2021-TIOL-1084-HC-TELANGANA-GST

Vijay Metal Vs DCTO

GST - Petitioner hired M/s. Anmol Parcel Services for transporting the material from Dadra and Nagar Haveli to Secunderabad -The said transporter also booked the material of M/s. Simi Steels, Adoni, Kurnool District from the same vendor M/s. Santosh Steels, Dadra and Nagar Haveli to it's business premises at Adoni, Kurnool District - For carrying the material to these two destinations, one at Secunderabad and the other at Adoni, two waybills were generated, one from Dadra and Nagar Haveli to Secunderabad for a travel of 867 kms. and the other from Dadra and Nagar Haveli to Adoni which is at a distance of 940 kms - Petitioner alleges that the transporter M/s. Anmol Parcel Services, while loading the goods on the goods vehicle loaded the material of the petitioner first, and then loaded the material of M/s. Simi Steels as the quantity of the petitioner amounting to 14320.90 kgs. was more and much heavier than the material of M/s. Simi Steels which was 2018.15 kgs.; and so the latter was loaded on top of the goods vehicle; that the transporter has done so for his operational convenience and it had intended to unload the material on the top of the goods vehicle at Adoni first; that the goods vehicle passed through Patancheru Ring road and crossed Jadcherla on its way to Adoni in Kurnool District; and while the vehicle was on its way to Adoni, it was intercepted at Annasagar, Mahabubnagar District by the 1st respondent on 29.12.2020 and detained by him on the ground that the 'documents of the vehicle were defective' and that 'the transaction in respect of the e-waybill No. 601250640413 was concluded at Hyderabad, but they were further transported to Adoni without invoice and ewaybill' and proposed Rs. 3,68,555/- as GST and Rs. 3,68,555/- as penalty, and issued a show-cause notice to the petitioner on 31.12.2020 - Petitioner alleges that the 1st respondent did not consider the reply of the petitioner and demanded the petitioner to pay tax and penalty for release of the vehicle and the petitioner was forced to pay the same under protest on 04.01.2021 to secure release of the vehicle - According to the 1st respondent, as per logic since Hyderabad comes first and not Adoni, when the vehicle comes from Dadra and Nagar Haveli, the consignment of 14.30 tonnes would be offloaded at Hyderabad, and then 2.01 tonnes consignment should proceed towards Adoni; and the vehicle was therefore rightly detained by him when it was more than 100 kms from Hyderabad and carrying the full load of 16.31 tonnes.

Held : Naturally for operational convenience the transporter would load the lesser quantity last and the larger quantity first, i.e. the larger quantity would then be at the bottom of the goods vehicle and the smaller quantity would be on top of it; and it would be convenient for the transporter to offload the lesser quantity first and then the larger quantity next – If the contention of the 1st respondent is to be accepted, for delivery of 14.30 tonnes at Hyderabad to the petitioner first, the transporter would have to offload even the 2.01 tonnes which is on top of the consignment of 14.30 tonnes in the goods vehicle, and then reload it in Hyderabad, which would be a cumbersome process - This fundamental issue the 1st respondent shockingly did not understand and simply went by the point that Hyderabad comes first and Adoni comes later ignoring the operational convenience of the transporter – Bench cannot accept the plea of the 1st respondent that even if the goods meant to be delivered at Adoni were loaded on top of the conveyance, the said goods should have been unloaded and then reloaded after unloading the goods intended for the petitioner at Hyderabad - Such view is utterly perverse and cannot be accepted - It is also not the case of the 1st respondent that there is any prohibition for a consignor to load the consignments to two different destinations intended for two different parties in two different States on a single conveyance; and there is any rule that consignments intended for a party at a shorter distance should be offloaded first - 1st respondent had acted mechanically without application of mind to the operational convenience of the transporter - Finding of the officer, the 1st respondent, in the impugned order that the transaction involving the petitioner was 'suspicious' and that the transporter was found 'without proper documents' is perverse and cannot be sustained in these circumstances - For the bonafide action of the transporter, the 1st respondent cannot mulct the petitioner with tax and penalty - Collection of the amount of Rs. 3,68,555/- towards GST and penalty of Rs. 3,68,555/- from the petitioner on 04.01.2021 was by way of economic duress since the petitioner had no choice but to pay it to secure release of the vehicle and so the petitioner is entitled to refund of the same - respondents are directed to refund to the petitioner within four (4) weeks - Writ Petition is allowed: High Court [para 19, 20, 21, 23, 24, 25, 26, 28, 29, 30]

- Petition allowed: TELANGANA HIGH COURT

2021-TIOL-1083-HC-MAD-GST

Immanuel And Company Vs CCT

GST - Petitioner seeks quashing the impugned order of the second respondent in GSTIN dated 07.06.2020 - According to the petitioner, when new Goods and Service Tax regime got implemented on 01.07.2017, the petitioner got un-availed credit of Rs. 1,28,37,268/- paid during the earlier regime, out of which, Rs. 8,30,365/- relates to tax paid on purchases and Rs. 1,20,06,903/- is pertaining to the tax deducted at Source (TDS) - Second respondent issued a notice dated 07.01.2020 alleging that the petitioner has no excess carry forward ITC as on 30.06.2017 and proposed to disallow and reverse the entire transitional credit claimed by the petitioner through TRAN-1 - Grievance of the petitioner is that without considering the reply filed, the second respondent has passed the impugned order confirming the proposal, even without granting any opportunity of personal hearing, which is highly unjustified and violation of principles of natural justice - Respondent insists that the petitioner is having an appeal remedy before the concerned Appellate Authority and therefore this Writ Petition is not maintainable.

Held: Contention of respondent regarding alternate remedy cannot be accepted - Issue involved in the present writ petition is squarely covered by the order of this Court in batch of Writ Petitions in W.P. Nos. 9991 of 2019 etc., dated 26.02.2021 wherein it is held that while erstwhile Rule 9 dealing with tax deduction at source stated that 'any person who makes a deduction under Section 13 shall deposit the same so deducted' with the assessing authority, the amended rule reads 'any person liable to make deduction and payment of tax under Section 13 shall apply to the registering authority having jurisdiction over the person for a Tax Deductor Identification Number', prior to effecting such deduction - Circular No. 54 of 2014 bearing Ref. No. D3/34075/2011 has been issued on tax deduction at source wherein the Principal Secretary/Commissioner/ of Commercial Taxes dated 14.11.2014 has issued guidelines on the subject of taxability of works contracts, including the aspects of assessment and TDS - Accordingly, impugned orders were set aside and the petitioners were held to be entitled to transition TDS under the TNVAT Act in terms of Section 140 of the TNGST 2017 - Following the same, impugned order dated 07.06.2020 passed in GSTIN.33AABFI1728A1Z5/17-18 is quashed and the Writ Petition stands allowed: High Court [para 5, 7]

- Petition allowed: MADRAS HIGH COURT

2021-TIOL-1082-HC-MAD-VAT

Rajgaru Plywoods Vs ACST

Whether principles of natural justice are said to be contravened where the Revenue has discharged the burden cast upon it to furnish relevant material sought for by the assessee - NO: HC

- Writ petitions dismissed: MADRAS HIGH COURT

2021-TIOL-1075-HC-MAD-VAT

Kiran Global Chems Ltd Vs Assistant Commissioner (ST)(FAC)

Whether the principles of natural justice are contravened where assessment orders are passed without granting adequate time to the assessee to put forth its submissions or to effectively file reply to Show Cause Notice - YES: HC

- Petitions disposed of: MADRAS HIGH COURT

2021-TIOL-1085-HC-TELANGANA-ST

Sew Infrastructure Ltd Vs Director General of GST Intelligence

ST - Petitioner filed application under the Scheme on 30.10.2019 and petitioner's application for settlement of dues under the SVLDRS was accepted by the Designated Committee of the Tax Department - The Committee reviewed petitioner's application and issued its approval vide Form No. SVLDRS-3 dt.28.01.2020 and the petitioner was asked to remit an amount of Rs.18,91,37,548/- as against the original liability of Rs.59,20,19,079/- - Petitioner contends that because of the COVID-19 Pandemic situation and its own financial difficulties, the only way the petitioner could discharge its liability as per Form No. SVLDRS-3 was by utilizing the Income tax refund of Rs.34,65,92,300/- which it was held entitled to but on account of the Garnishee Notice issued by the GST authorities to C.I.T. (C.P.C.), Bengaluru and Principal C.I.T. (Central), Hyderabad on 24.01.2019 and 22.03.2019 to remit Rs.59,02,23,755/- towards Service tax liability of the petitioner, the Income Tax Department did not pay to the petitioner the refund due to it for the Assessment Year 2018-19 - Efforts of petitioner to have the Garnishee Notice dt.22.3.2019 issued by the 1st respondent to the Income Tax Department withdrawn or modified did not succeed and the petitioner was disabled from discharging its Service tax liabilities determined under Form No. SVLDRS-3 by 30.06.2020 from out of the refund amount due to it from the Income Tax Department - Therefore, petition filed seeking a direction to the Principal Commissioner of Central Tax, Hyderabad Commissionerate (2nd respondent) not to declare the petitioner as defaulter under the SVLDRS scheme and not to disallow the benefits made available to it under the Scheme and grant reasonable time to it for making payment as per the scheme; direct the DGGI (1st respondent) to modify the garnishee notice dt.22.03.2019 to Rs.18,91,37,548/- based on Form No. SVLDRS-3 issued by 2nd respondent; and restrain the respondent Nos. 1 and 2 from taking any coercive or punitive actions against petitioner-Company's officials and directors.

Held: SVLDRS Scheme has to be given a liberal interpretation and not a narrow interpretation - The stand taken by respondents 1 and 2 that the Garnishee Notice dt.22.03.2019 cannot be amended is contrary to the Circular No. 996/3/2015-CX , dt.28.02.2015 issued by the Central Board of Excise and Customs - Circumstance mentioned in the Circular under which the Garnishee notices can be modified or withdrawn or amended cannot be taken as exhaustive and is merely illustrative; and if like in the instant case, there is a reduction of liability of Service Tax dues determined under a scheme like SVLDRS, the authority issuing the Garnishee notice not only has a power to withdraw or modify it, but it is his bounden duty to do so - Such a construction will advance the cause of justice and the object of schemes like the SVLDRS scheme - Held that it was the duty of the respondents 1 and 2 to (a) take note of the coming into force of the SVLDRS Scheme, (b) its object and purpose, (c) the acceptance of petitioner's application dt.30.10.2019 by the Designated Committee by issuing Form SVLDRS-3 dt.28.01.2020 reducing the Service Tax demand to Rs.18,91,37,548/-, and (d) either modify or withdraw the Garnishee Notice dt.22.03.2019 and this would have enabled the petitioner to settle the dues before 30.06.2020 and get the benefit of the SVLDRS Scheme - However, without any valid reason, this was scuttled by respondents 1 and 2 for reasons which do not appear to be bonafide - Bench holds that the said inaction of respondents 1 and 2 is arbitrary and unreasonable and violative of Article 14 and 300A of the Constitution of India - Bench fails to understand the anxiety of the Income Tax Department in attempting to deny refund of Income Tax to the petitioner and going out of its way to cooperate with the Service Tax Department by even soliciting from the latter, a fresh Garnishee Notice in order to see that the petitioner does not get the income tax refund, (which was payable as per the intimation issued to the petitioner under Section 143(1) of the Act on 20.02.2020, and by continuing to retain the income tax refund amounts till November, 2020 without any valid reason) - Bench is of the opinion that this action of the Income Tax Department is not bonafide and indicates a prejudice against the petitioner - What the Income Tax department has done is that, after the second Garnishee notice was issued to it by the Service Tax department on 5.11.2020, the 3rd respondent paid on 24.11.2020 by Chq.No . 309093 and 309094, a sum of Rs.3,73,31,630/- towards TDS and Rs.30,92,60,666/- to the Dy. Commissioner, Central Tax (GST), Hyderabad, i.e., Rs.34,65,92,300/- which the petitioner was entitled to get as Income Tax refund, to the Service Tax department - Thus a set off is permitted to be made by an Assessing Officer of the income tax refund due to an assessee only as against "sum, if any, remaining payable under this Act" - Thus the Assessing Officer can adjust the Income Tax refund due to an assessee only against Income Tax dues, and not towards any other dues of an assessee such as Service Tax dues under the Finance Act, 1994 - The 3rd respondent is a creature of the Income Tax Act, 1961 and is obliged to discharge his functions strictly in accordance with the provisions of the Income Tax Act, 1961; and he is not entitled to act in violation of the said provisions of the said Act by allowing a set off of Income tax refund due to the petitioner against Service tax dues of the petitioner under the Finance Act, 1994 - Merely because the Principal Chief Commissioner of Income Tax, Hyderabad vide letter dt.20.11.2020 accorded approval for adjusting income tax refund against dues to the Service Tax Department, the action of the 3rd respondent, which is per se illegal and in violation of Section 245 of the Income Tax Act, 1961, does not get validated - Payment made on 24.11.2020 by the 3rd respondent of Rs.30,92,60,666/- to the respondents 1 and 2 towards Service Tax dues of the petitioner is contrary to Section 245 of the Income Tax Act, 1961 - When Section 245 of the Income Tax Act,1961 permits a set off only as against the Income Tax dues, merely because the petitioner gave such a letter or an affidavit, the 3rd respondent cannot pay the Income Tax refund due to the petitioner to the Service Tax Department towards the Service Tax dues - Letter dt.4.4.2018 given by petitioner does not operate as estoppel against petitioner - Nothing prevented the 3rd respondent from transferring to the respondents 1 and 2 the amount of Rs.18,19,37,548/- from out of the Income Tax refund of Rs.30,92,60,666/- before 30.06.2020 and transfer the balance with interest under Section 243(1)(b) of the Act to the petitioner, if the 3rd respondent claims that it was entitled to do so on 24.11.2020 - This would have protected the petitioner from becoming a defaulter under the SVLDRS scheme and enable it to get the benefits under the said Scheme - This inaction of the 3rd respondent is arbitrary and is not bonafide - Moreover, when the petitioner was held entitled to refund of Rs.30,92,60,666/- as per the intimation issued on 20.2.2020 under Sec.143(1) of the Income Tax Act,1961 to it after deducting Rs.3,73,31,630/- towards TDS, the Income Tax Department is obligated to make a refund with 15% interest to the petitioner of the said amount as per Section 243(1)(b) of the Income Tax Act, 1961 - The respondents 1 and 2 (having kept quiet by not amending the Garnishee notice dt.22.03.2019 issued to the Income Tax Department, by reducing the amount mentioned therein to Rs.18,91,37,548/-) prevailed over the Income Tax Department and prevented the latter from releasing the Income Tax refund of Rs.30,92,60,666/- to the petitioner, and thus disabled the petitioner from utilizing the same to pay the amount of Rs.18,91,37,548/- determined in Form No. SVLDRS-3 on 28.01.2020 by the Designated Committee - Respondents cannot be allowed to take advantage of their own wrong and blame the petitioner for its inability to pay within time the amount of Rs.18,91,37,548/- determined in Form No. SVLDRS-3 on 28.01.2020 by the Designated Committee and label the petitioner as a "defaulter" - It would be a travesty of justice to allow the plan of respondent Nos. 1 to 3 to somehow or other ensure that petitioner gets the tag of a 'defaulter' in payment of Service Tax dues, to succeed - Writ Petition is allowed; the petitioner shall be deemed to have made payment of Rs.18,91,37,548/- determined under Form No. SVLDRS-3 dt.28.01.2020 before 30.06.2020; the respondents are restrained from declaring that the petitioner had committed a default under the SVLDRS Scheme 2019 and also restrained from taking any coercive action against the Directors, officials of the petitioner or against the petitioner; the respondents 1 and 2 are directed to release to the petitioner the amount of Rs.12,01,23,118/- out of the Income Tax refund amount of Rs.30,92,60,666/- payable to it within four (4) weeks; the 3rd respondent shall pay petitioner interest on the sum of Rs.30,92,60,666/- from 21.5.2020 (the date of expiry of the 3 month period as per Section 243 (1) (b) of the Income Tax Act,1961) till 24.11.2020 at 15% per annum within four (4) weeks; the respondents 1 and 2 shall also pay petitioner interest at 15% per annum on Rs.12,01,23,11812/- from 25.11.2020 till date of payment within four (4) weeks; costs of Rs.10,000/- (Rupees ten thousand only) shall also be paid by respondent No. 1 and respondent No. 3 to the petitioner within four (4) weeks: High Court [para 42, 43, 45, 47, 48, 54, 62, 66 to 68, 71, 74, 76, 77, 83, 84, 89, 90]

- Petition allowed: TELANGANA HIGH COURT

2021-TIOL-271-CESTAT-CHD

HGI Automotives Pvt Ltd Vs CCE & ST

CX - The appellant applied for refund along with interest - The claim of interest was not whispered in the order of adjudicating authority, against which the appellant moved an application for payment of interest and it was answered on 29.08.2019 - Against the said order, appellant has filed an appeal before Commissioner (Appeals) on 31.10.2019 which is well within the time-limit prescribed under the Act - The appeal filed by appellant before Commissioner (Appeals) is in time - Therefore, the impugned order is set aside: CESTAT

- Matter remanded: CHANDIGARH CESTAT