2021-TIOL-1127-HC-TELANGANA-GST

Golden Mesh Industries Vs ACST

GST - Petitioner did not file GSTR-3B return for the month of November, 2018 and notice was issued on 29-01-2019 u/s 46 of the GST Act, 2017 warning the petitioner that if it did not file its return within 15 days, tax liability would be assessed u/s 62 based on the relevant material available with the 1st respondent along with interest and penalty – Since petitioner did not comply, a best judgment came to be passed by the first respondent viz. Assistant Commissioner of State Tax as - Your Average monthly SGST Tax is Rs.50,000/-. Therefore your turnover under SGST, CGST and IGST are arrived to the best of my judgment to be 3 times the monthly Average and the Tax for the above tax period i.e. SGST Rs. 1,50,000/-, CGST Rs. 1,50,000/- and IGST Rs. 1,50,000/-. - 100% penalty has also been levied without indicating the provision under which it is imposed – Petitioner challenges this order as being arbitrary and not based on any principle of law.

Held : Counsel for Revenue is unable to point out what is the principle followed by the 1st respondent in doing best judgment assessment in the manner indicated above i.e. multiplying 3 times the monthly average SGST, and adopting it as a basis for assessing the petitioner to tax for the month of November, 2018; also could not indicate under which provision of law 100% penalty is levied on the petitioner - Since the impugned order appears to be prima facie arbitrary and contrary to the provisions of the Telangana GST Act, 2017 , same is set aside; the matter is remitted back to the 1st respondent for fresh consideration; the 1st respondent shall issue notice to the petitioner indicating the method of assessment under the best judgment assessment provision; grant a personal hearing to the petitioner; and then pass a reasoned order both with regard to levy of tax but also with regard to interest and penalty afresh within eight weeks - Consequential attachment orders/garnishee orders issued by respondent Nos. 1 to 3 are also set aside - Writ Petition is allowed: High Court [para 6, 7]

- Petition allowed: TELANGANA HIGH COURT

2021-TIOL-1126-HC-DEL-GST

Roshni Sana Jaiswal Vs CCT

GST - Petition is directed against the orders passed by the respondent whereby several bank accounts of the petitioner have been provisionally attached - Petitioner was acting as a director on the Board of Directors of the company and the petitioner drew a salary of Rs.1.50 crores per annum qua the financial year 2019-2020 - Petitioner is also a shareholder in the said company, and owns approximately 14.33 % equity shares - Respondent, based on the information received, that the company Milkfood Ltd. was availing Input Tax Credit against fake/ineligible invoices, commenced investigation, under Section 67 of the Act and consequently the orders of attachment of bank accounts - Petitioner submits that the proceeding initiated against the petitioner u/s 83 o f the Act is without jurisdiction, as the petitioner does not fall within the ambit of the definition of a 'taxable person'; the taxable person being Milkfood Ltd and not the petitioner.

Held:

++ Submission of the Counsel for Revenue that the instant petition under Article 226 of the Constitution, should not be entertained as recourse to an alternate remedy was taken by the petitioner, does not impress the Bench since the exercise of power under Section 83 of the Act, to begin with, was without jurisdiction. [para 5.1]

++ Subsection 1 of Section 83 of the Act in no uncertain terms states that provisional attachment can be ordered only qua property, including bank account, belonging to the taxable person. Furthermore, the definition of the 'taxable person', as set out in Section 2(107) of the Act, provides that only that person can be a taxable person, who is registered or liable to be registered as per the Act. It is not even the case of the respondent that the petitioner is either registered or was liable to be registered in terms of the provisions of Section 2(107) of the Act. Therefore, the proceedings must fail on this score alone. [para 5.3]

++ Even if it is assumed for the moment that since investigations are on against the taxable person and, therefore, proceedings are pending under Section 67 of the Act, there is nothing placed on record to show that there was material available with the respondent, linking the petitioner to purported fake invoices. In other words, in the absence of such material, the impugned action concerning provisional attachment of the petitioner's bank accounts, which is otherwise a "draconian" step, was unsustainable. In the zeal to protect the interest of the revenue, the respondent cannot attach any and every property, including bank accounts of persons, other than the taxable person. [para 5.7]

++ Petition is allowed. Impugned provisional attachment orders dated 07.12.2020 are quashed. The respondent will communicate the order passed to the Banks concerned. [para 6]

- Petition allowed: DELHI HIGH COURT

2021-TIOL-136-AAR-GST

Bharat Earth Movers Ltd

GST - Applicant is a Public Sector Undertaking, engaged in manufacture of wide range of products to meet the needs of mining, construction, power, irrigation, fertilizer, cement, steel and rail sectors - Applicant is also one of the leading manufacturers of rail and metro coaches - They seek a ruling as to whether the supplies made by Cost Centres C [ Delivery and receipt of indigenous manufacturing ], D [ Commissioning and Acceptance of trains/ cars in Depot ], E [ Taking over of unit/train for revenue services ] and G Supply of Unit Exchange spares, mandatory spares and consumable spares and special tools testing and diagnostic equipment ] are independent supplies of goods and services or composite supply with principal supply of goods.

Held: It is clear that the supplies made under Cost Centre C is of goods, Cost Centres D and E are related to services and supplies made under Cost Centre G is related to the spares - Supply by Cost Centre C to G would form a composite supply as the supply involves supply of intermediate cars and also integration, commissioning etc. - in view of s.8 of the Act, supply by Cost Centre C to G would only make it a composite supply and the supply of intermediate cars being the principal supply, the entire supply done under cost Centres A to E would be deemed to be the supply of intermediate cars - Further, when the Cost Centres C to G is taken together, it is seen that these are two supplies and would amount to a composite supply as per clause (30) of Section 2 of the CGST Act, 2017 - Since the agreement itself states that the milestones are only artificial creations to enable cash flows to the applicant, this is treated as a naturally bundled supply with the supply of intermediate cars - Hence Supply under Cost Centre C to G would form a composite supply and the entire supply would amount to composite supply of intermediate cars as per section 8 of the CGST Act, as the composite supply of intermediate cars would be the principal supply - Held that supplies made by the applicant under Cost Centres C, D, E and G form a composite supply and since the supply of intermediate cars is the principal supply, would be treated as the supply of intermediate cars as per section 8 of the CGST Act, 2017 and section 12 of the CGST Act, 2017 is applicable to the issues related to the time of supply: AAR

GST - Applicant has also put forth a query that in case the whole activity is considered as the composite supply with principal supply being the supply of intermediate cars, then, would the applicant be eligible to claim refund of excess tax payment made by them - Authority observes that this query is outside the scope of Section 97(2) of CGST Act, 2017 and therefore Authority declines to answer this question: AAR

- Application disposed of: AAR

2021-TIOL-135-AAR-GST

Guitar Head Publishing LLP

GST - The supply of books from the warehouse located in USA (non-taxable territory) to the customers located in USA, UK and Canada (non-taxable territory) without such books entering into India by the applicant does not amount to supply under GST: AAR

GST - The shipping charges collected by the applicant from the customers located in USA, UK and Canada (non-taxable territory) for the delivery of books from the warehouse located in USA (non-taxable territory) to the customer located in USA, UK and Canada (non-taxable territory) are not exigible to GST: AAR

GST - The printing charges, for printing of books, charged by the printer located in USA (non-taxable territory) are taxable under Reverse Charge Mechanism under GST, where only content is supplied by the applicant: AAR

GST - The services received by the applicant from foreign service provider such as warehousing of printed books located in USA (non-taxable territory) is not taxable under Reverse Charge Mechanism under GST: AAR

GST - The input tax credit can't be availed, to the extent of inputs and input service on the transaction covered in first question as the said transaction does not amount to supply under GST: AAR

- Application disposed of: AAR

2021-TIOL-1128-HC-KERALA-MISC

Impelpro SCM Solutions Pvt Ltd Vs STO

The petitioner challenges the Assessment Order for the year 2017-18 and contends that notice granted him 15 days time to file objections - It was served only on 24.03.2021 and the Assessment Order was passed within 5 days thereafter - According to petitioner, there is gross violation of principles of natural justice - Since it has come on record that the petitioner was served with notice, only on 24.03.2021, which contained the stipulation that he is given 15 days time, it was necessary to grant such period of time to file objections - Passing an order without complying with the period of time stipulated in notice amounts to violation of natural justice - Respondent is directed to pass fresh orders of assessment on the petitioner after hearing him, in accordance with law - In order to avoid any dispute of non service of notice, petitioner is directed to appear for a hearing before 1st respondent on 17.05.2021: HC

- Writ petition allowed: KERALA HIGH COURT

2021-TIOL-1118-HC-AHM-SERVICE

Mahesh Babubhai Brahmbhatt Vs UoI

Service Matter - The petitioner was appointed as a wash boy in the Income-Tax Department Cooperative Society Limited - The petitioner claimed that he was subsequently taken on the roll of the Income Tax Department and that his designation was changed from Wash Boy to Bearer - The petitioner claimed that his pay scale, however, remained the same - The petitioner claimed to continue work as Bearer & the Department chose not to hold any DPC for promotion of canteen staff, in violation of the instructions - The post of Bearer was in Group 'D' - Another post in Tea/Coffee Maker was also in Group 'D'. There were promotions in the Department at Mumbai on 30.11.2004. There were representations made to the Chief Commissioner of Income-Tax Department, Ahmedabad on 19.09.2005, 17.11.2005 and 10.11.2006 for grant of promotion to the canteen employees - It is also noticed that he was granted second ACP on 24.01.2017 - The Director of Canteen reported on 29.08.2015 and gave the directions for filling-up the vacant post - However, nothing happened for convening the DPC - In the year 2017, qualifying test for promotion as clerk was conducted where the applicant had applied and on 13.04.2017, the computer test also was conducted - Representations were made by the petitioner and one another person seeking declaration of the results of the test - However, the same were not responded to and hence, the petitioner approached the Central Administrative Tribunal by preferring OA No. 372 of 2019 - On the ground that promotion is not a right and no person can claim promotion as of right, without issuance of any notice, holding the OA being devoid of merits, the same was dismissed.

Held - Grammatical errors or inadvertent missing of words cannot decide fate of any employee - No adjudicatory authority can afford to be so very hyper technical, so as to become oblivious of the real object while performing the duties of dispensation of justice - The Supreme Court vide judgment in Mumbai International Airport Private Limited vs. Regency Convention Centre and Hotels rowned upon giving unwarranted importance to the technicalities: HC (Para 7, 7.1)

+ It is noticed that the relief sought at Paragraph (A) says that "declaring the inaction of the part of the respondent Income Tax Department in holding the regular DPC as arbitrary, illegal and in violation of Articles 14,16 and 21 of the Constitution of India." Here there was a need of adding "not" between the words "in" and "holding". Once permitted, relief at paragraph (A) would not become contradictory to relief sought at Paragraph (B). Even otherwise, once the learned advocate having not pressed the relief sought at Paragraph (A) so as to respect what the Tribunal was indicating, the Tribunal could not have held that in view of the contrary reliefs, OA had lost the sanctity. It ought to have been mindful of the fact that this grammatical error or inadvertent missing of words cannot decide the fate of any employee. No adjudicatory authority can afford to be so very hyper technical, so as to become oblivious of the real object while performing the duties of dispensation of justice.

+ It would be profitable to mind ourselves the famous words of wisdom of the Apex Court in this respect, where the Court has frowned upon giving unwarranted importance to the technicalities. The Apex Court in the case of Mumbai International Airport Private Limited vs. Regency Convention Centre and Hotels, AIR 2010 SC 3109 , held that while doing complete and substantial justice, technicalities must not be allowed to stand in the way of justice.

+ We notice that the Income Tax Department was not issued the notice and the OA was dismissed in limine , whereas the Court here had issued the notice on 06.01.2021, where Ms. Mauna Bhatt, learned Standing Counsel has appeared for all the respondents. She has chosen not to file any affidavit-in-reply and has fairly submitted that on technicalities, the respondents would not be contesting the matters.

+ Without entering into the merits of the matter and also quashing and setting aside the findings and observations made on merits by the Tribunal, we choose to remand the matter to the Tribunal for it to adjudicate it by allowing the request of either incorporating the word "not" in the relief sought at Paragraph (A) or allowing the deletion of relief sought at Paragraph (A) from the application.

- Matter remanded: GUJARAT HIGH COURT

2021-TIOL-1117-HC-MAD-VAT

Maris Spinners Ltd Vs Assistant Commissioner (CT)

Whether assessment order passed without furnishing the documents sought for by the assessee, such as Inspection Report of Enforcement Wing officers, is unsustainable as it breaches principles of natural justice - YES: HC

- Matter remanded: MADRAS HIGH COURT

2021-TIOL-1125-HC-MAD-ST

Senior Regional Manager Vs Pr.Chief CGST & CE

ST - Maintainability - When the order suffers from a patent illegality, it is certainly open to the aggrieved party to invoke the writ jurisdiction of the High Court: HC [para 8]

ST - Construction of godown to store food grains - Whether for the "works contract service" provided by contractors, service tax was leviable - Section 102 of the Finance Act, 2016 granted exemption from payment of service tax for the period 01.04.2015 to 01.03.2016 - Such construction activities have been explicatively exempted by the Mega Exemption Notification 25/2012-ST issued on 20.06.2012 - Of course, for a short duration, exemption was not available - But then, by a subsequent notification, the break in the exemption had also been bridged - Therefore, it should be held that the petitioner always was entitled to the benefit under Clause 12(a) of the mega exemption notification - Therefore, when the appellate order was to the benefit of the writ petitioner for the period upto October 2015, it was certainly not open to the original adjudicating authority to pass an order adverse to the petitioner for the period from October 2015 - Order impugned in the writ petition is not defensible; is quashed - Writ petition is allowed: High Court [para 7, 10]

- Petition allowed: MADRAS HIGH COURT

2021-TIOL-1124-HC-AHM-CUS

Maruti Printers Vs UoI

Cus - EPCG - Petitioner imported capital goods such as Ryobi Multi Colour Offset Printing Press (without Blanket washing & without air compressor), having total assessable value of Rs. 2,46,96,480/- availing concession of the Customs Duty of Rs. 63,09,755/- - Petitioner was required to export the goods valued at US$ 9,01,164.04 within the period of eight years or further period as may be extended by the DGFT - It is the say of the petitioner that due to the global economic slowdown and due to the consequent lack of orders, the petitioner could manage to export the goods totally worth US$ 2,74,686/- equivalent to sum of Rs. 1,68,25,375/- - Petitioner sought an extension and was granted to 09.09.2020 - Pursuant to the DRI investigation, respondent No. 3 vide letter dated 22.01.2019 unilaterally cancelled the extension granted for fulfilment of Export Obligation without responding to the said letter dated 02.01.2019 nor did it bother to explain the reason for demanding original EPCG licence - Upon completion of the investigations, a show cause notice dated 05.03.2019 was issued to the petitioner, where, the petitioner was directed to show cause to the respondent No. 4 as to why the duty of Rs. 45,87,584/- should not be demanded from him along with interest and consequent penalty - Petitioner contends that respondent No. 3 had no business to unilaterally suspend the said extension without granting any opportunity of hearing to the petitioner; that it is a settled position of law that the DGFT is the final authority in the matters concerning FTP as provided in para 2.57 of the FTP and licences, such as the EPCG licence issued to the petitioner; that despite the said position, respondent No. 4 intervened in the process and prevented the petitioner from enjoying the benefit of the extension of the EOP granted to the petitioner as is permissible under the law; that the DGFT permission once granted cannot be withdrawn.

Held: The question that dragged the attention of this Court is as to whether the extension as sought for of the authorisation needs to be given to the petitioner in wake of the pendency of the show cause notice dated 05.03.2019 and in total set of facts and circumstances? - The respondent authorities could not find any evidence that within the stipulated time period, the Export Obligation of each Block had been fulfilled - It is thus prima facie clear that the required condition of EPCG Authorisation that the goods exported needed to be manufactured out of the capital goods imported by the petitioner has not been complied with as per the information given by the DRI and therefore, the respondent No. 2 had cancelled the EOP extension granted to the petitioner upto 09.09.2020, in respect its EPCG authorisation - It is the stand of the respondent that it is not mandatory to extend the said period of Export Obligation since the DRI had found the indulgence of the petitioner in the misuse of the EPCG scheme by making the use of shipping bills of other firms and using it before its own export - The Foreign Trade (Development & Regulation) Act, 1992 and the Rules made thereunder requires the personal hearing for the authority to propose imposition of the penalty and it also involves adjudication of the confiscation - Challenge in this petition is to this suspension of amendment sheet No. 3, which had extended two years of Export Obligation period with a further request to prospectively grant it for two years - Bench notices that the suspension on the part of the respondent authority is in wake of non-fulfilment of the directions on the part of the petitioner to the communication dated 24.12.2018 - After nearly a month from the non-compliance on 22.01.2019, there had been a suspension of the amendment sheet No. 3 dated 27.11.2018 - The show cause notice pursuant to the said search operation and subsequent to the suspension of this is already given on 05.03.2019 - Any indulgence on the part of the Court at this stage, would amount to entertaining the matter and indulging into the merit at the stage of show cause notice, which is impermissible - Once having extended the period on 27.11.2018, without availing the opportunity, the grant of extension of Export Obligation period, cannot be cancelled - However, if there are certain suspicious documents noticed by the DRI, the authority concerned, if has chosen to suspend the same and has sought the detail from the petitioner, no interference is desirable - If the petitioner is given a clean chit in the proceedings of the show cause notice, it may request the concerned authority to consider the case of extending the Export Obligation period which has been suspended presently and it would be for the authority to consider such a request at an appropriate time, if the factual circumstances based on the substantive material eventually tilt in favour of the petitioner - Petition dismissed: High Court [para 10, 15, 17, 19, 21]

- Petition dismissed: GUJARAT HIGH COURT

2021-TIOL-1123-HC-AHM-CUS

Inox India Pvt Ltd Vs UoI

Cus - Challenge in this petition is to the denial of rewards under the Merchandise Exports from India Scheme ('MEIS') based on technical objections and procedural infractions when the substantial benefits had accrued and available in favour of the petitioner.

Held:

+ As held in case of Gokul Overseas ( 2020-TIOL-830-HC-AHM-CUS ) all the SEZ exports come under the free shipping bills and hence, the mandatory declaration of intent w.e.f. 01.06.2015 would not be applicable. In the instant case also, the unit needs to declare its intent for claiming benefit under the MEIS for export made prior to 01.06.2015 i.e. for the period between 01.04.2015 to 31.05.2015 since as per the Foreign Trade Policy, Handbook of Procedure, 2015-20, the MEIS benefits were available to SEZ units w.e.f. 01.04.2015. [para 15]

+ Exports made from SEZ unit would come under free shipping bills and here also, export was made from SEZ Kandla unit. For free shipping bills to be converted in to MEIS bill, ratio of Messrs Gokul Overseas (supra) would be applicable. Even if this Court accepts the version of respondent authority that for exports made from 01.04.2015 to 31.05.2015, declaration of intent was a must from 01.06.20215 and that would not exclude the exports made prior thereto, on account of the export having been made, fulfilling all requirements and with no disputes in that regard, the objective of promotion of export cannot be overlooked. [para 15.1]

+ Again, export is from Kandla SEZ, where there was no explicit mandate of declaration of intent on free shipping bill. And, even if they are treated as shipping bills and not free shipping bills, that initial absence of declaration for want of any obligation may not come in the way of the petitioner, more particularly, in wake of peculiar facts and circumstances and the discussion of law on the subject. [para 15.2]

+ Noticing that the declaration of intent on the shipping bill for claiming the benefit under the reward scheme is made mandatory w.e.f 01.06.2015 under the Foreign Trade Policy, 2015-20 or the Handbook of Procedure, 2015-20, in wake of the aforementioned decision, there could be no exclusion of SEZ or non-EDI Port unit for availing the benefit.

+ The decision of this Court in case of M/s. Raj & Company (supra), where the Court has emphasized on procedurality not to hamper the substantive right of the party. With otherwise no dispute to the export under the Shipping Bill No. 3905 dated 30.03.2015 and the reward under the MEIS License dated 03.12.2015, this Court is of the opinion that the respondent authority is required to be directed to consider the case of the petitioner. Let the process be undertaken and the same be completed within a period of eight weeks. [para 16]

- Petition is allowed: GUJARAT HIGH COURT

2021-TIOL-1122-HC-AHM-CUS

Adani Ports And Special Economic Zone Ltd Vs UoI

Cus - Petitioners have prayed for quashing and setting aside the impugned Less Charge Demand Notice dated 2.8.2007.

Held:

+ Petitioners have challenged the Demand Notice dated 2.8.2007 mainly on the ground that after the issuance of said notice, no steps worth the name have been taken by the respondent authorities for adjudicating the said notice.

+ Perceptibly, not a single communication has been addressed by the respondent to the petitioners, intimating it about keeping the show-cause notice in abeyance. Furthermore, in the reply filed by the respondent, limited explanation is offered in paragraph 3.3 to the effect that due to reorganization of the department, shifting of the office documents have taken place, and during such shifting, the documents might have been misplaced.

+ It is further averred that the office has tried to find out the documents related to the concerned Demand Notice dated 2.8.2007, however, the same are not traceable. Clearly, the Revenue has thoroughly failed to justify its lapse for not adjudicating the Demand Notice dated 2.8.2007 for more than 11 years. Quite apart, as is discernible from the contents of paragraph 3.3 of the reply, during the shifting of the office, papers pertaining to the Demand Notice dated 2.8.2007 are not traceable. Therefore, allowing the Revenue at this stage to proceed with the adjudication of the notice dated 2.8.2007, would be an exercise in futility, in breach of the principles of natural justice and against the principle laid down by this Court. [para 16]

+ Petition deserves to be allowed by quashing the Demand Notice dated 2.8.2007 considering the aspects, firstly, that after the issuance of Demand Notice dated 2.8.2007 and filing of the reply dated 8.10.2007, no steps worth the name have been taken by the Revenue in furtherance of the aforesaid notice; secondly, that no fault has been attributed to the petitioners for the delay in adjudication of the notice; thirdly, that almost after 11 years, the petitioners would be justified in forming a bonafide belief that the notice dated 2.8.2007 by now must have been dropped; fourthly, that to expect the petitioners to preserve the relevant document and evidence, in absence of any intimation of keeping the notice in abeyance, is an expectation too farfetched; and lastly, for the petitioners to gather all the records and in absence of sufficient record/assistance of the concerned employees/officers working at the relevant point of time, it would not be possible for the petitioners to defend the case properly. [para 17]

+ Demand Notice being F.No . B/E No. F-1434./02.11.04 dated 2.8.2007 is hereby quashed and set aside.

- Petition allowed: GUJARAT HIGH COURT

2021-TIOL-1120-HC-RAJ-CUS

Shree Rishabdev Marble and Minerals Pvt Ltd Vs ACC

Cus - The petition is directed against the impugned order dated 6.1.2020, whereby permission for job work given in favour of petitioner is withdrawn and the request made for export of goods from the job worker premises has been rejected - It is noticed that assailing the order dated 6.1.2020, the present petition was filed by petitioner before this Court on 4.2.2020 and thus, the petitioner was pursuing the remedy before this Court bonafidely and therefore, the indulgence as prayed for by the petitioner deserves to be granted - Accordingly, petition is dismissed as withdrawn with the liberty to the petitioner to avail the statutory remedy of appeal - It is directed that if the appeal is filed by petitioner within a period of three weeks, the same shall be decided on merits after giving an opportunity of hearing to the petitioner: HC

- Writ petition dismissed: RAJASTHAN HIGH COURT

2021-TIOL-278-CESTAT-KOL

Mankasia Steel Pvt Ltd Vs CCGST & CX

CX - A SCN was issued to the appellant to raise demand of central excise duty on the charge of clandestine removal on the basis of certain loose documents, print outs and weighment slips - In adjudication, the demand of duty and penalty as proposed in notice was confirmed by lower authority - On appeal, the Commissioner (Appeals) has made a detailed observation to hold that the charge of clandestine clearance of excisable goods has been made on assumptions inasmuch as no positive evidence could be adduced by Revenue - Based on the said observation, he set aside the penalty amount but confirmed the duty demand - The Tribunal do not find any observation to justify upholding the duty demand, as has been claimed to have made by Commissioner - Since a detailed observation has been made in impugned order to hold that the charge of clandestine manufacture and clearance is not supported by any positive evidence and is merely based on assumption and presumption, which has not been rebutted, no reason found to uphold the duty demand - Hence, the demand of duty and interest are set aside: CESTAT

- Appeal allowed: KOLKATA CESTAT