2021-TIOL-137-ITAT-DEL

ACIT Vs Claridges Hotels Pvt Ltd

Whether there is any law against employing the relatives or sons or daughters of a shareholder/owner if they are otherwise duly qualified/ experienced to hold the position - NO: ITAT

Whether failure to procure business does not lead to the conclusion that payments made in pursuence of the commerce is bogus or that such transaction was not genuine - YES: ITAT

- Revenue's appeal dismissed :DELHI ITAT

2021-TIOL-25-SC-GST

National Anti Profiteering Authority Vs Glenmark Pharmaceuticals Ltd

GST - Anti-Profiteering - Respondents had  inter alia  raised a challenge to the constitution of National Anti-Profiteering Authority; the constitutional validity of Section 171 of  CGST Act, 2017 - National Anti-Profiteering Authority (NAA) filed Transfer Petitions seeking for transfer of the writ petitions pending in the High Courts of Bombay, Gujarat and Karnataka, to the Delhi High Court - Counsel for the respondent referred to the Supreme Court's order dated 19.02.2020 to point out that similar writ petitions pending in the Delhi, Bombay, Punjab and Haryana High Courts, were ordered to be transferred, at the instance of the NAA - Notice had been issued, returnable within two weeks, to the respondent-writ petitioners by order dt. 31 August 2020.

Held: Respondent(s) has filed counter affidavit/last opportunity granted - Service report from the High Court is to be awaited - Matter to be listed again on 17.02.2021: Registrar Supreme Court

- Matter listed :SUPREME COURT OF INDIA

2021-TIOL-148-HC-AHM-GST

Chechani Trading Company Vs State of Gujarat

2021-TIOL-147-HC-AHM-GST

Steel Kraft Industries Vs State Of Gujarat

GST/GVAT - Writ applicant seeks to challenge the action of the respondent No.2 in blocking the input tax credit in exercise of power under Rule 86A of the Rules, 2017 to the tune of Rs.17,94,723/- allegedly towards effecting the recovery of dues under the Gujarat Value Added Tax Act, 2003 in the case of one Dolphin Metals (India) Ltd. - Writ applicant, at one point of time, was a Director in a public limited company named Dolphin Metals (India) Ltd. since 23rd November, 2009 and, thereafter, from 20th December, 2018 till the date of filing of this writ application; also a director in one another company named Bhagat Marketing Private Limited since 21st March, 1994 - It appears that the respondent No.2 sent a notice dated 5th September, 2020 under Section 44 of the GVAT Act to the Union Bank of India proposing to attach the bank account maintained by Bhagat Marketing Private Limited, referred to above, wherein the writ applicant is a Director, seeking recovery of the amount of outstanding tax and interest for the years 2006-07 to 2013-14 in the case of Dolphin Metals wherein the writ applicant was a Director for some period of time - It appears that the bank declined to act as per the notice dated 5th September, 2020 as the name and PAN of the account holder differed from that of the Dolphin Metals to whom the notices were addressed - It appears that the respondent No.2, on the very same day blocked the input tax credit of the amount of Rs.17,94,723/- available to the writ applicant in his electronic credit ledger under the provisions of the CGST Act - This action was with an intention to recover the amount of tax and interest due and payable by the Dolphin Metals under the GVAT Act for the period during which the writ applicant was not even the Director - The writ applicant addressed a letter dated 23rd September, 2020 to the respondent No.2 requesting to release the input tax credit blocked for the recovery of the amount of tax and interest in case of the Dolphin Metals under the GVAT Act – However, as the respondent No.2 declined to release the input tax credit, the writ applicant was left with no other option but to come before this Court with the present writ application - Only question that falls for consideration is whether the respondent No.2 could have exercised power under Rule 86A of the Rules, 2017 for the purpose of blocking the input tax credit available in the credit ledger account of the writ applicant for the purpose of recovering the dues of Dolphin Metals (India) Limited.

Held:

+ The moot question to be determined is whether Rule 86A could have been invoked for blocking the input tax credit available in the electronic credit ledger of the writ applicant to recover the dues of Dolphin Metals (India) Ltd? In our opinion, the answer has to be in the negative.

+ Rule 86A can be invoked only if the conditions stipulated therein are fulfilled. In other words, it is only if the Commissioner or an Officer authorized by him has reasons to believe that the credit of input tax available in the electronic credit ledger has been fraudulently availed or is ineligible for the reasons stated in Rule 86A(1)(a) to (d) that the authority would get the jurisdiction to exercise the power under Rule 86A of the Rules. We fail to understand how Rule 86A could have been invoked in the present matter.

+ In our opinion, the issue, as such, stands squarely covered by three decisions of this High Court, i.e , ( i ) Mr. Choksi vs. State of Gujarat (SCA No.243 of 1991) (ii) Different Solution Marketing Private Ltd. vs. State of Gujarat (SCA No.19949 of 2015) = 2016-TIOL-1745-HC-AHM-VAT and (iii) Paras Shantilal Savla vs. State of Gujarat (SCA No.7801 of 2019) = 2019-TIOL-1690-HC-AHM-VAT .

+ Writ application is hereby allowed. The respondent No.2 is directed to unblock the input tax credit available in the credit ledger account of the writ applicant at the earliest.

+ It is clarified that this order shall not preclude the department from recovering the dues of Dolphin Metals (India) Ltd. by any other mode of recovery permissible in law.

-Application allowed : GUJARAT HIGH COURT

2021-TIOL-145-HC-DEL-GST

Surbhi Kothiala VsCommissioner of GST & CE

GST - Case of the petitioner is that the freezing of and/or provisional attachment of the bank account of the petitioner has been done pursuant to an enquiry/proceeding launched u/s 67 of the CGST Act, 2017 against M/s Milkfood Limited in which the father of the petitioner is the Chief Financial Officer (CFO) and the petitioner is not even mentioned as a taxable person within the meaning of Section 2(107) of the Act - Counsel for the respondent revenue seeks time till Friday, i.e. 22nd January, 2021 - Matter listed on 22 January 2021: High Court [para 4, 5]

-Matter listed :DELHI HIGH COURT

2021-TIOL-144-HC-DEL-GST

Global Enterprises Vs Commissioner of Central CGST

GST - Petitioner states that his entire business has come to a standstill for the last eight months owing to their bank account being frozen - It is informed that there is an amount of about Rs. 40,000 odd in the bank account which has been frozen but monies are due from the overseas buyers to the petitioner and receipt whereof also is held up owing to the account having been frozen – Petitioner is agreeable to the proposal that the amount already lying in the account may be ordered to remain frozen in the account and/or be directed to be kept in a fixed deposit and the operation of the account can otherwise be permitted.

Held: Bench would like to hear the counsels on, whether in pursuance to the order under Section 83 of the Act, 2017 , the respondents are entitled to any further monies also received in the account beyond the date on which the order of freezing is made – Matter listed on 24th February, 2021: High Court [para 7, 8]

-Matter listed :DELHI HIGH COURT

2021-TIOL-42-AAR-GST

Dipakkumar Kantilal Chotai

GST - Brand name Talod - Khaman mix flour, Gota mix flour, Handwa mix flour, Dahi wada mix flour, Dalwada mix flour, Meduvada mix flour, Pudla mix flour, Moong bhajiya mix flour, Chorafali mix flour, Bhajiya mix flour, Dhokla mix flour, Idli mix flour and Dosa mix flour are classifiable under SH 1106 1000 - Applicable GST is @5% as per Entry No.59 of Schedule-I of 01/2017-CTR: AAR

GST - Upma mix flour, Rava idli mix flour and Muthiya mix flour are classifiable under SH 2302 3000 whereas Khichu mix flour is classifiable under SH 2302 4000 - Applicable GST is @5% as per Entry No.103A of Schedule-I of 01/2017-CTR: AAR

GST - Chutney powder is classifiable under SH 2106 9099 - Taxable @18% upto 14.11.2017 [Entry No.23 of Schedule-III of Notification No.01/2017-CTR] and @5% w.e.f 15.11.2017 [Entry No.100A of Schedule-I of 1/2017-CTR ]: AAR

GST - Supply of Gota Mix and Chutney powder will be considered as a ‘mixed supply' - Taxable @5% as a supply of Gota Mix: AAR

GST - Supply of Bhajiya Mix and Chutney powder will be considered as a ‘mixed supply' - Taxable @5% as a supply of Bhajiya Mix: AAR

- Application disposed of : AAR

2021-TIOL-41-AAR-GST

Dee Vee Projects Ltd

GST - On account of the insufficient information provided by the applicant, Authority is unable to answer the question with regard to the rate of tax applicable on the Composite supply of Works Contract: AAR

GST - In case of a notification, in the body of which, the effective date is not written, the effect of the amending notification shall be the date on which the amending notification is published in the official gazette - Effective date of amendments to 11/2017-CTR vide 20/2017-CTR and 24/2017-CTR shall be the date of publication of the notifications in the official gazette: AAR

- Application disposed of : AAR

2021-TIOL-40-AAR-GST

ENP Techno Engineers

GST - Applicant is involved in Electroplating surface coating and electroless nickel plating services - applicant has stated that they receive the goods (materials) from the party and do the process on the materials received and then return the same to the party concerned and in this process no new product is generated but it only enhances the durability of the received material to some extent - Applicant has submitted that there is confusion as to whether their services will fall under Serial no. (id) or Sr. no. (ii) of Entry no. 26 of notification 11/2017-CTR i.e whether chargeable to CGST @6% or @9%. Held: In view of the clarification given by the CBIC vide Circular  126/45/2019  dated 22.11.2019, the services of Electroplating surface coating and Electroless Nickel plating is classifiable under Heading 9988 (Manufacturing services on physical inputs/goods owned by others) which appears at Item (iv) of Entry no. 26 of 11/2017-CTR - GST liability would be 18% (SGST + CGST) up to 21.11.2019 - And for the period from 22.11.2019, the rate of GST would be @12% (when Inputs are provided by a registered person) and @18% (when Inputs are   provided by an unregistered person): AAR

- Application disposed of : AAR

2021-TIOL-146-HC-TRIPURA-CX

Tripura Ispat Vs UoI

CX - NE based exemption - Petitioner has challenged a SCN dated 03.07.2020 which seeks to recover erroneously refunded amount along with interest - For the goods cleared by the petitioner from its manufacturing unit, it claimed exemption under notification dated 25.04.2000 and claimed refund of CENVAT duty paid in cash - Petitioner was of the view that since there was exemption in payment of basic excise duty, Education and Higher Education cess also would be exempt - The petitioner therefore claimed refund of such duties paid in cash - A two-Judge Bench of the Supreme Court in case of SRD Nutrients Private Limited = 2017-TIOL-416-SC-CX held that the education cess and the higher education cess are in the nature of surcharge and when the primary tax i.e. the basic excise duty itself is exempt, such additional levies cannot be collected - By an order dated 29th May, 2019 the Assistant Commissioner of Central Goods & Services tax, Agartala passed a detailed speaking order and held that the petitioner was entitled to receive the refund of the education cess and higher education cess collected on the goods cleared from its manufacturing units - However, based on the Larger Bench decision of the Supreme Court in case of Unicorn Industries ( 2019-TIOL-528-SC-CX-LB ) holding that the decision in SRD Nutrients is per incuriam, the Assistant Commissioner issued impugned show cause notice.

Held:

+ As is well settled, ordinarily High Court would not encourage litigation at the very threshold when a competent authority has merely issued a show cause notice and not yet taken a final decision. The noticee would ordinarily be asked to respond to the show cause notice and allow the competent authority to pass order in accordance with law. However, in the present case the petitioner has questioned the very jurisdiction of the Assistant Commissioner to raise a demand for recovery of the refund already released. [para 7]

+ When the Excise Officer passed the order of refund, he was applying the law laid down by the Supreme Court which by virtue of Article 142 of the Constitution is the law of the land. He had no other choice but to follow the decision of the Supreme Court in case of SRD Nutrients (supra). Any other action on his part would be wholly illegal. His order of refund thus was in consonance with the law declared by the Supreme Court at the time when he was passing the order.

+ In our view any subsequent change in the legal position, would not permit him to invoke the powers under Section 11A of the Central Excise Act. As is well settled, all legal proceedings on the date when they are being decided by any Court, would be governed by the law laid down by the Supreme Court which prevails on such date.

+ As is often happens, a decision of the Supreme Court is reviewed, reconsidered or overruled by larger Bench. Such subsequent decision would undoubtedly clarify the position in law and such declaration would undisputedly apply to all pending proceedings, the proceedings which are closed in the meantime, cannot be reopened on the basis of subsequent declaration of law by the Supreme Court. Any other view would lead to total anarchy.

+ Based on the judgment of the Supreme Court, several proceedings would have been decided. If years later such view is reversed, the parties who had not carried the proceedings in higher forum and thus not kept the proceedings alive, cannot trigger a fresh look at the decision already rendered by the competent court on the basis of the previous judgment of the Supreme Court which was correctly applied at the relevant time. [para 12]

+ If the department was desirous of pursuing the question of leviability of education and higher education cess when the basic duty of excise was exempt, it ought to have carried the order of refund passed by the Assistant Commissioner in appeal. Only if such appeal was pending or could have been filed within the period of limitation subject to power of condonation of delay, can the department take advantage of the change of law declared by the Supreme Court. [para 14]

+ Section 11A of the Central Excise Act does not authorize the Assistant Commissioner to revise or review his own order. In the show cause notice effectively what he proposes to do is revise and recall his own order on the ground that the law that he applied when he passed order of refund, has since been changed. This, in our opinion, is wholly impermissible. [para 15]

+ One of the principles settled by the majority judgment [ Mafatlal Industries Ltd. = 2002-TIOL-54-SC-CX-CB ] was that each party must carry his own assessment in appeal and cannot rely on the order of the higher forum in case of some other assessee to claim refund of the duty collected in his case. [para 17]

+ Petition succeeds. The impugned show cause notice dated 03.07.2020 issued by the Assistant Commissioner of Central Goods & Services Tax, Agartala is set aside. [para 20]

-Petition allowed : TRIPURA HIGH COURT