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GST kitty - Revenue collects Rs 87422 Crore in July month

GST CASES

SUPREME COURT CASES

2020-TIOL-131-SC-GST

Bioveda Action Research Company Vs ADDL Director General

GST - The petitioner-company approached the High Court seeking that directions be issued to quash summons issued to a partner in the petitioner-company, who was directed to appear before the Revenue authorities - The petitioner admitted that the summons were issued in accordance with law - Yet it sought that it be exempted from personal appearance - The High Court found no good reason is made out to exempt the assessee from personal appearance.

Held - No interference is warranted in the present Special Leave to Petition and so the same merits being set aside - Nonetheless, it is open to the petitioner to request the authority concerned to defer recording of statements, till the lockdown period ends: SC

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

2020-TIOL-128-SC-GST

GST - Petitioner has filed the present petition seeking relief in the matter of GST TRAN-1 inter alia declaring that time limit specified in rule 117 (1) and (1A) as being ultra vires s.140(3) of the CGST Act as also being arbitrary and unreasonable and violative of article 14, 19 and 265 of the Constitution of India; that the due date contemplated under the Rule 117 of the CGST Rules to claim the transitional credit within a specified period of time as being procedural in nature and thus merely directory and not mandatory - In writ, the High Court noted that the nature of relief sought in the present petition and the facts involved are fully covered by the decision of this court in M/s Blue Bird Pure Pvt. Ltd wherein the court directed the respondents to either open the online portal or to enable the petitioner to file Form TRAN-1 electronically or else accept the same manually on or before 20.11.2019 - Hence the Revenue authorities concerned were directed to process the petitioner's claim as per law, once the Form GST TRAN-1 was filed.

Held - Notice be issued to the parties - The case be tagged with SLP(C) No. 26626/2019 and D.No. 38404/2019: SC

- Notice issued: SUPREME COURT OF INDIA

HIGH COURT CASES

2020-TIOL-1342-HC-KERALA-GST

Hero Ecotech Ltd Vs ASTO

GST - Petitioner is engaged in the manufacture and sale of bicycles - On the basis of orders received, consignment of bicycles were transported in lorry No.TN 38/AP-9081 under three invoices - However, the consignment of bicycles were intercepted and detained - The reason stated is that there was a time delay between the invoices and transportation which raised suspicion that consignor and consignee colluded for multiple transport of goods with the same set of invoices and thereby evaded tax - Petitioner challenges notice issued by the respondent under Section 129 of the Act, 2017 - Petitioner also submits that the amount directed in Ext.P2 notice was deposited by the petitioner for the purpose of releasing the detained vehicle and consignments - In the counter affidavit filed, it is mentioned that the vehicle was detained on account of the fact that the supplier had issued the invoices 21 days and 7 days prior to the time of removal of goods, which was in contravention to the provisions of the CGST Act - however, the petitioner denies these contentions.

Held: In view of the fact that an adjudication is already pending, it is only proper that a conclusion is not entered into at this juncture - For the present, a direction to complete the adjudication proceedings at the earliest would be sufficient in the instant case - Bench directs the respondent to complete the adjudication proceedings in relation to Ext.P2 notice, within an outer time period of two months from the date of receipt of a copy of this judgment - Petition disposed of: High Court [para 7, 8]

- Petition disposed of: KERALA HIGH COURT

2020-TIOL-1341-HC-P&H-GST

RSL Distilleries Pvt Ltd Vs UoI

GST - By filing the present petition, the petitioner seeks quashing of the Provisional Attachment Order dated 10.07.2020 passed under Section 83 of the CGST, Act, 2017 , freezing all the bank accounts of the petitioner-Company after a search in the premises of the Distilleries conducted on 07/08.07.2020 and summons for conducting an inquiry / investigation issued under Section 70 of the CGST Act, 2017 and Section 20 of the IGST Act, 2017 .

Held: Counsel for the respondents submits that the objections under Section 159 (5) of the Central GST Rules, 2017 have been filed by the petitioner on 18.07.2020 and the date of personal hearing to hear the petitioner-Company is fixed for tomorrow i.e. 22.07.2020; that, therefore, time be given till 27.07.2020 for deciding the objections - oral request made by counsel for respondents being reasonable is accepted - present petition is disposed of with the directions to the authority concerned to positively decide the same on or before 27.07.2020 by passing a speaking order, keeping in view, inter alia , the judgments Valerius Industries -2019-TIOL-2094-HC-AHM-GST and Bindal Smelting P. Ltd. - 2020-TIOL-92-HC-P&H-GST : High Court [para 3, 5]

- Petition disposed of: PUNJAB AND HARYANA HIGH COURT

2020-TIOL-1340-HC-RAJ-GST

Trivedi Ventures Llp Vs UoI

GST - In all the writ petitions, petitioners have prayed that they may be permitted to file Form TRAN-1 in compliance of CGST Act read with CGST Rules in order to enable the petitioners to avail Tansitional Credit in Electronic Credit Ledger - It is also prayed that the respondents should give effect to Form GST Tran-1 that had been manually submitted to the respondent-department to avail relevant Legitimate Input Tax Credit.

Held: Controversy involved in the present writ petitions is similar to the controversy involved in Obelisk Composite Technology LLP [order dated 12.12.2019] - Accordingly, Bench grants liberty to the petitioners to make an application before GST Council, who is further requested to hand over the same to the jurisdictional officer for forwarding the same to the GST Council to issue requisite certificate of recommendation along with requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioners' assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioners to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India - Petitions disposed of: High Court [para 7 to 9]

- Petitions disposed of: RAJASTHAN HIGH COURT

2020-TIOL-1332-HC-KAR-GST

Department Of Finance Vs KS Arcanut Stores

GST - Intra Court appeal has been preferred by the State challenging the order passed by Single Judge in Writ Petition Nos.19098/2019 and 19722-19723/2019 (T-RES)  Factual matrix of the case are that Vigilance Cell of Commercial Tax intercepted the goods conveyance which was carrying arecanut on 30.01.2019 at about 5.35 p.m. at Bagalkot road - The driver in charge of the goods conveyance tendered the invoice for verification and as per the invoice dated 23.01.2019 the consignor was M/s. T.K.K.Traders, Kerala and consignee has been shown as A.V. Traders, Maharashtra and arecanut of Rs.5,88,000/- with waybill & another invoice dated 23.01.2019 consignor has been shown as K.S. Arecanut Stores, Kerala and consignee as Akkino Traders, Maharashtra; arecanut of Rs.30,87,000/- with waybill - It is further alleged that on verification of the said document it is noticed that the driver of the goods vehicle has taken 5 days to reach from Tumkur to Vijayapura and the statement of the driver was recorded which reveals that the vehicle has been loaded with 300 bags (each bag containing 70 kg of arecanut) from M/s. K.S. Arecanut stores, Chalissery Road, Perumannur, Palakkad, Kerala and he has further stated that another 40 bags of arecanut, each bag containing 75 kg belonging to M/s. T.K.K. Traders, Kerala has been received through LMV and same has been loaded in the goods container and he has started the journey on 24.01.2019 at about 10.49 p.m - It is further alleged that the arecanut is most evasion prone commodity and the driver taking deviation route of more than 145 kms than the usual route, clandestine approach of the driver indicated is suspicion - Subsequently, the said goods have been taken possession and both the consignors have been summoned to appear before the Officer - By providing opportunity and after recording the statement and perusal of the documents, a finding was given that the goods were not loaded at Kerala but the same has taken somewhere in Karnataka as there is no processing units present at Kerala and there was absence of inward supply details in the business premises at Kerala and the goods under transit did not originate from Kerala; that the goods under transit are nowhere related to documents tendered nor belongs to both the respondents shown in the consignment - Subsequently, the owner of the conveyance came forward and discharged the fine of Rs.3,20,000/- u/s 130 (2) of the Act, 2017 and in pursuant to the payment of fine the conveyance was released on 16.05.2019, however, the owner of the goods did not come forward to discharge the tax penalty and as such the goods were confiscated and stored in the warehouse on 16.05.2019 - Subsequently, after following the procedure, auction was conducted on 19.07.2019 and the successful bidder bid it for Rs.75,44,799/- - Challenging the order dated 01.02.2019 and another order dated 25.02.2019 and 11.04.2019, the respondents filed the writ petitions - Single Judge after hearing both the sides, permitted the petitioners to pay the applicable tax and penalty equal to 100% of the tax payable on such goods as per Section 129 of the Act  - It was further ordered that on such payment, sale proceeds of Rs.75,33,620/- shall be returned to the petitioners and the respondents can collect the applicable tax from the petitioners as determined under Section 129(1)(a) of the Act and to return the balance amount out of Rs.75,33,620/- to the petitioner - Challenging the same the Government is before this Court.

Held: On perusal of the order of the Single Judge, he has not determined whether the impugned orders which were under challenge were sustainable in law or not - Until and unless the validity of the order is either upheld or quashed, no other ancillary relief can be given to the petitioners - When it is the specific contention of the Government that the goods which have been carried in conveyance is not belonging to the respondents and they are not the owners, then under such circumstances, the Single Judge ought not to have passed the order under Section 129(1) (a) of the Act - A close scrutiny of Section 129 (1)(a) of the Act indicates that if the owner comes forward to pay the tax payable on such goods equal to 100% of the tax payable, then Section 129 (1)(a) of the Act is attracted - But when already the appellants have passed an order under Section 129(1)(b) of the Act, by rejecting the documents tendered by the person in charge, until and unless that order is set aside, no order can be passed under Section 129 (1)(a) of the Act - Even for the order under challenge under Section 130 (1) of the Act, some order ought to have been passed - Single Judge without looking into the said provisions, by taking shelter under Section 168 of the Act gone into the circular issued on 31.12.2018 and passed the impugned order - Impugned order is not in consonance with the provisions of law - Firstly the Single Judge has to say whether the orders passed by respondent Government are in accordance with law or not - Then, if it is not in accordance with law, he has to set aside the same, then pass the suitable order - By keeping pending those orders, whatever order has been passed is not sustainable in law - It appears to be contrary to each other - The orders passed by the Government remain in tact and Single Judge passes order under Section 129(1)(a) of the Act - In that light, it requires interference at the hands of this Court - If the matter is remitted to consider afresh all the issues which have been raised by both the parties, then thereafter to pass suitable order, it would meet the ends of justice -The appeals are allowed, the impugned order passed in W.P.Nos.19098/2019 and 19722- 19723/2019 dated 25.08.2019 is set aside and the matter is remitted to the Single Judge for considering afresh all the points and to pass an order in accordance with law: High Court [para 10 to 12]

- Matter remanded: KARNATAKA HIGH COURT

2020-TIOL-1327-HC-MAD-GST

Tirumala Industries Vs Deputy Commissioner (ST)

GST - Petition seeks a certiorari challenging an order of rejection of appeal dated 31.01.2020 filed against the cancellation of registration dated 02.07.2019 - CBIC has passed an order called the Central Goods and Services Tax (Removal of Difficulties) Order, 2020 and bearing No. 1 of 2020 dated 25.06.2020 clarifying that for the purpose of calculating the period of thirty days for filing application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act for those registered persons who were served notice under clause (b) or clause (c) of sub-section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and where cancellation order was passed up to 12th June, 2020, the later of the following dates viz. Date of service of the said cancellation order; or 31 st day of August, 2020 shall be considered - accordingly, Commercial Taxes and Registration Department of the Government of Tamil Nadu has passed G.O.Ms.No.102 dated 26.06.2020 - In the light of the aforesaid, the petitioner has filed memo dated 06.08.2020 requesting that it may be permitted to withdraw the writ petition - The petitioner is so permitted to withdraw the Writ Petition and in addition is granted liberty to approach the Appellate Authority by the cut-off date provided in the Notification seeking restoration of registration - Writ petition is dismissed as withdrawn: High Court [para 2, 4]

- Petition dismissed : MADARS HIGH COURT

2020-TIOL-1325-HC-DEL-GST

GST - Anti-Profiteering - S.171 of the CGST Act, 2017 - Petitioner challenges the interim order dated 25th June, 2019 as well as order dated 16th June, 2020 = 2020-TIOL-30-NAA-GST passed by the National Anti-Profiteering Authority whereby it has been held that the petitioner had contravened the provisions of Section 171 of CGST Act and thereby had profiteered on the sale of its refrigerator Whirlpool FP313D PROTTON ROY MIRROR; the Authority has directed the petitioner to reduce the price of its Refrigerator and deposit the profiteered amount of Rs.4,07,451/- within three months from the date of receipt of the order, along with interest calculated at the rate of eighteen per cent from the date of collection of the amount from the recipients till the date of deposit - petitioner has also prayed for a writ of prohibition against direction of the Authority to expand the scope of the investigation to other impacted products and for setting aside the letters dated 02nd July, 2020 and 23rd July, 2020 issued by the Director General of Anti-Profiteering in furtherance to the impugned order on the basis of which details and documents for further investigation of "other impacted products" have been called for from the petitioner by 12th August, 2020 - Petitioner further prays for a declaration that Section 171 of the CGST Act and Chapter XV of the CGST Rules (particularly Rules 126, 127 and 133) are unconstitutional, ultra vires and violative of Articles 14, 19(1)(g), 265 and 300A of the Constitution of India, that the composition of respondent no. 2 under Rule 122 of the CGST Rules is unconstitutional and contrary to the directions of the Supreme Court and that paragraphs no. 1 to 10 of Notification dated 4/10/2019 issued by respondent no. 2 are ultra vires and violative of Rule 133(4) of the CGST Rules.

Held: Petitioner is directed to deposit Rs.4,07,451/- with Central and State Consumer Welfare Boards within two months - The interest amount as well as penalty and further investigation with regard to other impacted products as well as the letters dated 02nd July, 2020 and 23rd July, 2020 issued by the DGAP are stayed till further orders - Notice to be issued - counter affidavits to be filed within a period of four weeks and rejoinder affidavit, if any, to be filed before the next date of hearing - Matter to be listed on 28th September, 2020: High Court

- Matter listed : DELHI HIGH COURT

2020-TIOL-1324-HC-DEL-GST

GST - Present writ petition has been filed seeking a direction to respondents to make payment of refund of electronic cash ledger of Rs.27,06,979/- along with interest as notified in Notification No. 13/2017-Central Tax dated 28th June, 2017 - It is stated in the petition that the procedure for claiming refund of electronic cash ledger is not in accordance with proviso to Section 54(1) of the CGST Act and proviso to Rule 89(1) of the CGST Rules - petitioner states that the Common Goods and Service Tax Electronic Portal (common portal) constituted under Section 146 of the CGST Act is not processing the information in accordance with the statutory provisions; that the Government has not yet implemented Section 39 of the CGST Act and the corresponding Rules, although the said section is fully operational under ‘Statute Book' and has been enforced w.e.f. 1st July, 2017 vide Notification No. 9/2017-CT dated 28th June, 2017; that right from the inception of GST i.e. 1st July, 2017, all applications for refund including the application relating to refund of balance in electronic cash ledger were and are being filed in FORM GST RFD-01A and FORM GST RFD-01 respectively instead of FORM GSTR-3 .

Held: Notice issued - Counter-affidavits be filed within four weeks and rejoinder affidavits, if any, to be filed within four weeks thereafter - Matter to be listed on 12th October, 2020: High Court

- Matter listed : DELHI HIGH COURT

2020-TIOL-1323-HC-P&H-GST

Vij Engineers and Consultants Pvt Ltd Vs UoI

GST - The constitutional validity of Section 16(2)(C) of the CGST Act, 2017 and Rule 86A of the CGST Rules, 2017 was challenged on the ground that ITC credit in the electronic ledger of the purchaser dealer cannot be blocked in the light of fulfillment of all the statutory conditions except ensuring that the errant supplier/seller does deposit the tax collected from the purchaser, over which the bonafide purchaser has no control - Petitioner submits that although the entire tax liability of the petitioner stands extinguished using the credit liability, however, the electornic portal did not permit filing of returns till the extended date of 30.06.2020 without payment of tax and blocking of the electronic credit ledger - It is urged that the petitioner has to urgently dispatch consignment of goods for construction of bridges in Leh-Ladakh region for the Indian Army pursuant to the contract awarded by GREF, which is impeded in view of Rule 138 E of CGST Rules not permitting to issue electronically generated e-way bills - Petitioner pleads for permitting the filing of returns and issuance of e-way bills and have made an interim offer for securing the revenue, while simultaneously permitting the execution of the contract for the Indian Army - ASG of India is not averse to such a solution - Petitioner prays for two days' time to place the offer in writing on record with an advance copy to the ASG of India - Matter was directed to be listed on 14.07.2020 for interim directions.

Held - At time of resumed hearing, the counsel for the respondents sought more time to file detailed reply to the challenge to the vires of Section 16(2)(c) of the Act - Hence matter listed for hearing on 15.10.2020 - Meanwhile, petitioner is permitted to file manual returns in Form GSTR-3B for the months in question: HC

- Case deferred : PUNJAB AND HARYANA HIGH COURT

2020-TIOL-1320-HC-P&H-GST

Bioveda Action Research Company Vs Addl Director General

GST - The petitioner-company sought that directions be issued to quash summons issued to a partner in the petitioner-company, who was directed to appear before the Revenue authorities.

Held - The petitioner admitted that the summons were issued in accordance with law - Yet it sought that it be exempted from personal appearance - It is seen that no good reason is made out to exempt the assessee from personal appearance - Petition & pending applications are dismissed: HC

- Writ petition dismissed: PUNJAB & HARYANA HIGH COURT

2020-TIOL-1304-HC-KERALA-GST

Adams International Imports And Exports Vs State Tax Officer

GST - Petitioner, instead of availing alternative remedy of appeal qua limiting the claim of refund has approached this Court under Article 226 of the Constitution of India - It is settled law that in order to bring the case within the realm of judicial review, it is imperative for the petitioner to make out a case of gross illegality, irregularity and without jurisdiction or against the principles of natural justice - reason assigned for rejection of refund was that the petitioner had availed duty drawback on export of the goods @1% of FOB Value and this does not call for interference under writ jurisdiction - Bench refrains from commenting further with regard to the eligibility or otherwise qua claim of refund on IGST and CGST, as it would be in the domain of the appellate authority to examine issue, in case the petitioner chooses to avail the remedy, in accordance with law - Petition is without merit, hence rejected: High Court [para 1, 4]

- Petition rejected: KERALA HIGH COURT

2020-TIOL-1303-HC-KERALA-GST

Amani Machine Centre Vs State Tax Officer

GST - It is not in dispute that the petitioner did not furnish a valid return within 30 days from the service of the assessment orders under Section 62(1) of the Act - That being the case, it would follow that the petitioner cannot obtain the benefit under Section 62(2) of the Act, for deeming the assessment orders already passed on best judgment basis as withdrawn - The writ petition in its challenge to the assessment orders, therefore, fails and is dismissed - It is directed that recovery proceedings for recovery of the amounts confirmed against the petitioner by Exts.P12 to P23 assessment orders shall be kept in abeyance for a period of six weeks so as to enable the petitioner to move the Appellate Authority, in its challenge against the said assessment orders, in the meanwhile: High Court [para 3]

- Petition dismissed: KERALA HIGH COURT

2020-TIOL-1302-HC-KERALA-GST

Pazhayidom Food Ventures Pvt Ltd Vs Superintendent Commercial Taxes

GST - Petitioner, who is an assessee under the GST Act, is not disputing his liability to tax, or the quantum thereof, for the period in question - It only seeks an instalment facility to pay the admitted tax, together with interest thereon, in view of the financial difficulties faced by it during the Covid pandemic situation, when its business has come to a total standstill - During the pendency of this Writ Petition, the petitioner has established its bonafides by effecting a payment of Rs.4 lakhs towards the tax liability for the period 2018-2019 - It is also relevant to note that, as of today, there is no demand against the petitioner for the unpaid tax amount - Since the petitioner is not disputing his liability, and wishes to put a quietus to the matter, Bench deems it appropriate to direct the respondent to accept the belated return filed by the petitioner for the period November 2018 to March 2019, without insisting on payment of the admitted tax declared therein - Respondents shall adjust the amount of Rs. 4 Lakhs paid towards the admitted tax liability and thereafter permit petitioner to discharge the balance tax liability, inclusive of any interest and late fee thereon, in equal successive monthly instalments commencing from 25th August 2020 and culminating on 25th March, 2021 - If the petitioner defaults in any single instalment, he will lose the benefit of this judgment and it will be open to the respondent to proceed with recovery proceedings for realisation of the unpaid tax, interest and other amounts – Petition disposed of: High Court [para 3]

Petition disposed of: KERALA HIGH COURT

2020-TIOL-1301-HC-AHM-GST

Downtown Auto Pvt Ltd Vs UoI

GST - Section 140(3) of the CGST Act, 2017 - Rule 15 of CCR, 2017 - Notification 21/2017-CX(NT) - Transitional Credit - Petitioners are not having credit transfer document (CTD) but have produced on record the copies of the invoice received from the dealers along with copies of invoice issued by the manufacturer of the cars or spare parts (as applicable) in name of the dealers showing the payment of excise duty along with the Chassis Number of cars (in case of cars) - On perusal of the aforesaid provisions of s.140 of the CGST Act, it is clear that they nowhere provide for the petitioners to submit any CTD to claim the transitional credit - Therefore, even though the petitioners are not having CTD, the respondent-authorities can very well verify the payment of excise duty on the cars purchased by the petitioners from the dealers and on spare parts on the basis of documents submitted by the petitioners - If the respondents are satisfied on basis of such documents that the excise duty has been paid by the manufacturer, the excise duty paid should be allowed as transitional credit in the hands of the petitioners - Petition is disposed of with directions to meet the ends of justice - Such exercise shall be carried within a period of three months: High Court [para 7, 10, 11, 12, 13, 13.2]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-1300-HC-ORISSA-GST

Amit Beriwal Vs State Of Odisha

GST - Petitioner, who is in custody, has filed the instant bail application - Underlying complaint and the prosecution report indicates that a large number of fraudulent business transactions were made using several fictitious firms - Petitioner and proprietors of the alleged fictitious firms, individually and in collusion with each other, are stated to have created several dummy and non-existent entities to avail bogus Input Tax Credit (ITC), for the purpose of defrauding the Revenue - These fake and fraudulent transactions have, among others, alleged caused huge loss to the State exchequer at least to the tune of Rs.122.67 crores.

Held: [para 20 to 28]

+ There are four named accused persons in the present case and two of them are still evading arrest. Given the factual scenario, at this stage, this court is inclined to accept the submission of the Respondent State that if the accused persons are granted bail, the same could also pose difficulties in apprehending the other accused persons. It is brought to the notice of the court that the authorities have made a prayer before the trial court for issuance of NBW against the absconding co-accused. Further, the flight risk of the petitioner herein cannot be ruled out.

+ There is no hard and fast rule regarding grant or refusal to grant bail. Each case has to be considered on the touchstone of its own generic facts and individual merits. However, the discretion of the court has to be exercised judiciously sans any element of arbitrariness. Even if the “bail is the rule and jail is the exception” -- the basic bail jurisprudence remains unaltered, but in the instant case, the alleged GST fraud committed by the petitioner is having humongous ramification on the revenue collection by the State. At this backdrop, the possibility of the accused tampering the evidence and/or influencing/intimidating the witnesses also cannot be ruled out.

+ Moreover, the courts cannot lose sight of the adverse impact such activities would have in the economy. It appears that a large number of cases have now emerged in different parts of the country, where such persons, with vested interests, have created a host of unscrupulous and bogus entities. These fake entities are then used for the purpose of indulging in issuances of false and fabricated invoices, without actual movement or supply of goods and services and without payment of any GST to the public exchequer, but for the purpose of claiming ITC, by defrauding the Revenue.

+ Enormity of such devious activities touch the raw nerve of the economic system and strike at the root of the proper and effective functioning of the GST regime, which has been set up with the laudable object of "One Nation, One Tax, One Market", by subsuming various earlier indirect levies such as Central Excise Duty, Service Tax, VAT etc.; expecting that goods and services would be cheaper and beneficial to the common man. One cannot lose sight of the fact that GST regime is relatively new and is still evolving. Unfortunately, the attempts to dampen the spirit of its proper implementation are already assuming huge proportions and need to be curbed with an iron fist so that the contours of fiscal compass will be extended to the advantage of the people.

+ Court is well aware of the complications thrown in by the new GST regime and the problems posed in its implementation. It seems a countrywide cartel specializing in defrauding the GST system is operating to bring the economy to its knees. These complications created by the unscrupulous fraudsters, one would fear, could lead to arrest of innocent businessmen and traders. However, a reading of the GST code would make it abundantly clear that it is rooted with several checks and balances to ensure that the initiation of prosecution or an arrest is to be made only after following due and elaborate process.

+ One cannot lose sight of the fact that the Governments are making their best efforts to enhance the ease of doing business, to reduce the burden on the tax payers, to make the procedures simpler with the use of new technologies. The Government officials have also been making all efforts to ensure efficient collection of tax, so that the burden on the genuine tax payers can be reduced. All these efforts cannot be permitted to be sabotaged by such criminals who prey on the public exchequer. The text book notion of tax collection needs to be overhauled by conjuring with the emerging technologies so as to get rid of practical hiccups.

+ It may be apposite to note that in the year 2018-19, 1620 cases involving a sum of Rs.11251.23 crores, were registered with respect to fake invoice(s) involving fraudulent Input Tax Credit in GST by the Central GST alone (Answer by the Minister of Finance to the Unstarred Question No.1385 (on 1.07.2019) in the Lok Sabha). Further, during the year 2019-20 (till 25.06.2019), 535 cases involving a sum of Rs.2565.40 crores were registered. These numbers are quite alarming and effective measures, in terms of ensuring increased bandwidth of efficiency of the tax officials, have to be devised to streamline the system, to ensure that the ITC is not misused.

+ Taking into account a holistic view of the facts and circumstances in the instant case, Court is not inclined to release the accused Petitioner on bail at this stage. Accordingly, the bail petition filed on behalf of the accused/petitioner stands rejected. It is, however, clarified that the above observations shall not come in the way of a fair trial before the Ld. Trial Court and it will proceed to decide the matter on its own merits, uninfluenced by any of the observation made hereinabove.

- Application dismissed: ORISSA HIGH COURT

2020-TIOL-1297-HC-DEL-GST

Parnika Commercial And Estates Pvt Ltd Vs UoI

GST - The present petition was filed to challenge the notice issued to the petitioner for rejection of refund application - The petitioner also sought that directions be issued to the Revenue to refund the amount wrongly forfeited from the pending refund application of the petitioner - The petitioner also sought a declaration that its liability to pay interest u/s 50 if the CGST Act be confined only to the net tax liability and that no interest is payable on the available ITC - The petitioner also sought that directions be issued for implementing the decision taken by the GST Council in its 39th Meeting, wherein it was recommended that law should be amended and interest under Section 50 of the CGST Act should be charged only on net liability of the tax payer, after taking into account the admissible credit, by notifying a date of implementation of section 100 of the Finance (No 2) Act, 2019 - The petitioner also claimed that the principles of natural justice were violated as no SCN was issued to the petitioner u/s 73 of the CGST Act and that no opportunity of personal hearing was granted.

Held - Notice be issued to the parties - Counter affidavit be filed in four weeks' time - Matter listed for hearing on October 20, 2020: HC

- Notice issued: DELHI HIGH COURT

2020-TIOL-1295-HC-MP-GST

Amit Bothra Vs State Of Madhya Pradesh

GST - The petitioners Amit Bothara and Ashok Daga are partners of the firm M/s Vishnu Essence - They have allegedly confessed in their statements recorded under Section 70 of the GST Act that their firm had supplied Vimal brand Pan Masala worth Rs.320 crores clandestinely and has evaded payment of the GST to the tune of Rs.225 crores - Subsequent search of various places and statements of various persons further confirmed the aforesaid tax evasion - Following the due process, the petitioners were taken into custody and booked in the aforementioned crime - Petitioners have made elaborate submissions and pleaded that they be granted bail - Inter alia it is informed that the statements have been retracted; that though under pressure, they have already paid Rs. 7 crores and are still ready to pay the deficit, if any, found due on the final assessment; that alleged evasion is assessed about Rs. 7 crores and despite their right to challenge the assessment by depositing 10% of the amount assessed, they have deposited entire amount of Rs. 7 crores; that about 150 workers are working in the firm of the petitioners; that in case of their detention, the work of the firm will be at a halt and hence, affect the survival of the families of those 150 workers; that the offence is punishable with maximum 5 years imprisonment and is triable by the Judicial Magistrate First Class; that they are ready to abide by the terms and conditions to be imposed by this Court while granting bail.

Held: On careful consideration of nature and gravity of the allegation made against the petitioners and the specific evidence collected in respect of these allegations, elaborate discussion of which would not be apt as it may adversely affect the interest of either party, the specific facts put-forth by the senior counsels for the petitioners and their reply and other facts and circumstances of the case, in the considered opinion of this court, the case for granting bail is made out, therefore, without commenting on the merits of the case, both the petitions stand allowed - It is directed that the petitioners Amit Bothra and Ashok Daga be released from custody on their furnishing a personal bond in the sum of Rs.5,00,000/- each with separate sureties to the satisfaction of the Trial Court for their appearance before it as and when required further subject to the conditions as detailed: High Court [para 21, 22]

- Petition allowed: MADHYA PRADESH HIGH COURT

2020-TIOL-1294-HC-DEL-GST

Affiniti Enterprises Vs UoI

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Petition has been filed challenging the order dated 19th March, 2020 passed by the respondent No.2-National Anti-Profiteering Authority as well as for setting aside the consequential directions issued therein - petitioner contends that the petitioner had passed on commensurate reduction in prices to its recipients, by grammage increase - It is submitted that respondent No. 2 had accepted grammage increase as a legitimate methodology to pass on the commensurate reduction in prices consequent upon GST rate reduction in Ankit Kumar Bajoria Vs. Hindustan Unilever Limited - 2018-TIOL-19-NAA-GST and in Reckitt Benckiser India Private Limited Vs. Union of India and Ors., W.P.(C) 4345/2020 - 2020-TIOL-1233-HC-DEL-GST .

Held: Petitioner is directed to deposit the principal profiteered sum of Rs.2,33,456/- within two weeks - Upon deposit of the said amount, interest amount as well as the penalty proceedings initiated by the respondents shall stand stayed till further orders - Matter along with other connected matters to be listed on 24 th August 2020 - application disposed of: High Court [para 3, 4]

- Matter posted: DELHI HIGH COURT

AAR CASES

2020-TIOL-218-AAR-GST

Reach Dredging Ltd

GST - Irrigation and Flood control Department, Govt of Jammu and Kashmir (recipient) has awarded the applicant a contract for construction of channels across Hokersar Wetland along the old alignment from RD 13182m to RD 16713m of flood spill channel, including its side slope protection and dredging of drainage flowing into Hokersar Wetland - work is aimed at the improvement of immovable property and involves the supply of various services and goods in the course of its execution - It is works contract within the meaning of section 2 (119) of the GST Act, where earthwork exceeds more than 75% of the contract value - The recipient being a Union Territory, all the conditions of Entry No. 3 (vii) of the IGST Notification are satisfied, therefore, applicant's supply to the Irrigation and Flood control Department, Govt of Jammu and Kashmir, is taxable @ 5% under Entry No. 3(vii) of Notification No 8/2017–Integrated Tax (Rate) : AAR

- Application disposed of: AAR

2020-TIOL-217-AAR-GST

Reach Dredging Ltd

GST - Wular Conservation and Management Authority (recipient) has awarded the applicant a contract for the dredging of Wular lake along with its feeder channels and the strengthening of embankments of the lake - Recipient is a Governmental Authority within the meaning of para 5(ix) of the IGST Notification and, therefore, applicant's supply to the Wular Conservation and Management Authority is taxable @ 5% under Sl No. 3(vii) of Notification No 8/2017-Integrated Tax (Rate) : AAR

- Application disposed of: AAR

2020-TIOL-215-AAR-GST

Hooghly Motors Pvt Ltd

GST - A combined reading of the provisions of section 2A (2) of the MV Act and Entry No. 242A of Schedule I of the Rate Notification establishes that the battery pack is an essential character of an e-rickshaw - An electrically operated three-wheeled vehicle is run entirely on electrical energy, derived from an external source or one or more electrical batteries fitted to such vehicles - If the battery pack is withdrawn, it will no longer be a three-wheeled electrically operated vehicle - Accordingly, a three-wheeled motor vehicle (commonly known as Toto) is classifiable under HSN 8703 as an electrically operated vehicle, provided it is fitted with the battery pack - Otherwise, it will be classifiable under HSN 8706 being the chassis fitted with an engine for the motor vehicles of heading 8703: AAR

- Application disposed of: AAR

2020-TIOL-216-AAR-GST

Prragathi Steel Castings Pvt Ltd

GST - Railway parts such as Couplers, Knuckle, Locks, Toggle, Yoke etc., manufactured and supplied by the applicant to M/s Sanrok Enterprises (who in turn supply to Indian Railways after assembly) are classifiable under HSN 8607 - The applicable rate of GST is 5% in terms of entry number 241 of Schedule I to the Notification No.1/2017-Central Tax (Rate) till 29.09.2019 and effective from 30.09.2019, the rate of GST is 12%, in terms of entry number 205 G of Schedule II to the Notification No.1/2017-Central Tax (Rate) as amended by Notification No.14/2019-Central Tax(Rate) dated 30.09.2019, with no refund of unutilized input tax credit, in terms of Sl.No. 14 of Notification No.5/2017-Central Tax (Rate) dated 28.06.2017: AAR

- Application disposed of: AAR

2020-TIOL-214-AAR-GST

Enfield Apparels Ltd

GST - NCLT had passed order on 04/04/2019 under section 33 of the Insolvency & Bankruptcy Code, 2016 to start the process of liquidating the corporate debtor (applicant) and appointed Sri Dutta as the Liquidator and who has obtained separate registration as a distinct person in terms of Notification No. 11/2020 - Central Tax - West Bengal Industrial Development Corporation Ltd (Sub-lessor) had granted the applicant possession of the Demised Premises [assets under liquidation viz. the leasehold factory unit along with car parking space] for ninety-nine years under a registered deed of sub-lease dated 06/08/2010 (Deed) on payment of an up-front premium of Rs 5.07 crore and monthly lease rental of Rs 21,000/- - According to clause 12.28 of the Deed, the applicant, after the expiry of at least five years from the date of the Deed coming into force, is entitled to assign to another person the unexpired residual period of the sub-lease after taking written approval of the Sub-lessor and on payment of transfer fee, being 10% of the prevailing market value of the property as assessed by the Registering Authority of the State Government - The Liquidator wants to know whether GST is payable on the consideration receivable on such assignment. If so, what should be the SAC and the rate applicable? He also seeks clarity on whether he can claim input tax credit for the GST paid on the transfer fee.

Held: The activity of assignment is in the nature of agreeing to transfer one's leasehold rights - It does not amount to further sub-leasing, as the applicant's rights as per the Deed of sub-lease stands extinguished after assignment - Neither does it create fresh benefit from the land - It is in the nature of compensation for agreeing to do the transfer of the applicant's rights in favour of the assignee - It is a service classifiable under 'Other miscellaneous service' (SAC 999792) and taxable @ 18% under Sl No. 35 of Notification No. 11/2017 - CT (Rate) - The transfer fee charged by the Sub-lessor is the consideration payable to the Sub-lessor for providing a service in the course or furtherance of business, more specifically because business includes supply or acquisition of goods or services in connection with the closure of a business in terms of section 2(17)(d) of the GST Act - The GST to be paid on such transfer fee is, therefore, admissible as input tax credit: AAR

- Application disposed of: AAR

2020-TIOL-213-AAR-GST

Vishwanath Project Ltd

GST - Applicant is providing services viz., Supply, Erection. Testing & Commissioning of 51 Nos. 33/11kV Substations with Associated Lines to M/s Odisha Power Transmission Corporation Limited (OPTCL) - From the website of OPTCL, it is understood that with the enactment of the Electricity Act, 2003, the Government of Orissa through notification of a Transfer Scheme transferred the transmission business of GRIDCO and vested the same with OPTCL with effect from 01-04-2005 - OPTCL, registered on 29th March, 2004 under the Companies Act, 1956, is a wholly owned Government Company - Under the Transfer Scheme, OPTCL has been notified as the State Transmission Utility (STU) and is also mandated to discharge the State Load Dispatch functions - Under the provisions of the Electricity Act, 2003, OPTCL is a deemed transmission licensee and it undertakes the activities of transmission of electricity in the State of Orissa under regulatory control of Orissa Electricity Regulatory Commission (OERC) and also in compliance of the provision of the Orissa Electricity Reform Act, 1995 and Electricity Act, 2003 - Thus, M/s Odisha Power Transmission Corporation Limited falls under the domain of Government entity in terms of the provisions of Not. No. 11/2017-CT Dt. 28.06.2017 (as amended) - Therefore, services rendered to M/s Odisha Power Transmission Corporation Limited (OPTCL) falls under services provided to a Government entity - Services rendered by the applicant squarely falls under the works contract and is covered under entry no. (ii) of S.No. 3 of the of Not. No. 11/2017 - CT (R) , Dt. 28-06-2017 (as amended) and corresponding notifications under TGST Act, 2017, and the applicable rate of tax is 18% (9% CGST + 9% SGST) for the period from 01.07.2017 to 31.03.2019 - However, entry no. (ii) of S. No. 3 was omitted w.e.f 01.04.2019 by Not. No. 03/2019-CT (R) dated 29.03.2019 - Nevertheless, entry no. (xii) of S. No. 3 of Not. No. No. 11/2017 - Central Tax (Rate) , Dt. 28-06-2017 (as amended) prescribes rate of tax as 18% (9% CGST + 9% SGST) in respect of constructions not specified under entry numbers other than (i), (ia), (ib), (ic), (id), (ie), (if), (iii), (iv), (v), (va), (vi), (vii), (viii), (ix), (x) and (xi) of S. No. (3) - Therefore, for the period from 01.04.2019, the services rendered by the applicant fall under the said residual entry and attract rate of tax @18% (9% CGST + 9% SGST): AAR

- Application disposed of: AAR

2020-TIOL-212-AAR-GST

Sushi Pet Nutrisciences

GST - "Poultry meal" is classifiable under CSH 2301 10 90; attracts GST rate of 5% under Sl. No. 103 of the Schedule-1 of the Not. No. 01/2017-CT (R): AAR

GST - "Poultry fat" is classifiable under CSH 1501 90 00; attracts 12% GST vide entry No. 19 of the Schedule-II of Not. No. 01/2017-CT(R): AAR

- Application disposed of: AAR

2020-TIOL-211-AAR-GST

Daicel Chiral Technologies (India) Pvt Ltd

GST - Impugned services referred by the applicant have been received for construction of immovable property on their own account and, therefore, input tax credit on those services is barred under the provisions of clause (d) of Sec. 17(5) of the CGST Act, 2017 - 'plant and machinery' excludes building from its purview - Applicant is, therefore, not eligible to avail input tax credit of GST paid on payment of Lease Premium Charges (one-time charges); GST paid on annual Lease rentals (recurring) towards land lease; GST paid on maintenance charges collected by the lessor: AAR

- Application disposed of: AAR

2020-TIOL-210-AAR-GST

Navneeth Kumar Talla

GST - Applicant is engaged in supplying food and beverages at the canteen of their customers - The Applicant himself does not get paid for by the consumers of the food and beverages - The Recipient of the services are hospitals who enter into contract with the applicant - The charges are received from the hospitals on monthly basis on the coupons collected - In short, it is deciphered that the Applicant is vested with management of the canteen facilities - Supply of food is classified under Service Code No. 9963 - Exemption under entry 74 of Notification No. 12/2017-CT is available only when the clinical establishment itself provides this service (supply of food) as a part of health care services to the in-patients and the same is not available, when such supply of food and beverages is made by a person other than clinical establishment based on a contractual arrangement with such establishment - Therefore, GST is payable on supply of the services by the applicant to Hospitals and no exemption is provided in r/o the same - Supply of food to hospitals by the applicant depends on the time period (during which they are supplied) and will be subjected to tax as per the provisions of Not. No. 11/2017 - State Tax (Rate) [entry no. (ii) of S. No. 7] - For the period from 01.07.2017 to 26-07-2018 - 18% (CGST 9% + SGST 9%) and for the period from 27.07.2018 onwards - 5% (CGST 2.5% + SGST 5%) provided that credit of input tax charged on goods and services used in supplying the service has not been taken: AAR

- Application disposed of: AAR

2020-TIOL-209-AAR-GST

Prasa Infocom And Power Solutions Pvt Ltd

GST - M/s Cray Inc. has entered into a contract with Indian Institute of Tropical Meteorology (ITM) for supply of high performance computing solutions (including its maintenance) and preparation and maintenance of Data Centre - M/s Cray has sub-contracted the p ortion related to preparation of Data Centre (including its maintenance) to the applicant vide a contract - Applicant is engaged in the business of providing data centre construction and contracting services - Applicant was required to undertake civil and mechanical works, namely construction of civil structure to house the equipment - applicant also undertook supply and installation of other ancillary equipment necessary in a civil structure namely UPS and batteries, fire alarm system, chillers, air conditioners, surveillance systems etc. - all such activities undertaken by the applicant were required to set up Data Centre as a whole - the Data centre cannot be shifted to another location without first dismantling and then re-erecting it at another site - applicant seeks to know as to whether the said supply of goods and services qualify as ‘Works Contract' as defined u/s 2(119) of the CGST Act, 2017.

Held: From the contract, it is seen that the costing of goods and services are shown separately and the major value of the contract exceeding 85% of the total cost of the project is pertaining to supply of goods - These goods are sold to the client by the applicant and they receive separate payment for such goods sold - Without these goods, the services cannot be supplied by the applicant and, therefore, the goods and services are supplied as a combination and in conjunction and in the course of their business where the principal supply is supply of goods - There is a composite supply in the instant case but there is no building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any "immovable property" wherein transfer of property in goods is involved in the execution of the contract, therefore, is no Works Contract involved in the subject case - The data centre, as per the submissions made, appears to be a space/room where the equipment/machinery/other various apparatus are installed - The value of Civil Construction shown is insignificant as compared to the value of goods/services - it is clear that works contract is applicable only in immovable properties for GST purpose and where the value of goods and service are not distinct and in the subject case, perusal of the copy of agreement/document submitted reveal that the value of goods/equipment is clearly distinct and separate from the value of services, therefore, their project/work is not classifiable under Works Contract - moreover, from the list of goods and services, it is seen that items at Sr. no. 2 to 17 are in the nature of machine/instruments/equipment and are all replaceable and hence cannot be said to be of ‘immovable' nature - question posed by the applicant in their application is, therefore, answered in the negative: AAR

Jurisdictional Officer's contention that the applicant under letter dated 08.11.2019 has intimated that the works with respect to construction and commissioning of the service in relation to the said contract has been completed and, therefore, their application is liable for rejection in view of s.95 of the CGST Act, 2017 is untenable because the maintenance work is ongoing and is a part of the subject agreement: AAR

- Application disposed of: AAR

NAA CASES

2020-TIOL-42-NAA-GST

Director-General Of Anti-Profiteering Vs Durga Marketing Pvt Ltd

GST - Anti-profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the respondent has profiteered in respect of the supply of Duracell Battery AA/6 inasmuch as they had not reduced the selling price of the product when the GST rate was reduced from 28% to 18% w.e.f 15.11.2017; that the price of the product had remained the same and thus the benefit of reduction in GST rate was not passed on to the recipients by way of commensurate reduction in the price - DGAP observed that the respondent had supplied the product in the state of Rajasthan only; that the respondent had increased the base price of the product when the rate of GST was reduced from 28% to 18% w.e.f 15.11.2017; that based on the above, the amount of net higher sales realisation due to increase in the base price of the impacted goods, despite reduction in the GST rate viz. the profiteered amount comes to Rs.1,57,200/-, such computation being arrived at by comparing the average of the base price of the product sold during the period 01.7.2017 to 14.11.2017 with the actual invoice-wise base prices of the products supplied by the respondent during the period from 15.11.2017 to 30.06.2019; that the excess GST so collected from recipients was also included in the aforesaid profiteered amount - respondent in his written submissions accepted the above profiteered amount as computed by DGAP and paid the same vide challan of Rs.98,585/- in favour of Deputy Director, Consumer Affairs Department, Rajasthan and a DD for Rs.98,585/- paid in favour of Pay & Accounts Officer (Consumer Affairs) payable at New Delhi which amounts includes the interest amount of Rs.39,969/- @18% - Authority agrees with the computation of profiteered amount made by DGAP and also takes into account the payment of the entire profiteered amount along with interest and holds that in view of the same, the respondent is not liable for imposition of penalty under the provisions of s.171(3A) of the CGST Act, 2017 - Order is being passed accordingly keeping in view the notification 55/2020-CT issued u/s 168A of the Act, 2017: NAA

- Application disposed of: NAA

CGST RULES

CGST Rules, 2017 as amended up to 30.07.2020 Part-A

CGST Rules, 2017 as amended up to 30.07.2020 Part-B

OFFICE ORDER

Order-88

Two ACs deputed to GST Council Secretariat on loan basis

Order-87

IRS officer of DC rank deputed to GST Council Secretariat

Order-86

JC-rank officer posted to GST Council Secretariat

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