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GST - To obtain release of the goods or conveyances, while the adjudication proceedings are continuing, the taxpayer needs to pay only the fine and not the tax, penalty and charges thereon: HC

GST - There is nothing unjust in the taxpayer escaping if the letter of the law fails to catch him: HC

ST - 1973 Zanjeer 2013 - Infringement of copyright - Javed saab should get back service tax paid by him on ex gratia payment received from Reliance Big Entertainment: CESTAT

ST - Refund provisions should be interpreted in a reasonable and practical manner and when warranted, liberally in favour of the assessee: CESTAT

GST - Applicant club has to pay GST on amounts received against membership subscription and admission fees from members - Principles of mutuality inapplicable: AAR

2021-TIOL-2230-HC-KERALA-GST

STO Vs Y Balakrishnan

GST - Following three issues arise for consideration in the review petition filed by the Tax officer - (i) Whether the provisions of section 130 of the Act contemplate any provisional release of goods, as directed in the interim order of this Court? (ii) Whether the amount payable for release of the goods under section 130 of the Act is fine alone or is it fine, penalty and tax to be paid together for securing release of the goods? & (iii) What is the basis or rate for calculating the fine under section 130 of the Act?.

Held:

+ T hough section 130(2) is not a case of provisional release, the sub-clause confers power upon the competent officer to release the goods on payment of fine in lieu of confiscation, while the proceedings for confiscation are continuing and before orders of adjudication are passed. [para 30]

+ The words "be liable" in section 130(3) of the Act only conveys a possibility of attracting the obligation and not an imperative obligation, shorn of fair procedure. Court is of the view that when fine in lieu of confiscation is paid by a dealer under section 130(2) of the Act, the liability for payment of tax, penalty and charges will fall upon the dealer, in addition to the fine and they need be paid only after adjudication. To obtain the release of the goods or conveyances, while the adjudication proceedings are continuing, the taxpayer needs to pay only the fine and not the tax, penalty and charges thereon. The tax, penalty and charges can be paid after adjudication. [para 40]

+ If the taxpayer has a dispute on the value fixed tentatively by the Proper Officer, he can dispute the same and during the course of adjudication, get a determination of the market value also. The amount payable is in the realm of a disputed question of fact and this Court cannot determine the quantum payable by the dealer. [para 45]

- Review petition dismissed: KERALA HIGH COURT

2021-TIOL-272-AAR-GST

Rotary Club of Nagpur Vision

GST - Monthly contribution made by the members to the association is in return for receiving the services of the Applicant Club - The money collected by the Appellant from its members is used to procure services and goods from a third party and provide the benefits of such procured goods and services to the members of the association - Applicant club and its members are distinct persons and the amounts/consideration received by the applicant from its members are nothing but consideration received for supply of goods/services as a separate entity - The principles of mutuality is not applicable in view of the amended Section 7 of the CGST Act, 2017 and, therefore, the applicant has to pay GST on the said amounts received against membership subscription and admission fees from members: AAR

- Application disposed of: AAR

2021-TIOL-767-CESTAT-MUM

Shri Javed Akhtar Vs CCGST

ST - Issue involved is whether the appellant is entitled for refund of service tax paid under protest without challenging the assessment proceedings, which was held to be not payable by authorities concerned in an appeal of another assessee of the very same transaction? Facts: Appellant Javed Akhtar was a co-writer along with Salim Khan of film Zanjeer (1973) - A film by the same name was produced in the year 2013 by Reliance Big Entertainment P Ltd. - Appellant and Salim Khan jointly filed a suit before the Bombay High Court against Reliance Big Entertainment Pvt. Ltd. for infringement of copyright, claiming damages to the tune of Rs. 6 crores - In the said Suit, out of Court settlement was made and a payment of Rs. 2 crores each was made by Reliance to the Appellant as well as to Mr. Salim Khan in the year 2013 itself - Department was of the opinion that service tax needs to be paid on the said amount as the same falls under the definition of declared services - Appellant stated that he has not rendered any service and the amount received is the compensation towards the damages of copyrights and moral rights done by the producers of Zanjeer (2013) but despite that the appellant paid the service tax amount of Rs.22 lakhs under protest along with interest on 31.01.2014 and requested for closure of proceedings vide letter dated 23.06.2014 - Commissioner passed an order of closure of proceedings - Incidentally, in the matter of similar proceedings initiated by the department against Salim Khan, although the amount of service tax was paid under protest, the Commissioner(A) in appeal proceedings held that the amount of Rs.2 crores received was an ex gratia payment and NOT a payment for a consideration relating to any service - Since the said order was not appealed by the department, it attained finality and a refund was sanctioned to Salim Khan on 30.10.2017 - The appellant also filed a refund claim on 15.03.2018 on the primary ground that he too had paid the amount of tax under protest and as the amount paid to/by Salim Khan arises out of the same transaction, he too is entitled for the refund on similar lines - The claim was rejected by lower authorities and hence appeal filed before Tribunal.

Held:

+ Commissioner (A) has recorded a specific finding that the payment made by the appellant was not voluntary and is under protest and also that the application for refund is not barred by limitation. Aforesaid findings of the commissioner have not been challenged by the department and, therefore, it attained finality.

+ It is settled position that if the payment made by the assessee is not for any services rendered by him, the amount collected by Revenue as service tax is without authority of law and cannot be termed as tax even and can't be retained by them.

+ Where there is no levy of service tax, amount wrongly paid cannot partake the character of ‘service tax'. Had it been a tax then one would have understood the case of revenue but since in another case arising out of the same transaction it has been held not to be taxed since no service has been provided, then the amount paid by the appellant herein and that too under protest cannot be termed as tax, but merely a deposit.

+ Retention of any amount paid without any liability or in excess of the liability violates Article 265 of the Constitution of India.

+ Therefore, the contention that the assessment in the case of the appellant has attained finality and hence, he cannot claim refund unless the assessment is challenged is misconceived and contrary to the law. The authority concerned is duty bound to refund such amount as retention of such amount would be hit by Article 265 of the Constitution of India which bears the heading “Taxes not to be imposed save by authority of law” and lays down that no tax shall be levied or collected except by authority of law.

+ Act of the authorities by keeping the deposit is directly in conflict with Article 265. When the amount deposited by the appellant is not a tax and merely a deposit, there is no question of applying the provisions of the Finance Act for its refund. + Refund provisions should be interpreted in a reasonable and practical manner and when warranted, liberally in favour of the assessee.

+ Appeal is allowed with consequential relief.

- Appeal allowed: MUMBAI CESTAT