Dadhichi Iron And Steel Pvt Ltd Vs Chhattisgarh GST

GST - Petitioner is questioning the investigation initiated by the respondents and the summons issued in connection with the said investigation - respondent officers have already issued a show cause notice on 25.10.2019 proposing cancellation of registration of the petitioner for the reasons of dealing in fake invoices and subsequently, on 15.11.2019 the respondents had cancelled the registration of the petitioner - petitioner again applied for restoration of registration vide application dated 31.12.2019, which is still pending consideration before the concerned authorities - Meanwhile, the respondents issued a show cause notice dated 02.01.2020 proposing a tax demand of Rs. 11 crores for allegedly dealing with fake dealers and using of fake invoices - later, respondents conducted a raid on the premises of the petitioner including the house of few employees of the petitioner's establishment on 31.01.2020 and consequently, one of the directors Mr. Dadhichi has been arrested by the respondents in-connection with the aforesaid investigation proceedings on 04.02.2020 by the DGCGST - petitioner challenges this on the ground of the same being illegal - primary contention of the petitioner is that once when a show cause notice proceeding initiated by the respondents dated 14.11.2019 is pending before the authorities concerned under the CG SGST, the respondents could not have issued or initiated another investigation or proceeding in-respect of the same subject matter, which otherwise is not permissible under the provisions of Section 6(2)(b) - respondents referred to the documents enclosed along with the writ petition and submitted that from the perusal of the records in the course of investigation, as of now, the respondents have been able to detect the petitioner of having availed ineligible ITCs of approximately Rs. 60 crores and the said amount is likely to increase manifold in the course of further investigation taking into consideration the large number of bogus transactions that the petitioner-establishment have shown to have been made; that since the nature of offence now being investigated is entirely different than the proceedings drawn in the show cause notice or the proceedings pending before the State Authorities are concerned, it would not be hit by the provisions of Section 6(2)(b); that since the offences reflected from the transactions were made in more than one State, the respondents had all the powers for initiating a proceeding under the provisions of Section 132; that the present investigation is more in respect of the defrauding of the government revenue committed by the petitioner in contravention to the provisions of the CGST Act and the nature of offence committed by the petitioner is one which falls under the provisions of Section 132(1)(i) and in view of the provision of Section 132(5) of the said Act, the offence is also a cognizable offence and is a non-bailable offence as well; that, therefore, the petition deserves rejection.

Held: Bench notes that the records clearly reflect that the initial issuance of the show cause notice and the proceedings drawn were in respect of the intra-state transactions made by the petitioner, wherein he had used fake and bogus invoices for the purpose of availing ineligible ITC, whereas subsequent to a secret information being received and further investigation being made, particularly in the course of a raid, which was conducted at the premises of the petitioner-establishment and other related premises, it was revealed that the magnitude of the offence committed by the petitioner-establishment was far more grave and serious; that in the course of raid it is found that the petitioner had been making false and bogus transactions and has illegally availed ineligible ITC credits; that the magnitude of offence detected by now is approximately Rs.60 crores and with further investigation the amount is likely to increase manifold - Court does not find any substance in the arguments of the petitioner, when they say that the investigation and the proceedings now initiated is one, which is hit by Section 6(2)(b) of the CGST Act of 2017; that there is a clear distinction between a proceeding drawn for the demand of tax evaded by the petitioner-establishment and the investigation being conducted by the Department of the DG, GST Intelligence Wings in respect of an offence committed by an establishment by way of using bogus and fake invoices and illegally availing ITC, which the petitioner-establishment otherwise was ineligible; that the judgments cited by the petitioner are distinguishable on facts itself - writ petition thus fails and is accordingly rejected: High Court [para 13 to 16]

- Petition rejected: CHHATTISGARH HIGH COURT

2020-TIOL-520-HC-DEL-ST

Vianaar Homes Pvt Ltd vs Assistant Commissioner

ST - Petitioner seeks issuance of a writ of certiorari, for quashing the notice/letter dated 01.11.2019, issued by the respondent No.1 intimating that they propose to conduct an audit/verification of documents/records for the financial years 2014-15 to 2016-17 or for the period since last audited, "in terms of Rule 5(A) of Service Tax Rules, 1994, read with Section 174(2)(e) of the CGST Act, 2017.

Held: Prima facie , Bench is of the view that no interim relief of the nature as prayed for can be granted without calling for a reply by the respondent - Bench is also not persuaded to come to the aid of the petitioner right away for the reason that it has taken almost three months reckoned from 01.11.2019, to approach the court for relief and that too at the nick of the time - Notice issued and it is directed that the matter be listed for consideration before the roster Bench on 04.03.2020: High Court [para 6 to 8]

- Matter listed: DELHI HIGH COURT

2020-TIOL-402-CESTAT-ALL

Vedant Clearing Agency Vs CCGST

ST - The assessee is registered as a Clearing & Forwarding Agent for M/s ACC Limited and was also procuring GTA services - The assessee was held liable to pay service tax on GTA service so received, on reverse charge basis - Wherever the transportation charges are lesser than Rs 1500/- no service tax is leviable - Hence the assessee discharged its service tax liability wherever the transportation fee exceeded Rs 1500/- - Later, SCN was issued proposing to raise demand for the relevant period - The assessee claimed that the GTA services in respect of which demand had been raised, involved transportation fees lesser than Rs 1500/- - On appeal, the Commr.(A) sustained the demands on grounds that no documentary evidence was put forth by the assessee to justify its claims - Hence the present appeal.

Held: The assessee's counsel claimed that even if it were accepted that exemption of Rs 1500/- was not to be extended to the assessee for want of documentary evidence, even otherwise, the assessee is entitled to abatement provided as per Notfn No 12/2003 upto 75% - Hence, only 25% of the service tax is payable by the assessee, which is also available to it as credit - Hence the entire exercise is revenue-neutral, in which case, extended period of limitation cannot be invoked - Thus, where an assessee is entitled to credit of that tax required to be paid, the assessee is not at any loss and so no mala fide intent to evade payment of duty can be attributed to it - Hence the subject order merits being quashed: CESTAT

- Assessee's appeal allowed: ALLAHABAD CESTAT

CENTRAL EXCISE

2020-TIOL-401-CESTAT-BANG

Swastik Engineering Vs CCE, ST & C

CX - Department proceeded against the appellant by issuing show-cause notice dated 19.1.2009 alleging therein that they had availed irregular CENVAT credit of Rs.90,89,714/- during the period from January 2008 to November 2008 on the inputs viz., coils of brass, bronze and copper which was not admissible for the reason that cutting/slitting of the same into strips did not amount to manufacture and that the appellant by availing irregular CENVAT credit had contravened the provisions of CENVAT Credit Rules and further, that the CENVAT credit in question was recoverable under Rule 14 of CCR r/w s.11A of CEA along with interest - Commissioner confirmed the demand by holding that cutting and slitting of coils of brass, bronze and copper into strips does not amount to manufacture as held in the case of Faridabad Iron & Steel Traders Association - 2003-TIOL-79-HC-DEL-CX (and as upheld by the Supreme Court) - aggrieved, assessee is in appeal before CESTAT.

Held: Appellants have produced ER-1 returns for the disputed period wherein the details of CENVAT credit availed in respect of inputs and the duty paid on the final products are clearly shown - Further, Bench also finds that in total, the appellants have availed CENVAT credit to the tune of Rs.90,89,714/- during the relevant period but had paid an amount of Rs.97,41,477/- which is more than the credit availed by them - In the appellant's own case, Tribunal has vide its order dated 28.10.2009 - 2010-TIOL-1109-CESTAT-BANG held that the appellants are otherwise entitled to avail credit and pass on the credit as a trader if not as manufacturer - impugned order is not sustainable in law and, therefore, same is set aside and appeal is allowed: CESTAT [para 6, 6.1, 6.2, 7]

- Appeal allowed: BANGALORE CESTAT

India-Mauritius DTAA - Distribution income earned by foreign resident entity cannot be taxed in India if its Indian advertiser does not constitute an agency PE: HC

TP - Company which outsources all its activities can be adopted as comparable to company engaged in providing IT-enabled service: ITAT

I-T - Payments made for FTS is not liable for disallowances for failure to deduct TDS, then consequent reimbursement of expenses in relation to provision of technical services cannot be disallowed: ITAT

TIOL CORPLAWS

SARFAESI - Resorting to criminal complaint against bank officials after dismissal of appeals/petition by DRAT & HC amounts to intimidatory tactic which is abuse of process of law: SC Larger Bench

Trade Marks - When plaintiffs successfully proved that defendants are indulging in large scale infringement of plaintiffs' copyright, where defendants are aggregating content from various news services across world, including plaintiffs, it is entitled to a decree in its favour, along with cost: HC

Competition Act - In absence of documentary evidence in respect of allegation of cartelization by opposite parties while submitting bids for tender, Commission is unable to draw prima facie case against them and will not order for DG investigation: CCI