Sutherland Global Services Pvt Ltd Vs ACCGST & CE

GST - Petition filed praying for issuance of a Writ of Certiorari to quash the letter issued by AC of GST and CEX directing respondents to enable the petitioner to avail and utilise the credit pertaining to Education Cess, Secondary and Higher Education Cess and Krishi Kalyan Cess - Request to carry forward and utilise the credit was rejected vide impugned order dated 09.02.2018 on the ground that credit could be set-off only against specific duties and taxes enumerated in the Explanation to Section 140(1) of the CGST Act r/w rule 117 of the CGST Rules; that since the explanation does not cover cesses such as EC, SHE Cess and KKC, the same could not be carried forward.

Held: Issue can be clinched in favour of the petitioners for two reasons - impugned order proceeds on the basis that the petitioner has no entitlement to claim set off of credit and thus denies it - however, such credit continues to be available till such time it is expressly stated to have lapsed - lapsing of credit is not a concept unknown to the respondent Revenue and there are multiple instances where the Board/Government provides for specified credits to lapse mentioning the exact point in time when the lapsing would commence and/or stipulating other conditions in this regard - in the present case, there is no notification/circular/instruction that has expressly provided that the credit accumulated would lapse - not only this, the credit has been carried forward manually and reflected in the returns from time to time and such accumulated credits stare the Revenue in the face - having permitted the assessee to carry forward the credit, the authorities cannot now take a stand that such credit is unavailable for use - provisions of sub-section (1) r/w sub-section (8) of section 140 and the Explanation thereunder make it more than clear that all available credit as on the date of transition would be available to an assessee for set off - Instructions issued by the CBEC dated 07.12.2015 reveal a policy decision not to allow utilisation of accumulated credit of EC and SHEC but nowhere states that the credit has lapsed - Board only says that the cesses have been phased out and since there is no new liability to pay these cesses, no vested right can be said to exist in relation to the past accumulated credit in the light of rule 3(7)(b) of CCR - Board could have very well stated even at that juncture that the credit lapsed, but did not choose to do so - even after the decision of the Division Bench in Cellular Operators Association of India 2018-TIOL-310-HC-DEL-ST  there has been no instructions/notification/circular from the Board till date to state that the accumulated credit has lapsed - Thus, though there were a good many occasions that presented themselves to the Board to clearly stipulate that the accumulated credit had lapsed, this was not done - petitioner had been permitted to carry forward the cesses in question without any move whatsoever to state that the credits could not be so carried forward, since they had lapsed - not having done so, the provisions of s.140 should be given full effect and meaning - In strategising and conducting its business, the assessee would  certainly have taken into account that credit was available for set-off against output tax liability - the impugned action of the assessing authority in rejecting the claim has, however, the consequence of insertion of a Rule/Regulation to this effect, which is impermissible - A fiscal statute has to be read and understood as seen - the interpretation should be on the basis of what is apparent, apart from being strict - if one were to apply these propositions to the case on hand, the provisions of section 140(1) provide for transfer of all credits and levies, barring those set out in the proviso - There are only three conditions/embargoes that bar the transfer of accumulated credit - language of section 140(1) and (8) both make it clear that an assessee is entitled to transition of “the amount of CENVAT credit carried forward in the return relating to the period ending with the date preceding the appointed date” and this, in the present case, includes accumulated credit of EC, SHEC and KKC - Revenue has not made out any bar for the transitioning of EC, SHEC and KKC into the GST regime and the petitioner satisfies all conditions, both under sub-section (1) and (8) of section 140 - embargo placed by rule 3(7)(b) of CCR is long gone with the introduction of GST and certainly the powers-that-be are conscious of these factors in drafting the new legislation and the specific provision s.140 - At the risk of repetition, accumulated credit cannot be said to have been wiped out unless there is a specific order under which it lapses - section 28 of the CGST Amendment Act, 2018 proposes the amendment and significantly, explanation (3) clarifies that the expression ‘eligible duties and taxes' excludes any cess not specified in Explanation (1) or (2) has not been notified - In view of the above, impugned order is set aside and the writ petition is allowed: High Court     [para 22, 23, 24, 35, 37, 41, 42, 44, 47, 48, 49, 50]

- Petition Allowed: MADRAS HIGH COURT

2019-TIOL-2515-HC-MP-GST

Shailesh Rajpal Vs Commissioner

GST - Offences punishable under Sections 132(1)(d) of Central Goods and Service Tax Act, 2017 and Sections 471 and 120-B of the IPC - Petitioner has been arresed on 17/09/2019 and by this application filed u/s 439 of CrPC seeks bail - Case of the Revenue is that Turnover of the applicant in respect of his company M/s Sai Sun Outsourcing Services Private Limited during the period July 2017 to March 2018 was Rs. 51,57,01,823/- but he disclosed only Rs. 10,80,11,848/- in his GST returns - Similarly, during the financial year, 2018-19 turnover of the applicant was Rs. 174,26,61,455/- but he has declared only Rs.79,01,25,667/- in his GST returns - Furthermore, the applicant has completely suppressed the turnover of his proprietary firm M/s Sai Sun and has neither filed any GST return nor made any payment - Inasmuch as the Applicant by way of suppressing turnover pocketed the GST amount collected by him from their clients and the total recoverable amount from the applicant and one of his firm M/s Sai Sun Outsourcing Services Private Limited is Rs. 62,08,48,907/-; that exact GST liability of the company M/s Sai Sun Outsourcing Services Private Limited and M/s Sai Sun Private Limited has to be determined for the period 2019-20 and the investigation is currently on; that some other companies namely M/s Seven Eye IT Solutions Private Limited, M/s Happiest Job Consultants Limited etc. were also found to be operating from the same premises and liability of service tax, and GST of these firms, also needs to be determined; that the applicant has a history of forgery and submission of fake documents to the public authorities and, therefore, if the applicant is released on bail, he may affect the investigation.

Held: Looking to the alleged huge tax evasion by the applicant and the contention of the counsel of the respondent and keeping in view that the investigation is going on and apprehensions of applicant tampering with the evidence cannot be ruled out, the Court is not inclined to grant bail to the applicant at this stage - bail application is rejected: High Court [para 6, 7]

- Application rejected: MADHYA PRADESH HIGH COURT

ST - Construction of Residential Complex service - The dispute relates to the valuation of the services - The assessee is collecting charges from their customers under the category of "Interest Free Maintenance Security" (IFMS) and "External Development Charges" (EDC) - Revenue by entertaining a view that such charges collected by assessee from that owners would form value of the services provided by them raised the demand against them by way of issuance of SCN - The said amount collected by assessee from the flat owners is towards the security for the purpose of maintenance of the building and to cover the eventual default made by any of the flat owners for payment of monthly maintenance charges - As per the agreement with the flat owners, the said amount is liable to be refunded to them within the period of Six months from the date of termination of the said agreement - The Adjudicating Authority observed that the genuineness of the said term is very much doubted inasmuch as the assessee had not produced any evidence to show that the said IFMS was ever refunded to anyone - Tribunal fail to understand the said reasoning of the Adjudicating Authority - The amount is refundable in case of termination of the ownership agreement and if no such termination has taken place till date, the amount would not be refunded - As long as the provisions for refund of the said amount in the agreement itself is there, it has to be considered that the said amount is refundable and was towards security deposits and was not for the purpose of providing any services, so as to levy tax on the same - Commissioner (A) for the subsequent period in assessee's own case has dropped the demand vide its O-I-A - Inasmuch as the issue stands decided, no reason found to take a different view - Accordingly, demand on the said account is set aside, alongwith setting aside of penalty: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

ST - Despite the due service of notices i.e. more than thrice, the assessee have not marked the presence either in person or through representative - This is the sufficient ground to form an opinion that the assessee is no more interested in pursuing the present appeals and the continuous absence of assessee amount to nonprosecution on their part - Therefore, no good reason found for adjourning the matters in further - Appeals are hereby dismissed for want of non-prosecution - Support drawn from the case law of Supreme Court in case of Ram Siromani Tripathi & Ors - 2019-TIOL-63-SC-MISC-LB : CESTAT

- Appeal dismissed: DELHI CESTAT

2019-TIOL-2505-HC-DEL-CUS

Munjal Showa Ltd Vs UoI

Cus - The writ petition has been preferred against O-I-O - Much has been argued out by petitioners on merits as well as on the applicability of exemption notification and attention is also drawn to the fact that since for the last seven years, they are importing goods and are classified as stated in the memo of this writ petition - Be that as it may, court is not inclined to adjudicate on the merits of matter as impugned order is an appealable order and a statutory appeal is provided under Section 128 of Customs Act, 1962 before the appellate forum - Hence, there is no substance in this writ petition and the same is, therefore dismissed on the ground of availability of efficacious alternative remedy: HC

- Writ petition dismissed: DELHI HIGH COURT

2019-TIOL-3172-CESTAT-ALL

Pr.CC Vs R V Fashions