2020-TIOL-GST-335, Dated: Friday, February 14, 2020

TOP NEWS

GST CASES

SUPREME COURT OF INDIA CASE

2020-TIOL-48-SC-GST

UoI Vs Tax Bar Association

GST - A petition had been filed by the Tax Bar Association raising the issue about non-functionality of the appellant-Union's portal i.e. www.gst.gov.in, as a consequence of which, various assessees are unable to upload their returns both GSTR-9 and GSTR-9C - The High Court then passed an interim order, considering that the GST portal was not functioning effectively and that there appeared to be a physical limit in respect of returns which could be uploaded in a day - The court was prima facie satisfied that there were technical bottlenecks which limited an assessee's opportunity to upload the forms - The Court had directed the respondent-association and the assessee's represented by it to keep uploading returns at the earliest possible and also directed that no late fee be charged till Feb 12, 2020 for uploading - The Union had been directed to enable compliance of such uploading through requisite corrections on its portal - Since it is well-settled that where the last date of submission has been prescribed by law, it would be incumbent on the part of the revenue to provide for adequate facility for accepting such declarations or returns or forms within the period stipulated, it was held.

Held: While the order of the High Court warrants no interference with, only that portion of it merits being stayed, which extends the deadline for submitting the returns - This is based on the fact that only Rs 200/- per day is being levied as late fees for filing returns beyond 12.02.2020 & based on the assurance that no penal powers would be invoked by the authorities - The petitioner-Union is also directed to look into the plea regarding the capacity for online processing of GST applications being extremely limited - Considering that the application are increasing in number, the petitioner-Union is also directed to devise a solution to address such issue: SC

- Revenue's SLP disposed of: SUPREME COURT OF INDIA

HIGH COURT CASES

2020-TIOL-358-HC-MAD-GST

ACCGST & CE Vs Daejung Moparts Pvt Ltd

GST - Both the writ petitioners are engaged in the business of manufacture - It is not in dispute in both cases there was some delay in filing the return and paying the GST within the time - Therefore, the Revenue, by relying upon Section 50 of the CGST Act, resorted to recover interest on the delayed payment - Such recovery proceedings culminated into the impugned bank attachments for recovery of Rs.41,74,617/- [Indian Overseas Bank, Maraimalai Nagar] and Rs.1,00,91,755/- [Indian Overseas Bank, Sriperumbudur] - According to the writ petitioners, the impugned bank attachment proceedings were issued in violation of the principles of natural justice and without passing any order determining the liability to pay interest - Revenue contested the writ petitions by claiming that payment of interest under Section 50 of the Act, 2017 is automatic; that once a delayed payment of tax was made, liability to pay interest on the same becomes automatic, for which no separate proceedings need to be initiated for determining such interest liability and in support of the said contention reliance is placed on the Division Bench order of the Telengana High Court in Megha Engineering and Infrastructures Limited = 2019-TIOL-893-HC-TELANGANA-GST - In the matter of both the Writ Petitions, orders were passed viz. 2019-TIOL-1802-HC-MAD-GST and 2019-TIOL-1289-HC-MAD-GST and wherein the Bench held that upon payment/adjustment of the admitted liability of Rs.22,39,413/- and Rs.9,15,121/ - respectively, the attachment orders would be set aside - Revenue has filed Writ appeals against these orders -In view of the difference of opinion between the Judges constituting the Division Bench, the matter was referred to the Chief Justice under Clause 36 of the Letters Patent, on the issue as to whether under Section 50 of the CGST Act, the interest on delayed filing of the Returns arises automatically or on assessment and after considering the explanation offered by the Assessee and whether at all that explanation has to be considered by the Assessing Officer and then pass further orders - consequently, the matter has been placed before the Single Judge pursuant to an order passed by the Chief Justice.

Held:

+ Two issues arise for the third view viz. ( a) Whether the delayed filing of returns attract the interest liability on the assessee automatically? and (b) Whether the Writ Appeals ought to have been entertained?

+ (a) Whether the delayed filing of returns attract the interest liability on the assessee automatically?

++ A reference to the third Judge has to be made only when two different views are expressed by the Judges in the Division Bench - In this case, except the view on the maintainability of the writ appeals, Bench finds that the issue regarding automatic interest liability is not the issue, where two different or contra views are expressed by the Judges - A careful perusal of sub Sections (2) and (3) of Section 50 would show that though the liability to pay interest under Section 50 is an automatic liability, still the quantification of such liability, certainly, cannot be by way of an unilateral action, more particularly, when the assessee disputes with regard to the period for which the tax alleged to have not been paid or quantum of tax allegedly remains unpaid - Likewise, whether an undue or excess claim of input tax credit or reduction in output tax liability was made, is also a question of fact which needs to be considered and decided after hearing the objections of the assessee, if any - Therefore, though the liability fastened on the assessee to pay interest is an automatic liability, quantification of such liability certainly needs an arithmetic exercise after considering the objections if any, raised by the assessee - It is to be noted that the term "automatic" does not mean or to be construed as excluding "the arithmetic exercise" - In other words, though liability to pay interest arises under section 50 of the said Act, it does not mean that fixing the quantum of such liability can be unilateral, especially, when the assessee disputes the quantum as well as the period of liability - Therefore, though the liability of interest under section 50 is automatic, quantification of such liability shall have to be made by doing the arithmetic exercise, after considering the objections of the assessee - first issue is answered accordingly: High Court Third Judge on reference [para 23, 24, 29]

+ (b) Whether the Writ Appeals ought to have been entertained?

++ In both the writ petitions, the respective writ petitioners are not disputing their liability to pay the interest on the delayed payment of tax - On the other hand, they are disputing the quantum of interest claimed by the Revenue by contending that the interest liability was worked out on the entire tax liability instead of restricting the liability to the extent of tax unpaid - It is further seen that the writ petitioners have placed some worksheets, wherein they have claimed some ITC credit for every month as well - Their grievance before the Writ Court was that the impugned bank attachment ought not to have been resorted to without determining the actual quantum of liability, therefore, it is evident that the dispute between the parties to the litigation is not with regard to the very liability to pay interest itself but only on the quantum of such liability.

++ In order to decide and determine such quantum, the objections raised by each petitioners shall have to be, certainly, considered - Undoubtedly, unilateral quantification of interest liability cannot be justified especially when the assessee has something to say on such quantum - The Writ Court thus, in the above line, has disposed the writ petitions, that too, on a condition that the petitioner in each case should pay the admitted liability of interest - A careful perusal of the direction issued by the Writ Court does not indicate anywhere as to how the Revenue is prejudiced by the said order, especially when the Revenue is given liberty to pass an order in a manner known to law and communicate the same to the petitioners, after considering their objections.

++ Writ Appeals preferred against the said orders of the Writ Court, as observed by Dr. Vineet Kothari, J., are wholly unnecessary, therefore, Bench is in agreement with the view expressed by Dr. Vineet Kothari, J., as it find tshat entertaining the writ appeals is not warranted, since the Writ Court has not determined the interest liability of each petitioners against the interest of the Revenue in any manner and on the other hand, it only remitted the matter back to the Officer concerned to determine the quantum of such liability.

++ Second question with regard to the maintainability of the writ appeals is answered accordingly. [para 31 to 33]

- Writ appeals dismissed: MADRAS HIGH COURT

2020-TIOL-348-HC-AHM-GST

Bharat Vijay Transport Company Vs State Of Gujarat

GST - Petitioner had sought quashing and setting aside of the impugned order dated 02.01.2019 and direction to the respondent to release the Truck detained on 02.01.2019 without any direction of payment/security etc.; that the State government be directed to pay demurrage/detention charges of truck which is seized for more than two months for no fault on the part of the petitioner - By way of interim relief, the respondents were directed to forthwith release the conveyance being Truck No.GJ-01-BY-5326 of the petitioner, subject to a responsible partner of the petitioner firm filing an undertaking before this court, within a period of two days that in the event the petitioner fails in the petition or is otherwise found to be liable under the CGST/GGST Act, the petitioner shall forthwith discharge such liability without prejudice to its rights to challenging such order before the appropriate forum - pursuant to complying with the said directions, the goods and conveyance were released - Matter heard.

Held: In view of the fact, that the impugned order dated 02.01.2019, passed u/s 130 of the GGST, 2017 is without any reason and the same is passed without considering the objections raised by the petitioner, the same is quashed and set aside - However, it is made clear by the Bench that the respondent authority can invoke Section 130 of the Act, if any material is found against the petitioner - Petition is disposed of: High Court [para 5 to 7]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-347-HC-AHM-GST

RK Imaging Vs State Of Gujarat

GST - Petitioner had sought release of goods and conveyance by quashing and setting aside the notice issued u/s 130 of the Act - Accordingly, Coordinate Bench by its order dated 25 th July 2019 had viewed that having regard to the fact that the goods involved in the case on hand is a sonography machine and the same is lying with the authorities past more than one month, the same should be released subject to the final outcome of this petition and also keeping in mind that the writ applicant had deposited an amount of Rs.3,32,144/- towards the penalty and tax - writ applicant had, therefter, availed the benefit of the interim order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST Act, 2017 and which proceedings, the High Court observed, need to go ahead in accordance with the law.

Held: Bench notes that it shall be open for the writ applicant to rely on the decision in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-546-HC-AHM-GST , in particular, the observations made in Paragraph Nos.99 to 104 - It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - writ application stands disposed of: High Court [para 5 to 7]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-346-HC-AHM-GST

Jaylakshmi Agro Foods Vs State Of Gujarat

GST - Petitioner sought quashing and setting aside of the impugned notice in form GST MOV-10 and an order directing the respondents to forthwith release the truck along with the goods contained therein - Co-ordinate bench by its order dated 27 th March 2019 noted therein that the petitioner had already deposited tax and penalty u/s 129 and, therefore, by way of interim relief directed the respondents to release the truck and the goods and the petitioner was directed to file an undertaking to the effect that in case the petitioner, ultimately, does not succeed in the petition, he shall duly cooperate in the further proceedings - writ applicant availed the benefit of interim order and got the goods and the truck released, after making payment towards the tax and penalty.

Held: It appears that while the writ applicant was heard before the Court, pursuing the present writ application, a final order, in the Form GST MOV-11, came to be passed - according to the writ applicant, at no point of time such order was served upon him - nonetheless, such order passed in the Form GST MOV-11, is now available on record - Bench, therefore, relegates the writ applicant to avail the remedy of preferring an appeal under Section 107 of the Act before the appellate authority - appellate authority shall hear the appeal and dispose of the same within a period of two weeks from the date of filing of the appeal - it shall be open for the writ applicant to rely on the pronouncement in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-546-HC-AHM-GST - Petition disposed of: High Court [para 7, 8, 10, 12]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-345-HC-AHM-GST

Vishnukumar Shivkumar Vs State Of Gujarat

GST - Petitioner had sought release of goods and conveyance by quashing and setting aside the notice issued u/s 130 of the Act - Accordingly, Coordinate Bench by its order dated 27 th March 2019 clarified that in the meanwhile, it would be open for the respondents to release the vehicle together with the goods upon payment of the tax amount in terms of the impugned notice - writ applicant had, therefter, availed the benefit of the interim order passed by the Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST Act, 2017.

Held: Bench notes that it shall be open for the writ applicant to rely on the decision in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-546-HC-AHM-GST, in particular, the observations made in Paragraph Nos.99 to 104 - It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - writ application stands disposed of: High Court [para 5 to 7]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-341-HC-RAJ-GST

Paridhi Jain Vs State

GST - Bail applications have been filed by the petitioner, a professional Chartered Accountant and who is in custody, under Section 439 Cr.P.C. - Petitioner submits that he was only getting the firms registered at the behest of her clients after collecting requisite documents from them; that it was the duty of the competent authority of the department to get the details furnished by the present petitioner verified as per KYC; that as per Section 132 (1)(i) of the CGST Act, if the amount of input tax credit wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, then she has to undergo imprisonment for a term which may extend to five years and with fine; that the amount of wrongly availed input Tax credit is yet to be ascertained by the authorities; that the amount which has come in the bank account of the petitioner as well as in her close relatives accounts has very well been explained; that the petitioner undertakes to cooperate with the investigating authority as and when called for and any violation in providing any information or document asked for by the departmental authorities may result into the cancellation of liberty of bail granted by this Court - Counsel for Revenue submitted that the investigation is still in progress and would take considerable time to conclude as also the actual transaction of the money has not yet been ascertained - Further, they do not dispute the fact that if the petitioner undertakes to cooperate with the investigation of the case, the benefit of enlargement of bail cannot be seriously opposed by them.

Held: Having regard to the facts and circumstances of the case and upon a consideration of the arguments advanced and the fact that the petitioner being a practising Chartered Accountant and a lady of 27 years is facing incarceration for last more than one month and in view of the undertaking submitted by the petitioner to fully cooperate with the investigating agency and provide the information/documents asked for by the investigating agency, Court is of the opinion that the bail applications filed by the petitioner deserve to be accepted - the arrested accused-petitioner was ordered to be be released on bail provided she furnished a personal bond of Rs.10,00,000/- each with two sureties of Rs.10,00,000/- (out of which one of the surety would be a close family member) each to the satisfaction of the trial court with the stipulation to appear before that Court on all dates of hearing and as and when called upon to do so; that the petitoner would deposit her passport before the Investigating Authority and will not leave the country without the prior permission of the Court concerned: High Court

- Applications allowed: RAJASTHAN HIGH COURT

2020-TIOL-340-HC-AHM-GST

Kanak Ratna Steel Vs State of Gujarat

GST - Petitioner had sought release of goods and conveyance by quashing and setting aside the notice issued u/s 130 of the Act - Accordingly, Coordinate Bench by its order dated 26th July 2019 had deemed fit to order release of the goods at the earliest, keeping in mind that the writ applicant had deposited an amount of of Rs.2,12,246/- towards the penalty and tax - writ applicant had, therefter, availed the benefit of the interim order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST Act, 2017.

Held: Bench notes that it shall be open for the writ applicant to rely on the decision in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-546-HC-AHM-GST , in particular, the observations made in Paragraph Nos.99 to 104 - It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - writ application stands disposed of: High Court [para 5 to 7]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-339-HC-AHM-GST

Shree Nandwana Transport Vs State of Gujarat

GST - Petitioner had sought release of goods and conveyance by quashing and setting aside the notice issued u/s 130 of the Act - Accordingly, Coordinate Bench by its order dated 31st July 2019 had deemed fit to order release of the goods at the earliest, keeping in mind that the writ applicant had deposited an amount of of Rs.2,12,246/- towards the penalty and tax - writ applicant had, therefter, availed the benefit of the interim order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST Act, 2017.

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-338-HC-AHM-GST

JMK Solar Energies Pvt Ltd Vs State of Gujarat

GST - Petitioner had sought quashing and setting aside of impugned notice isued u/s 130 of the CGST and, as an interim measure, sought release of confiscated goods and conveyance - Bench, by its order dated 22nd May 2019 had, by way of an ad-interim measure directed the respondent to release the detained goods together with the conveyance subject to the petitioner paying the tax and penalty as computed by the respondent authorities and also subject to filing a solemn undertaking before the court to the effect that the petitioner shall make good the deficit liability, if any, as may be determined finally by the authorities for the goods as well as for the vehicle/s - Pursuant to the notice issued under Section-129 of the Act determining the amount to be paid towards the tax and liability, the requisite amount has been paid by the writ-applicant and the conveyance and the goods have been released - later, a showcause notice came to be issued under Section 130 of the Act calling upon the writ-applicant to show cause why the goods and conveyance should not be confiscated.

Held: Bench notes that the matter is now at the stage of MOV-10 - the writ-applicant is, therefore, directed to appear before the authority and file an appropriate reply to make good his case that the notice issued in GST-MOV-10 deserves to be discharged; that it shall be open for the writ-applicant to place reliance on the decision in the case of Synergy Fertichem Pvt. Ltd. = 2019-TIOL-546-HC-AHM-GST - writ application stands disposed of: High Court [para 3 to 5]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-328-HC-AHM-GST

IPCA Laboratories Ltd Vs State of Gujarat

GST - Petitioner seeks a direction/order declaring ultra vires the third proviso to Rule 138(1) and Rule 138(5) read with Section 129 of CGST Act for limited purpose of tax demand and imposition of penalty for the discrepancy/invalidity of Eway bill during movement for job work provided under Section 143 read with Section 7 & 9 of the CGST Act and rules made thereunder under the purview of Article 265 of the Constitution of India.

Held: Bench is not inclined to look into the challenge to the constitutional validity of the 3rd proviso to Rule 138(1) and Rule 138(5) read with Section 129 of the CGST Act - Notice issued to the respondents with a view to resolve the controversy as highlighted - Notice to be issued to the respondents returnable on 12.02.2020 - Bench clarifies that the pendency of the present writ application shall not come into the way of the appellate authority in deciding the appeal preferred by the writ applicant against the order passed under Form GST-MOV-09 via Form GST-APL-01; that the appellate authority takes up the appeal at the earliest and decides the same in accordance with the law: High Court [para 3 to 6]

- Notice issued: GUJARAT HIGH COURT

2020-TIOL-327-HC-AHM-GST

A and S Metal Vs State of Gujarat

GST - Petitioner had sought release of goods and conveyance on any terms and conditions as fixed by the Court - Accordingly, Coordinate Bench by its order dated 26 th July 2019 had deemed fit to order release of the goods at the earliest, keeping in mind that the writ applicant has deposited an amount of Rs.1,27,820/- towards the penalty and tax - writ applicant had, therefter, availed the benefit of the interim order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST Act, 2017.

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-326-HC-AHM-GST

Anopsinh Kiritsinh Sarvaiya Vs State of Gujarat

GST - Applicant seeks stay of the implementation and operation of the sealing memos in relation to the Godown no. 14 situated at Marketing yard, Gondal - Writ applicant claims to be an agriculturist and submits that the said godown has been given on rent to five distinct entities (i) Ajayraj & Co. (ii) Dharamraj Exports (iii) Kamani Exports (iv) R.L. Enterprise and (v) Ruturaj & Co. and who purportedly used the same for the purpose of storing agricultural produce like cotton bales and cotton yarn; that the relationship is that of landlord and tenant; that on 17th November, 2018, the authorities under the CGST Act visited the godown and in exercise of power u/s 67 of the Act, applied seal on the godown; that it is the case of the writ applicant that if the five dealers have contravened any of the provisions of the Act or the Rules, then it is always open for the authorities to proceed against them in accordance with law; that the grievance of the writ applicant is that he, being the owner of the godown, the seal which has been affixed, cannot be for an indefinite period of time; that if the five dealers have stored anything in the godown in the form of goods or other documents, then they may be liable to confiscation, but being the owner of the godown, he has nothing to do with the alleged contravention of the provisions of the Act or the Rules; that, therefore, the applicant has sought appropriate relief as prayed for.

Held: It is not the case of the respondents that the writ applicant is also involved along with the dealers in one way or the other - if it is the case of the Department that the five dealers have stored goods or other articles which are liable to confiscation, then the authorities could have seized such goods and documents long time back - Once the goods and other articles are seized from the premises, then there could be no good reason to keep the godown in a sealed condition - Bench has not been shown anything to indicate that the proper officer had any reasons to believe that the goods stored in the godown in question are liable to confiscation - Bench, therefore, disposes of the petition with directions: High Court [para 7, 10, 11, 12, 13]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-325-HC-AHM-GST

Dangar Bhagwanbhai Mithabhai Vs State of Gujarat

GST - Petitioner had sought release of goods and conveyance on any terms and conditions as fixed by the Court - Accordingly, Coordinate Bench by its order dated 2 nd August 2019 had deemed fit to order release of the goods at the earliest, keeping in mind that the writ applicant has deposited an amount of Rs.1,99,176/- Plus Rs.11,812/- towards the penalty and tax - writ applicant had, therefter, availed the benefit of the interim order passed by this Court and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, u/s 130 of the CGST Act, 2017.

Held: Bench notes that it shall be open for the writ applicant to rely on the decision in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-546-HC-AHM-GST , in particular, observations made in Paragraph Nos.99 to 104 - It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - writ application stands disposed of: High Court [para 5 to 7]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-324-HC-AHM-GST

Nav Nirman Con Specialties Pvt Ltd Vs UoI

GST - Applicant has submitted an undertaking before the court that they had not filed GSTR-3B for the period from May 2018 to December 2018 on account of financial stress due to past losses of the company; that since form GSTR-3B cannot be uploaded without payment of tax and hence the forms are yet to be uploaded; that the net tax liability (net of ITC) payable for the impugned period is Rs.42,63,031/- and they undertake to pay the same in installments - Bench, therefore, directs issuance of notice to the respondents returnable on 05.03.2020 by which date the writ-applicant is directed to deposit an amount of Rs.42,63,031/-: High Court [para 3, 4]

- Notice issued: GUJARAT HIGH COURT

2020-TIOL-310-HC-AHM-GST

Manmohan Lalman Agarwal Vs State of Gujarat

GST - ITC - generating of fake and fabricated documents - Application is filed under Section 438 of the Code of Criminal Procedure, 1973 for anticipatory bail in the event of their arrest in connection with file No.IV/06-Prev/32/Gr.IV/2019-20 with Central GST and Central Excise, Vadodara-II for the offence punishable under provisions of GST Act - Applicants state that they are ready and willing to abide by all the conditions, including imposition of conditions with regard to the powers of Investigating Agency to file an application before the competent court for their remand.

Held: Without discussing the evidence in detail, at this stage, Bench is inclined to grant anticipatory bail to the applicants - application is allowed by directing that in the event of arrest of the applicants in connection with FIR registered, the applicants shall be released on bail on their furnishing personal bond of Rs.10,000/- each with one surety of the like amount on the conditions as detailed - However, it would be open for the Investigating Agency to apply to the competent Magistrate, for Police remand of the applicants - It is clarified that the applicants, even if, remanded to the Police custody, upon completion of such period of Police remand, shall be set free immediately, subject to other conditions of this anticipatory bail order - Application allowed: High Court [para 6 to 8]

- Application allowed: GUJARAT HIGH COURT

2020-TIOL-309-HC-P&H-GST

Sanjay Dhingra Vs DG GST

GST - Petitioner was arrested on 07.10.2019 and seeks regular bail - Allegations are that the petitioner along with Gushan Dhingra were involved in the generation and selling of fake tax invoices without supplying the goods through various firms/companies; that the input tax credit has been availed by the said firms/ companies on the basis of fake invoices issued by various non-existent firms/companies; that by generating and selling fake invoices, the accused have facilitated irregular availment and utilization of input tax credit by various entities leading to substantial and wrongful loss to the government revenue to the tune of Rs.127 crores.

Held: Allegations against the petitioner are serious and magnitude of fraud is to the extent of Rs.127 crores - It is too early to conclude that arrest can't be effected or prosecution can't be launched without issuing notice under Section 74 of the Act particularly when the power of arrest has been given under Section 69 of the Act - Furthermore, merely because no police remand of the petitioner was sought and he has been remanded to judicial custody, it cannot be construed as a circumstance which may entitle him to be released on bail - allegations against the petitioner are with regard to commission of economic offence of high magnitude - it has been held by the Supreme Court in the cases of Nimmagadda Prasad vs. CBI, 2013(3) SCC (Criminal) 575 and Y.S.Jagan Mohan Reddy vs. CBI, 2013(3) R.C.R. (Criminal) 108 that while granting bail, the Court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public and the State and other similar considerations - there are serious allegations against the petitioner that fake invoices of approximately Rs.931 crores involving GST of approximately Rs.127 crores without movement of goods have been issued and input tax credit has been availed - no justified ground is made out to grant concession of bail to the petitioner - Petition dismissed: High Court [para 6 to 9]

- Petition dismissed: PUNJAB AND HARYANA HIGH COURT

2020-TIOL-308-HC-AHM-GST

Rifty Vinimay Enterprises Vs State of Gujarat

GST - Petitioner has prayed for quashing and setting aside the order of detention dated 5th January 2020 passed by the respondent No.2 u/s 129(1) of the GST Act, 2017 and notice issued by the respondent No.2 dated 16th January 2019 u/s 130 of the GST Act in Form GST-MOV-10 - Petitioner also submits that the petitioner would file an appropriate application u/s 67(6) of the GST Act, 2017 for provisional release of the goods and conveyance; that they would approach before the authority to proceed with the adjudication process u/s 130.

Held: Petition is disposed of by directing the respondent authorities to consider the application to be made by the petitioner for provisional release of the goods and vehicle in accordance with law; that the respondent authorities will decide such application as expeditiously as possible, preferably within two weeks - Petition disposed of: High Court [para 3, 4]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-298-HC-KERALA-GST

Jilmon John Vs State Of Kerala

GST - Central Goods and Services Tax Act, 2017 - Whether petitioner is liable to pay the tax in terms of the GST as is claimed by the respondents?

Held: There is a stipulation contained under clause 44 of Ext.P1 tender inviting notice that, the Sales Tax as per Rules from time to time is liable to be paid by the petitioner and the rates quoted for various items remain unaffected by any changes that may be made from time to time at which such tax is levied -the case projected by the petitioner is that, as per the special condition, petitioner is liable to pay Value Added Tax at the rate of 4% -however, on a harmonious construction of clause 44 as well as special condition contained under Ext.P1, even though petitioner was only liable to pay tax at the rate of 4% when notice inviting tender was issued, if during the course of proceedings or even after execution of the agreement, if the tax is increased, petitioner is liable to pay the same as per the stipulations contained under clause 44 quoted above without insisting for any rate variation -so also the tender is to be submitted by a bidder taking into account various factors and components and a little bit of speculation is also required -when clause 44 was incorporated in Ext.P1 tender notification and the introduction of GST was under comprehension and in fact it was made without being introduced and, therefore, it cannot be said that, petitioner was not aware of the likelihood of legislation being introduced on and with effect from a future date -therefore, necessarily, petitioner ought to have visualised such a situation and the rates should have been quoted only in accordance with the same -it is also clear from Exts.R3(a) and R3(b), petitioner has quoted less than the probable amount of contract and according to the Special Government Pleader, petitioner wants now to wriggle out of the contract without causing any injury to him -GST is nothing but tax on supply of goods, supply of service and supply of goods and services, however, a homogeneous mixture of several of the indirect taxes under a single umbrella, having uniform rate throughout the country, on any goods or service covered by GST -therefore, the contention advanced by counsel for petitioner that, GST is not tax enabling the respondents to rely upon clause 44 of Ext.P1, is devoid of merits -it is also a condition liable to be undertaken by the petitioner, in order to execute the agreement -which thus means, petitioner is not at liberty to introduce any legal principle to his rescue so as to interfere with the rule of the game provided under Ext.P1 notice inviting tender, having an express stipulation for enhancement of rate of tax from time to time -therefore, evaluating the entire pros and cons and facts and circumstances of the case, the petitioner is not entitled to get any relief as is sought for in the writ petition since there was a clear stipulation that, petitioner is liable to pay tax increased from time to time -the writ petition has no sustenance, accordingly it is dismissed: HIGH COURT [para 15, 17]

- Writ Petition dismissed: KERALA HIGH COURT

2020-TIOL-290-HC-AHM-GST

Priya Traders Vs State of Gujarat

GST - Pursuant to the notice issued under Section 129 of the CGST Act determining the amount to be paid towards the tax and liability, the requisite amount has been paid by the writ applicant and the conveyance and the goods have been released - later on, a show cause notice came to be issued under Section 130 of the Act calling upon the writ applicant to show cause why the goods and conveyance should not be confiscated - As the matter is now at the stage of MOV-10, the writ applicant shall appear before the authority and file an appropriate reply to make good his case that the notice issued in GST-MOV-10 deserves to be discharged - Applicant may place reliance on the decision in the case of Synergy Fertichem Pvt. Ltd - 2019-TIOL-546-HC-AHM-GST - application disposed of: High Court [para 3 to 5]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-289-HC-AHM-GST

SVP Apparels Pvt Ltd Vs State of Gujarat

GST - Coordinate Bench, by way of interim relief had directed the respondent to forthwith release the conveyance together with the goods contained therein subject to the petitioner paying the tax and penalty leviable thereon - Writ applicant availed the benefit of the interim-order passed and got the vehicle along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017 - It shall be open for the writ applicant to point out the recent pronouncement in the case of Synergy Fertichem Pvt. Ltd - 2019-TIOL-546-HC-AHM-GST and rely on the observations made in paragraph Nos.99 to 104 and make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged - writ application disposed of: High Court [para 5 to 7]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-288-HC-AHM-GST

Vivek Ramvilas Bansal Vs Deputy Commissioner of State Tax

GST - Pursuant to the notice issued under Section 129 of the CGST Act determining the amount to be paid towards the tax and liability, the requisite amount has been paid by the writ applicant and the conveyance and the goods have been released -- later on, a show cause notice came to be issued under Section 130 of the Act calling upon the writ applicant to show cause why the goods and conveyance should not be confiscated -- As the matter is now at the stage of MOV-10, the writ applicant shall appear before the authority and file an appropriate reply to make good his case that the notice issued in GST-MOV-10 deserves to be discharged - Applicant may place reliance on the decision in the case of Synergy Fertichem Pvt. Ltd - 2019-TIOL-546-HC-AHM-GST - application disposed of: High Court [para 3 to 5]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-287-HC-AHM-GST

Panchhi Traders Vs State of Gujarat

GST - Writ applicant prays for quashing and setting aside the notice for confiscation in form MOV-10 and release of seized goods along with truck.

Held: Bench notes that Form GST MOV-10 has been issued, calling upon the writ-applicant to show cause why the goods in question and the conveyance used to transfer the goods, should not be confiscated under the provisions of Section 130 of the Central Goods and Service Tax Act, 2017 and why the penalty and fine shall not be recovered - Bench is of the view that as the matter is at the stage of show-cause notice, under Section 130 of the Act, 2017, the writ-applicant should appear before the authority and file an appropriate reply - Insofar as the release of the goods and the conveyance is concerned, it shall be open for the writ-applicant to prefer an application, under Section 67(6) of the Act, 2017, for provisional release and the authority concerned shall pass appropriate order, in accordance with law, within a period of one week from the date of filing of such application - Application disposed of: High Court [para 2 to 5]

- Application disposed of: GUJARAT HIGH COURT

AAR CASES

2020-TIOL-31-AAR-GST

Sakshi Jhajharia

GST - Applicant intends to supply to the State government the service of crushing food grains - the Government will send to the applicant the whole, unpolished food grain for processing and the applicant will return the grain after crushing - said processed food grain will be used for distribution through the Public distribution system (PDS) - applicant seeks a ruling as to whether the above activity is exempt under Sl. no. 3 or 3A of 12/2017-CTR.

Held: If the applicant's agreement with the State government binds both the supplier and the recipient in such a way that neither can divert the food grains to any use other than distribution through PDS, the Applicant's composite supply of crushing the food grains belonging to the State government and delivery of the crushed grains will be an activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution and its supply would be exempt under Sl. no. 3A of 12/2017-CTR provided the proportion of the packing materials in the composite supply in value terms does not exceed 25%: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2020-TIOL-30-AAR-GST

Las Palmas Cooperative Housing Society Ltd

GST - Replacement of existing lift/elevator by applicant, a CHS, paying GST on Maintenance charges collected from members - whether entitled to avail ITC of GST paid on such activity by vendor.

Held: Lift, after erection and installation is an immovable property because it becomes a part of an immovable property i.e. a building - in other words it is to be considered as an integral part of the building itself and it is not a separate part of the building - Therefore, manufacture, supply, installation and commissioning of lifts/elevators is in the nature of Works Contract (WCS) activity which results in creation of an immovable property - In view of Explanation to s.17 of the CGST Act, applicant is not entitled to ITC of GST paid on replacement of existing lift/elevator at its premises: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2020-TIOL-29-AAR-GST

Wise Design Communications Pvt Ltd

GST - Applicant is engaged in supply of e-commerce products which are exported out of India, sale amount being realised in foreign exchange - for these export transactions, applicant has all required documents as export proofs but for filing claim for refund of ITC they require shipping bill which is not traceable to ICEGATE website - they, therefore, seek an answer as to whether hard copies of shipping bills (which are duly stamped and signed by the LET Export officer of Customs) are enough for filing claim for refund of ITC - Authority can only pass a ruling on matters or questions specified in s.97(2) of the Act - since the query raised by the applicant is technical/procedural in nature and is not covered under categories (a) to (g) of s.97(2) of the Act, therefore, Authority cannot pass a ruling in respect of the said query: AAR

GST - Drop-Shipment sales where the delivery of merchandise is from a manufacturer or original supplier directly to a buyer without passing through applicant's office or warehouse, applicant seeks to know whether the same is an export sale under the Act and is subject to IGST.

Held: Applicant is not directly supplying goods to the buyers - applicant neither owns the said goods nor delivers the same to their customers but only facilitates the transaction between the buyer and the seller through their website and acts as an intermediary - when there is no sale of goods by the applicant, the question as to whether such supply will be considered as export sale under GST Act does not arise at all - consequently, the provisions of s.95 of the Act will be applicable and in view thereof the application is not maintainable and liable for rejection: AAR

- Application rejected : AUTHORITY FOR ADVANCE RULING

2020-TIOL-28-AAR-GST

Kutting Fusion Hospitality LLP

GST - The Cheaters', a restaurant operated by the applicant, is a restaurant located at J.W.Marriott Hotel where they are planning to start the business of providing the services of serving food and beverages for consumption - applicant seeks to know the rate of tax applicable for providing restaurant services.

Held: Authority has no hesitation in holding that the applicant restaurant since located in the same premises as JW Marriott Hotel having rooms with a tariff of seven thousand five hundred rupees and above, per unit/room per day or equivalent for any unit/room and as applicant would be supplying food or drinks for consumption within the JW Marriott Hotel premises, the applicant is required to discharge its GST liability @18% as per Sr. no. 7(iii) of 11/2017-CTR: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2020-TIOL-27-AAR-GST

Equitron Medica Pvt Ltd

GST - Applicant does not supply goods to end users who undertake or are engaged in scientific research - goods are supplied to their distributors only who are involved in further trading of the said goods - notification 45/2017-CTR, Sr. no.2 clearly states that the institutions should be registered with the Government of India in the Department of Scientific and Industrial Research along with appurtenant conditions - said notification requires a certificate to be issued to the supplier, who in the subject case is the distributor and not the applicant - inasmuch as the applicant does not satisfy the conditions of the notification 45/2017-CTR, therefore, the applicant cannot sell their product to their dealers/distributors by discharging GST @5% as per 45/2017-CTR: AAR

GST - As regards the second question raised by the applicant viz. 'Can a certificate issued by the end user (scientific research organisation) mentioning the name of the manufacturer (applicant in this case) and name of the seller (distributor) be held valid to enable the applicant to invoice their product to their dealer at concessional rate of GST @5%', it is observed that the question raised is not pertaining to any of the matters mentioned in s.97(2) of the CGST Act, hence it is held that the Authority does not have jurisdiction to pass any ruling on such matters - resultantly, the impugned question no.2 is not maintainable: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2020-TIOL-26-AAR-GST

Rishab Industries

GST - Transformers supplied by the applicant to Indian Railways is covered under HSN 8504 and Sr. no. 375 of Schedule III of 1/2017-CTR and subjected to GST @18% - CBIC Circular 30/04/2018-GST dated 25.01.2018 relied upon: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

2020-TIOL-25-AAR-GST

Vilas Chandanmal Gandhi

GST - GST is leviable on sale of Transferable Development Rights (TDR)/Floor Space Index (FSI) received as consideration for surrendering the joint rights in land in terms of Development Control Regulations and granted in light of the article of agreement dated 18/12/2017 entered between the applicant and Pune Municipal Corporation (PMC) read with Development Control Regulations - Classification of such supply would be under heading 9972 and the applicable rate of GST is 18% under reverse charge: AAR

- Application disposed of : AUTHORITY FOR ADVANCE RULING

NAA CASE

2020-TIOL-05-NAA-GST

Director General Of Anti-Profiteering Vs Xiaomi Technology India Pvt Ltd

GST - Anti-Profiteering - Applicant has alleged that the respondent had resorted to profiteering in respect of supply of 'Xiaomi-MI Power Bank 2i Red (10000 mAh)" inasmuch as the respondent had maintained the same selling price for the said power bank despite reduction in the GST rate from 28% to 18% effected vide notification 24/2018-CTR dated 31.12.2018 (w.e.f 01.01.2019) and that the respondent had not passed on the benefit of this reduction in the GST rate to his recipients by way of commensurate reduction in the price of the power bank as envisaged u/s 171 of the CGST Act, 2017 - DGAP in its report has stated that the respondent had classified the Power Bank under HSN 8507 6000 and the same following notification 18/2018-CTR dated 26th July 2018 wherein Entry Sl. no. 376AA, Description of goods - Lithium-ion batteries, HSN 8507 6000, was inserted in Schedule III where the rate of GST was @18%; that the rate of tax in respect of the said Power Banks remained unaffected by coming into force of Notification 24/2018-CTR dated 31.12.2018 - inasmuch as since there was no reduction in the rate of tax consequent upon the notification w.e.f 01.01.2019, the provisions of s.171(1) are not attracted - DGAP also submitted that the ambit of the current investigation was limited to determine if the respondent had not passed on the benefit of reduction in the GST rate on Power Banks from 28% to 18% w.e.f 01.01.2019 and the scope of investigation did not cover any previous instance of reduction of tax rate including the rate reduction effected vide 18/2018-CTR; that there is no profiteering.

Held: Applicant has vide his email dated 30.09.2019 stated that he was in agreement with the investigation report of the DGAP in the matter - Authority has perused the screenshots of the price of the product on the official web portal of the respondent as on 19.12.2018 and on 03.01.2019 and observes that the said Power Bank was being classified under HSN 8507 6000 and supplies of the said 'Power Bank' described as 'Lithium-ion Batteries' were being effected in line with entry at Sl. no. 376AA of 18/2018-CTR whereby the GST is being levied @18% w.e.f 26.07.2018; that the entry, after coming into force of 24/2018-CTR had no effect on the tax rate leviable on the said Power Bank being supplied by the respondent; therefore, there is no case of profiteering as alleged by the applicant - scope of investigation/proceedings is limited to the issue of profiteering only and not to the issue of classification - in view thereof, Authority holds that the allegation of profiteering made by the applicant is untenable and, therefore, the application alleging violation of provisions of s.171 of the CGST Act, 2017 is dismissed: NAA

- Application dismissed : NATIONAL ANTI-PROFITEERING AUTHORITY

AAAR CASES

2020-TIOL-11-AAAR-GST

Nagpur Integrated Township Pvt Ltd

GST - Applicant is a SPV into development of land and construction of flats to be given out on lease as per the agreement of lease entered by them with customers - developed units would be transferred to prospective customers through an agreement wherein the allotment is given to customer referred to as lessee - the lessee agrees to take on lease from Developer (applicant) and applicant agrees to lease out to respective buyer the respective flat as mentioned specifically in the agreement - Applicant had approached the Authority for Advance Ruling and sought to know as to whether the transaction is outside the purview of GST as a transaction in immovable property and, if not, what is the appropriate classification and rate of GST - the AAR observed that t here is a taxable supply in the subject case, which is a supply of services in the form of construction of a complex, building, civil structure or part thereof, including a complex or building to their prospective lessees, a part of which i.e. flats are intended to be handed over to the buyer, for which consideration is received by the applicant in instalments, on completion of work, slab wise viz. the developed units will be transferred to the prospective customers through an agreement wherein the allotment is given to customers - Held that, in the form of construction service, a composite supply of works contract as defined in s. 2(119) of the Act is provided to prospective lessee in compliance of an agreement and the same is taxable under GST laws - Inasmuch as the transaction between applicant and lessee is taxable under GST and it is not a transaction in immovable property [Rental and leasing services SAC 9972 11]; that supply is a composite supply and classifiable under SAC 9954(ii) attracting GST @18% - Appeal to AAAR.

Held: Bench has gone through the draft agreement and observed that although the appellant has projected the said transaction as a lease transaction of residential unit in an apartment/building and has also drafted agreement in such a way to project it as a lease transaction, the said transaction cannot be a lease transaction but is an agreement for construction of residential flats - in the present case, the agreement has taken place during the construction of the project and the lease payments are made slab wise before the completion of the project and which almost never happens in the lease of a flat or a unit - under the CGST Act, what is exempted from tax is services by way of renting of residential dwelling for use as residence - appellant has got the land on a long term lease from Maharashtra Airport Development Authority (MADC) wherein the developments happening out of the agreement have to abide by the basic tenets of the agreement with MADC - thus the residential flats being booked by the appellant are flats with agreement to construct and cannot be coloured by the ‘lease agreement' word being used throughout the agreement under consideration - it is seen that almost 95% of the amount comprising the lease consideration is paid before the possession of the apartment - it is difficult to believe that a lessee will commit such amount before moving into or enjoying the flat - suffice to say that it is nothing but a sale transaction projected as a lease transaction - project is also RERA registered and the objective of the RERA Act is to regulate the sale of building, apartment etc. - said fact and interpretation by the Bombay High Court in the case of Lavasa Corporation also shows that the said transaction is not a lease - findings and order of the Authority for Advance Ruling agreed upon and appeal dismissed: AAAR

- Appeal dismissed : APPELLATE AUTHORITY FOR ADVANCE RULING

2020-TIOL-10-AAAR-GST

Vaishnavi Splendour Homeowners Welfare Association

GST - The appellant is a home-owners' association and maintains the common areas, provides lighting, undertakes periodic upkeep of equipments - It collects annual contributions from its members calculated based on super built up area owned by the members - The applicant also collected contribution for Corpus fund for future contingencies - It approached the AAR seeking to know whether the applicant was liable to pay CGST and SGST on the contribution received from its members and if so, whether it could avail exemption under Notfn No 12/2017-CT(R) and if so, whether the applicant must restrict its claim of ITC; Also if the applicant was liable to pay CGST/SGST on amounts collected from its members for setting up a corpus fund - AAR held that the applicant is liable to pay CGST and SGST on the contribution received from its members as their activities amounts to supply of service; that the benefit of exemption is available only if the maintenance charges do not exceed Rs 7500/- per month per member; that in case the charges exceed such amount, then the entire amount becomes taxable; that the applicant is eligible to claim ITC on inward supplies of goods & services subject to the restrictions enumerated in Section 17(2) of CGST Act r/w Rule 42 of CGST Rules and other restrictions; that the applicant is not liable to pay CGST or SGST on amounts collected from members for setting up a corpus fund - appeal to AAAR

Held: Clause (e) of the definition of 'business' given in section 2(17) of the CGST Act is relevant and it is clear from the said clause that the activity of providing facilities or benefits by an association to its members for a subscription is a business under GST law and, therefore, the transactions between the association and its members is a service - the monthly contribution made by the members to the association is in return for receiving the services of the Association in ensuring the maintenance and upkeep of the residential complex - in terms of s.2(d) of the Indian Contract Act, 1872, consideration needs to necessarily flow from one person to another and moreover, the term 'person; has been defined in s.2(84) of the CGST Act to include an 'individual' as well as an 'association of persons or a body of individuals, whether incorporated or not, in India or outside India' - therefore, the individual apartment owners who are members of the association are the beneficiaries and the contributions made by them is to be considered as 'consideration' for the service received - as there is a marked difference in the concept of the levy between the Finance Act, 1994 and the CGST Act, the apex court ruling in the case of State of West Bengal & Ors. vs. Calcutta Club Ltd. 2019-TIOL-449-SC-ST-LB will not influence the determination of the taxable event of 'supply' under GST in the present case - there is, therefore, a supply of 'service' by the appellant to its members and the same is taxable under GST - insofar as the claim of the appellant that in respect of contributions above Rs.7500/- per member per month, the difference alone is liable to tax, the same is not a correct interpretation of the notification 12/2017-CTR inasmuch as the apex court has in the case of Dilip Kumar & Co. and Ors 2018-TIOL-302-SC-CUS-CB has held that the benefit of ambiguity in exemption notification cannot be claimed by the assessee and it must be interpreted in favour of the revenue/state - therefore, the AAR has correctly interpreted the exemption notification that in respect of a member who contributes an amount which is more than Rs.7500/- he will not be eligible for the exemption under Entry no. 77 and the entire contribution amount would be liable to be taxed - Moreover, Circular no. 109/28/2019-GST dated 22.07.2019 issued by CBIC only clarifies this position - argument by appellant that the said Circular will apply only prospectively since it is oppressive in nature does not hold water since the said Circular does not introduce any new levy by its clarification but only clarifies the position - not adhering to the time limit (by AAR) in passing an order within the mandatory period of 90 days (section 98(6) of the CGST Rules, 2017) can be termed as irregularity in procedure which can be set right in appeal proceedings - An order passed by a Court of competent jurisdiction cannot be denuded of its efficacy by any collateral attack or in incidental proceedings - an order suffering from illegality or irregularity of procedure cannot be termed as in-executable - ruling given by the Authority is correct in law and Appellate Authority does not find any reason to interfere with the same - AAR ruling upheld and appeal dismissed: AAAR

- Appeal dismissed: AAAR

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