2020-TIOL-176-SC-GST-LB

Skill Lotto Solutions Pvt Ltd Vs UoI

GST - Tax on lottery - Writ petition cannot be said to be not maintainable under Article 32 - It is well settled that with regard to taxing policy of the legislature, the Courts have very limited role to play - Bench does not agree with the submission that Parliament has exceeded its jurisdiction in including actionable claims in the definition of "goods" under Section 2(52) of the CGST Act, 2017 - Inclusion of actionable claim in definition "goods" as given in Section 2(52) of Central Goods and Services Tax Act, 2017 is not contrary to the legal meaning of goods and is neither illegal nor unconstitutional - There is no hostile discrimination in taxing the lottery, betting and gambling and not taxing other actionable claims - no violation of Article 14 in Item No. 6 of Schedule III of the Act, 2017 - Service Tax Circular dated 14.02.2007 has no relevance or application after the 2017 enactment - While determining the taxable value of supply, the prize money is not to be excluded for the purpose of levy of GST - When the levy of GST, determination of taxable value are governed by the Parliamentary Act in this country, legislative scheme of other countries may not be relevant - Issue which has been raised has to be answered by looking into the statutory provisions of the Act, 2017 and the Rules framed therein which govern the field - Petitioner is not entitled to reliefs as claimed - Petition dismissed subject to liberty to challenge the notifications dated 21.02.2020/02.03.2020 (challenging the rate of levy tax uniformly at 28%) separately in appropriate proceedings: Supreme Court Larger Bench [para 12, 16, 17, 46, 57, 58, 61, 62, 63, 66, 68, 71 to 76, 78 to 83]

Petition dismissed

Facts: The petitioner, an authorized agent, for sale and distribution of lotteries organized by State of Punjab has filed this writ petition impugning the definition of ‘goods' under Section 2(52) of Central Goods and Services Tax Act, 2017 and consequential notifications to the extent it levies tax on lotteries. The petitioner seeks declaration that the levy of tax on lottery is discriminatory and violative of Articles 14, 19(1)(g), 301 and 304 of the Constitution of India.

Held:

Following are the questions which arise for consideration in this writ petition:-

(I) Whether the writ petition is not maintainable under Article 32 of the Constitution of India since the writ petition relates to lottery, which is res extra commercium and the petitioner cannot claim protection under Article 19(1)(g)?

+ The writ petition alleging the violation of Article 14 specially with respect to a parliamentary Act can very well be entertained under Article 32. With regard to the matter of lottery itself, this Court had entertained a writ petition earlier under Article 32.

+ On the grounds, which have been raised in the writ petition, the writ petition cannot be said to be not maintainable under Article 32 and the preliminary objection made that the writ petition cannot be entertained under Article 32 and is overruled.

(II) Whether the inclusion of actionable claim in the definition of goods as given in Section 2(52) of Central Goods and Services Tax Act, 2017 is contrary to the legal meaning of goods and unconstitutional?

(III) Whether the Constitution Bench judgment of this Court in Sunrise Associates (2006-TIOL-4O-SC-CT-LB) in paragraphs 33, 40, 43 and 48 of the judgment has laid down as the proposition of law that lottery is an actionable claim or the observations made in the judgment were only an obiter dicta and not declaration of law?

+ Bench is of the view that definition of goods under Section 2(52) of the Act, 2017 does not violate any constitutional provision nor it is in conflict with the definition of goods given under Article 366(12). Article 366 clause(12) as observed contains an inclusive definition and the definition given in Section 2(52) of Act, 2017 is not in conflict with definition given in Article 366(12). As noted above the Parliament by t he Constitution(One Hundred and First Amendment) Act, 2016 inserted Article 246A. a special provision with respect to goods and services tax.

+ The Parliament was fully empowered to make laws with respect to goods and services tax. Article 246A begins with non obstante clause that is "Notwithstanding anything contained in Articles 246 and 254", Which confers very wide power to make laws. The power to make laws as conferred by Article 246A fully empowers the Parliament to make laws with respect to goods and services tax and expansive definition of goods given in Section 2(52) cannot be said to be not in accord with the constitutional provisions.

+ In view of what has been laid down by the Constitution Bench, as above, there has to be a rational connection between the item taxed but it is well settled that with regard to taxing policy of the legislature, the Courts have very limited role to play.

+ Under Article 246A, notwithstanding anything contained in Articles 246 and 254, Parliament has power to make laws with respect to goods and services tax. Article 246A is a special provision with regard to goods and services tax w.e.f. 16.09.2016, which special power has to be liberally construed empowering the Parliament to make laws with respect to goods and services tax.

+ The Constitution Bench of this Court in Sunrise Associates (supra) has held that actionable claims are includible in the definition of goods and had actionable claims were not includible there was no need for excluding them. The Constitution Bench held "were actionable claims, etc., not otherwise includible in the definition of "goods", there was no need for excluding them. In other words, actionable claims are "goods" but not for the purpose of Sales Tax Acts and but for this statutory exclusion, an actionable claim would be "goods" or the subject-matter of ownership".

+ In view of what has been said above by the Constitution Bench, the submission of the petitioner that actionable claims have been artificially included in the definition of goods cannot be accepted. The Constitution Bench has clearly laid down that actionable claims are goods. Bench does not agree with the submission that Parliament has exceeded its jurisdiction in including actionable claims in the definition of "goods" under Section 2(52).

Answer No. II

++ The inclusion of actionable claim in definition "goods" as given in Section 2(52) of Central Goods and Services Tax Act, 2017 is not contrary to the legal meaning of goods and is neither illegal nor unconstitutional.

Answer No. III

++ The Constitution Bench judgment of this Court in Sunrise Associates has laid down that lottery is an actionable claim as proposition of law. The observation cannot be said to be obiter dicta .

(IV) Whether exclusion of lottery, betting and gambling from Item No.6 Schedule III of Central Goods and Services Tax Act, 2017 is hostile discrimination and violative of Article 14 of the Constitution of India?

+ Another limb of attack is on the ground of hostile discrimination while taxing lottery, betting and gambling and excluding other actionable claims. Reference is made to Item No.6 of Schedule III of Act, 2017. Schedule III begins with heading "activities or transactions which shall be treated neither as supply of goods nor supply of services. Item No.6 of Schedule III is as follows:- "Item No.6 - Actionable claims other than lottery, betting and gambling"

+ The question to be answered is as to whether there is any rational reason for taking out only three actionable claims, i.e., lottery, betting and gambling while leaving other actionable claims from tax net.

+ Whether there is any rational basis for taking out only these three actionable claims is a question to be answered, whether the legislature has created a hostile discrimination by taxing only these three whereas leaving other actionable claims out of the tax net.

+ Even before enforcement of the Constitution of India, there were several legislations by different States regulating lottery, betting and gambling.

+ In a later decision, Union of India and Ors. Vs. Martin Lottery Agencies Limited, (2009) 12 SCC 209 , this Court had occasion to consider levy of service tax on the lottery tickets. This Court had held that law as it stands today recognises lottery to be gambling, which is res extra commercium .

+ Lottery, betting and gambling are well known concepts and have been in practice in this country since before independence and were regulated and taxed by different legislations. When Act, 2017 defines the goods to include actionable claims and included only three categories of actionable claims, i.e., lottery, betting and gambling for purposes of levy of GST, it cannot be said that there was no rationale for including these three actionable claims for tax purposes. Regulation including taxation in one or other form on the activities namely lottery, betting and gambling has been in existence since last several decades. When the Parliament has included above three for purpose of imposing GST and not taxed other actionable claims, it cannot be said that there is no rationale or reason for taxing above three and leaving others.

+ It is a duty of the State to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life. The Constitution Bench in State of Bombay Vs. R.M.D. Chamarbaugwala and Anr. has clearly stated that Constitution makers who set up an ideal welfare State have never intended to elevate betting and gambling on the level of country's trade or business or commerce. In this country, the aforesaid were never accorded recognition of trade, business or commerce and were always regulated and taxing the lottery, gambling and betting was with the objective as noted by the Constitution Bench in the case of State of Bombay Vs. R.M.D. Chamarbaugwala and Anr. , we, thus, do not accept the submission of the petitioner that there is any hostile discrimination in taxing the lottery, betting and gambling and not taxing other actionable claims. The rationale to tax the aforesaid is easily comprehensible as noted above. Hence, we do not find any violation of Article 14 in Item No. 6 of Schedule III of the Act, 2017.

(V) Whether while determining the face value of the lottery tickets for levy of GST, prize money is to be excluded for purposes of levy of GST?

+ The petitioner's contention is that price money should be abated from the face value of the lottery ticket for levy of GST. The prices are paid to the winner of the lottery ticket by the distributer/agent. It has been submitted that in the earlier regime of service tax also for the purposes of computing service tax the value of service tax was taken into account as the total face value of the ticket sold minus the total cost of the ticket and the prize money paid by the distributor. Further, service tax was levied at a miniscule rate of 0.82% and 1.2% as compared to the exorbitant rate of 28% which is being charged now. The question to be answered is that while determining the face value of the ticket for levy of tax the price money of the ticket is to be excluded. The reliance has also been placed on the circular dated 14.02.2007 which provided that the value of taxable service shall be taken into account at the total face value of the ticket sold minus (a) the total cost of the ticket paid by the distributor to the State Government and (b) price money paid by the distributer.

+ Section 15 of the Act deals with value of taxable supply. The Rules have been framed, namely, the Central Goods and Services Tax Rules, 2017 in which Rules by notification dated 23.01.2018, Rule 31A has been inserted dealing with value of supply in case of lottery, betting, gambling and horse racing.

+ Rule 31A has now been amended vide notification dated 02.03.2020 by which following sub-rule (2) has been substituted:

"Sub-Rule (2). The value of supply of lottery shall be deemed to be 100/128 of the face value of ticket or of the price as notified in the Official Gazette by the Organising State, whichever is higher."

+ Circular dated 14.02.2007 was issued when the service tax was levied on distributor of paper lottery. The circular provided for determination of value of taxable service by deducting total cost of ticket paid by the distributor and price money paid by the distributor, that was regime when it was treated as business auxiliary service rendered by distributor. The said circular has no relevance or application after the 2017 enactment.

+ For determining the value of the lottery, now, there is statutory provision contained in Section 15 read with Rule 31A as noted above. When there are specific statutory provisions enumerating what should be included in the value of the supply and what shall not be included in the value of the supply we cannot accept the submission of the petitioner that prize money is to be abated for determining the value of taxable supply. What is the value of taxable supply is subject to the statutory provision which clearly regulates, which provision has to be given its full effect and something which is not required to be excluded in the value of taxable supply cannot be added by judicial interpretation.

+ Further, Rule 31A as noted above, sub-rule (2) as amended clearly provides that value of supply shall be deemed to be 100/128 of the face value of ticket or of the prize as notified in the Official Gazette by the Organising State, whichever is higher. For example, if Rs.100 is the face value of lottery ticket, 28% GST is levied only on Rs.78.125[(100*28)/128]. GST amount will be 21.875. Therefore, Rs.100 includes GST of 21.875 on the taxable value of Rs.78.125. This is a mechanism to split the face value of Rs.100 in two parts (A and B). A is the transaction value. B is GST on A. The formula as above is to come to A by reverse calculation.

+ The value of taxable supply is a matter of statutory regulation and when the value is to be transaction value which is to be determined as per Section 15 it is not permissible to compute the value of taxable supply by excluding prize which has been contemplated in the statutory scheme. When prize paid by the distributor/agent is not contemplated to be excluded from the value of taxable supply, we are not persuaded to accept the submission of the petitioner that prize money should be excluded for computing the taxable value of supply the prize money should be excluded. We, thus, conclude that while determining the taxable value of supply the prize money is not to be excluded for the purpose of levy of GST.

+ When the levy of GST, determination of taxable value are governed by the Parliamentary Act in this country, we are of the view that legislative scheme of other countries [United Kingdom-Value Added Tax, 1994; Excise Tax Act of Canada; Goods and Services Tax Act of Singapore; Goods and Services Act, 1985 of New Zealand and Sri Lanka-Value Added Tax Act, 2002] may not be relevant for determining the issue which has been raised before us. The taxing policy and the taxing statute of various countries are different which are in accordance with taxing regime suitable and applicable in different countries. The issue which has been raised before us has to be answered by looking into the statutory provisions of the Act, 2017 and the Rules framed therein which govern the field.

+ In the foregoing discussion we are of the view that the petitioner is not entitled to reliefs as claimed in the writ petition.

+ Petitioner has prayed for grant of liberty of challenging the notifications dated 21.02.2020/02.03.2020 by which rate of GST for lottery run by the State and lottery organized by the State have been made the same, which notification has not been challenged in the writ petition since the notifications were issued during the pendency of writ petition. Petitioner has prayed that the said issue be left open, the notification having not been challenged in the writ petition liberty be given to the petitioner to challenge the same in appropriate proceedings. We accept the above prayer of the petitioner. The petitioner shall be at liberty to challenge the notifications 01/2020-CTR dated 21.02.2020 [State Notification 02.03.2020] (challenging the rate of levy tax uniformly at 28%) separately in appropriate proceedings.

+ Subject to liberty as above, the writ petition is dismissed

- Petition dismissed: SUPREME COURT OF INDIA (LARGER BENCH)

2020-TIOL-2065-HC-MP-GST

Ram Prasad Sharma Vs Chief Commissioner

GST - Petitioner seeks quashing of order Form GST DRC-07 dated 18.09.2020 - Grievance of the petitioner is that while raising the demand of tax vide summary of order dated 18.09.2020 vide Annexure P/2, the foundational show-cause notice/order No.10 dated 10.06.2020 qua financial year 2019-2020 and tax period April, 2019 to July, 2019, was never communicated to the petitioner who is an individual registered under GST Act - State has filed reply on 11.11.2020 disclosing that show-cause notice/order No.10 dated 10.06.2020 was communicated to petitioner on his E-mail address and despite receiving the same the petitioner failed to file any response - Petitioner submits that in view of rule 142(1) of the Rules, 2017, the department is obliged to communicate the SCN/orders by uploading the same on the website of revenue so that the aggrieved person can have access to the same and be aware of the reasons behind the demand to enable the aggrieved person to avail alternative remedy before the higher forum. 

Held:   A bare perusal of the rule 142 reveals that the only mode prescribed for communicating the show-cause notice/order is by way of uploading the same on website of the revenue - State in its reply has provided no material to show that show-cause notice/order No.10 dated 10.06.2020 was uploaded on website of revenue - Counsel for Revenue fairly concedes that the show-cause notice/order was communicated to petitioner by Email and was not uploaded on website of the revenue - It is trite principle of law that when a particular procedure is prescribed to perform a particular act then all other procedures/modes except the one prescribed are excluded - This principle becomes all the more stringent when statutorily prescribed -  Court has no manner of doubt that statutory procedure prescribed for communicating show-cause notice/order under Rule 142(1) of CGST Act having not been followed by the revenue, the impugned demand dated 18.09.2020 vide Annexure P/2 pertaining to financial year 2019-2020 and tax period April, 2019 to July, 2019 deserves to be and is struck down - Petition stands allowed with liberty to the revenue to follow the procedure prescribed under Rule 142 of CGST Act: High Court [para 6.1, 7 to 10] 

- Petition allowed : MADHYA PRADESH HIGH COURT

IO No. 26/2020

BPTP Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicants have alleged profiteering by the respondents in the purchase of flats made by them in the respondent's project ‘Discovery Park' inasmuch as it is alleged that the respondent had not passed on the benefit of Input Tax Credit (ITC) to them by way of commensurate reduction in the prices of the flats in terms of s.171(1) of the Act - DGAP in its report has stated that it was clear that the ITC as a percentage of the total turnover that was available to the respondent during the pre-GST period was 4.32% and during the post-GST period it was 14.38% i.e. the respondent had benefited from the additional ITC to the tune of 10.06% [14.38% - 4.32%] of the taxable turnover - It is concluded by the DGAP that the respondent had profiteered by an amount of Rs.6,11,09,771/- [excluding the amount  that the respondent had suo motu passed on of Rs.3,41,44,848/-]   which included profiteered amounts of Rs.84,956/- and Rs.1,83,963/- in respect of the applicant no.1 & 2 respectively - the DGAP has claimed that he has verified passing on of the benefit in respect of 50 home buyers and found it to be correct - however, it is clear from the emails of the five home buyers that the claim of the respondent is wrong and hence the DGAP is directed to verify the passing on of the benefit to all the eligible home buyers as has been claimed by the respondent during the investigation to be carried out by him and submit his findings to the Authority - without going into the merits of the case, the Authority finds this to be a fit case for further investigation as per the provisions of rule 133(4) of the CGST Rules, 2017 - Authority, therefore, directs the DGAP to reinvestigate the above issues and furnish his report under rule 129(6) of the Rules - Investigation is to be carried out w.e.f 01.07.2017 to 31.11.2020 or till the date OC is received by the respondent in respect of the aforementioned project - There are fourteen more projects of the respondent which are under construction or have been partly completed - Authority is competent to suo moto examine all such cases where the benefit of additional ITC is required to be passed on and then determine the benefit - since the respondent is availing the benefit of ITC post-GST under one registration, hence all the fourteen projects are required to be investigated so that the exact quantum of benefit can be determined - action of taking suo moto cognisance has been approved vide order dated 10.02.2020 passed by the Delhi High Court in the case of Nestle India Ltd. [ 2020-TIOL-415-HC-DEL-GST ] - Accordingly, DGAP is directed to investigate all the 14 projects of the respondent and submit its report under rule 129(6) so that the benefit of ITC to be passed on to the home buyers of these projects could be determined - read with the notification 65/2020-CT, the present Interim order is passed on 27.11.2020: NAA

- Interim order passed: NAA

IO No. 25/2020

Dang Enterprises

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Report dated 27.03.2020 has been furnished by the DGAP in response to a reference  received alleging profiteering in respect of restaurant service supplied by the respondent who is a franchisee of M/s Subway Systems India P Ltd. (SSIPL) - it is alleged that despite the reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017, the respondent had not passed on the commensurate benefit of tax-rate reduction as he had increased the base prices of his products - DGAP has stated that since the respondent as also SSIPL, the franchisor was not cooperating in the investigation by not providing the requisite data/information on one pretext or the other, DGAP was unable to compute the amount of profiteering as per the standard methodology followed in similar cases of restaurant services; that, therefore, they were left with no option but to compute the amount of profiteering by taking the other similar cases of Subway franchisees investigated by the DGAP, as the basis; that the highest ‘profiteering to turnover' ratio for exactly the same period of investigation had been computed in the case of M/s Neeva Foods P Ltd., another franchisee of SSOPL, and based on the same the quantum of profiteering in the instant case has been worked out as Rs.28,74,557/- for the period November 2017 to June 2019 - in response to the aforesaid DGAP report, the respondent has made submissions vide email dated 20.08.2020 - Authority observes that as an investigating agency the DGAP has been conferred with wide-ranging powers under rules 129, 132 r/w s.171 of the Act to summon any relevant record which may be required for conducting an investigation and the DGAP should have exhausted all the options available to him to get the requisite data from the respondent - since the respondent has not furnished the requisite data for a significant period, this was a fit case for exercise of all the powers granted under the CGST Act/Rules 2017 to summon the data/information and any other records for computation of the amount of profiteering - DGAP has neither taken available appropriate coercive action against the respondent u/r 132 nor has DGAP initiated prosecution against the respondent u/s 122 of the Act, 2017 - Authority is of the view that the DGAP has still not exhausted all the legal recourses available under the CGST law to arrive at an evidence-based conclusion in the matter - Respondent has also abysmally failed to comply with repeated directions of not only of the DGAP but also the repeated direction of this Authority over a five-month period to furnish the requisite data/information - such data has been supplied in a timely manner by all the other franchisees of SSIPL who are/have been investigated by DGAP and no excuses were offered in the manner as is being done by the present respondent - Without going into the merits/other submissions filed, Authority views this as a fit case for revisiting the investigation by the DGAP and for computing the amount of profiteering based on the data/records to be submitted by respondent/SSIPL, the franchisor - Respondent is directed to furnish all the data/information to the DGAP within thirty days failing which DGAP shall use all the means available with the law to obtain the same and complete the investigation and submit a report - DGAP is accordingly ordered to reinvestigate the matter as per rule 133(4) of the Rules, 2017 - Interim Order is passed in the circumstances keeping note of notification 65/2020-CT: NAA

- Interim order passed: NAA

IO No. 24/2020

Pareena Infrastructure Pvt. Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant has alleged profiteering by the respondent in respect of the purchase of flat in his Laxmi Apartments located in Gurugram, Haryana - Applicant alleges that the respondent had not passed on the benefit of Input Tax Credit (ITC) availed  by him by way of commensurate reduction in the price of the above flat after implementation of GST w.e.f 01.07.2017 - DGAP has in its report dated 25.03.2020 stated that the respondent has benefited from additional input tax credit to the tune of 2.01% of the turnover; that the total profiteered amount during the period 01.07.2017 to 30.06.2019 came to Rs.1,39,41,309/- which includes GST on the base profiteered amount; that the respondent had claimed that he had already passed on the benefit of Rs.1,55,06,800/- to the home buyers; that it appeared that the respondent has passed benefit higher than the commensurate benefit that ought to have passed on to the buyers; that the excess benefit claimed to have been passed on to the homebuyers could not be set off against the additional benefit that he was required to pass on to the other homebuyers - respondent has made their submission on the said DGAP report and hearings were closed by the Authority on 23.06.2020 - Authority observes that that there are many issues which remain to be addressed by the DGAP in its report and hence the present report cannot be accepted thereby warranting a further investigation under rule 133(4) of the Rules up to 30.10.2020 or till the date of issue of Completion Certificate in respect of the project, whichever is earlier, on issues which are detailed in the order - DGAP to submit a detailed report in terms of rule 129(6) of the Rules - Present Interim order is passed in terms of rule 133(1) read with notification 65/2020-CT: NAA

- Interim order passed: NAA

2020-TIOL-175-SC-MISC-LB

Paramvir Singh Saini Vs Baljit Singh

Criminal law - Pursuant to the directions of the Supreme Court vide Order dated 03.04.2018 a COB was constituted by the Ministry of Home Affairs on 09.05.2018 (as per the Affidavit dated 26.07.2018) to oversee the implementation of the use of photography and videography in the crime scene by the State / Union Territory Government and other Central Agencies, to suggest the possibility of setting up a Central Server for implementation of videography, and to issue appropriate directions so as to ensure that use of videography becomes a reality in a phased manner - Court, vide Order dated 16.09.2020, impleaded all the States and Union Territories to find out the exact position of CCTV cameras qua each Police Station as well as the constitution of Oversight Committees in accordance with the Order dated 03.04.2018 of this Court in Shafhi Mohammad ( (2018) 5 SCC 311 ) - Pursuant to the said directions, Compliance Affidavits and Action Taken Reports were filed by 14 States (till 24.11.2020), namely, West Bengal, Chhattisgarh, Tamil Nadu, Punjab, Nagaland, Karnataka, Tripura, Uttar Pradesh, Assam, Sikkim, Mizoram, Madhya Pradesh, Meghalaya, Manipur; and 2 Union Territories, namely, Andaman & Nicobar Islands and Puducherry – However, majority of the Compliance Affidavits and Action Taken Reports fail to disclose the exact position of CCTV cameras qua each Police Station - The affidavits are bereft of details with respect to the total number of Police Stations functioning in the respective State and Union Territory; total number of CCTV cameras installed in each and every Police Station; the positioning of the CCTV cameras already installed; working condition of the CCTV cameras; whether the CCTV cameras have a recording facility, if yes, then for how many days/hours, have not been disclosed - position qua constitution of Oversight Committees in accordance with the Order dated 03.04.2018, and/or details with respect to the Oversight Committees already constituted in the respective States and Union Territory have also not been disclosed - Compliance affidavits by all the States and Union Territories are to be filed within a period of six weeks - State and Union Territory Governments should ensure that CCTV cameras are installed in each and every Police Station functioning in the respective State and/or Union Territory - Further, in order to ensure that no part of a Police Station is left uncovered, it is imperative to ensure that CCTV cameras are installed at all entry and exit points; main gate of the police station; all lock-ups; all corridors; lobby/the reception area; all verandas/outhouses, Inspector's room; Sub-Inspector's room; areas outside the lock-up room; station hall; in front of the police station compound; outside (not inside) washrooms/toilets; Duty Officer's room; back part of the police station etc. - It is obvious that none of this can be done without allocation of adequate funds for the same, which must be done by the States'/Union Territories' Finance Departments at the very earliest - CCTV systems that have to be installed must be equipped with night vision and must necessarily consist of audio as well as video footage - In areas in which there is either no electricity and/or internet, it shall be the duty of the States/Union Territories to provide the same as expeditiously as possible using any mode of providing electricity, including solar/wind power - The internet systems that are provided must also be systems which provide clear image resolutions and audio - Most important of all is the storage of CCTV camera footage which can be done in digital video recorders and/or network video recorders - CCTV cameras must then be installed with such recording systems so that the data that is stored thereon shall be preserved for a period of 18 months - Union of India is also directed to install CCTV cameras and recording equipment in the offices of Central Bureau of Investigation (CBI) , National Investigation Agency (NIA) , Enforcement Directorate (ED), Narcotics Control Bureau (NCB), Department of Revenue Intelligence (DRI), Serious Fraud Investigation Office (SFIO) & Any other agency which carries out interrogations and has the power of arrest - Since these directions are in furtherance of the fundamental rights of each citizen of India guaranteed under Article 21 of the Constitution of India, and since nothing substantial has been done in this regard for a period of over 2½ years since the first Order dated 03.04.2018, the Executive/Administrative/police authorities are to implement this Order both in letter and in spirit as soon as possible – Affidavits will be filed by the Principal Secretary/Cabinet Secretary/Home Secretary of each State/ Union Territory giving this Court a firm action plan with exact timelines for compliance with today's Order within a period of six weeks - To be listed on 27.01.2021: Supreme Court Larger Bench

- Matter listed :SUPREME COURT OF INDIA

2020-TIOL-1660-CESTAT-MUM

CCE Vs Bombay Paints Ltd

CX - Proceedings initiated against assessee in SCN for recovery of inadmissible CENVAT credit availed between August 2005 and April 2008 was dropped vide impugned order leading to review of the order, now impugned for Tribunal by the competent Committee of Chief Commissioners under section 35E(1) of CEA, 1944 - Though it was grossly improper on the part of Committee of Chief Commissioners to insist that an appeal filed on their direction by adjudicating authority should even suggest that decisions accorded by competent appellate authorities or constitutional courts do not bind adjudicating authorities merely because the executive authority has chosen not to accept those, Tribunal do not intend to dwell overmuch on such demonstrated lack of respect for rule of law and leave it to the management of Central Board of Indirect Taxes & Customs to evolve appropriate methods for proper sensitisation at the senior levels that are entrusted with the high responsibility of review - A copy of this order may be served on Chairman, Central Board of Indirect Taxes & Customs for necessary action - No merit found in the appeal of Revenue which is dismissed: CESTAT

- Appeal dismissed: MUMBAI CESTAT

2020-TIOL-1658-CESTAT-BANG

Religare Technova Global Solutions Ltd Vs CST

ST - Appellants are developers of an internet based trading software "Trade Anywhere' and are licensing the same to its customers who are primarily share broking houses/financial institutions/banks and media portals - The appellant has entered into Software License Agreements with various share broking houses, etc. and are collecting charges termed as "license fee' and on this value they are collecting and discharging CST @ 4% for interstate sales and excise duty - The department entertained the view that the appellants are liable to pay service tax under Management or Business Consultant Service whereas the appellant claims that the said service falls under Information Technology Software service - SCN dated 08.04.2011 issued demanding service tax of Rs.3,54,54,363/- for the period March 2006 to May 2008 and imposition of penalties, interest etc. - Demand was confirmed by the Commissioner by the impugned order dated 30.05.2012, hence the appeal before CESTAT.

Held:  Commissioner after examining the services rendered by he appellant has come to the conclusion that the activities carried out by the appellant is covered under the category of Enterprise Resource Planning (ERP) Software Application and the same is rightly classifiable under the category of Management or Business Consultant service and are liable for service tax - After carefully considering the definition of Management or Business Consultant Service and Information Technology Software Service, Bench is of the view that Enterprise Resource Planning implementation would not be covered under Management or Business Consultant service due to the following reasons:  (a)  The services are not in connection with the management of an organization; (b)  The services would not be covered under the inclusive part of the definition (i.e., advice, consultancy or technical assistance with regard to specific activities; (c)  Services provided by the appellant is executor in nature and hence do not fall under "Management Consultant Services';(d)  Although the ERP software per se may be capable of enhancement of competitive capabilities of the customer's systems, by integrating various business functions, its implementation into the system cannot be treated as "management consultant's service' - Judicial precedents have categorically held that software implementation service would not be covered under "Management Consultancy Services" - Activities undertaken by the appellant are covered under the definition of Information Technology Software Service as specifically covered under the Information Technology Services as taxable under Section 65(105)(zzzze) with effect from 16.5.2008 - Further, the activities alleged in the show-cause notice clearly fall within the ambit of Information Technology Software Service as defined in the Finance Act, 1994 - It is also settled law that introduction of a new entry implies that services were not taxable earlier - This Tribunal in the case of IBM India Pvt. Ltd. - 2010-TIOL-167-CESTAT-BANG  [upheld by Supreme Court by dismissing Revenue appeal] has specifically held that implementation of Enterprise Resource Planning does not attract service tax under the category of Management or Business Consultant Service - Appeal allowed: CESTAT [para 11, 12, 13, 14]

Limitation -  we note that the period involved in the present case is from 1.3.2006 to 15.5.2008 whereas the show-cause notice was issued on 8.4.2011 by invoking the extended period of limitation alleging suppression of facts with intent to evade payment of tax by the appellant. In this regard, we find that the appellant has been regularly filing the returns and was under bona fide belief that their activities are not liable to service tax under Management or Business Consultant Service. It is not disputed that the appellant is paying service tax with effect from 16.5.2008 under the category of Information Technology Software Service. Moreover, the department was very much aware of the activities of the appellant as the department conducted audit of the accounts of the appellant from time to time and the last audit was conducted in December 2009 but has not raised any objections regarding the activities of the appellant, hence, allegation of suppression of material facts against the appellant is not sustainable and we hold that entire demand is time barred - Appeal allowed with consequential relief: CESTAT [para 15]

- Appeal allowed: BANGALORE CESTAT

2020-TIOL-1657-CESTAT-MUM

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