UoI Vs Tax Bar Association

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

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

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

2020-TIOL-328-HC-AHM-GST

IPCA Laboratories Ltd Vs State of Gujarat

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

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

- Notice issued: GUJARAT HIGH COURT

2020-TIOL-327-HC-AHM-GST

A and S Metal Vs State of Gujarat

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

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

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-326-HC-AHM-GST

Anopsinh Kiritsinh Sarvaiya Vs State of Gujarat

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

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

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-325-HC-AHM-GST

Dangar Bhagwanbhai Mithabhai Vs State of Gujarat

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

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

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-324-HC-AHM-GST

Nav Nirman Con Specialties Pvt Ltd Vs UoI

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

- Notice issued: GUJARAT HIGH COURT

2020-TIOL-10-AAAR-GST

Vaishnavi Splendour Homeowners Welfare Association

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

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

- Appeal dismissed: AAAR

Mohammad Saleem Vs CTT

Trade Tax - By means of the present revision, the revisionist has challenged the order of the Trade Tax Tribunal dated 7.11.2007 whereby the order of the first appellant authority dated 15.2.2003 has been set aside and the order of the Assessing Authority has been restored - the main ground which has been canvassed by the revisionist is that entire assessment proceedings were conducted ex parte - the survey was conducted totally contrary to the statutory provisions and even during the assessment no opportunity of hearing was provided and the assessment was passed ex parte.

Held: From perusal of the order dated 7.11.2007 passed by the Trade Tax Tribunal, while setting-aside the order of the first appellate authority, they have not considered the case of the revisionist on merit, but only held that the action of the first appellate authority in allowing the appeal of the revisionist only on the ground that for the earlier two years his entire income was below the tax limit and on this basis the assessment order for the year 2000-01 is set-aside is not acceptable - the Tribunal has even failed to record any reason as to what was the infirmity in the order of the first appellate authority which persuaded them to set-aside the order of the first appellate authority 15.2.2003, no deliberations or consideration of any legal provisions has been made by the tribunal which renders the said order bad and is liable to be set-aside by this Court alone - the Tribunal, while hearing the second appeal, is mandated to give adequate reasons for their findings which may indicate that the case has been properly dealt and there is due application of mind while passing any judgment in the matter - the Tribunal has failed to record any reasons for allowing the appeal of the department in setting-aside the order of the first appellant authority which was passed in favour of the revisionist - an order without valid reasons cannot be sustained - to give reasons is the rule of natural justice - non recording of reasons, non consideration of admissible evidence or consideration of inadmissible evidence renders the order to be unsustainable - providing of reasons in orders is of essence in judicial proceedings - it is the reasoning which ultimately culminates into final decision which may be subject to examination of the appellate or other higher Courts - it is not only desirable but, in view of the consistent position of law, mandatory for the Court to pass orders while recording reasons in support thereof, however, brief they may be - whether an argument was rejected validly or otherwise, reasoning of the order alone can show - to evaluate the submissions is obligation of the Court and to know the reasons for rejection of its contention is a legitimate expectation on the part of the litigant - it is the duty cast upon the Appellate Authority that even if it is in agreement with the view taken by the first Appellate Authority, it should give its own reasons/findings which may indicate that there has been application of mind and also the consideration of grounds raised in the appeal by the revisionist - in absence of reasons it is difficult to come to a conclusion that there has been any application of mind by the Tribunal and such an order in the opinion of the Court cannot be sustained and deserves to the set aside - in light of the above, the order dated 7.11.2007 passed by the Trade Tax Tribunal is set-side and the matter is remanded to the Trade Tax Tribunal to be decided afresh in accordance with law after affording an opportunity of hearing to the revisionist - the Trade Tax Tribunal is directed to decide the revision preferred by the revisionist within a period of six months - with the aforesaid direction the revision is allowed : HIGH COURT [para 8, 9, 10, 11, 14, 15, 19, 20, 21, 22]

- Revision allowed: ALLAHABAD HIGH COURT

2020-TIOL-323-HC-ALL-ST

Mohit Murari Vs CBEC & GST

ST - By this writ petition, a challenge has been made to the order dated 7.8.2019 passed by the Assistant Commissioner, CGST, Division-III, Lucknow apart from the order dated 20.3.2018 and other orders passed earlier to it - it includes challenge to recovery certificate dated 20.3.2019.

Held: In the impugned order, detailed reasons for dismissal of the application has been given - the petitioner failed to produce the relevant documents and to appear in the adjudication proceedings to make out a case - the Tribunal did not find mistake apparent on the face of record to rectify it - in the appeal, all the issues can be taken up at threshold appropriately while the jurisdiction of the authority under section 74 of the Act of 1994 would be limited - it cannot rewrite the order which otherwise can be in an appeal - rectification can be when there is a defect apparent on the face of the record and to be rectified - the Court does not find any defect of nature which could have been rectified by entertaining the application under section 74 of the Act of 1994 - accordingly, no reason found to cause interference in the order passed by the Competent Authority, dismissing the application under section 74 of the Act of 1994 - the writ petition is dismissed: High Court

- Petition dismissed: ALLAHABAD HIGH COURT

2020-TIOL-270-CESTAT-KOL

Saha Road Lines Pvt Ltd Vs CGST & CE

ST - The assessee is engaged in providing storage and warehousing services - It paid service tax and filed ST-3 returns - An SCN was issued, proposing to raise duty demand - On adjudication, the demand was partly dropped - The assessee did not contest the part of the demand and paid the same - Regarding storage and warehousing services, the assessee claimed that such demand was raised on account of storage and warehousing of aricultural produce, which is outside the ambit for levy of service tax u/s 65(87) of the Finance Act 1994 - Regarding renting of godown, the assessee claimed that the demand is not sustainable since renting became a taxable service u/s 65(90a) of the Finance Act 1994 only w.e.f. 01.06.2007 and the present appeal pertains to period prior to this stage - Regarding demand for Handling of Agricultural Produce, the assessee claimed that the demand is under Cargo Handling Service, which is inapplicable to agricultural product as per Notfn No 10/2002.

Held - It is seen that the present appeal involves determining several facts, which would require perusal of several agreements and some of the corresponding invoices - There is no dispute that near Renting Godown Space was not taxable during the period or that storage for warehousing agricultural produce was not taxable - Hence the matter warrants remand to the original authority for examination of the same: CESTAT

- Case remanded: KOLKATA CESTAT

CENTRAL EXCISE

CST Vs Reliance Telecom Ltd

CX - There is a default on the part of the Department as objections were not removed - secondly, the Department refused to pay even a single farthing to the junior Counsel who was engaged in August, 2017 to file a notice of motion for restoration - the Court fails to understand as to how the Department expects the Advocate to file a notice of motion for restoration to get the appeal restored and to remove the office objections in the appeal, without receiving single farthing from the Department even for out of pocket expenses - considering the correspondence enclosed to the affidavit in support, there is a complete justification for the said advocate who refused to file the notice of motion without receiving requisite amount as mentioned in the bill submitted by him - there is a delay at every stage on the part of the Department - instead of some responsible Officer of the Department coming to the Court and accepting the responsibility, the Assistant Commissioner who has filed the affidavit in support has tried to put the entire blame on the panel Advocate, in particular the panel Advocate who was appointed in August, 2017 - the Department claims that there are stakes involved in the appeal - thus, there is complete negligence on the part of the department in prosecuting the appeal - the first notice of motion for restoration was withdrawn on the ground that there has been no explanation for the delay of 690 days - in the present second notice of motion, not only that the delay is not explained, but false and frivolous allegations have been made against a junior Counsel appointed by the Department - therefore, no case is made out for condonation of delay and for restoration of the appeal - ultimately the present notice of motion is not filed through the second advocate but through the third advocate - considering the conduct of the applicant which is reflected from the findings recorded above, no case is made out for restoration of appeal - the Notice of Motion is, accordingly, dismissed - considering the manner in which this matter is handled by the Department, the Court directs the Prothonotary and Senior Master to forward a copy of this order to the Central Board of Indirect Taxes and Customs so that appropriate remedial action can be taken by the Department - the Court is constrained to observe that if the Department refuses to pay even out of pocket expenses to the advocate, many of such appeals are bound to be dismissed for non-prosecution: HIGH COURT [para 9, 10, 11, 12, 13]

- Notion of Motion dismissed: BOMBAY HIGH COURT

2020-TIOL-321-HC-KERALA-CX

FCI Oen Connectors Ltd Vs CCE, C & ST

CX - Issue is - Whether the appellant is liable to reverse the cenvat credit availed with respect to the inputs removed as such to a unit situated in the Special Economic Zone (SEZ) by using Form No.ARE-I, under rule 3(5) of the Cenvat Credit Rules, 2004 [CCR]

Held: The appellant has contended that in terms of rule 6(6) of CCR, the liability for reversal of the credit, envisaged under rule 3(5) of the CCR will not apply in this case because the inputs have been cleared to a unit in the SEZ through the bond executed - therefore, the demand for reversal cannot be sustained - in CBEC Circular No.29/D6-CVS, dated 27.12.2006, which pertains to implementation of the SEZ Act, 2005, it is provided that, in the light of provisions contained under section 2(m) and 51 of the Act, the supplies from DTA to a unit in the SEZ for authorized operations inside the SEZ, may be treated as in the nature of exports - the Court takes note of the definition of 'export' provided under the SEZ Act and also the exemptions provided therein under section 26(c) - since the legislature had intentionally included section 51 to give an overriding effect to the SEZ Act, wherever it is inconsistent with any other law for the time being in force, the exemptions provided under section 26(3) cannot be denied to a transfer of inputs from the DTA to a unit in the SEZ - the position remains clarified through the CBEC Circular No.1001/8/2015-CX dated 28.4.2015 - hence the appellant needs to be held as entitled for the cenvat credit and the demand for reversal of the credit availed along with interest and penalty, with respect to the inputs removed as such to a unit situated in the SEZ, cannot be sustained - hence the question of law framed is found in favour of the appellant and against the revenue - consequently the appeals are allowed and the impugned orders of the Appellate Tribunal is hereby set aside: HIGH COURT [para 8, 9, 12, 13]

- Appeals allowed: KERALA HIGH COURT

2020-TIOL-269-CESTAT-MUM  

Jamshri Ranjitsinghji Spinning And Weaving Mills Company Ltd Vs CCE

CX - Tribunal, while remanding the matter to the Commissioner (Appeals), directed him to consider the benefit of MODVAT Credit and export benefit admissible to them - In the remand proceedings, the Commissioner (Appeals), though allowed MODVAT benefit relating to the process of bleaching and dyeing, but denied credit to the process of printing, observing that no further process thereafter being carried out, hence the Appellants are not eligible – no substance found in the said observation inasmuch as on going through the annexure to the show cause notice, Bench finds that the demand has been calculated alleging that the Appellant had failed to discharge the duty at each stage of manufacture i.e. bleaching, dyeing and printing - In other words, while proposing to recover duty, the process of printing was also considered as a process of manufacture, therefore, denying credit holding that the process of printing does not amount to manufacture, is contrary to the very basis of show cause-cum-demand notice, hence, cannot be sustained - MODVAT Credit of Rs.34,84,249/- is admissible to the Appellant: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

TP - Automatic determination of ALP on non-verification by TPO is illegal where value of international transaction exceeds Rs 5 crore: ITAT

I-T - TDS not deducted on expenses of barefoot rentals when offshore oil exploration services restricted to 10% u/s 44B: ITAT

TIOL CORPLAWS

Trademark - Expression of 'Actionable claim or Enforceable right in a court' in GST exemption notification are wide enough to encompass action as well as a defence against trademark infringement action: HC

CCI - OPs can be said to be abusing their dominant position by charging higher price than actual base fare for sale of e-tickets in contravention of Section 4 of Act: CCI