2020-TIOL-GST-354, Dated: Saturday, October 17, 2020

GST - Principal Commissioner states that there is no specific material against the petitioner other than the fact that he was a director in the company; that the petitioner is not cooperating in the investigation and the founder director Mr.Ram Mohan Gupta is not traceable - Petitioner is directed to appear before Deputy Commissioner, Anti Evasion, CGST, South, Bhikaji Kama Place, New Delhi on 19th October, 2020 at 11.30 A.M - Matter to be listed on 21st October 2020: High Court

GST - Transition of unutilised Input Tax Credit could be allowed only in respect of taxes and duties which were subsumed in the new GST Law - Admittedly, the three types of Cesses, namely Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess were not subsumed in the new GST Laws, either by the Parliament or by the States, therefore, the question of transitioning them into the GST Regime and giving them credit under against Output GST Liability cannot arise - The plain scheme and object of GST Law cannot be defeated or interjected by allowing such Input Credits in respect of Cess, whether collected as Tax or Duty under the then existing laws and therefore, such set off cannot be allowed -

Assessee was not entitled to carry forward and set off of unutilised Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess against the GST Output Liability with reference to Section 140 of the CGST Act, 2017 - Order of Single Judge set aside - The appeal of the Revenue is allowed: Division Bench High Court [para 60, 62]

GST - Main pitfalls in the reasoning given by the Single Judge are (a) the character of levy in the form of Cess like Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess was distinct and stand alone levies and their input credit even under the Cenvat Rules which were applicable mutatis mutandis did not permit any such cross Input Tax Credit, much less conferred a vested right, especially after the levy of these Cesses itself was dropped; (b) Explanation 3 to Section 140 could not be applied in a restricted manner only to the specified Sub-sections of Section 140 of the Act mentioned in the Explanations 1 and 2 and as a tool of interpretation, Explanation 3 would apply to the entire Section 140 of the Act and since it excluded the Cess of any kind for the purpose of Section 140 of the Act, which is not specified therein, the transition, carry forward or adjustment of unutilised Cess of any kind other than specified Cess, viz. National Calamity Contingent Duty (NCCD), against Output GST liability could not arise: Division Bench High Court [para 61]

- Appeal allowed: MADRAS HIGH COURT

GST - Aggrieved by the order dated 06.01.2020 = 2020-TIOL-90-HC-MAD-GST passed by the Single Judge, disposing of the Writ Petitions filed by M/s.Prime Gold International Limited / Assessee, with the observations that the show cause notice on the basis of the materials collected against the Assessee during investigation may be issued, within the stipulated time frame, as per Section 74 of the Central Goods and Services Tax Act, 2017 and that if show cause notice is not issued within two weeks from the date of the order of the learned Single Judge, the attachment of the goods in question shall be lifted forthwith, Writ Appeals have been filed by Revenue - It seems that these proceedings could not be concluded and even the expected show cause notice, which was to be issued in pursuance of the directions of the learned Singe Judge, could not be issued within the period of two weeks, as directed in the order dated 06.01.2020, due to the pandemic – Counsel for Revenue informs that the Assessee is not cooperating in the matter and has not presented himself for verification of certain preliminary materials collected by the concerned Authority, for which, his presence was necessary – Assessee submits that the imaging of data could be completed only during the second week of March, 2020, i.e., from 11.03.2020 to 13.03.2020 and on 16.03.2020 but the said show cause notice has not been issued by the competent Revenue Authority and therefore, the Appeals of the Revenue deserve to be dismissed.

Held: Bench is of the view that no significant interference is required in the directions given by the Single Judge, except for extending the time limit to comply with the directions given by the Single Judge and setting a new time frame for the said purpose - Since the SCN could not be issued for some reasons beyond the control of either of the parties and a fresh attachment order has been made on 28.03.2020, Bench is of the opinion that the show cause notice should be issued now by the competent Revenue Authority latest within a period of three months from today - This will be conditional upon the Assessee fully cooperating in the matter and further fix the time frame of three months thereafter to conclude the assessment proceedings itself - Respondent / Assessee to appear before the Authority concerned in the first instance on 02.11.2020 and present himself with the relevant materials, information, submissions, on all such dates, when he is summoned by the Authority concerned - No further extension of time would be granted to the Revenue Department for this purpose – Writ appeals disposed of: High Court [para 7]

GST - Writ applicant is a partnership firm registered with the GST and is engaged in the business of manufacturing of different types of textile fabrics - It appears that an inquiry has been initiated against the firm by the CGST Department, Surat by issuing summons under Section 70(1) of the Act, 2017 dated 25th June, 2020 - It further appears that pending the inquiry, the Department has taken two fold action - First an order in Form GST DRC-01A dated 23rd July, 2020 has been issued and secondly, an order of provisional attachment of property under Section 83 of the Act in Form GST DRC-22 has been passed - Being dissatisfied with the aforesaid action on the part of the GST Authorities, the writ applicant has come up before this Court with the present writ application.

+ Bench is not inclined to interfere with the order passed in Form GST DRC-01A dated 23rd July, 2020, referred to above.

+ However, Bench is of the view that the order of provisional attachment of the immovable property in the form of residential premises under Section 83 of the Act is not sustainable in law.

+ Section 83 talks about the opinion which is necessary to be formed for the purpose of protecting the interest of the government revenue. Any opinion of the authority to be formed is not subject to objective test. The language leaves no room for the relevance of an official examination as to the sufficiency of the ground on which the authority may act in forming its opinion. But, at the same time, there must be material based on which alone the authority could form its opinion that it has become necessary to order provisional attachment of the goods or the bank account to protect the interest of the government revenue. The existence of relevant material is a pre-condition to the formation of opinion.

+ The use of the word "may" indicates not only the discretion, but an obligation to consider that a necessity has arisen to pass an order of provisional attachment with a view to protect the interest of the government revenue. Therefore, the opinion to be formed by the Commissioner or take a case by the delegated authority cannot be on imaginary ground, wishful thinking, howsoever laudable that may be. Such a course is impermissible in law.

+ At the cost of repetition, the formation of the opinion, though subjective, must be based on some credible material disclosing that it is necessary to provisionally attach the goods or the bank account for the purpose of protecting the interest of the government revenue. The statutory requirement of reasonable belief is to safeguard the citizen from vexatious proceedings. "Belief" is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed. It is equally true that it is not necessary for the authority under the Act to state reasons for its belief. But if it is challenged that he had no reasons to believe, in that case, he must disclose the materials upon which his belief was formed, as it has been held by the Supreme Court in Sheonath Singh's case [AIR 1971 SC 2451] , that the Court can examine the materials to find out whether an honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the Court.

+ In the case at hand, A.G.P. appearing for the respondents very fairly submitted that not only the impugned order of provisional attachment is bereft of any reason, but there is nothing in the original file on the basis of which this Court may be in a position to ascertain the genuineness of the belief formed by the authority. The word "necessary" means indispensable, requisite; indispensably requisite, useful, incidental or conducive; essential; unavoidable; impossible to be otherwise; not to be avoided; inevitable. The word "necessary" must be construed in the connection in which it is used. The formation of the opinion by the authority should reflect intense application of mind with reference to the material available on record that it had become necessary to order provisional attachment of the goods or the bank account or other articles which may be useful or relevant to any proceedings under the Act.

+ In the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment under Section 83 of the Act, then such action amounts to malice in law. Malice in its legal sense means such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or excuse or for want of reasonable or probably cause. Any use of discretionary power exercised for an unauthorized purpose amounts to malice in law. It is immaterial whether the authority acted in good faith or bad faith.

+ Writ application stands partly allowed. The relief with regard to the order in Form GST DRC-01A is not granted, whereas the order of provisional attachment of immovable property under Section 83 of the Act is quashed and set aside. [para 4, 6, 12, 16]

GST - Writ applicant is a partnership firm registered with the GST and is engaged in the business of manufacturing of different types of textile fabrics - It appears that an inquiry has been initiated against the firm by the CGST Department, Surat by issuing summons under Section 70(1) of the Act, 2017 dated 20th September, 2019 - It further appears that pending the inquiry, the Department has taken two fold action - First an order in Form GST DRC-01A dated 24 th July, 2020 has been issued and secondly, an order of provisional attachment of property under Section 83 of the Act in Form GST DRC-22 has been passed - Being dissatisfied with the aforesaid action on the part of the GST Authorities, the writ applicant has come up before this Court with the present writ application.

+ Bench is not inclined to interfere with the order passed in Form GST DRC-01A dated 24 th July, 2020, referred to above.

+ However, Bench is of the view that the order of provisional attachment of the immovable property in the form of industrial unit under Section 83 of the Act is not sustainable in law.

GST - Writ applicant is a partnership firm registered with the GST and is engaged in the business of manufacturing of different types of textile fabrics - It appears that an inquiry has been initiated against the firm by the CGST Department, Surat by issuing summons under Section 70(1) of the Act, 2017 dated 30th June, 2020 - It further appears that pending the inquiry, the Department has taken two fold action - First an order in Form GST DRC-01A dated 23rd July, 2020 has been issued and secondly, an order of provisional attachment of property under Section 83 of the Act in Form GST DRC-22 has been passed - Being dissatisfied with the aforesaid action on the part of the GST Authorities, the writ applicant has come up before this Court with the present writ application.

+ Bench is not inclined to interfere with the order passed in Form GST DRC-01A dated 23rd July, 2020, referred to above.

+ However, Bench is of the view that the order of provisional attachment of the immovable properties in the form of the industrial unit and the residential premises under Section 83 of the Act is not sustainable in law.

+ At the cost of repetition, the formation of the opinion, though subjective, must be based on some credible material disclosing that it is necessary to provisionally attach the goods or the bank account for the purpose of protecting the interest of the government revenue. The statutory requirement of reasonable belief is to safeguard the citizen from vexatious proceedings. "Belief" is a mental operation of accepting a fact as true, so, without any fact, no belief can be formed. It is equally true that it is not necessary for the authority under the Act to state reasons for its belief. But if it is challenged that he had no reasons to believe, in that case, he must disclose the materials upon which his belief was formed, as it has been held by the Supreme Court in Sheonath Singh's case [AIR 1971 SC 2451] , that the Court can examine the materials to find out whether an honest and reasonable person can base his reasonable belief upon such materials although the sufficiency of the reasons for the belief cannot be investigated by the Court.

GST - Petitioner impugns an order passed by the respondent in Form GST Mov 09, whereby goods have been detained by the respondent noticing a discrepancy in the documents that ought to have accompanied the transportation of the goods - Counsel for Revenue submits that as the final order under Section 129, in Form GST Mov 09, has already been passed, the remedy of the petitioner lies in moving an appeal before the appellate authority, and if the petitioner wants a clearance of the goods and the vehicle in the meanwhile, he has to produce a bank guarantee for the amounts confirmed through the detention order - Petitioner has since furnished a bank guarantee before the respondent for enabling an expeditious clearance of the goods and the vehicle.

Held: Since a final order u/s 129(3) in Form GST Mov 09 has already been passed, writ petition is disposed of with a direction to the First Appellate Authority, before whom Ext.P12 appeal has been preferred by the petitioner, to consider and pass orders on Ext.P12 appeal within three weeks after hearing the petitioner either through a physical hearing or through video conferencing - It is made clear that Ext.P14 bank guarantee furnished before the respondent shall not be encashed till such time as orders are passed by the First Appellate Authority as directed and the order communicated to the petitioner: High Court [para 3]

GST - Petitioner had received the assessment orders under Section 62 of the GST Act, on 04.10.2019, and the returns that had to be filed within 30 days after receipt of the order for getting the benefit of setting aside the orders in terms of Section 62 of the GST Act were filed only on 21.11.2019 - Inasmuch as, admittedly, the said returns were filed more than 30 days after the receipt of the orders by the petitioner, the petitioner cannot be heard to contend that Ext.P2 series of orders ought to be set aside in terms of Section 62 of the GST Act - Writ petition is dismissed - However, recovery steps in respect of the confirmed amounts shall be kept in abeyance for a period of three weeks so as to enable the petitioner to avail appellate remedy, in the meanwhile: High Court [para 1]

GST - Section 27 of the CGST Act, 2017 - Petitioner, a casual trader, had obtained Ext.P1 registration for the period from 25.2.2020 to 31.03.2020, and during the said period, the petitioner had conducted certain events in the course of his business - Petitioner had also issued GST invoices to its clients for the services rendered - It is stated that on account of the Covid-19, the petitioner firm could not complete the entire work by 31.03.2020 and further, could not apply for an extension of the registration online for another 90 days, since it was not able to access the online portal owing to the expiry of its registration - The limited prayer in the writ petition is for a direction to the respondent to grant a short extension of the registration.

Held: No doubt, the period of extension permitted under the statute is already over, but Bench is of the view that the petitioner cannot be faulted for his inability to access the system for the purposes of seeking an extension of the registration period - Thus, by excluding the period during which the petitioner could not access the system for extension of his registration, Bench deems it appropriate to direct the respondent to extend the registration period of the petitioner for a period of two weeks so that the petitioner can, during the said period, upload the details of the invoices raised by him as also details of the input tax credit claimed by him under the GST Act - The respondent shall do the needful to facilitate the said exercise by the petitioner within the said period of two weeks - Petition disposed of: High Court [para 3]

GST - Petition has been filed seeking a declaration that Sections 69 and 132 of the CGST Act, 2017 are arbitrary, unreasonable and beyond the legislative competence of the Parliament as well as ultra vires the Constitution - Petitioner also prays that Crl.M.C. No.5853/2019 as well as Crl M.C. No.1916/2019, which have been filed by the respondents for cancellation of petitioner's bail, be adjudicated subject to the outcome of the present petition.

Held : Keeping in view the order dated 20th August, 2020 [ 2020-TIOL-1401-HC-DEL-GST ] passed by this Court in W.P(C) No.5454/2020, it is directed that no coercive action be taken against the petitioner till further orders and bail of the petitioner shall not be cancelled in the aforesaid cases - Matter is to listed along with WP(C) 5454/2020 on 18th November, 2020: High Court [para 8, 9]

GST - Petitioner contends that the alleged mis-classification of the goods cannot be a reason for detaining the consignment under Section 129 of the GST Act.

Held: If the respondents feel that there has been a mis-classification of the goods, then it is for them to prepare a report based on the physical verification done by them, get the petitioner to sign on the same after recording his objections, if any, to the findings recorded therein, and thereafter forward a copy of the said report to the Assessing Officer of the petitioner, who can consider the said report and objections at the time of finalising the assessment in relation to the petitioner - The detention of the goods in transit, therefore, cannot be justified - Ext.P7 notice quashed and the respondents directed to forthwith release the goods and vehicle: High Court [para 3]

GST - It is the case of the petitioner that though the Company filed GSTR-1 returns for the months of February, 2020 to May, 2020, due to Covid pandemic, could not generate funds to make lump sum payment of the admitted tax - Petitioner is not disputing its 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 - Respondent Revenue would point out that the provisions of the Act do not provide for the payment of the admitted amount shown in the return in instalments, and hence the relief sought for by the petitioner cannot be granted in view of the express provisions of the statute.

Held: Court in W.P.(C) No.14275/2020 [2020-TIOL-1302-HC-KERALA-GST], in similar circumstances, directed the respondent tax authority to accept the belated returns and permitted the petitioner therein to discharge the balance tax liability in equal monthly instalments - respondent is directed to accept the belated return filed by the petitioner for the period from February, 2020 to April, 2020, without insisting on payment of the admitted tax declared therein - The petitioner shall be permitted to discharge the tax liability, inclusive of any interest and late fee thereon, in equal successive monthly instalments commencing from 15th November, 2020 and culminating on 15th August, 2021 - It is made clear that if the petitioner defaults in any single instalment, the petitioner 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, in accordance with law - Petition disposed of: High Court [para 5, 6]

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Petition has been filed challenging the judgment and order dated 07th July, 2020 passed by National Anti Profiteering Authority (NAPA) = 2020-TIOL-37-NAA-GST whereby it has been held that the petitioner profiteered Rs.30,13,058 during the period 01st January, 2019 to 07th February, 2019 - Petitioner also prays for quashing the directions with regard to interest and penalties issued under the impugned order - Petitioner further prays that due to Covid-19 pandemic, the petitioner be allowed to deposit the aforesaid amount in installments.

Held: Court directs the petitioner to deposit the principal profiteered amount i.e. Rs. 25,53,454/- (Rs.30,13,058/- minus Rs. 4,59,604/-) in six equated installments commencing 02nd November, 2020 - The interest amount directed to be paid by the respondents as well as penalty proceedings are stayed till further orders - Matter to be listed on 03rd November, 2020: High Court

GST - Aggrieved by the orders passed u/s 130 of the Act of confiscation of goods as well as vehicles in which the goods were being transported, petitioner is before the High Court.

Held: It is not in dispute that the reasons that weighed with the adjudicating authority while passing the impugned orders of confiscation were not enclosed with the said orders – Bench is of the view that Exts.P4 and P4(a) orders have to be quashed on the ground that they do not reflect an application of mind by the adjudicating authority on the objection/ explanation of the assessee against the proposal for confiscation – It is well settled in law, the absence of reasons by an adjudicating authority in the order passed by him would suggest a non-application of mind by the adjudicating authority and the presumption to be drawn by the reviewing court is that the adjudicating authority did not have any reason to give - Exts.P4 and P4(a) orders shall stand quashed and the matter is remanded to the adjudicating authority for a reconsideration of the matter and to pass fresh orders after hearing the petitioner - Petitioner is directed to appear before the 1st respondent at his office on 11:00 AM on 19.10.2020 and the 1st respondent shall pass fresh orders as directed within a week thereafter: High Court [para 5, 6]

GST - Petitioner has prayed for appropriate directions to the respondent to forthwith grant refund of IGST paid on export by the petitioner from August 2017 along with appropriate interest on such refund amount - refund was not being paid for the reason that the writ petitioner had inadvertently mentioned the drawback claim under column - A instead of column - B.

Held: Similar issue had arisen and was duly dealt in the case of M/s. Amit Cotton Industries = 2019-TIOL-1443-HC-AHM-GST - said judgement has attained finality and this Court, while allowing the petition, directed for refund of the IGST paid in regard to the goods exported with 7% simple interest from the date of shipping bills till the date of actual refund - present petition also deserves to be allowed in the same terms, and is, accordingly, allowed: High Court [para 4, 6]

GST - Petition had been filed seeking refund of outstanding IGST amount of Rs.7,61,176/- and the Court had on 01/22 September 2020 passed an order in this regard and directed that the needful be done by the respondent within ten days – In pursuance thereto, the counsel for respondent Revenue has placed on record a letter dated 29th September, 2020 issued by Deputy Commissioner (Legal) stating that pending IGST refund of Rs.7,61,176/- has been scrolled out to the petitioner vide Scroll No.26339/2020 dated 29th September, 2020 - Petitioner admits that they have received pending IGST refund of Rs.7,61,176/- - Consequently, the present writ petition is disposed of as satisfied: High Court [para 4 to 6]

GST - On the premise that the petitioner had evaded payment of GST, the department issued a SCN dated 12.03.2019 - Case of the department is that the petitioner was selling packaged rice with registered trade mark, which activity, after 22.09.2017 was subject to Central as well as State GST which the petitioner had not paid - SCN is issued for recovery of unpaid GST on the seized value of rice stock as well as on the sale of such rice for the period 22.09.2017 to the date of seizure viz. 17.07.2018 - Petitioner put up a defence that some old stock was returned due to quality disputes and the same were lying in the godown on the day of the visit of the officers and that in any case, after 22.09.2017 when GST was introduced on sale of rice with packaged marking of registered trademark, they had discontinued sale of such rice - demand of GST as proposed in the SCN has been confirmed with interest and penalty - petition filed before High Court against this order.

Held: Bench is not inclined to entertain the petition on the short ground of availability of alternate remedy - In the present case, the order in original is appealable and eventually if the assessee is aggrieved by such appellate order also, further appeal would be available before the High Court - Tribunal of GST is considered the final fact finding authority against whose decision appeal would lie before the High Court on substantial question of law - In the present case, Bench does not see any reason whatsoever as to why such mechanism contained in the statute should be dismantled and the petitioner should be allowed to bypass the appeal route and approach the High Court directly in a Writ petition - In the present case, the petitioner has raised number of disputed questions of facts about the nature of its activities and the manner in which the petitioner was selling rice after 22.09.2017 - It is not possible for this Court, nor even necessary to examine these disputed questions of facts acting as a first appellate authority in a writ petition - such highly disputed questions of facts must be examined by the appellate authority and not by the Court in a writ petition - Order passed by the adjudicating authority is a speaking order and cannot be criticised by suggesting that no reasons are recorded or that it is a non-speaking order - Petition is dismissed - Appellate forum, if the petitioner files appeal within a period of two weeks, shall entertain the same on merits without raising a question of limitation: High Court [para 5, 6, 7, 9]

GST - As per the administrative instructions issued by the Central Board of Indirect Taxes and Customs, to implement the decision of the GST council it has been decided that for the period 1st July, 2017 to 31st August, 2020 field formations have been instructed to recover interest only on the net cash liability i.e. that portion of the tax that has been paid by debiting the electronic cash ledger or is payable through cash ledger - In those cases where show cause notices have been issued calling upon the noticees to make payment on gross tax liability, those have been directed to be kept in the Call Book till retrospective amendment is made in Section 50 of the Central Goods and Services Tax Act, 2017 - In view of the aforesaid decision taken by the Central Board of Indirect Taxes and Customs, grievance of the petitioner no longer survives - Writ petition is accordingly disposed of: High Court [para 5 to 7]

GST - Single Judge had merely directed the Authorities of the Department, who are the Appellants before the Bench, to do the needful forthwith to enable the Assessee to upload the requisite Form Trans 1 in order to avail the unutilized credit under the new GST regime.

Held: Against the said innocuous order, what ought to have been complied with by the Appellants herein in letter and spirit, the Appellants have chosen to file the present Writ Appeal, which, Bench is of the considered opinion is a frivolous litigation, totally unnecessary and a sheer wastage of time and money of the State - The appeal seems to have been filed by the ill-conceived advices given to the Appellants for filing the intra court Appeal in such a manner - are constrained to observe that the Revenue Department, cannot be permitted to file such frivolous appeals by way of intra court appeals - The documents clearly establish beyond doubt that the Assessee had been making bona fide efforts to upload his declaration Form Tran 1 - However, having faced technical glitches in the same, he was not only redirected to the help desk of the GST Department in the first communication dated 28 December 2017, where his request was registered as ID No.20171228912950, but the same does not appear to have been responded at all - Instead of solving the problem of their own infrastructure and technical glitches, the authorities created all kinds of problems by remaining a silent spectator and making the Assessee to run from pillar to post, against the clear intention of the Government to allow credit of the un-utilized input credit under the earlier tax regime and the input service tax and excise duty to be set off under the new GST regime, to which a switch over was made with a big aplomb on 1.7.2017 by the Central Government - The authorities should have acted in aid of this clear and unambiguous intention of the Government but, however, what they did was just the opposite of it, by not even accepting the manual submission of the said form Tran-1 by the Assessee, or by not extending the date suitably, once the portal could be accessed by the Assessee - Bench is inclined to impose cost on all the Appellants - Bench further directs that the due benefit of input credit of stocks, as on 1.7.2017, shall be given to the Assessee either by accepting the offline copy of Form Tran-1 submitted by the Assessee or by allowing him to resubmit the same on E-portal of the GSTN by providing opportunity to Assessee to do it now - Appeal of Revenue is accordingly dismissed with a token cost of Rs.15,000/- on the Appellants and which cost should be deposited with the Registrar General, within a period of four weeks from today and the same will be transferred to the Legal Services Authority of the State, for being spent in the aid of legal aid of the poor: High Court [para 12 to 15]

GST - Petitioner imports toys from China and also purchases goods from Delhi-based dealers - Superintendent (HPU), CGST and Central Excise, Madurai inspected and conducted search of the petitioner's place of business - Orders of seizure and prohibition issued on 21.08.2020 by the third respondent are put to challenge in this writ petition.

Held: In the case on hand, bare assertion has been made that the impugned proceedings were initiated based on the intelligence developed by CGST (HPU), Madurai that the petitioner is evading GST by misdeclaring the goods while importing - But not a scrap of material was produced before the court - The recitals set out in the order of seizure and the order of prohibition indicate that the formation of the requisite belief is predicated on the scrutiny of the books of account, registers and documents found during the search - This is sufficient to invalidate the entire - However, the order of prohibition has to be necessarily interfered with - The search and seizure had taken place on 21.08.2020 - By now, more than 40 days have elapsed - Even, a show cause notice has not been issued till date - The respondents have made a cool statement in their para wise comments that no allegation has been made against the petitioner on the matter under investigation merely by issuing orders of seizure and prohibition and that the matter would be decided by proper officer under CGST Act only after completion of the investigation of the case - The respondents may not be in a hurry - They can afford to wait - Officials who get their salaries in the first week of every month may not be conscious of the cost of delays in such cases - Adjudication proceedings may go on for months and that is why, the statute [s.67(6) of the Act] provides for provisional release of the detained goods - Common sense dictates that the petitioner is allowed to do business - The respondents are directed to release the goods on taking personal bond from petitioner and on payment of a sum of Rs.2.00 lakhs - Even while the order of seizure is sustained, the order of prohibition is modified in the above terms - Writ petition is partly allowed: High Court [para 9 to 11, 13]

GST - Petitioner is aggrieved by detention of her vehicle by the respondents on suspicion of tax evasion in respect of the goods carried therein - It is the case of the petitioner that the owner of the goods is now not traceable and under the said circumstances, although proceedings under Section 130 of the GST Act have been completed against the petitioner, she must be permitted to get a release of the vehicle on furnishing a security for the redemption fine that would be imposed on the vehicle in lieu of confiscation.

Held: There is force in the contention of the counsel for Revenue that in view of an order having been passed under Section 130 of GST Act, the ownership of the vehicle now stands vested with the State Government as per the statutory mandate, and if the petitioner seeks a release of the vehicle, pending appellate proceedings that she wishes to pursue against the order passed under Section 130, she would have to pay the amount demanded above by cash and she cannot be permitted to get the release of the vehicle by furnishing a Bank Guarantee for the said amount - Accordingly, petition is disposed of by directing that, if the petitioner pays the amount of Rs.4,21,200/- to the respondents, then on such payment the respondent shall forthwith release the vehicle to the petitioner: High Court [para 3]

GST - SCN and the order of cancellation of registration are assailed in the writ petition - Petitioner submits that without fixing a date for hearing and without waiting for any reply to be filed by the petitioner, the cancellation order was passed on 30.07.2020 whereby registration of the petitioners with GST department was cancelled; that although the cancellation order refers to a reply submitted by the petitioner and also about a personal hearing, but according to the petitioner neither they had submitted any reply nor were afforded any opportunity of hearing.

Held: Upon perusal of the SCN dated 20.07.2020, Bench notes that to such show cause notice no response can be given by any assessee; that the SCN is as vague as possible and does not refer to any particular facts much less point out so as to enable the noticee to give his reply - Without entering into the merits of the impugned order, Bench is convinced that the show cause notice itself cannot be sustained for the reasons already recorded and, therefore, the cancellation of registration resulting from the said show-cause notice also cannot be sustained - The impugned show cause notice dated 20.07.2020 and the impugned cancellation order dated 30.07.2020 are hereby quashed - Writ petition succeeds and is allowed: High Court [para 2, 5, 6]

GST - Anti-Profiteering - Petitioner states that they no longer wish to press their relief challenging the vires of Section 171 of the CGST Act, 2017 , of course without prejudice to their rights to raise such issues at an appropriate stage by a separate petition - And effect of this relief being not pressed would be that the transfer application moved by the department before the Supreme Court for all such matters pending in different High Courts challenging the vires of the aforesaid provision would not be applicable in the case of this petition - Counsel for Revenue agrees, therefore, Application is allowed - Counsel for Revenue further prays that the interim order dated 30th June 2020, as extended from time to time, may be vacated - Bench also feels that the disposal of the said application may entail sufficient time to deal with the matter and so, it would be appropriate that the main matter itself may be finally heard - Accordingly, Bench directs that this petition be listed for final disposal on 12th October 2020: High Court

GST - Petitioner is aggrieved by Ext.P2 order passed by the 1st respondent, rejecting an application preferred by him for condonation of delay in filing returns wherein he had raised the claim for input tax credit.

Held: It is seen from Ext.P2 order of the respondents that the refusal to consider the delay condonation application was on account of Ext.P4 order having already been passed by the assessing authority, rejecting an application for refund preferred by the petitioner - The said authority had rejected the application for refund on finding that the returns claiming the input tax credit had not been filed within time - Petitioner has prefered Ext.P5 appeal against Ext.P4 order of the Assessing Officer before the Joint Commissioner [Appeals], Ernakulam, who is suo motu impleaded as the additional 3rd respondent in the Writ Petition - Taking note of the above situation and finding that if the 1st respondent considers the delay condonation application and finds valid reasons to condone the delay in filing returns, the petitioner would be in a position to claim the input tax credit claimed in the said returns, Bench deems it appropriate to dispose the Writ Petition with the directions: High Court

GST - SCN and the order of cancellation of registration are assailed in the writ petition - Petitioner submits that without fixing a date for hearing and without waiting for any reply to be filed by the petitioner, the cancellation order was passed on 31.07.2020 whereby registration of the petitioners with GST department was cancelled; that although the cancellation order refers to a reply submitted by the petitioner and also about a personal hearing, but according to the petitioner neither they had submitted any reply nor were afforded any opportunity of hearing.

Held: Upon perusal of the SCN dated 21.07.2020, Bench notes that to such show cause notice no response can be given by any assessee; that the SCN is as vague as possible and does not refer to any particular facts much less point out so as to enable the noticee to give his reply - Without entering into the merits of the impugned order, Bench is convinced that the show cause notice itself cannot be sustained for the reasons already recorded and, therefore, the cancellation of registration resulting from the said show-cause notice also cannot be sustained - The impugned show cause notice dated 21.07.2020 and the impugned cancellation order dated 31.07.2020 are hereby quashed - Writ petition succeeds and is allowed: High Court [para 2, 5, 6]

GST - Applicant seeks extension of time limit for making payment of balance amount of Rs.44,77,778/- and also requests that the petitioner may be permitted to make payment in six monthly installments.

Held: Bench is inclined to take a very strict view of the matter because once an undertaking on oath is filed before the Court, it is expected of the person giving such undertaking to comply with the same as the non-compliance would entail the consequences of contempt - Bench could have not only rejected this Civil Application but, in the process, even the interim relief would have stood vacated - However, with a view to give one opportunity to the writ-applicant, Bench extends the time period by a further period of six weeks to enable the applicant to comply with the undertaking and deposit the amount as directed in the order dated 19th February 2020 - Furthermore, if within a period of six weeks if the requisite amount is deposited, then the interim relief granted by this Court in terms of paragraph 21E shall continue - However, if the requisite amount is not paid within a period of six weeks, then the interim relief granted earlier shall stand automatically vacated and it shall be open for the respondents to proceed further with the garnishee notices and the notice dated 3rd February 2020 - Civil Application stands disposed of: High Court

GST - Writ applicant prays for an order directing respondents to forthwith release truck along with goods - It appears from the materials on record that the writ applicant has been served with a notice dated 28th August, 2020 issued in the Form GST MOV-10 calling upon the writ applicant to show-cause as to why the goods along with the vehicle seized under Section 129 of the Act should not be confiscated under Section 130 of the Act, 2017.

Held: Final order of confiscation in Form GST MOV-11 is yet to be passed - Bench expects the writ applicant to appear before the authority and make good his case that the goods and the vehicle is not liable to be confiscated under Section 130 of the Act - Ultimately, if the show-cause notice in the Form GST MOV-10 is discharged, then that would be the end of the matter - However, in the event if final order of confiscation in the Form GST MOV-11 is passed, then the writ applicant will have the remedy of filing a statutory appeal under Section 107 of the Act - As on date, Bench is considering a limited question whether the goods and the conveyance should be ordered to be released subject to certain terms and conditions pending the confiscation proceedings - Petitioner submits that they are ready and willing to deposit Rs.6,64,000/- towards the tax and penalty and is also ready and willing to furnish Bank Guarantee of the amount of Rs.18,44,634/- being 50% of the amount of fine in lieu of confiscation of goods - Bench, therefore, directs that if these two conditions are fulfilled, then the authority concerned shall immediately release the goods and the vehicle - Confiscation proceedings shall proceed further in accordance with law and the same shall be decided by the authority concerned on its own merits - writ application stands disposed of: High Court [para 4 to 7]

GST - Applicant intends to supply, under the brand name Aashirvaad Svasti, a variant of ready to consume pouch milk fortified with Vitamins A & D and small quantities of turmeric (Haldi) and black pepper extracts - Applicant wants to know whether the said product can be classified under HSN 0401 and is exempt under Sr. no. 25 of 2/2017-CTR, hence the present application before AAR.

Held: The Explanatory Note concerning HSN 0401 mentions that the products falling under this heading may contain in addition to natural milk constituents (i.e. milk enriched in vitamins or mineral salts), small quantities of stabilising agents which serve to maintain the natural consistency of the product during transport in a liquid state as well as very small quantities of anti-oxidants or of vitamins not normally found in the product - Circular 52/26/2018-GST dated 09.08.2018 clarifies that Milk fortified with Vitamins A & D is classifiable under HSN 0401 - Applicant's product, therefore, remains classifiable under HSN 0401 even after a small quantity of curcuminoids having anti-oxidant properties are added - the product is, therefore, exempt in terms of entry no. 25 of 2/2017-CTR: AAR

GST - GOI and Govt. of Bangladesh have signed a MoU for construction of an oil pipeline from Siliguri in India to the depot of the Bangladesh Petroleum Corporation at Parbatipur in Bangladesh - Work would be monitored by MEA, GOI and which has engaged M/s Numaligarh Refinery Ltd. (NRL) as the implementation agency - NRL has awarded the applicant the contract for installation of the pipeline by the HDD method - Applicant wishes to know whether such supply is a Works Contract Service; whether the supply of service to NRL for the above construction in Bangladesh is an export and exempt under the Act and if not, the rate of tax; whether ITC is available on the inward supplies; whether the applicant is liable to pay tax on the goods and services procured locally within Bangladesh for the purpose of construction of Bangladesh portion of the pipeline on behalf of NRL etc.

Held: Location of the recipient NRL in the present context cannot be determined by applying the provisions u/s 2(14)(b) or (c) of the IGST Act - NRL being registered and resident of India, the location of the recipient of the service shall be in India in terms of s.2(14)(d) of the IGST Act - place of supply of the services, therefore, should be determined in terms of the proviso to s.12(3)(a) of the IGST Act for carrying out the construction work of immovable property - It shall be in India, being the location of the recipient - The applicant's service, therefore, will not be export of service within the meaning of s.2(6) of the Act - supply cannot also be considered as 'deemed export' - Service is a Works Contract Service - since NRL is not a Government Entity as defined in the rate notification, the concessional rate of tax in terms of Entry no. 3(iii)(c) of 11/2017-CTR is not available, hence supply of the impugned service will be taxed @18% under Entry no. 3(xii) of 11/2017-CTR - Applicant is entitled to ITC on the GST paid on procurement - since the applicant has not paid GST on purchasing goods or services in Bangladesh used in the construction of the pipeline, the question of ITC does not arise - GST is payable on the consideration receivable for the applicant's service: AAR

GST - Applicant is involved in promotion of commercial activities relating to Foundry industry and preservation of environment through its sand reclamation plants - used/waste sand of foundry industry is neither capable of being reused nor being capable of being dumped anywhere in the open due to environmental reasons viz. pollution - applicant processes such waste sand by heat treatment and various other set of small procedures and sand is thus reclaimed and made re-usable - applicant, therefore, seeks a ruling in respect of the following questions viz. whether the activity of applicant is supply of goods or supply of job work services and whether the used waste sand which is of the value Nil (based on valuation certificate by engineer) will have any impact on valuation.

Held: From a combined reading of the definition of 'job work' and the procedure of job work as prescribed u/s 143 of the Act and rule 45 of the Rules, it is the principal who will send inputs to the job worker for undertaking any treatment or process that may or may not amount to manufacture and will bring back same after completion of the job work - in the present case, the applicants have received waste sand having no commercial and market value at their plants from different foundries under cover of rule 55 challans; that the used waste sand is stored at common pool storage location for production activity and it is not possible to segregate the same as per the receipt from foundries - the chemical properties of sand are changed and the quality of sand is good for foundry use - activity undertaken by the applicant, therefore, satisfies the conditions of the term 'manufacture' u/s 2(72) of the Act - considering the quality, composition, distinct character and use of the product that emerges from the process and treatment undertaken, the finished product satisfies the definition of the term 'goods' mentioned u/s 2(52) of the Act - supplied material is only waste of the foundry industry and not a byproduct or outcome of any manufacturing process - concept of job work already exists in Central Excise where a principal manufacturer can send inputs or semi-finished goods to a job worker for further processing - applicant does not satisfy the conditions mentioned for the term 'job work' u/s 2(68) of the Act, hence the activity carried out is not covered under Job Work services and is out of scope of supply of services - jurisdictional officer has submitted an invoice dated 7th December 2019 obtained from the applicant which shows the rate of sand is Rs.2.50 per kg while the market rate of fresh sand is Rs.3.00 per kg - subject transaction is supply of goods i.e. sale of ready to use sand for the foundry industry and not supply of job work services - in the subject case, the applicant has themselves admitted that the value of input used sand is Nil and the same has been accepted by the jurisdictional office also and not disputed - It appears from the applicant's submissions that their rate of Rs.2.50 per kg on output supply of sand has taken into account the valuation of input sand at Nil value - To conclude, the activity of the applicant is supply of goods and the used waste sand of Nil value has an impact of valuation: AAR

GST - Applicant is engaged in renting of vehicles like e-bikes (Miracle) and bicycles (Move) through a technology driven mobility platform - They enter into contract/agreement with the customers with regard to usage/renting of the e-bikes and bicycles and charge based on the time of usage of such vehicles - Applicant is currently charging GST @18% [SAC 9966] in respect of the said services and seeks a ruling in respect of the following question so as to confirm their understanding of law - 'Whether renting of e-bikes and bicycles without operator can be classified under SAC 9973 as leasing or rental services without operator, Sl. no. 17(vii) of 11/2017-CTR'.

Held: Heading 9966 reads as 'Rental services of transport vehicles with or without operators' - Heading 9973 reads as 'Leasing or rental services with or without operator and includes rental or operational leasing of machinery and equipment, personal and household goods, but does not include leasing services of machinery and equipment of person and household goods on a purely financial service basis' - Further, sub headings of 9973 pertain to other goods, IPR etc. with no mention of transport goods/vehicle - Thus the applicant's services are squarely covered under SAC 9966 - Specific description is preferred to general one as per the Explanatory Notes and hence Authority concludes that the applicant's activity is classifiable under Heading 9966 - Applicant's interpretation that post 30th September 2019, renting/leasing of all goods without operator should be falling under heading 9973 is not correct and hence is not tenable under law for the reason that the so-called amendment by notification 20/2019-CTR dated 30.09.2019 [w.e.f 01.10.2019] is to the rate of GST for the services covered under SAC 9973 but not to the classification of services - Further, the amendment amends entry bearing Sl. no. 17 covering the services classified under SAC 9973 to substitute "Leasing or rental services without operator, other than (i), (ii), (iii), (iv), (vi) and (viia) above” for item (viii) in column 3, therefore, the said amendment is irrelevant to the instant case - Held, therefore, that renting of e-bikes and bicycles without operator cannot be classified under heading 9973, Sl. 17(viia) of 11/2017-CTR so as to attract s ame rate of central tax as applicable on supply of like goods involving transfer of title in goods viz. e-bikes [GST @5%] and bicycles [GST @12%]; rightly classifiable under SAC 9966 @18% GST: AAR

GST - Applicant had sought a ruling as to whether the preparation of Whole Wheat parota and Malabar parota be classified under Chapter heading 1905 attracting GST @5% - AAR in its ruling dated 22.05.2020 [2020-TIOL-114-AAR-GST] had held that the product ‘Whole Wheat Parota, Malabar Parota' is neither khakhra, plain chapatti or roti; that the impugned products are not ready to eat food preparations like khakhra, plain chapatti or roti but require further processing for human consumption as admitted by applicant and, therefore, impugned products are classifiable under Chapter Heading 2106 @18% GST, not CH 1905 as claimed and is not covered under Entry no. 99A of Schedule I to 1/2017-CTR which entry attracts GST @5% - Aggrieved, the applicant/appellant had filed an appeal before the AAAR - The department's representative at the time of hearing submitted that the DGGI, Chennai had initiated an investigation against M/s ID Fresh Food (India) Pvt. Ltd. on the issue of misclassification of ‘Parotas' under HSN 1905 9090 instead of 2106 and consequently M/s ID Fresh Food (India) Pvt. Ltd. were paying GST at the lower rate of 5% instead of 18%; that the DGGI had issued summons dated 21.06.2019 and 09.07.2019 to the applicant/appellant and statements were recorded on 02.07.2019 and 09.07.2019; that during the pendency of the investigation the applicant/appellant had applied for an Advance Ruling on the same issue of classification of Parotas on 09.10.2019 and the authority had given a ruling on 22.05.2020 that the product is classifiable under heading 2106; that since the applicant/appellant had obtained the ruling by not revealing the fact of the ongoing investigation on the same subject matter and which is violative of section 98(2) of the CGST Act, 2017; therefore, the ruling given by the lower AAR has to be held as void ab initio in terms of section 104 of the Act inasmuch as the ruling has been obtained by suppressing the facts - the appellant submitted that the investigation initiated was clearly at a preliminary stage since no SCN was issued u/s 73 or 74 of the Act for any ‘proceeding' to have commenced or decided; that there is a gap of five months for the advance ruling to be issued since the application was filed and as such there was enough time for the Department to highlight the issue before the AAR and having not done so, it cannot now be alleged that the appellant had suppressed information from the AAR to obtain the ruling; that the issue of jurisdiction could not be raised at a belated stage before the appellate authority.

Held: Authority finds that the objection raised by the department points to the very maintainability of the advance ruling in question - the term ‘proceeding' is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right and hence it necessarily embraces the requisite steps by which a judicial action is invoked - the process of investigation in tax administration is such a step towards the action of issuing a SCN which culminates in a decision -Investigation is activated when there is enough predication to show that there is an alleged tax evasion - the essence of investigation is to carry out an in-depth review of the taxpayer's records and activities to ensure that the tax due to the government is not lost in evasion, therefore, commencement of investigation in terms of s.67 of the CGST Act can be said to be the start of a ‘proceeding' to safeguard government revenue - Therefore, the Appellate Authority is of the view that the usage of the words “any proceeding” in the proviso to s.98(2) of the CGST Act, 2017 will encompass within its fold the investigation launched by the agencies - From the records, it is clearly evident that the DGGI were conducting their investigation on the issue of classification of Parotas and the eligibility of the concessional rate of tax of 5% as per Entry no. 99A, therefore, Authority is not including to accept the argument of the appellant that the classification of the disputed products was not raised specifically by DGGI - It is well settled that reason to believe that the question on which an advance ruling was sought was not pending in any proceedings in the case of the appellant under the Act is a jurisdictional fact and only on its satisfaction the lower authority acquires jurisdiction to give a ruling on the question - An objection regarding jurisdiction can be raised at any time even in appeal proceedings and the mere fact that no objection was taken before the lower authority would not by itself bestow jurisdiction to the said authority - Supreme Court in the case of Kanwar Singh Saini [ CRIMINAL APPEAL NO. 1798 of 2009 Dated 23 September 2011] has held that it is a settled position that conferment of jurisdiction is a legislative function and cannot be conferred by the consent of the petitioner; that an issue of jurisdiction can be raised at any time even in appeal or execution - Argument by the appellant that in the absence of an appeal by the department the objection cannot entertained by the appellate authorities is not tenable since there is no provision in the statute [CGST Act] for a cross appeal/cross objection to be filed before the Appellate authority in the appeal against the advance ruling - Appellate authority is inclined to take cognisance of the fact that the advance ruling has been obtained by suppression of material facts - It is trite law that when one comes for justice, one should come with clean hands and which is not the case here - The appellant is indeed guilty of having not revealed the fact of an investigation pending against them by the DGGI, Chennai Zonal Unit on the issue of classification of Parota at the time of applying for an advance Ruling - Therefore, Appellate Authority invokes the provisions of s.104 of the CGST Act, 2017 and declares the advance ruling order dated 22nd May 2020 as void ab initio - Having held that the order of the lower authority is void ab initio , the question of addressing ‘Whether the preparation of Whole Wheat parota and Malabar parota be classified under Chapter heading 1905 attracting GST @5%' does not arise - Appeal dismissed: AAAR

Exemption granted to Satellite launch services supplied by ISRO, Antrix Corporation Limited or New Space India Limited

Central Goods and Services Tax (Twelfth Amendment) Rules, 2020 issued - CGST Rules 46, 67A, 80, 138E, 142 amended

W.e.f. 1st April 2021, registered person having aggregate turnover more than Rs.5 crores to mention 6 digit HSN code in tax invoice issued

Filing of Annual return made optional for FY 2019-2020 for small taxpayers whose aggregate turnover is less than Rs.2 crores

GSTR-3B for each of the months from October 2020 to March 2021 to be furnished on or before 20th day of the month succeeding such month - for taxpayers having aggregate turnover of up to Rs.5 crores in the previous FY, 22nd day or 24th day of the month succeeding such month depending upon in which State they have their principal place of business

Registered persons having aggregate turnover of more than Rs.1.5 crore in preceding FY or current FY - GSTR-1 for each of the months from October 2020 to March 2021 to be filed by the eleventh day of the month succeeding such month

Registered persons having aggregate turnover of up to Rs.1.5 crore in preceding FY or current FY - GSTR-1 for Quarters October to December 2020 and January 2021 to March 2021 to be filed by 13th January 2021 and 13 April 2021 respectively

W.e.f. 1st April 2021, registered person having aggregate turnover more than Rs.5 crores to mention 6 digit HSN code in tax invoice issued

Partial modification to the Group of Ministers (GoM) to examine the issue of IGST Settlement