2021-TIOL-1768-HC-GUW-GST

Sourav Bajoria Vs UoI

GST - Application has been filed seeking bail u/s 439 of CrPC in connection with initiation of GST case u/s 132(5) of the Act, 2017 - Allegation is regarding generation of invoices without actual supply of goods/services - Petitioner is the tax consultant of M/s Maruti Traders who has been involved in generation of invoices without actual supply of goods - Declared principal place of business of M/s Maruti Traders is vague and fictitious and does not exist; that when search was conducted in the office of the tax consultant, incriminating documents like E-way bills, invoices were found - It has come out during investigation that sale of coal in the name of M/s Maruti Traders is only on paper and similarly purchase of coal from places like Delhi, Gandhidham and Ludhiana etc. are also fake and no movement of stock of coal took place - It is also found that the applicant petitioner has been arranging fake invoices and acted as a connection with various clients of M/s Maruti Traders; that the petitioner has prepared accounts of M/s Maruti Traders on such false and fabricated accounts.

Held: Complainant has alleged a huge economic offence and, therefore, a thorough and detailed investigation is essential - at least in one case there was no record that the truck reached Beltola and in the other one although the destination of the truck was Beltola, the truck went to Gujarat -  Considering the materials so far collected by the Investigating Agency in respect of manipulation of invoices, etc and the role of this petitioner in facilitating commission of the offence of huge tax evasion of Rs.28,97,85,917/-, the enlargement of the petitioner on bail, at this stage, is likely to hamper the investigation and tamper evidence which may amount to compromising with the entire investigation of the case - Investigation of the case involves a huge number of documents to be examined at different levels and at different places necessitating reasonably sufficient time to the Investigating Agency - P rayer for bail of the petitioner stands rejected: High Court [para 9, 10, 12, 14]

- Petition rejected: GAUHATI HIGH COURT

2021-TIOL-1767-HC-TRIPURA-GST

Ne Equipment Solutions Pvt Ltd Vs State of Tripura

GST -  Petitioner has prayed for release of machinery which has been detained at Churaibari check post while it was in transit from Silchar to Khowai - Facts are that the petitioner sold one TATA Hitachi Hydraulic Excavator to one Satya Sundar Das of Khowai - The cost of machinery was Rs.49,66,102/- on which IGST of Rs.8,93,898/- was collected - When the transport vehicle reached at Churaibari check post in the early morning hours of 16.08.2021, the transport department of State of Tripura detained the vehicle on the ground that the excavator had no registration in the State of Tripura which was violative of Section 192A of the Motor Vehicles Act - Eventually the transport authority released the order of detention on 17.08.2021 upon the petitioner paying fine of Rs.10,000/- but in the meantime the validity of the e-way bill had expired - Vehicle was thereafter  intercepted by the GST authorities at the Churaibari check post and although the petitioner generated a new e-way bill on 18.08.2021, the authorities refused to accept the same and o n 19.08.2021, the Superintendent of Taxes, Churaibari Enforcement Wing issued a show-cause notice to the petitioner u/s 129(3) of the Act, 2017  calling upon the petitioner why unpaid tax with penalty totalling to Rs.17,87,796/- should not be recovered from the petitioner - At that stage, the petitioner has approached this Court primarily for release of the machinery.

Held:  Though the petitioner generated a new e-way bill, the GST department of the State was not prepared to accept it - Under the circumstances, allowing the department to detain the machinery would be wholly impermissible - The fault of the petitioner, if at all, is rather technical - The machinery costs nearly half a crore of rupees on which the Government revenue has already earned substantial tax - Detaining such machinery at the check post would expose it to deterioration, particularly in the present season of heavy rainfall - Under the GST regime, even the tax authority has power to release machinery on provisional basis pending further assessment - Present was an ideal case where such powers should have been activated - The tax authorities must make a clear distinction between deliberate tax evasion and technical or minor defects which manifest no intention to evade tax - When the IGST liability has been fully discharged, no intention can be attributed on part of the petitioner to evade tax - Bench orders release of the machinery upon the petitioner filing an undertaking that eventually subject to appeal and further right to challenge the order of assessment, if any tax or penalty liability is crystallized, the petitioner would discharge the same - Petition disposed of: High Court 

- Petition disposed of: TRIPURA HIGH COURT

2021-TIOL-1766-HC-ORISSA-GST

Narayan Kumar Khaitan Vs UoI

GST - Petitioner, being in custody, seeks bail in the matter of offences registered against him u/s 132 of the CGST Act, 2017 - On a complaint that the Petitioner, who happens to be the Director and Authorized Signatory of M/s. Shri Ganapati Ores & Ispat Pvt. Ltd. And M/s. Kshipra Consumer Marketing Pvt. Ltd. which are trading Companies having G.S.T. registration, is involved in issuance of fake invoices indicating the sales of goods/raw materials used to different manufacturing units of Steel and Aluminium which are located in different locations of Odisha as well as outside the State of Odisha, has been taken to custody as the same resulted huge loss of the revenue in the shape of input tax credit claimed by the units to whom the fake invoices are issued without actual movement of goods - Court vide order dated 4.11.2020 has granted interim bail for a period of sixty days to the Petitioner with a direction to the Court below to take all effective steps to conclude the trial within six months from the date of order and in view of the order of this Court, the trial court posted the case on 25.1.2021, 12.2.2021, 25,2.2021, 1.3.2021, 2.3.2021 and 3.3.2021 and on 3.3.2021, but due to non-production of the witnesses by the complainant and seeking adjournment, the trial of the case could not be completed though the petitioner is in custody since 12.10.2018 and cooperating with the trial.

Held: It appears that the prosecution in this case is not interested to conclude the case at an early date inasmuch as in spite of the opportunities given, witnesses have not been produced by the complainant - The Petitioner has already undergone more than 50% of the sentence prescribed on conviction of the offence alleged and this fact is not disputed -Section 436A of Cr.P.C. speaks that where a person has, during the period of investigation, inquiry or trial under this Code of an offence under any law (not being an offence for which the punishment of death has been specified as one of the punishments under that law), undergone detention for a period extending up to one-half of the maximum period of imprisonment specified for that offence under that law, he shall be released by the Court on his personal bond with or without sureties - In this case, nothing has been brought to the notice of the Court indicating the fact that the petitioner, who was all along in custody has contributed to the delay of conclusion of the trial, rather the order of the Magistrate speaks that the complainant is not producing the witnesses, as such, the delay - This Court extending the benefit of mandate of Section 436A of Cr.P.C. directs the trial Court to release the Petitioner on bail in the aforesaid case on such terms and conditions as it would deem just and proper - Bail application allowed: High Court [para 6 to 8] 

- Application allowed: ORISSA HIGH COURT

2021-TIOL-1765-HC-PATNA-VAT

ITC Ltd Vs State of Bihar

Whether the order passed under Section 20(1) (a) of the Bihar Finance Act, 1981 imposing a levy of penalty is illegal and invalid given the bar of limitation stipulated under Section 24 of the said Act - No: Patna HC

- Writ petition dismissed: PATNA HIGH COURT

2021-TIOL-1764-HC-MAD-VAT

Infra Engineers India Vs CTO

Whether there is availability of input tax credit under Section 19(5) of the Tamil Nadu Value Added Tax Act, 2006 and the claim of the petitioner for adjustment of the aforesaid input tax credit under the provisions of the Central Sales Tax Act, 1956 read with Rule 3A of the Central Sales Tax (Tamil Nadu) Rules, 1957: YES

Whether the respondent was justified in disallowing adjustment of the input tax credit amounting to Rs. 23,31,952/- from the petitioner's online monthly return of February 2014 towards the arrears of the tax liability for the Assessment Year 2011-12 on the ground that it is not open to the petitioner to adjust the same without filing a proper refund claim within time in the light of Section 18(3) of the Tamil Nadu Value Added Tax Act, 2006: NO

- Assessee's petition dismissed: MADRAS HIGH COURT

2021-TIOL-1763-HC-TELANGANA-VAT

KMC Constructions Ltd Vs Asstt.Commissioner (CT)

Whether the respondents rightfully refused to grant refund of excess tax paid by the petitioner for the tax period 2011-12 and 2012-13, respectively, in a sum of Rs. 4,44,62,188/-, pursuant to the order dt. 18.02.2019, in T.A. No. 176 of 2016, passed by the Telangana Value Added Tax Appellate Tribunal, Hyderabad - No: Telengana HC

- Writ petition allowed: TELANGANA HIGH COURT

2021-TIOL-537-CESTAT-BANG

Divya Sree R O W Projects LLP Vs CCT

ST - The appellant imported passenger lifts and availed the credit of CVD paid - During audit, availment of credit on passenger lifts were raised contending that lifts were capital goods and credit on such capital goods are not allowed - On these allegations, a SCN was issued to them for demand/recovery of an amount being the irregular CENVAT credit availed and utilized, in terms of provision of Rule 14 of Cenvat Credit Rules, 2004 r/w proviso to Section 73(1) of Finance Act, 1994 - When the passenger lift was imported, it was classified under Chapter 84 and the Classification was accepted by Department and once the classification is accepted by Department, it cannot be changed at the receiver's end by Department - The lift is essential for providing output service and therefore, appellant has fulfilled both the conditions to avail the credit, hence the denial of credit is not sustainable, simply because the lifts are fitted into the building does not have an impact on treatment of lifts as capital goods because even after fitting into the building, lift is a lift and covered under Chapter 84 and cannot be considered as input just to deny the benefit of CENVAT credit - Further, the findings in impugned order that the lifts were not used in providing service but used in supply of material hence not eligible for credit, is not sustainable in law because the capital goods used cannot be attributed to service portion and material portion as envisaged in the order - Therefore, appellant is entitled to CENVAT credit on lift which is capital goods and the denial of same is not sustainable - Impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT

2021-TIOL-536-CESTAT-CHD

CCE & ST Vs Showa India Pvt Ltd

CX - The assessee-manufactures Electronic Power steering - Their records were audited and it was pointed out that they cleared the goods at a price below their cost of production - Accordingly, they were asked to pay differential duty which they paid - They also filed a letter of protest - No SCN under Section 11A of Central Excise Act was issued to the assessee demanding differential duty and to appropriate the duty already debited - Thereafter, assessee filed a refund claim of the amount reversed under protest - It was held by High Court in case of Century Metal Recycling Pvt Ltd 2008-TIOL-711-HC-P&H-CX and upheld by Supreme Court that, as far as the amount deposited by petitioners is concerned, case of petitioners is that the same was deposited under coercion - Case of the respondents was that the same was deposited voluntarily - Whatever be the position, unless there is assessment and demand, the amount deposited by petitioners cannot be appropriated - No justification has been shown for retaining the amount deposited except saying that since it was voluntarily deposited - The petitioners are entitled to be returned the amount paid - The facts of the present case are identical - Thus, the assessee is entitled for refund claim of the amount already reversed during the course of audit - No infirmity found in the impugned order, same is upheld: CESTAT

- Appeal dismissed: CHANDIGARH CESTAT

2021-TIOL-535-CESTAT-BANG

Chamundi Textiles (Silk Mills) Ltd Vs CC

Cus - The appellant is a manufacturer and exporter of linen and silk fabrics since 1988 and there has not even a single remark or dispute either with the Customs Department or DGFT which has been approved by respondent - The mistake in the shipping bills occurred on account of change of employee who was looking after the import and export of appellant and as soon as the appellant came to know about the fact of filing of shipping bill under duty drawback instead of advance authorisation scheme, they immediately reported to Deputy Commissioner seeking amendment of shipping bill but the same was declined by Principal Commissioner on the ground that there is a delay in filing the application and secondly export documents were not endorsed by Customs officer and thirdly that the appellant has not been able to establish the foreign exchange receipt against these exports - In impugned order, the Commissioner has wrongly observed that shipping bills have not been endorsed whereas the appellant has proved on record, all the documents including shipping bills which have been endorsed by Customs department upon verification of documents - Further, appellant has established on record by proof of invoices and shipping bills supported by bank realisation certificate which are sufficient proof of export of goods and shipping bills filed by appellant are also endorsed by Superintendent of Customs - Appellant has only claimed an amount of Rs. 1,11,583/- whereas the duty foregone on imported goods was more than Rs. 1 crore, the Tribunal do not think that the appellant will indulge in diverting or misuse by claiming drawback, when the appellant is into the export business and exports goods worth hundreds of crores - Appellant has given the undertaking before Principal Commissioner stating that the duty drawback was claimed by them due to inadvertent mistake and that will be paid back along with interest - As far as limitation of time provided under circular is concerned, provision of Section 149 of Customs Act, 1962 or the rules or notifications made thereunder does not provide any time limit for amendment or conversion of documents and it is only through the circular issued by CBEC a period of three months have been prescribed - It has been consistently held by Tribunal that the time-limit prescribed by CBEC is not binding on the court if the Circular is contrary to the statutory provision, then the statutory provision would prevail - The impugned order is not sustainable in law - The concerned Customs officer is directed to allow the amendment in the shipping bills but before that the appellant would pay back the duty drawback claimed by them along with interest which will be quantified by Departmental officer and after the payment of said amount, concerned officer allow the amendment in shipping bills as prayed by the appellant: CESTAT

- Appeal disposed of: BANGALORE CESTAT