I-T - Reassessment notices u/s 148 served on or after 1.4.2021 can be set aside since issued in reference to unamended provisions : HC

I-T - Additions framed u/s 68 merit being upheld where assessee failed to appear before AO to establish creditworthiness & genuineness of share applicants: ITAT

I-T - No addition can be made u/s 68, when assessee proves receipt and repayment of loan received along with interest : ITAT

I-T - Re-opening of assessment cannot be resorted to when there is no failure on part of assessee to make full & true disclosure of material facts necessary for assessment : ITAT

I-T - Addition of Rs. 3,00,000 for unexplained investment can sustain as agricultural property is sold in June 2004 and same in all likelihood cannot have been available for making a purchase on March 2006: ITAT

GST - provisions of GST Acts cannot be interpreted so as to deny GST registration or revival of cancelled/lapsed registration: HC

2022-TIOL-261-HC-MAD-GST

Nazhar Ahmed Vs Appellate DCST (GST)

GST - The present petitions were filed to challenge the cancellation of GST registrations issued to the petitioners under the Tamil Nadu GST Act and CGST Act - Some of the petitioners contested the cancellation of GST registration while others challenged orders passed in appeals filed against the orders of cancellation of registration.

Held -

+ Some of the appeals filed against the order of cancellation of GST registration were rejected without numbering, while, some of the appeals were numbered and rejected on the ground that the time prescribed for appeal had existed. Appeals filed by these petitioners were dismissed as these appeals were filed not only beyond the statutory period of limitation prescribed under Section 107 of the respective GST Acts but also beyond the condonable period. (Para 154);

+ The law on the limitation has been well settled by the Supreme Court. In this connection, a reference is invited to the decision of the e Supreme Court in M/s. Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and Others , wherein, it has been held that statuary appeal that filed beyond the statutory period for condonation of delay under Section 35 of the Central Excise Act, 1944 cannot be condoned. (Para 155);

+ As original or as appellate authority exercising power under the respective enactments, quasi judicial officers were bound by the provisions of the Act and the limitation under it, they have acted in accordane with law. They cannot look beyond the limitations prescribed under provisions of the Act. Therefore, no fault can be attributed to their action. (Para 156);

+ Under these circumstances, no fault can be attributed to the impugned orders passed by the Appellate Commissioner inasmuch as they cannot exercise jurisdiction beyond the provisions of the Act and are bound to Act in accordance of the provisions of the Act. At the same time, I find there are overwhelming reasons for granting reliefs to these petitioners to restore their registration. (Para 157);

+ It should be however remembered that the provisions of the Goods and Services Tax Act, 2017 cannot be interpreted in such a manner, so as to debar an assessee, either from obtaining registration or reviving the lapsed/cancelled registration as such an interpretation would be not only contrary to the Article 19(1)(g) of the Constitution of India but also in violation of Article 14 and Article 21 of the Constitution of India. (Para 206);

+ The provisions of the GST Enactments and the Rules made there under read with various clarifications issued by the Central Government pursuant to the decision of the GST Council and the Notification issued thereunder the respective enactments also make it clear, intention is to only facilitate and not to debar and de-recognised assesses from coming back into the GST fold. (Para 208);

+ Thus, the intention of the Government has been to allow the persons like the petitioners to file a fresh application and to process the application for revocation of the cancellation of registration by the officers. (Para 209);

+ No useful purpose will be served by keeping these petitioners out of the bounds of GST regime under the respective GST enactments other than to allow further leakage of the revenue and to isolate these petitioners from the main stream contrary to the objects of the respective GST enactments. (Para 210);

+ The purpose of GST registration is only to ensure just tax gets collected on supplies of goods or service or both and is paid to the exchequer. Keeping these petitioners outside the bounds of the GST regime is a self defeating move as no tax will get paid on the supplies of these petitioners. (Para 211);

+ May be, organised companies who comply with the requirement of GST enactments may not give business with these petitioners. However, by keeping the petitioners out of the bounds of GST law, purpose of the Act will not be achieved. It will also not mean that the petitioners will not do business ie., of either supplying goods or service in the unorganised sector. They will still do their buisness, may be surreptitiously and clandestinely. (Para 212);

+ They may perhaps not get opportunity to supply goods or services to established players. They may still supply to smaller players who may not be keen on GST compliance by the petitioners. By not allowing the petitioners to revive their registration is to de-recognise a whole lot of entrepreneurs and to not to collect GST at all from them. (Para 213-214);

+ It will only strain the system, as these petitioners will continue to carry on their business and supply goods and service and/or end up not paying the GST under the respective GST enactments. It will lead to loss of revenue to the Government which is not intended when these enactments were enacted; Since, no useful will be served by not allowing persons like the petitioners to revive their registration and integrate them back into the main stream, I am of the view that the impugned orders are liable to be quashed and with few safeguards; There are adequate safeguards under the GST enactments which can also be pressed against these petitioners even if their registration are revived so that, there is no abuse by these petitioners and there is enough deterrence against default in either paying tax or in complying with the procedures of filing returns; Further, the Government requires tax to meet its expenditure. By not bringing these petitioners within the GST fold, unintended privilege may be conferred on these petitioners unfairly to not to pay GST should they end supplying goods and/or services without registration. For example, a person renting out an immoveable property will continue to supply such service irrespective of registration or not; (Para 2-15-218);

+ The provisions of the GST enactments cannot be interpreted so as to deny the right to carry on Trade and Commerce to a citizen and subjects. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of the defect in the scheme of the GST enactments. The right to carry on trade or professoin also cannot be curtailed. Only reasonable restriction can be imposed. To deny such rights would militate against their rights under Article 14, read with Article 19 (1)(g) and Article 21 of the Constitution of India; (Para 225);

+ As original or as appellate authority exercising power under the respective enactments, quasi judicial officers were bound by the provisions of the Act and the limitation under it, they have acted in accordance with law. They cannot look beyond the limitations prescribed under provisions of the Act. Therefore, no fault can be attributed to their action. (Para 226);

+ This is a fit case for exercising the power under Article 226 of the Constitution of India in favour of the petitioners by quashing the impugned orders and to grant consequential relief to the petitioners. By doing so, the Court is effectuating the object under the GST enactment of levying and collecting just tax from every assessee who either supplies goods or service. Legitimate Trade and Commerce by every supplier should be allowed to be carried on subject to payment of tax and statutory compliance. Therefore, the impugned orders deserve to be quashed. (Para 227);

+ These petitioners deserve a chance and therefore should be allowed to revive their registration so that they can proceed to regularize the defaults. The authorities acting under the Act may impose penalty with the gravity of lapses committed by these petitioners by issuing notice. If required, the Central Government and the State Government may also suitably amend the Rules to levy penalty so that it acts as a deterrent on others from adopting casual approach. (Para 228)

- Writ petitions disposed of: MADRAS HIGH COURT

2022-TIOL-158-CESTAT-BANG

Nazhar Ahmed Vs CC

Cus - The appellant has mainly questioned the confiscation of gold inter alia on the grounds that the goods in question was not prohibited goods and that 'an individual passenger was allowed to bring gold up to 5 kgs' and that in view of liberalization policy, the gold ornaments imported should be released to appellant or allowed to be re-exported - Consequently, he has also questioned the penalty imposed under Section 112(b) ibid imposed on him - This is a case where a passenger was found in possession of gold to such extent that is not permissible under any law, the same was found hidden without declaring, which made the said gold in question liable for confiscation within the meaning of Section 111 ibid and therefore, imposition of penalty under Section 112(b) of Customs Act, 1962 is justified - But however, since the appellant has identified/treated him as a carrier for Imran and the revenue has not brought on record any updates on further investigation about said Imran, penalty imposed on appellant is very much on the higher side - Hence, penalty to be restricted to Rs. 100,000/-: CESTAT

- Appeal partly allowed: BANGALORE CESTAT

2022-TIOL-157-CESTAT-MAD

Ornate Creations Pvt Ltd Vs CGST & CE

ST - The only issue arises in appeal is rejection of refund claim as being barred by limitation as well as being hit by unjust enrichment - Appellant made an application for refund after passing of Final Order of Tribunal dated 13.06.2018 and application for refund is dated 28.02.2019 - Therefore, appellant's claim is well within the prescribed period of limitation - The other finding in impugned order, that Final Order of Tribunal did not cover the Service Tax paid for earlier period is also seriously disputed on the ground that the Tribunal itself has held, going by the provisions, that there was no tax liability prior to 01.06.2007 - No justifiable reasons found, therefore, to sustain the finding of First Appellate Authority and accordingly, to this extent, the impugned order is set aside - With regard to unjust enrichment, duty element was not passed on to its customers, in support of which appellant had placed documents - Revenue has not pointed out any defects in said documents and there is also no discussion as to the genuineness or otherwise of the same - In absence of any contrary findings on documents, appellant has been able to successfully prove that the tax incidence has not been passed on to its customers - Rejection of refund is held to be vague and unjustifiable, for which reason the impugned order is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2022-TIOL-156-CESTAT-DEL

Rajram Maize Products Vs CCGST, Excise & Customs

CX - The issue arises is, whether the input service credit availed for unit for the purpose of repair and maintenance to Captive Wind Mill of appellant located far from their factory is admissible - The issue is no longer res integra and has been decided in favour of appellant by the law laid down by Supreme Court in case of Vikram Cement 2006-TIOL-04-SC-CX-LB , wherein the Supreme Court has upheld the allowability of cenvat credit on inputs or input services received outside the factory at the captive mines - Admittedly, appellant have generated power at the wind mill and transferred the power under Wheeling Dealing Agreement in the Western Grid and thereafter, has drawn power at its factory at Rajnandgaon - Further, from the Bill raised by Western Grid, it is evident that the appellant has been given credit of units transferred to the grid at the Wind Mill and thereafter, have drawn power at Factory, they were required to make payment and if they have drawn excess power, and if they have drawn some less power, then they were entitled to such credit as per the agreement - The agreement also provides for payment of Wheeling Dealing charges to western grid by appellant - Thus, there is clear mis-reading of agreement between the appellant and the Western Grid - In appellant's own case vide order 2014-TIOL-1567-CESTAT-DEL, the Coordinate Bench of this Tribunal has allowed cenvat credit, wherein the dispute was for cenvat credit for transport expenses of coal for the use in captive power plant - As the appeal is allowed on merits, the issue of limitation is left open: CESTAT

- Appeal allowed: DELHI CESTAT