2021-TIOL-828-HC-MAD-GST
Shri Nandhi Dhall Mills India Pvt Ltd Vs Senior Intelligence Officer DG of GST
GST - Amended prayer is for a mandamus restraining R1 and R2 from demanding any amount from the petitioner except by following the due process of law and a further direction to refund a sum of Rs.2 crores along with statutory interest under the provisions of the Central Goods and Service Tax Act, 2017 and return the documents seized at the time of search on 22.10.2019 - In the course of investigation, a statement was recorded from one S.A.Kumar, who has also deposed to the effect that the petitioner has not discharged its GST liability correctly; that they accept the mistakes and assure the respondents that the liability would be discharged at the earliest with applicable interest; A scheme of payment has also been set out for the tax remaining unpaid - In line with the undertaking, the petitioner has, on the same day remitted a sum of Rs.1 crore in FORM GST DRC-03 and the second instalment of the tax was paid on 30.10.2019, however, on 05.11.2019, the Managing Director of the petitioner retracted his statement and stated that it has no liability to tax; that the MD and officials were forced to accept liability to tax and the admission was, by no means, voluntary - Bench is only concerned with the legal issue of whether the collection of any amount during the process of investigation is statutorily permitted - legal issue raised is as to whether the petitioner is entitled to the refund of the amounts paid during investigation and the revenue relies upon the provisions of Section 74(5) of the Act.
Held:
++ Remittance under Section 74(5) is in terms of Rule 142 of the Central Goods and Services Tax Rules, 2017 (in short ‘Rules') and has to be made in Form GST DRC-03 [para 19]
++ Revenue points out that the payment is ‘voluntary' as per the form above and the same procedure has been followed in regard to the second instalment as well. [para 20]
++ Petitioner has relied on various decisions in support of its contention that any amount collected during investigation should be refunded in the absence of any determination of demand as against the assessee. [para 21]
++ With the inception of Section 74(5), it is the case of the revenue that the collection of amounts in advance has attained statutory sanction, provided the same are voluntary in Form GST-DR03. [para 22]
++ Thus, according to the revenue, the remittances made by the petitioner during investigation in terms of Section 74(5) amount to ‘self- ascertainment'. Having remitted two instalments of the tax as per its own ascertainment, it cannot now pray for a mandamus seeking refund of the amount. [para 23]
++ Bench is not in agreement with the submission that Section 74(5) is a statutory sanction for advance tax payment, pending final determination in assessment; that this is contrary to the scheme of assessment set out under Section 74. [para 24]
++ What Section 74(5) provides is the first opportunity to an assessee to pay tax, interest and penalty liability even prior to the issuance of a show cause notice and such acceptance will have to be in the form of either self-ascertainment or an ascertainment by the proper officer. [para 25]
++ Statement recorded at the time of search admitting GST liability and setting the scheme of instalments have been retracted by the petitioner on 05.11.2019 and the petitioner has consistently and vehemently contested the liability to tax. With this, the requirement of ‘ascertainment' under Section 74(5), fails.
++ Merely because an assessee has, under the stress of investigation, signed a statement admitting tax liability and has also made a few payments as per the statement, cannot lead to self-assessment or self-ascertainment. The ascertainment contemplated under Section 74(5) is of the nature of self-assessment and amounts to a determination by it which is unconditional, and not one that is retracted as in the present case.
++ Had such ascertainment/self-assessment been made, there would be no further proceedings contemplated, as Section 74(6) states that with ascertainment of demand in Section 74(5), no proceedings for show cause under Section 74(1) shall be issued. In this case, enquiry and investigation are on-going, personal hearings have been afforded and both the parties are fully geared towards issuing/receiving a show cause notice and taking matters forward. Thus, the understanding and application of Section 74(5) in this case, is, wholly misconceived. [para 26]
++ Mandamus as sought for by the petitioner is granted. The amount of Rs.2.00 crores collected shall be refunded to the petitioner within a period of four (4) weeks. [para 29]
- Petition allowed: MADRAS HIGH COURT
2021-TIOL-824-HC-DEL-GST
Gulati Enterprises Vs CBIC
GST - Petition has been filed challenging the show cause notice dated 21st May, 2020 as well as for a direction to the respondents not to proceed with the adjudication proceedings until Rule 142(1A) [ Notice and order for demand of amounts payable under the Act ] of the CGST Rules is complied with - Petitioner states that the impugned show cause notice has been issued without communicating the details of tax, interest and penalty in Part A of FORM GST DRC-01A prior in time in accordance with Rule 142(1A) of the CGST Rules - Revenue was directed to file Counter affidavit within a period of four weeks and rejoinder affidavit, if any, to be filed before the next date of hearing - Counsel who appears on behalf of respondent nos. 2 and 3, seeks a short accommodation to return with instructions qua this aspect of the matter - Matter is, therefore, listed on 09.04.2021: High Court [para 5, 6]
- Matter listed : DELHI HIGH COURT
2021-TIOL-823-HC-ORISSA-GST
Devi Prasad Tripathy Vs Pr.CCGST & CE
GST - In the counter affidavit filed by the Principal Commissioner, GST and Central Excise, Bhubaneswar Commissionerate it is stated that "after receiving information from Devi Prasad Tripathy having PAN as being an individual advocate practicing in the Hon'ble High Court of Odisha", further proceedings against him are dropped - Court is concerned about the deponent insisting that the Petitioner should have submitted "documentary evidence to prove his claim that he is a practicing individual lawyer and does not come under the provision of GST or service tax." - In terms of notification 25/2012-ST dt. 20.06.2012, service tax liability of an individual advocate is Nil for legal services rendered to any of business entities located in the taxable territory - However, Department appears to insist that the burden to prove it lies on the Petitioner - Assistant Solicitor General of India, has fairly admitted that no notice in the first instance ought to have been issued to the Petitioner, who is a practising advocate - During the hearing, certain other advocates present in the Court stated that they too have received such notices.
Held: It appears that despite knowing fully well that advocates are not liable to pay service tax or GST, notices continue to be issued to them by the GST Commissionerate - Court expresses its concern that practising advocates should not have to face harassment on account of the Department issuing notices calling upon them to pay service tax/GST when they are exempted from doing so, and in the process also having to prove that they are practising advocates - The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as GST regime is concerned - Copy of such instructions to be placed before the Court - Matter listed on 22nd April, 2021: High Court [para 7]
- Matter listed : ORISSA HIGH COURT
