Gulshan Dhingra Vs Directorate General Of Goods And Service Tax

GST - Petitioners are brothers and are facing criminal proceedings on the basis of a Complaint registered by the Director General of Goods and Services Tax Intelligence alleging evasion of GST - Petitioners were granted bail by the court concerned – Counsel refers to the proceedings dated 20.03.2020 of the ACJM, Gurugram, to point out that the complaint against the two accused relates to matters outside the jurisdiction of the Gurugram court and, therefore, the proceedings should be transferred to a competent court at Delhi; that all the referable 16 firms/companies, their Bank Accounts and Registered Offices are in Delhi and that is how, the Gurugram court gave a prima facie view on the jurisdictional aspect, in its order dated 20.03.2020.

Held: Notice to be issued returnable in three weeks - Petitioners to service notice to the respondents: Supreme Court

- Notice issued: SUPREME COURT OF INDIA

2020-TIOL-1560-HC-KERALA-GST

Pit Stop Vs ASTO

GST - The petitioner company purchased 120 car tyres in the relevant period, from a consignor in New Delhi - The goods were unloaded at the business place of the assessee at Aluva, which was also the place of destination as per the invoice - Subsequently, the consignment was detained, the vehicle driver was questioned and Form GST MOV-1 was issued - The petitioner filed the present petition, stating that proceedings had stalled, with no inspection being conducted and no order being passed - The petitioner claimed to have complied with the applicable provisions of the CGST and SGST Act - It claimed that it would face immense losses, should the goods be detained based upon an oral order.

Held - The petitioner has not been issued a detention order so far - Hence in order to meet the interests of justice, the petitioner can have the goods and vehicle released, subject to payment of bank guarantee for the amount in question - Upon payment of the same, the Revenue would complete and conclude the adjudication proceedings in a weeks' time: HC

- Writ petition disposed of: KERALA HIGH COURT

2020-TIOL-1559-HC-AHM-GST

Kanuji Shambhuji Thakor Vs State Of Gujarat

GST - The petitioner was transporting certain perishable goods, whereupon such consignment was intercepted and detained by the Revenue - The goods were later confiscated and penalty was imposed on the petitioner - The petitioner approached the writ court, seeking that the order confiscating the goods be quashed and the penalty imposed be set aside - The petitioner also sought that the goods detained were perishable in nature and so sought for their provisional release.

Held - The petitioner should file statutory appeal u/s 107 against the order of confiscation passed u/s 130 of the Act - In respect of the application for provisional release of the goods, such an application can be made only after filing appeal u/s 107 of te Act - If an appeal is filed, then the authority concerned is to immediately take up the application for provisional release of the goods and conveyance u/s 67(6) - Petition is disposed of with such observations: HC

2020-TIOL-1558-HC-AHM-GST

Kalpsutra Gujarat Vs UoI

GST - The petitioner sought that the Rule 86A of the CGST Rules be struck down as being ultra vires of Section 16 of the CGST Act, since it enabled the Revenue to block the Input Tax Credit at no fault of the registered recipient - The petitioner also sought that directions be issued to the Revenue to allowed utilisation of ITC, until it was proven that the supplier did not pay tax on the relevant items.

Held - Considering the submissions of both parties, notice is issued to the Revenue in respect of the reliefs being claimed by the petitioner - Comments sought from the Revenue on as to whether omission on part of third party in filing GSTR 3B for the relevant period, is sufficient grounds to block ITC availed by the purchaser of the relevant goods, in this case, the petitioner herein: HC

- Notice issued: GUJARAT HIGH COURT

2020-TIOL-1557-HC-AHM-GST

Jay Goga Traders Vs State Of Gujarat

GST - The petitioner was transporting certain perishable goods, whereupon such consignment was intercepted and detained by the Revenue - The goods were later confiscated and penalty was imposed on the petitioner - The petitioner approached the writ court, seeking that the order confiscating the goods be quashed and the penalty imposed be set aside - The petitioner also sought that the goods detained were perishable in nature and so sought for their provisional release.

Held - The petitioner should file statutory appeal u/s 107 against the order of confiscation passed u/s 130 of the Act - In respect of the application for provisional release of the goods, such an application can be made only after filing appeal u/s 107 of te Act - If an appeal is filed, then the authority concerned is to immediately take up the application for provisional release of the goods and conveyance u/s 67(6) - Petition is disposed of with such observations: HC

- Writ petition disposed of: GUJARAT HIGH COURT

2020-TIOL-1556-HC-AHM-GST

JSK Sons Vs State Of Gujarat

GST - Petitioner no.2 is a proprietor of Petitioner no.1 firm - It is the case of the petitioners that their bank accounts have been provisionally attached without considering the provisions of section 83 of the GGST Act, as in the case of the petitioners no proceedings are pending under any of the sections mentioned therein.

Held: [para 6, 8, 10 to 13]

+ Prima facie, it appears that the petitioners have issued very large number of EWay bills within a short period of time between their associate concern without movement of goods like cement, iron, tiles, brass etc. From the report, submitted to the Enforcement department of the respondent authorities, it is also revealed that the petitioners were involved in carrying out the transactions on paper without actual physical movement of goods. It is also pertinent to note that petitioner no.2 has shown total ignorance with regard to the transactions which were reported to be fictitious, more particularly, when the petitioner no.2 is the owner of the petitioner no.1 firm having GST No.

+ Prima facie, there is reasonable apprehension that the petitioners may default in the ultimate collection of the demand that is likely to be raised on completion of the assessment. It appears that prima facie there is sufficient material on record to justify the satisfaction in view of denial of the petitioner no. 2 with regard to the transactions carried out by the petitioner no.1 which is a proprietary concern of petitioner no.2.

+ It also emerges from the materials on record that this is a fit case to invoke the provisions of section 83 of the GGST Act as apparently the petitioners seem to have been indulging in bogus billing causing loss to the Revenue and as such it cannot be said that passing of the impugned order under section 83 of the GGST Act is for recovery of dues but it is only for the purpose of protecting the Government revenue as the petitioner has failed to produce on record to show as to the capacity to pay the tax dues which may be levied upon the petitioners on completion of the assessment proceedings.

+ It is also not in dispute that as per the returns filed by the petitioner no.1, there is an outward supply of Rs.10,68,24,458/- and generation of EWay bill amounting to Rs.8,44,26,683/- of which the petitioner no.2 has no knowledge. Petitioner no.2 has also replied to question no.17 in his statement that he is not aware about email ID used for the purpose of obtaining GST number. Petitioner no.2 has raised his hands in ignorance with regard to the benefits received by him out of the transactions carried out in the account of petitioner no.1.

+ Petitioner no.2 has also stated that the entire transactions were carried out by one Sandipbhai Maganbhai Chaniyara and petitioner no.2 was not aware about such transactions. In such circumstances, it cannot be said that the respondent authorities have no reason to form an opinion as required by section 83 of the GGST Act for passing the impugned order of provisional attachment.

+ It is clear that once an opinion is formed by the competent authority as stipulated in section 83 that there is a reasonable apprehension that the petitioners may default in ultimate collection of demand that is likely to be raised on completion of the assessment, then it was incumbent upon the respondent authorities to exercise powers under section 83 of the GGST Act.

+ It has prima facie emerged from the material on the record that the petitioners were involved in bogus billing to defraud the Revenue by generating EWay bills without physical movement of the goods. Therefore, the power exercised by the respondent authorities cannot be said to be without jurisdiction.

+ As prima facie it appears from the record that the petitioners were involved in the activity of bogus billing and generation of EWay bill without physical movement of the goods, it cannot be said that the impugned orders passed for provisional attachment are used as tool to harass the petitioners or it would have irreversible detrimental effect on the business of the petitioners. In the facts of the case, prima facie it appears that the petitioners have misused the provisions of the GGST Act by generating EWay bills so as to claim input tax credit by indulging in bogus billing without physical movement of the goods from remote villages in Jamnagar district.

+ No interference is required to be made in exercise of powers under section 83 of the GGST Act by the respondent authorities while exercising extraordinary powers under Articles 226 and 227 of the Constitution of India.

+ The petition, being devoid of any merit, is summarily dismissed.

- Petition dismissed: GUJARAT HIGH COURT

2020-TIOL-258-AAR-GST

Mother Earch Environ Tech Pvt Ltd

GST - Landfill pit is a combination of earth work and other capital goods as given in the brief submitted - It cannot solely or in itself be identified as apparatus, equipment and machinery fixed to earth by foundation - it is also not a structural support for anything - Therefore, Authority does not agree with the applicant's view that the landfilling pit falls under Plant and Machinery - Civil structure involves engineering work at both levels i.e. above and below the ground - Applicant has performed civil work to create the landfill pits below the ground and, therefore, it is a civil structure - On a case to case basis, the Orissa High Court in Safari Retreats Pvt. Ltd. [2019-TIOL-1088-HC-ORISSA-GST ] has granted the credit of input tax paid on goods/services used for construction - since the appeal against the High Court order (supra) is pending before the Supreme Court [2019-TIOL-489-SC-GST ], Authority refrains from commenting on the eligibility of the ITC in the instant case: AAR

- Application disposed of: AAR

2020-TIOL-257-AAR-GST

Gnanaganga Gruha Nirmana Sahakara Sangha Niyamitha

GST - Activity of maintaining the facilities at the housing society layout from the funds collected from members of the society is a service attracting GST - contribution collected from members either annually or once in ten years towards sourcing of goods or service from the third person for common use of its member, must be divided by recipients of such service in the society and if the said amount per member does not exceed rupees seven thousand five hundred in that tax period suchamount is exempted from tax as per Entry no. 77(c) of 12/2017-CTR and if the amount exceeds Rs.7500/-, then the entireamount is taxable: AAR

GST - Water charges collected separately is exempt from levy of GST in view of Entry no. 99 of 2/2017-CTR: AAR

GST - Applicant isutilising the endowment amount which is collected from members who are selling their ‘sites' -such contribution is not for providing any maintenance service but for providing No-objection certificates (NOC) and other clearances for the site sellers - this amount when collected amounts to a service and applicant is liable to pay GST at the rate of 18% as such services are unclassified services covered under Entry no. 35 of 11/2017-CTR - Exemption under Entry 77(c) of 12/2017-CTR is not available - Concluded that Amount collected as endowment fund from member who is selling the site and ceases to be a member is liable to tax @18% under GST: AAR

- Application disposed of: AAR

2020-TIOL-256-AAR-GST

Patrator

GST - Applicant submitted that, "ALOHA" a business brand is operated by EXPLORE KNOWLEDGE RESOURCES LLP, Rajkot - It charges Royalty from its franchisees for using its brand name and sells its product under its brand through its franchisees - The applicant M/s PATRATOR further submitted that they, "PATRATOR" is a partnership firm, unregistered under the GST Act and one of the franchisees of EXPLORE KNOWLEDGE RESOURCES LLP, Rajkot - Further submitted that they sell their products and provide services under the brand name of "ALOHA" to customers - They sell products like books, stationery etc. without having profit margin under the brand name of "ALOHA" - They offer various courses to students Mental Arithmetic, English Smart under the brand name of "ALOHA" - All receipts of product sale or services are being taken in the name of their partnership firm "PATRATOR" and deposit the fees in their partnership firm bank account - At the end of every fifteen days, they pay royalty to their franchiser, KNOWLEDGE RESOURCES LLP, Rajkot based on fees they collect from their customers - Applicant has submitted that total yearly receipt of their partnership firms PATRATOR does not exceeds Rs. 20 lacs in any financial year; however the annual receipt of the franchiser, KNOWLEDGE RESOURCES LLP, Rajkot exceeds Rs. 20 lacs - Applicant, therefore, seeks to know as to whether they are required to take GSTIN and are required to pay tax under the GST Act.

Held: From a reading of the clauses of the agreement, it is crystal clear that the applicant is authorized to supply only the goods and services under the brand name of "ALOHA" and cannot supply the other goods and services - Hence applicant is supplying the goods and service on behalf of the taxable person i.e. Xplore Knowledge Resources LLP - Accordingly, the applicant is covered under the Sr. No. (vii) of the Section 24 of CGST Act, 2017 - Therefore, applicant is liable for taking GST registration - Consequently, they are required to pay GST on supply of goods and services: AAR

- Application disposed of: AAR

2020-TIOL-255-AAR-GST

Sayaji Industries Ltd

GST - 'Maize Bran' manufactured and supplied by applicant is covered under Entry Sr.No.103A of Notification No. 1/2017-Central Tax (Rate) on which rate of GST chargeable is 5% (2.5% SGST + 2.5% CGST): AAR

- Application disposed of: AAR

2020-TIOL-254-AAR-GST

Shivani Scientific Industries Pvt Ltd

GST - Micro manipulator is a device, which is used to physically interact with a sample under a microscope, where a level of precision of movement is necessary that cannot be achieved by the unaided human hand - In the absence of a microscope, a micro manipulator cannot function i.e. a micro manipulator is dependent on the microscope to do the function that it is created for i.e. micro manipulation – From the procedure of micro manipulation described, it appears that the same can be compared to surgery - It can, therefore, be concluded that the said product would be rightly classifiable as 'Surgical microscope' (Tariff item No.90118000) under the First Schedule to the Customs Tariff Act, 1975 covered under the Sub-heading "Compound optical microscopes, including those for photomicrography, cine photomicrography or micro projection" - 'Micro manipulator system' manufactured and supplied by applicant for use in Assisted Reproductive Technology Procedure (IVF) is classifiable under Tariff item no.9011 of the First Schedule to the Customs Tariff Act, 1975 and not under HSN 9018 as claimed by applicant - The said product is covered under Entry No.184 of Schedule-IV of Notification No. 01/2017-Central Tax (Rate) (upto 14.11.2017) and under Entry No.411F of Schedule-III of Notification No. 01/2017-Central Tax (Rate) (w.e.f. 15.11.2017) - Applicability of the rate of GST on the said product would be 28% (14% SGST + 14% CGST) upto 14.11.2017 and 18% GST (9% SGST + 9% CGST) with effect from 15.11.2017: AAR

- Application disposed of: AAR

2020-TIOL-253-AAR-GST

Dipakkumar Ramjibhai Patel

GST - 'Fly Ash Bricks' manufactured and supplied by applicant is classifiable under Tariff item No.6815 9910 - Applicability of GST rate on the said product would be 12% GST (6% SGST + 6% CGST) upto 14.11.2017 and 18% GST (9% SGST + 9% CGST) with effect from 15.11.2017 as per Notification No: 01/2017-Central Tax(Rate) - 'Fly Ash Blocks' manufactured and supplied by applicant is classifiable under Tariff item No.6815 9990 and the GST rate on the said product would be 12% (6% SGST + 6% CGST) upto 31.12.2018 and 5% GST (2.5% SGST + 2.5% CGST) with effect from 01.01.2019 as per Notification No:01/2017-Central Tax(Rate): AAR

- Application disposed of: AAR

2020-TIOL-252-AAR-GST

V2 Realty

GST - Applicant has received part Building Used Permission for the commercial Shops of Ground and First Floor and not for the Residential Flat - Accordingly, Authority holds that since no Building used permission has been issued by the competent authority in respect of residential flat and since no residential unit has been occupied by prospective buyer, supply of residential flats shall be treated as supply of service in terms Para 5(b) of Schedule-II of the CGST Act, 2017 - Selling of residential flats after date of completion certificate of commercial shops or after first occupancy in building is not an exempt supply - The manner of reversal of ITC on expenses incurred up to date of completion certificate shops has been provided under Sections 16 and 17 of CGST Act, 2017 read with Rules 42 and 43 of CGST Rules, 2017 read with Notification No. 16/2019-CT dated 29.03.2019 - The manner of claiming Input Tax Credit on expenses incurred after date of completion certificate of commercial shops has been provided under Sections 16 and 17 of CGST Act, 2017 read with Rules 42 and 43 of CGST Rules, 2017 read with Notification No. 16/2019-CT dated 29.03.2019: AAR

- Application disposed of: AAR

AAF India Pvt Ltd Vs KBR Industries

Whether mere notice or demand to recover money is sufficient as a cause of action – NO: HC 

- Assessee's appeal dismissed: KARNATAKA HIGH COURT

2020-TIOL-1551-HC-MAD-VAT

SHV Lpg India Pvt Ltd Vs Deputy Commissioner

Whether the AO is not obligated to initiate proceedings against an assessee, based solely on reports or proposals of higher authorities such as the Enforcement Wing or ISIC authorities & the AO is empowered to deviate from such missives - YES: HC

- Case remanded: MADRAS HIGH COURT

SERVICE TAX

Mehrangarh Museum Trust Vs CCE  

ST - The assessee, a Museum Trust charges entry fees/admission charges, camera ticket charges, audio tour charges, guide fee, and elevator fee from visitors to the museum - For the period 01.07.2012 to 31.03.2014, vide SCN invoking the extended period of limitation, service tax was demanded on the gross receipts by assessee from the visitors in respect of charges/fee collected from the visitors to the Museum/Fort - It is admitted fact that at the enquiry stage, assessee did not dispute the liability of service tax on guide fees, audio tour charges, elevator fee and parking charges and deposited the service tax amount of Rs. 20,55,657/- alongwith interest on such charges received up to February 2014 - But assessee disputed as exempt, and did not deposit service tax on museum fee/admission charges and camera ticket - In view of the Notfn 9/2017-ST, extending the benefit of exemption on services by way of admission fee to museum w.e.f. 01.07.2012, the demand vide the impugned order against the assessee does not survive - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2020-TIOL-1391-CESTAT-DEL

Shri Nath Tiles Pvt Ltd Vs CCE & ST

ST - The assessee is engaged in cutting and polishing of marble slab - For such purpose, they obtained marble block from the mines - For transportation of such blocks to their manufacturing and processing unit, assessee engaged individual transporters (truck owners) for transporting of the marble block on agreed freight - Such individual transporters do not issue any consignment note - For payment of freight, a debit voucher is prepared by assessee for accounting and acknowledgement purposes - SCN was issued to assessee as it appeared to Revenue that the assessee being corporate body 'private limited company', are liable to pay service tax on reverse charge basis in terms of Section 65 (105) (zzp) read with Section 65(50b) of the Finance Act read with Rule 2(1)(d)(i)(B) of STR, 1994 under the reverse charge mechanism - The Commissioner (A) have misconceived the provisions of law as he has considered the provision for payment of tax under reverse charge mechanism as the charging section - Admittedly, charging section does not provide for levy of service tax in case of GTA service, where no consignment note is issued - The impugned order is set aside: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

CCE & ST Vs Prem Jain Ispat Udyog Pvt Ltd

CX - The assessee is engaged in manufacture of MS Ingots and bars - The Department noticed that the assessee had received investment subsidy in form of VAT-37B entitlement certificate sanctioned to them by Rajasthan Government under Rajasthan Investment Promotion Policy (RIPP), 2003 - The Department have issued a SCN holding the view that as per the provision of Section 4 (3) (d), the retention of sales tax collected by assessee equivalent to VAT-37B challan, amounts to retention of the sales tax by the assessee, which was collected from the customers and therefore an additional consideration have flown to them and therefore this amount should have been included in assessable value for payment of central excise duty on their finished goods - The matter is no longer res-integra as the issue has already been decided by Tribunal in case of Shree Cement Limited, wherein it is held that there is no justification for inclusion in assessable value, the VAT amounts paid by assessee using VAT 37B Challans - Since the facts of the case at hand are similar to the one decided by mentioned final order of this Tribunal, following the same, it is held that order of Commissioner (A) is legally correct and the same is upheld: CESTAT

- Appeal dismissed: DELHI CESTAT

2020-TIOL-1393-CESTAT-DEL

Golden Chocolate Pvt Ltd Vs CCGST

CX - Two separate show cause notices were served upon the appellant, one proposing the confiscation of recovered finished goods, unfinished goods, raw material and Indian Currency amounting to Rs.4,10,000/- holding the same to be the sale proceeds of clandestinely removed goods - Evasion of Central Excise duty with recovery thereof was proposed vide a subsequent separate show cause notice - Both the show cause notices have alleged different offences to have been committed by the appellants, which are punishable under different provisions of the law - Penalty for both the offences irrespective of the fact that they are arising out of the same transaction of acts cannot be called as double jeopardy – no illegality in the impugned order, hence the same is upheld and the appeal is dismissed: CESTAT [para 7, 8]

- Appeal dismissed: DELHI CESTAT

CUSTOMS

2020-TIOL-1394-CESTAT-MUM

AS Vasan & Sons Vs Pr CC

Cus - This appeal of assessee, holder of custom broker license lies against impugned order ordering continued suspension in exercise of powers under regulation no. 16(2) of CBLR, 2018 - Based on report that the assessee was involved in over-valuation of 'rough diamonds/precious stones' imported by M/s Lush Exim Pvt Ltd, the license was suspended vide order dated 27th August 2019 subject to 'post-decisional hearing' which, upon confirmation by impugned order is now under challenge - For lapses in import and export in which breach of obligations prescribed in CBLR, 2018, the licensing authority is empowered, under regulation no. 14 of CBLR, 2018, to revoke the license and/or to impose appropriate penalties, subject to compliance with procedure laid down in regulation no. 17 - This process could take as long as six months, as per prescribed timelines, for investigations, issue of notice comprising specific charges of violation, conduct of enquiry in hearing, furnishing of a report of enquiry, response of the broker and culminating in issue of speaking order by the licensing authority - In the meanwhile, the continued validity of licence would entitle the broker to carry on normal activities which may, in specific circumstances, be prejudicial to public interest and, regulation no. 16 of CBLR, 2018 permits temporary validation subject to certain basic procedural prescriptions - The gap of more than a year since the alleged overvaluation was attempted, and the continued operation of assessee as a customs broker since then, does indeed raise doubts about the urgency for suspension - The impugned order has not recorded any justification for curtailing the broking operations of assessee - The Regulations do not into envisage suspension to be retribution for alleged wrongdoing for which separate provisions exist and which should already have been initiated if licensing authority is serious about compliance with the timelines prescribed therein - After having awaited the issue of SCN by investigating agency, elapse of further time, which, in any case, would be less than the demonstrated gap between the commencement of investigations and issue of SCN, cannot be claimed to be detrimental to public interest - This has been the consistent view of High Court of Bombay and of Tribunal - No justifiable reason found to deviate from such - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2020-TIOL-1396-CESTAT-KOL

MS Glass Traders Pvt Ltd Vs CC

Cus - The assessee is engaged in business of trading in glass products and sold the consignment bearing Bill of Entry filed by M/s Trade Development Combine to the said importer on High seas - Departmental officers inspected the consignment, which was provisionally cleared on payment of duty, calculated in terms of contemporaneous imports and submission of bank guarantee - Accordingly, SCN was issued to the Importer, the assessee and the CHA - The case of assessee is that since the very beginning, they had been seeking cross-examination of CHA, as the entire case of Department was built on the basis of statement of CHA, which was denied to them - However, it is the Department's contention that the assessee failed to appear on scheduled date of personal hearing - The process of cross-examination is not a mere empty formality but a part of an assessee's right to put forth a proper defence - The reasoning given by Department for denying the cross-examination to the assessee, that they failed to appear on appointed date is not acceptable in as much as the assessee had made the request for providing cross-examination at the adjudication stage - The Gujarat High Court in Manek Chemicals Pvt. Ltd. 2015-TIOL-2871-HC-AHM-CX has held that cross-examination is an integral part of the Principles of Natural Justice - Therefore, by denying an opportunity of cross-examination to the assessee, the Adjudicating Authority has acted in violation of the Principles of Natural Justice - Matter is remanded to the Adjudicating Authority to allow the assessee an opportunity for cross examination of CHA and pass an order after considering the evidence on record: CESTAT

- Matter remanded: KOLKATA CESTAT