2021-TIOL-1853-HC-KAR-GST
Sterne India Pvt Ltd Vs UoI
GST - The petitioner-company is engaged in trading in White Goods - In the course of investigation of some third parties, who were found to be bogus, the Revenue claimed that the petitioner had issued fake invoices to these entities without any actual supply of goods & that such entities were seeking ITC despite being ineligible - The petitioner's Head Office was searched & statements of director were recorded - Summons were later issued to them - Subsequently, the Revenue sought for the bank details of the petitioner and then proceeded to place attachment over the same - Hence the petitioner filed the present petition seeking to challenge the validity of provisional attachment of the petitioner's bank account - The petitioner sought that directions be issued to lift the attachment over it's accounts.
Held - Order of provisional attachment is required to be communicated to the party affected and this requirement is necessary for a meaningful exercise of the right conferred under Rule 159(2) of CGST Rules - In light of wide discretion granted to the Commissioner for formation of an opinion, greater the power and wider the discretion, the same is to be exercised with greater circumspection - If power is sought to be exercised, it has to be on the basis of substantive material, which is absent in the present case: HC
+ At the very outset, it must be noted that the order of provisional attachment is required to be communicated to the party affected and this requirement is necessary for a meaningful exercise of the right conferred under Rule 159(2) of CGST Rules. (Para 18);
+ What is of significance is the opportunity to be afforded to the affected person under Rule 159(5) of CGST Rules which provides that a person whose property is attached may, within seven days of the attachment under Sub-Rule (1), file objections to the effect that the property attached was or is not liable for attachment, and the Commissioner may, after affording an opportunity of being heard to the person permitting him to file objections, may pass an order releasing the property in Form GST DRC-23. (Para 21);
+ As pointed out by the Apex Court at para-57 of its judgment in the case of Radha Krishan Industries v. State of Himachal Pradesh and Others Sub-Rule (5) of Rule 159 of CGST Rules provides a right of post-provisional attachment consisting of right of (1) submitting an objection to the attachment (2) an opportunity of being heard. (Para 22);
+ Obviously, the right contemplated under Rule 159(5) of CGST Rules would require that the order of provisional attachment has to be communicated to the petitioner, without which, the question of exercising right seeking for lifting of the provisional attachment as contemplated under Sub-Rule (5) would be negated. (Para 23);
+ In the present case, undisputedly, there is no evidence to indicate the receipt of notice by the petitioner, despite assertion by the respondent Authority that the communication has been sent and in the absence of any material to indicate receipt of the same by the petitioner by furnishing any acknowledgement, the question of presuming receipt of communication relating to the order of provisional attachment does not arise. There are certain doubts that have also arisen as regards to the version of respondent Authority as regards the document at Annexure-A produced by the petitioner with the petition, which does not have any endorsement relating to sending of copy to the petitioner, while identical copy produced by the respondent Authority contains a handwritten endorsement. (Para 24);
+ In light of the dispute that has arisen and in light of absence of any material to indicate conclusively that the communication was sent to the petitioner to his address by producing any cogent material enclosing the postal receipt, there is no reason to accept the assertion of Revenue.
+ In the facts of the present case, as noticed above, there was an obligation for the respondent Authority to have considered the representation of the petitioner under Rule 159(5) of the CGST Rules. Though learned counsel for the respondent Authority would submit that even if the procedural lapse as pointed out by the petitioner were to be accepted, the matter requires to be remanded for fresh consideration of the representation of petitioner dated 13.10.2020 as per law. What requires to be noticed is that the order of attachment is dated 21.09.2020. Section 83(2) of the CGST Act provides that every provisional attachment shall cease to have the effect after expiry of one year from the date of the order made under Sub-Section (1) of Section 83 of CGST Act. As the period of one year would come to an end on 21.09.2021, it would be travesty of justice, if the matter is remanded back keeping the option open for the respondent Authority to pass orders on the representation of the petitioner, which theoretically would entitle the respondent, if circumstances are so made out to reject lifting of such attachment. Much water has flown in terms of lapse of time from the date of passing of the order of provisional attachment till this day, i.e. the date of this order. Even otherwise, merits of the matter being dealt with, does not warrant any such remand to the respondent Authority in light of the discussion infra. (Para 28);
+ In light of wide discretion granted to the Commissioner for formation of an opinion, greater the power and wider the discretion, the same is to be exercised with greater circumspection. If power is sought to be exercised, it has to be on the basis of substantive material, which is absent in the present case. The contention of learned counsel for the Revenue regarding the statements made by the representative of petitioner Company forming necessary basis for formation of an opinion of the Commissioner cannot be accepted, as the formation of the Commissioner's opinion must be reflected in some proceedings and no such proceedings are placed before this Court. (Para 33); Accordingly the petition is allowed and the order at Annexure-A dated 21.09.2020 is set aside. It is open to the respondent No.2 in light of the order passed, to issue necessary communication to the respondent Bank forthwith to lift the attachment, more so, in light of the period of one year as contemplated under Section 83(2) of the CGST Act coming to an end on 21.09.2021.
- Writ petition disposed of: KARNATAKA HIGH COURT
2021-TIOL-1847-HC-MUM-GST Gayatri Agro Agencies Vs UoI
GST - The grievance of petitioner is that, on the one hand, his entire TRAN-1 form could not be uploaded due to technical glitches in GSTN Portal and on the other hand, authorities are not allowing the petitioner, either to revise the proposal or submit hard copy of proposal, manually - Consequentially, the accrued CENVAT credit available to petitioner has not been allowed to be utilized as their form was not appropriately loaded due to glitches in GSTN Portal - After the petitioner first failed in making a complete uploading of TRAN-1 form, he could succeed in uploading the said form without glitches on 10.11.2017 - The revision that is sought, is not being accepted by the authorities - His first revision is dated 08.01.2018, which was not being accepted online and, therefore, he tendered the same manually - This is not being accepted on the ground that it amounts to a Second Revision and the Rules do not permit a Second Revision - It is found from the contents of TRAN-1 form that the successful attempt of petitioner in uploading the form online was nothing new but the exact copy of form which he had attempted to submit online for the first time and in which effort, he had been unsuccessful because of the glitches in GSTN Portal - Petitioner is allowed to tender the revised form GST TRAN-1, online as well as by tendering a copy manually to respondent within two weeks in view of the judgment in Adfert Technologies Pvt. Ltd. 2019-TIOL-2519-HC-P&H-GST and Siddharth Enterprises 2019-TIOL-2068-HC-AHM-GST - The respondent would decide the revised form filed by petitioner online / manually in accordance with procedure as is prescribed: HC
- Writ petition partly allowed: BOMBAY HIGH COURT
2021-TIOL-1846-HC-AHM-GST
Guru Steel Vs State of Gujarat
GST - The authority vide its order has determined the taxes payable by petitioner alongwith penalty and fine and confiscated the goods and conveyance under Section 130 of the CGST Act - The petitioner was afforded an opportunity of hearing by issuing a SCN, but the same was not responded to by petitioner - Now, since a final order has been passed under Section 130 of CGST Act, the proper course would be to file an Appeal as provided for under the Statute - As there is an alternative equally efficacious remedy available to the petitioner, the Court is not inclined to entertain the present petition: HC
- Petition dismissed: GUJARAT HIGH COURT |
