocation of the general entry called "others" by the petitioner is clearly misconceived, since the product in question is covered by a specific description in the heading under which the product has been classified - Court is not persuaded to take a different view in the light of the preceding discussion: High Court [para 20, 30 to 33, 40, 45, 47, 49, 50]
GST- Article 226 of the Constitution of India - Judicial Review - Judicial review is confined to the decision making process and is not directed against the decision itself - The court of judicial review examines the manner in which the decision was made - In judicial review the Court scrutinizes the correctness of the decision making process and not the decision itself - While exercising powers of judicial review, the Court has to find whether the decision making authority acted within its jurisdictional limits, committed errors of law, adhered to the principles of natural justice or acted in breach thereof, and whether the decision is perverse or not - The powers of judicial review are thus distinct from powers of an appellate court - The order of Appellate Authority can be judicially reviewed and not appealed against - Courts exercising judicial review do not ordinarily substitute the decision of the authority by their judgment - Merely because two views are possible, a court sitting in judicial review shall not exercise its discretion in favour of an alternative view to that of the authority - Court finds that the petitioners were given full opportunity of hearing before the authorities below - The Appellate Authority as well as Original Authority have adhered to the principles of natural justice while deciding the controversy - The order of the Appellate Authority assailed in the instant writ petition reflects due application of mind to the relevant facts and material in the record and is supported with cogent reasons - No arbitrariness or perversity in the findings of the Appellate Authority could be pointed out during the course of arguments - In fact, two views are not even possible in the facts of this case - This is not a fit case to judicially review the impugned order - Consequently, Court declines to exercise its discretionary jurisdiction under Article 226 of the Constitution of India in favour of the petitioner - order passed by the Appellate Authority is liable to be upheld and stands affirmed accordingly Petition dismissed: High Court [para 53 to 58]
- Petition dismissed: ALLAHABAD HIGH COURT
2020-TIOL-164-HC-AHM-GST
Mohit Minerals Pvt Ltd Vs UoI
GST - No tax is leviable under the IGST Act, 2007, on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India upto the customs station of clearance in India - Notification No.8/2017 – IT(R) and the Entry 10 of the Notification No.10/2017 – IT(R) both dated 28th June 2017 are declared as ultra vires the IGST Act, 2017 and unconstitutional as they lack legislative competency: HC
GST - Request of the Revenue Counsel to stay the operation, implementation and execution of the judgment is declined: HC
- Appeal allowed: GUJARAT HIGH COURT
2020-TIOL-151-HC-MUM-GST
Kaish Impex Pvt Ltd Vs UoI
GST - Respondent-authorities suspected that M/s.Maps Global was involved in fraudulent availing of Input Tax Credit, and this Input Tax Credit was utilised for payment of export goods, and later a refund was sought - Respondent-authorities scrutinized the bank account of M/s.Maps Global and noticed that an amount of Rs.28,50,000/- was transferred to one M/s.Balajee Enterprises, on 19 June 2019 and 12 July 2019 - The Respondent-authorities suspected these transactions were fictitious and no material was supplied to M/s.Maps Global - Further, according to Respondent-authorities M/s.Balajee Enterprises transferred an amount of Rs.1,63,00,000/- to the account of the Petitioner on 17 October 2019 – consequently, summons were issued to the petitioner referring to inquiry against M/s.Maps Global and the Directorate General of GST Intelligence issued a communication to the State Bank of India informing the Bank Manager of proceedings being initiated against the Petitioner and that a provisional attachment of bank account is necessary under section 83 of the CGST Act - Petitioner received a communication from the State Bank of India on 5 November 2019 regarding attachment by the Respondent-Authorities and this action of attachment u/s 83 has been challenged by the petitioner.
Held: During the pendency of any proceedings under section 62, 63, 64, 67, 73 and 74 of the CGST Act, the Commissioner can provisionally attach any property including bank account belonging to the taxable person - For this purpose, the Commissioner has to form an opinion that it is necessary to do so for protecting the interest of the government Revenue - These steps have to be taken in such manner as prescribed - Rule 159(1) of CGST Rules, 2017 deals with provisional attachment of property - The bank account of the taxable person can be attached against whom the proceedings under the sections mentioned above are initiated - Section 83 does not provide for an automatic extension to any other taxable person from an inquiry specifically launched against a taxable person under these provisions - Section 83 read with rule 159(2), and the form GST DRC-22 show that a proceeding has to be initiated against a specific taxable person, an opinion has to be formed that to protect the interest of Revenue an order of provisional attachment is necessary - The format of the order, i.e. the form GST DRC-22 also specifies the particulars of a registered taxable person and which proceedings have been launched against the aforesaid taxable person indicating a nexus between the proceedings to be initiated against a taxable person and provisional attachment of bank account of such taxable person – Only upon contingencies provided therein that the power under section 83 can be exercised - This power is to be used in only limited circumstances and it is not an omnibus power - It is, therefore, not possible to accept the submission of the Respondents that even though specified proceedings have been launched against one taxable person, bank account of another taxable person can be provisionally attached merely based on the summons issued under section 70 to him – Bench holds that hold that the order dated 22 October 2019 provisionally attaching the bank account of the Petitioner was without jurisdiction and is liable to be quashed and set aside - provisional attachment on the bank account specified in the prayers clause stands lifted - bank authorities concerned will act upon the same - Petition succeeds: High Court [para 9, 14, 15, 16, 17, 18, 19]
GST - Counsel for the Respondents prays that this direction is stayed for some period.
Held: The mandate the Bench has issued will come into effect two weeks after the order is uploaded on the server of this Court: High Court [para 20]
- Petition allowed: BOMBAY HIGH COURT
2020-TIOL-155-HC-AHM-GST
Paresh Nathalal Chauhan Vs State of Gujarat
GST - Officers staying back at the residence, where the petitioner's mother, wife and young daughter reside, throughout the day and night to find out the whereabouts of the taxable person; recording conversations of family members on mobile phones - officers acting beyond powers vested in s.67(2) - High Court deprecates such conduct in strictest terms and directs the Chief Secretary of State to look into the matter - respondent tendered a report of inquiry made by Chief Commissioner of State Tax - Upon perusal of report, it emerged that it was no better than the earlier report dated 20.10.2019 submitted by Assistant Commissioner of State Tax, and did not meet with the directions issued by the Court in letter and spirit - It appeared that the Chief Commissioner of G.S.T. had taken a very lenient view in the matter and instead of examining the action of the officers concerned in the context of the relevant provisions of Goods & Services Tax Act, had tried to justify the action of the officers concerned, which is required to be deprecated in the strictest terms - The respondent prayed for time to submit another report and accordingly the the matter was adjourned - Accordingly, a report was submitted on 19.12.2019 by the Chief Commissioner of State Tax, Gujarat State and the matter was heard - High Court observed that the manner in which the search had taken place, whereby a search for any goods liable to confiscation or any documents or books or things, has literally been converted to a search for the taxable person and the search party has camped in the residential premises of the petitioner for in all eight days, during which period the family members of the petitioner were at the mercy of the authorised officer and were confined to the searched premises and kept under surveillance and were not permitted to leave the premises without the permission of the authorised officer, has shocked the conscience of this court; that, therefore, High Court is of the view that it would be failing in its duty as a sentinel on the qui vive if it were to turn a blind eye to the violation of the legal and fundamental rights of citizens by authoritarianism and remain a mute spectator - High Court has, therefore, thought it fit to comment upon the validity and nature of the search proceedings.
Held:
++ The entire action of the search party after the first day, i.e. from 12.10.2019 to 18.10.2019, was illegal, invalid and not backed by any provision of the GST Acts - The only reason why the search party remained back appears to be to intimidate the family members of the petitioner to extract information about the petitioner or records of his business, and to either coerce the petitioner to return home or to apprehend him if he returns home.
++ From the facts recorded in the panchnama, it is abundantly clear that while the authorisation issued to the officer concerned was to search the premises mentioned in the authorisation, the entire search was converted to a search for the dealer, namely the petitioner herein.
++ Admittedly, no summons was issued to the petitioner under section 70 of the GST Acts nor is it the case of the respondents that he was summoned, but had not remained present - While the petitioner was not present at the premises when searched, there could be a reasonable explanation for his absence - Moreover, even if the petitioner may have been intentionally avoiding the authorities, the same is not a valid ground for converting the search proceedings to a search for the petitioner, more so, when no such power is vested in the authorities.
++ Moreover, as is evident from the contents of the panchnama, the members of the petitioner's family were literally under house arrest and were not permitted to leave the premises without the permission of the authorised officer and at times without being escorted by a member of the search party.
++ It may be noted that there is no provision under the GST Acts which empowers the authorised officer to confine family members of a dealer in this manner and to interrogate them at all times of the day and even late at night as has been done in this case.
++ Apart from the illegality of the continuation of the search proceedings, the conduct of the search officers in confining the family members of the petitioner to the house and of interrogating them time and again is nothing but a blatant abuse of powers.
++ Since, the continued stay at the premises of the petitioner after 11 th October, 2019 was not for search of the premises but to search for the petitioner and to obtain further information about where else he could have secreted documents, books or things relevant for any proceedings under the GST Acts, such continued stay was totally unauthorised as it was not backed by any statutory provision.
++ Powers conferred by subsection (2) of section 67 of the GST Acts is to search for goods liable to confiscation, documents, books or things which in the opinion of the proper officer shall be useful for or relevant to any proceedings under that Act.
++ Section 348 of the Indian Penal Code provides that whoever wrongfully confines any person for the purpose of extorting from the person confined or any person interested in the person confined, any confession or any information which may lead to the detection of an offence or misconduct or for the purpose of constraining the person confined or any person interested in the person confined to restore or to cause the restoration of any property or valuable security or to satisfy any claim or demand or to give information which may lead to the restoration of any property or valuable security, shall be punished with imprisonment of either description for a term which may extend to three years and shall also be liable to fine.
++ Unauthorised action of the concerned officers may tantamount to an offence under the Indian Penal Code; what is not permissible in law cannot be done under the guise of discharge of statutory functions. Action of the respondents cannot be countenanced.
++ GST Acts are new enactments. Officers acting under the relevant provisions are required to study the scope of their powers under the statutory provisions under which they are acting and cannot act on the basis of presumptions or past precedents under a previous enactment. If the common man is supposed to know the law and face penalty for any infraction thereof, the officers enforcing such provisions are required to be well versed with the statutory provisions and the scope and limits of their power and cannot take shelter behind ignorance of law to justify their illegal actions.
++ It appears that the idea behind taking assistance of the SRP constable appears to be to intimidate and shame the family members, more so, in view of the prolonged presence of the search party at the residential premises of the petitioner.
++ It may be noted that even the police, during the course of investigation, do not have the powers to reside at any residential premise and the officer concerned is required to carry out investigation and thereafter, leave the premises. The action of the respondents in continuing to reside at the residential premises of the petitioner without any valid reason despite the fact that search was concluded is unwarranted and uncalled for. It may be that ultimately, the respondents might have been able to extract some material from the conversation recorded in the mobile phone regarding where some books of account and other documents were secreted, but the end does not justify the means and does not validate the unauthorised and illegal action of the concerned officers.
++ Stand of the Chief Commissioner in the report is that in view of past precedent under the Gujarat Value Added Tax Act, 2003, the officers under the GST Acts have recorded statements of the family members of the petitioner.
++ Chief Commissioner has placed reliance upon the provisions of section 88 of the Gujarat Value Added Tax Act, 2003 which relates to authorisation to investigate; overlooking the fact that in the present case the authorisation was for search and seizure and not investigation inasmuch as recording of statements under section 161 of the Code finds place in Chapter XII thereof which pertains to “Information to the police and their powers to investigate” and not under the provisions of the Code relating to search and seizure.
++ One fails to understand as to what the officers concerned were doing at the residential premises of the petitioner for a whole week, along with two panchas and an SRP Constable when the search was concluded on day one. Such action on the part of the respondents is abhorrent and cannot be countenanced. No provision of the Code of Criminal Procedure, for investigation, search or seizure, empowers a police officer to remain a moment longer at any premises once the search is over.
++ In the facts of the present case, the power under subsection (2) of section 67 of the GST Acts has not only not been exercised strictly in accordance with law, but has also not been exercised for the purposes for which the law authorises it to be exercised, namely that though the power was to be exercised for carrying out search and seizure of goods liable to confiscation, documents, books or things at the place in respect of which the authorisation of search was given, the search was converted to a search for the dealer and into an investigation to find out other places where documents, books or things could have been secreted, which was beyond the scope of the powers vested in the authorised officer.
++ It is a matter of deep regret that the Chief Commissioner of State Tax has attempted to justify such wrongful action on the part of the officers of the department by placing reliance upon the provisions relating to power of investigation under an earlier enactment to justify the actions of the concerned officers who were exercising powers of search and seizure under section 67(2) of the GST Acts.
++ One would expect the higher officer to reprimand the subordinate officers for their unauthorised actions. But in this case, the higher ups, for reasons best known to them are trying to shield the actions of the subordinate officers though they are not in a position to show the relevant provisions of law under which such officers were empowered to act in this manner. All that the court can say at this stage is that the reports submitted of the Chief Commissioner in response to the orders dated 25.10.2019 and 20.11.2019, do not meet with the standards expected from an authority of his stature.
++ Lastly, the court may sound a word of caution to the authorities exercising powers under the GST Acts. Subsection (2) of section 157 of the GST Acts says that no suit, prosecution or other legal proceedings shall lie against any officer appointed or authorised under the Act for anything which is done or intended to be done in good faith under the Act or the rules made thereunder. An action like the present one which is not contemplated under any statutory provision and which infringes the fundamental rights of citizens under article 21 of the Constitution of India may not be protected under this section. An action taken may be said to be in good faith if the officer is otherwise so empowered and he exceeds the scope of his authority. However, in a case like the present one where the authorisation was for search and seizure of goods liable to confiscation, documents, books or things and the concerned officer converted it into a search for a person and an investigation, which is not otherwise backed by any statutory provision, it may be difficult to accept that such action was in good faith. Protection of such action under section 157 of the GST Acts may unleash a regime of terror insofar as the taxable persons are concerned.
++ It is clarified that this court does not condone any alleged illegal acts on the part of the petitioner and in case he has indulged in any illegalities, the law should take its own course.
++ However, the court found it necessary to pass the present order to curb any further abuse of powers in this manner by the authorities under the GST Acts.
++ Matter to be listed for hearing on merits on 23.01.2020.
[para 18 to 23, 25, 27 to 29, 31]
- Matter listed: GUJARAT HIGH COURT
2020-TIOL-150-HC-KERALA-GST
Mandayapurath Rasiya Vs State Tax Officer
GST - Petitioner seeks a declaration that the GST registration granted to the second respondent for additional place of business without the consent of the petitioner is illegal, invalid and issued in violation of the CGST Rules - Petitioner submits that he is the owner of a building and had leased a room therein to a tenant and the said tenant had unlawfully sublet it to the 2nd respondent herein and a rent control petition is now pending in respect thereof; that on a reliable enquiry, it is learnt that the 1st respondent has granted a GST registration for additional place of business to the 2nd respondent at the abovesaid premises owned by the petitioner, without the consent of the petitioner, who is the owner of the premises, as is required under the provisions of CGST Rules and without any proper verification of the documents; that although the petitioner has submitted a petition dated 28.08.2019 before the first respondent in the matter, the first respondent has not rendered any decision on the same, hence the aforesaid prayers.
Held: Bench orders that the 1st respondent will take up the plea made by the petitioner on Ext.P7 petition without any further delay and after affording reasonable opportunity of being heard to the petitioner as well as the 2nd respondent and will render a considered decision thereon within a period of 6-8 weeks: High Court [para 4]
- Petition disposed of: KERALA HIGH COURT
2020-TIOL-137-HC-DEL-GST
Mukesh Garg Vs UoI
GST - The present application was filed by the Revenue authorities seeking vacation of interim protection granted to the petitioner through an earlier order passed by this court - It is claimed that during investigation of one M/s Royal Sales India, Delhi which was related to a firm namely M/s Oblique Enterprises was required to be verified - Data retrieved from AIO and E-way bills showed that input and output of goods were not in correlation and that the party availed ITC and passed on such credit without actual supply or receipt of goods - It was noted that M/s Royal Sales India availed ITC mainly on invoices qua soft drinks, almonds and MS Scrap, whereas it issued invoices for sale of plastic dana, news print and paper board - It was found that excess amount of ITC was passed on - Hence, premises of main suppliers and main recipients were searched & statements were taken from managers in various banks - From the same, more such firms reportedly controlled by the petitioner came to light - Search warrant was executed at 8 premises and more statements were taken - From these, it became evident that there are many firms controlled by the petitioner and again search warrant was executed at 12 premises & search were conducted - It was claimed that the person managing the affairs of M/s Royal Sales India, Delhi was searched whereupon cash was seized - Such person was repeatedly summoned by the Department but evaded from appearing on some pretext or the other - It was averred that the petitioner had been involved in huge tax evasion and illegal utilization of input tax credit under the GST laws - Besides, the investigation is at a nascent stage and the petitioner was trying to scuttle the same and was threatening the crucial witnesses, the fact which has been revealed during the investigation.
Held - Considering the statements of the witnesses produced in the court, the same shows the threats being extended to them - Considering that the petitioner is not joining the investigation and has rather abused the interim protection granted to hom bu threatening the witnesses, the interim protection granted merits being withdrawn: HC
- Application disposed of: DELHI HIGH COURT
2020-TIOL-136-HC-DEL-GST
Brij Gopal Gupta Vs Government of NCT of Delhi
GST - A vehicle containing some goods belonging to the petitioner, had been detained during the relevant period - As the GSTAT is presently non-functional on account of the stay granted by this court vide order passed in Bharatiya Vitta Salahkar Samiti & Anr. v. UOI and Ors. the petitioner filed the present petition to assail an order passed by the Appellate Authority as well as the order raising demand for tax and imposing penalty, seeking that the detained vehicle and the goods be released.
Held - The Revenue authorities concerned are directed to release the conveyance and the goods upon the petitioner furnishing a bank guarantee for the penalty amount under the CGST Act, DGST Act and Cess - The petitioner shall also provide requisite proof in the form of monthly returns to establish that the tax on the goods in question being transported, has been paid - In case the tax in respect of the goods has not been paid, the petitioner shall provide bank guarantee in respect of the amount of tax as well - The bank guarantee may be provided within two weeks' time: HC
- Writ petition disposed of: DELHI HIGH COURT
2020-TIOL-128-HC-JHARKHAND-GST
Shree Nanak Ferro Alloys Pvt Ltd Vs UoI
GST - Petitioner is aggrieved by the letter dated 26.04.2019, issued by the respondent No.2, Superintendent, CGST, whereby the petitioner Company has been saddled with the liability to pay the short paid IGST, amounting to Rs.41,98,642/-, along with due interest within a period of one week - Petitioner had informed the respondent that the Company had actually paid the amount of the IGST of Rs.41,98,643/-, but inadvertently it was paid under the head of CGST, instead of IGST, and as such it was not a case of short payment, rather, it was the case of payment of IGST under a different head; that this mistake had occurred in the early phase of implementation of the GST, and accordingly, the adjustment of the said amount may be made in the appropriate head - such request was not acceded to and the impugned letter dated 26.04.2019 was issued leading to filing the present Writ petition.
Held: Admittedly, the petitioner Company had discharged their tax liability under the IGST head, but inadvertently or otherwise, the petitioner deposited the amount under the CGST head - It is not the case that the petitioner Company has concealed the transaction or has committed any fraud in discharging its tax liability - It is a plain case in which the tax has been paid by the petitioner to the Central Government, but not under the IGST head, rather under the CGST head - There appears to be substance in the submission of the petitioner, inasmuch as, by deliberately depositing the cash in the electronic cash ledger for the CGST head, at the place of IGST head, possibly no benefit was going to be derived by the petitioner Company - In that view of the matter, Bench is not in a position to doubt the bona fides of the petitioner Company, that due to the initial stage of the CGST regime, there might be some confusion, and the cash was wrongly deposited in the wrong electronic cash ledger - From a plain reading of Section 49 (3) and (4) of the CGST Act, the counsel for the CGST may be right in his contention that under Section 49 (3) of the CGST Act, the 'electronic cash ledger' may be used for making the payment of the tax and the other liabilities under this Act only, i.e., CGST Act, and there is no provision of cross utilization of the fund as in case of 'electronic credit ledger' under Section 49 (4) of the CGST Act, but Section 77(1) of the CGST Act, read with Section 19(2) of the IGST Act, clearly lay down that a registered person who has paid the Central tax, treating the transaction to be intra-State supply, as in the case of the petitioner, but which turns out to be inter-State supply, is entitled to the refund of the amount of tax so paid, under Section 77 (1) of the CGST Act, and at the same time such person cannot be saddled with the liability of interest in view of the provision of Section 19 (2) of the IGST Act - Bench, therefore, does not find any plausible reason whatsoever, to deny the petitioner Company the benefit of the provisions of Section 77(1) of the CGST Act, read with Section 19(2) of the IGST Act - Bench directs the petitioner Company to deposit the amount of Rs. 41,98,642/-, under the IGST head within a period of 10 days, towards the liability of September, 2017 - The petitioner shall not be liable to pay any interest on the said amount - The petitioner shall also be entitled to get the refund of the amount of Rs.41,98,643/- deposited by them under the CGST head, or they may get the amount adjusted against their future liabilities, in accordance with law, as they may choose - Impugned letter dated 26.04.2019 is, therefore, quashed - Writ application is allowed: High Court [para 14, 15, 17, 18, 19]
- Application allowed: JHARKHAND HIGH COURT
AAAR CASES
2020-TIOL-07-AAAR-GST
Parker Hannifin India Pvt Ltd
GST - AAR held that Filters manufactured solely and principally for use by/in Indian Railways and supplied directly to Indian Railways (IR) are classifiable under HSN Heading 8421 and not under HSN 8607; that classification would not be altered if the filter are supplied to a distributor instead of Indian Railways directly and the distributor in turn effects supply to IR - Aggrieved, the appellant is before the AAAR.
Held: Ruling given by the UP Authority for Advance Ruling in the case of G.S Products is not applicable to any other taxable person within the State of Uttar Pradesh leave alone a taxable person outside the State of Uttar Pradesh - nevertheless, the ruling given by UP AAR has not examined the provisions of note 2(e) to Section XVII and the General Notes on Parts and Accessories in Section XVII while determining the classification of Air Filters, hence no weightage is required to be given to the said ruling - Appellate Authority also finds that the Circular no. 80/54/2018-GST dated 31.12.2018 issued by CBIC, Paragraph 12 thereof deals with classification of Turbo Charger supplied to Railways - It has been clarified that Turbo Charger is specifically classified under CH 8418 8030 and continues to remain in this code irrespective of its use by Railways - This substantiates the stand of the AAAR that goods which are excluded by virtue of Note 2(e) to Section XVII and specifically classified elsewhere in the nomenclature cannot be classified as parts of Railway locomotives under Chapter 86, irrespective of their use by Railways - Filters manufactured by the appellant solely and principally for use by the Indian Railways and supplied directly to the IR or through a distributor are, therefore, rightly classifiable under CH 84.21 and not under CH 86.07 - AAR Ruling upheld and appeal dismissed: AAAR
- Appeal dismissed: AAAR
2020-TIOL-06-AAAR-GST
Chromachemie Laboratory Pvt Ltd
GST - Pharmaceutical Reference Standards (Prepared Laboratory Reagents) imported and supplied by the appellant and classified under Tariff Item 3822 00 90 of the Customs Tariff is covered under Entry no. 80 of Schedule II to 1/2017-ITR attracting a levy @12% GST - Interpretation given by the AAR that the Entry no. 80 covers only diagnostic kits and diagnostic reagents is not correct - principles of ejusdem genesis applied by the AAR while interpreting the Entry Sl. no. 80 is misconstrued - rule of ejusdem genesis has no inverse application inasmuch as general words preceding the enumeration are not governed by this rule - AAR ruling set aside and appeal allowed: AAAR
- Appeal allowed: AAAR
GST CIRCULAR
circular-cgst-131
Standard Operating Procedure (SOP) to be followed by exporters
RULES
F.No. 587/CE/167/Pol/2019/11219-11269
Blocking of Input Tax Credit under rule 86A(1)(a) of CGST Rules, 2017
SGST AMENDMENT REGULATIONS (DADRA AND NAGAR HAVELI)
The UnionTerritory of Dadra and Nagar Haveli and Daman and Diu Goods and Services Tax (Amendment) Regulation, 2020.
The UnionTerritory of Dadra and Nagar Haveli and Daman and Diu Central Goods and Services Tax (Amendment) Regulation, 2020.
The Dadra and Nagar Haveli Value Added Tax (Amendment) Regulation, 2020.
The Dadra and Nagar Haveli and Daman and Diu (Extension with modifications of the Goa, Daman and Diu Excise Duty Act, 1964) Excise Regulation, 2020.
ARTICLES
Nagging issues under SVLDRS
Conundrum of reimbursement of expenditure under GST laws!
GST on waste disposal: Take care of 'health care'
Synergy between seizure and confiscation under GST
Ship stores whether taxable under GST - A detailed analysis
Doctrine of Ultra Vires
Sabka Vishwas - Kuch ka Vikas
GST - An agenda for reforms - Part - 70 - Supplying clarity to supplies between distinct persons
THE COB(WEB) by Shailendra Kumar
GST Bureaucracy needs to develop the Art of Listening!
JEST GST by Vijay Kumar
Over The Counter Supply - IGST or SGST?
