Shameer Chinganam Poyil Vs Assistant State Tax Officer

GST - The present writ petition assails an order detaining a consignment of goods being transported at the instance of the petitioner - The goods were detained on grounds that at time of detention of vehicle, the original invoice was not produced by the driver of the vehicle - The petitioner claimed that the original copy of the invoice was shown to the check post authorities in the electronic format and so there was no justification for the detention.

Held - There is merit in the Govt pleader's contention that absence of an invoice can be valid grounds for detention u/s 129 of the CGST Act - Hence the detention of the goods merits being sustained - However, if the petitioner furnishes the bank guarantee for the tax and penalty amount, the authorities concerned would release the consignment and the vehicle and then proceed to adjudication: HC

- Writ petition disposed of: KERALA HIGH COURT  

Hardcastle Restaurants Pvt Ltd Vs UoI

GST - The present petition assailed a notification which fixed the tax rate for the restaurant sector at 2.5% without ITC - Attention was drawn to the Explanation inserted in the notification, the effect of which was that for the first time such rate was made mandatory, the option to pay 18% GST with full ITC was removed for the restaurant sector - The petitioner claimed that the explanation took away the right of the restaurant sector to avail option of paying higher rate of tax and availing ITC - It was also submitted that the notification was issued in exercise of powers conferred u/s 9(1), 11(1), 15(5) and 16(1) of the CGST Act - It was pointed out that Section 16(1) provides that every registered person shall be entitled to ITC on any supply of goods or services or both which are used or intended to be used in the course or furtherance of business - Such amount would be credited to the electronic credit ledger of such person - The petitioner claimed that in the present case, the provision restricting the petitioner's right is introduced by virtue of a notification and is not prescribed by the rules - It was also claimed that as Section 16(1) provided for imposing a condition or restriction, it is impermissible to deny right to avail credit thereunder - Hence the petitioner claimed that the Explanation is arbitrary inasmuch as in case of other services, there is option to pay a higher rate of tax and avail ITC, but in the present case, no such option was made available, in effect leading to total denial of ITC.

Held - Considering such submission, notice be issued to the parties, returnable on December 11, 2019 - Meanwhile, the respondent-Union is directed to consider and report before this court as to what amount could be taken to secure to the petitioners the option to discharge GST either at 18% with full ITC or at 5% without ITC: HC

- Notice issued: GUJARAT HIGH COURT 

Meena Anil Jain Vs State Of UP

GST - During a relevant period, a truck transporting some goods was intercepted and detained by the Revenue - It was alleged by the Revenue that the transaction was bogus as there was neither a genuine transport agency nor a genuine buyer mentioned in the documents accompanying the goods - The present writ was filed by the owner of the truck, who claimed to not be involved in the entire transaction - The petitioner also claimed waiver of the bar of alternate remedy as the Tribunal had yet not been constituted.

Held - The matter be listed along with Writ Tax No 942 of 2018 - The present writ is provisionally entertained on account of non-constitution of the Tribunal - Regarding the interim relief, the order confiscating the truck shall remain in abeyance, conditional upon the petitioner depositing an amount equal to the tax on the goods found loaded on the truck, within two weeks' time - The amount so deposited shall abide by the final orders passed in this petition: HC

- Writ petition disposed of: ALLAHABAD HIGH COURT

Sakshi Motors Vs UoI

GST - The petitioner-company filed the present writ on account of its inability of GST TRAN-1 - The petitioner herein sought directions be imposed similar to those rendered in WP(C) No. 1738 of 2019.

Held - In the case referred to by the petitioner, the Board had issued a letter dated 13.11.2018 to all concerned clarifying that if non-submission of requisite declaration is not traceable due to any technical glitch, then re-opening of the portal for filing the requiste declaration or allowing manual declaration of requisite form may not be in consonance with the framework of the GST Act - Hence the court therein opined that if a provisions existed for electronic filing of returns and if because of certain technical glitches, uploading could not be done in time, the individual or firm could not be put in a disadvantageous position - Hence the court directed the authorities concerned to examine the petitioner's grievance and permit filing of returns electronically or manually so that the petitioner not be deprived of ITC which is otherwise due to the petitioner - Following such findings rendered in this judgment, the present petition is disposed of with directions to re-open the web portals enabling the petitioner to upload Form GST TRAN-1 electronically or allow the petitioner to file such return manually: HC

- Writ petition disposed of: GAUHATI HIGH COURT

2019-TIOL-56-NAA-GST

Director General of Anti-profiteering Vs Horizon Projects Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act - Applicant alleges profiteering by the respondent in respect of purchase of flat in the Respondent's project 'Runwal My City'; that the benefit of Input Tax Credit (ITC) has not been passed on to him by the respondent by way of commensurate reduction in the price of the flat purchased - DGAP in its report has noted that the accurate quantum of ITC would be finally determined and the benefit would be passed on to the recipients at the time of giving possession might be correct but the profiteering, if any, had to be established at a point of time in terms of rule 129(6) of the Rules and, therefore, the ITC available to the respondent and the taxable amount received by him from the above applicant and the other recipients post implementation of GST had to be taken into account for determining the benefit of ITC required to be passed on - DGAP also noted that the ITC pertaining to the unsold units was outside the scope of investigation and the respondent was required to recalibrate the selling price of such units to be sold to the prospective buyers by considering the net benefit of additional ITC available to him post-GST - DGAP has found that the ITC as a percentage of the total turnover that was available to the respondent during the pre-GST period (April 2016 to June 2017) was 1.76% and during the post-GST period (July 2017 to June 2018) it was 5.27% and which clearly confirmed that post-GST the respondent had benefited from additional input tax credit to the tune of 3.51% of the taxable turnover - revised calculation was made based on the documents made available by the respondent and in terms of which the ITC as a percentage of the total turnover was 1.76% in the pre-GST period and during the post-GST period it was 5.11% and thus the respondent had benefited from additional ITC to the tune of 3.35% of the turnover; that the profiteered amount computed based on the aforesaid ratio comes to Rs.3,15,96,095/- which included GST @12%/8% on the base profiteered amount of Rs.2,86,44,653/-; that in respect of the applicant no.1, the inclusive amount comes to Rs.98,808/- including GST on the base amount of Rs.89,418/- and which was the profiteered amount; that the profiteered amount so computed in totality is in respect of 495 home buyers whereas the respondent had booked 537 flats till 30.06.2018; that 42 customers had not paid any consideration during the post-period and, therefore, the profiteering in respect of these 42 units should be calculated when the consideration thereof would be received; that the construction service had been supplied in the State of Maharashtra only - respondent claims that he had passed on the benefit of Rs.3,00,76,576/- to the homebuyers who had booked their flats up to 30.06.2018 - DGAP claimed that the additional amount of Rs.60,81,718/- should have been passed in respect of 333 cases including the applicant; that in respect of 162 flat buyers the respondent had profiteered an amount of Rs.1,22,79,124/- but the respondent claimed to have passed on the benefit of Rs.1,68,45,255/- to them which was in excess of the benefit that was required to be passed but the same cannot be allowed to be set off - the respondent submitted that the additional amount required to be passed on to the customers was only Rs.15,20,519/- (3,15,96,095 - 3,00,75,576/-) and not Rs.60,81,718/- as computed by the DGAP - nonetheless, DGAP did not agree with the submission of the respondent.

Held: Mathematical methodology for determination of the profiteered amount has to be applied on case to case basis depending upon the facts of each case and no fixed formula can be set for calculating the same as the fact of each case are different - mathematical methodology applied in the case where the rate of tax has been reduced and ITC is disallowed cannot be applied in the case where the rate of tax has been reduced and ITC allowed - similarly, the mathematical ideology applied in the case of Fast Moving Consumers Goods (FMCG) cannot be applied in the case of construction service - even the methodology applied in two cases of construction service may vary on account of the period taken for execution of the project, the area sold and the turnover realised - It would be appropriate to mention that the National Anti-Profiteering Authority has power to 'determine' the methodology and not to 'prescribe' it - therefore, no set prescription can be laid down while computing profiteering - Passing on the benefit of ITC which is not being paid by the respondent from this own pocket also does not amount to violation of his fundamental right to carry out his business - there should be no extra liability on the respondent on account of the GST charged by the suppliers as the said supplies were also enjoying the benefit of ITC - Both the Central as well as the State government had no intention of collecting this additional GST as they had forfeited their share of tax revenue in favour of the flat buyers to provide them accommodation at affordable prices and by forcing the buyers to pay the additional GST the respondent has not only defeated the intention of the government but has also acted against the interest of the house buyers - GST credit passed through price negotiation can certainly not be taken as benefit of ITC  - the amount of turnover of Rs.82,78,03,642/- is taken to be correct as it is based on the returns filed by the respondent and the ratio of CENVAT/ITC to turnover mentioned as 5.27% is taken to be correct and the percentage of additional benefit of ITC availed by the respondent post-GST is held to be 3.51% as per the DGAP report dated 10.12.2018 instead of 3.35% as mentioned in their revised report dated 11.03.2019 - accordingly, the computation of benefit of ITC as per the revised report indicates that the applicant is entitled to an amount of Rs.15,336/- as benefit of ITC apart from what has been already passed on to him and which has been duly verified by DGAP - in respect of the other flat buyers, the balance amount of Rs.3,19,49,275/- is directed to be passed without taking into account the benefit of ITC which has been claimed to have have been passed on; interest payable @18% on the said amount - said amounts to be paid within a period of 3 months failing which the same shall be recovered by the Commissioner concerned - penalty is required to be imposed for the offence committed u/s 171(3A) of the Act for which reason SCN is to be issued  - SCN dated 12.12.2018 issued to respondent proposing penalty u/s 29 and 122-127 is withdrawn - Commissioner to monitor this order and ensure that the amount profiteered by respondent, as ordered by the authority is passed on to all eligible buyers: NAA

- Application allowed: NAPA

Pawadha Canteen Vs CCT

Whether where adverse material found during survey shows substantial undisclosed purchase & sale of goods, then Commercial Department is permitted to reject dealers books of account - YES: HC

- Assessee's revision dismissed: ALLAHABAD HIGH COURT

2019-TIOL-3327-CESTAT-KOL

Etrans Solutions Pvt Ltd Vs CCGST & CE

ST - The assessee is engaged in the business of providing vehicle tracking system through smart card/swipe card and Global Positioning System (GPS) and is accordingly registered under Business Support services - They are also engaged in some trading activity of GPS units procured from suppliers and sold to customers for tracking the movement of vehicles on real time basis - In terms of the order received from customers, assessee provides the services of vehicle tracking system and also sells the GPS units to different customers - They maintains common balance sheet for their manufacturing as well as trading activity - The short issue that arises for consideration is whether assessee is required to pay 6% of total sale value of the goods traded by them in terms of Rule 6(3)(i) when they paid the actual credit attributed to the quantum trading sale in terms of Rule 6(3A) along with interest following the option available under Rule 6(3)(ii) - It is an admitted fact that the assessee did not maintain separate accounts for input services used in or in relation to the provision of taxable service as well as exempt service i.e. trading of goods - Therefore, two options were available to them, i.e., either to pay 6% of value of the exempted service or pay an amount equal to the credit attributable to the input services used in or in relation to exempt services subject to the provisions of Sub-rule (3A) - When the mistake was pointed out, the assessee reversed the proportionate common credit taken on input services used in the provision of exempt services (trading of goods) along with interest thereon - Therefore, Rule 6(3) (i) will not have any application, when a credit is taken wrongly and the same is reversed along with interest as it tantamounts to not taking of the credit at all - The facts of the present case are squarely covered by the decision of co-ordinate Bench of Tribunal in M/s Mercedes Benz India (P) Ltd - 2015-TIOL-1550-CESTAT-MUM - Accordingly, the demand confirmed by lower appellate authority has no legs and therefore the same cannot be sustained - The impugned order is set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT

2019-TIOL-3326-CESTAT-ALL

CCE & ST Vs Executive Engineer

ST - The assessee is engaged in providing 'works contract services' to various departments of Govt. of Uttar Pradesh in terms of the contract entered between the two - The services provided by them were exempt in terms of Entry No.12 of Notfn 25/2012-ST - However, subsequently vide Notfn 06/2015-ST, effective from 01.04.2015 such mega exemption was omitted and the services provided to the govt. authorities became taxable - Accordingly, the assessee started paying Service Tax - Subsequently, the said exemption was again restored vide Notfn 09/2016-ST by inserting entry 12A in mega Notification - Further, section 112 was inserted in the Act, vide Finance Act, 2016 - In terms of said section 112, assessee applied for the refunds under section 11B of CEA, 1944 as made applicable to Service Tax matters vide section 83 of Finance Act - The said refund claims so filed by assessee were rejected by Deputy Commissioner by observing that they failed to produce documentary evidences to show that they had not passed on the incidence of Service Tax - As is seen from the findings of Commissioner(A), he has observed that the contracts with the Government were executed when the services were exempted in terms of various Sl.Nos. of Entry 12 of the Mega Notification - Admittedly, in such a scenario the question of inclusion of any tax in the contract value would not arise - He has further observed that the assessee was not raising any Bills for the work executed by them and only the contract amounts were being paid to them - No infirmity found in the findings of Commissioner(A): CESTAT

- Appeals rejected: ALLAHABAD CESTAT