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2023-TIOL-601-HC-DEL-GST
Sidhivinayak Chemtech Pvt Ltd Vs Pr.CCGST
GST - On the ground that the petitioner company had fraudulently transferred ITC amounting to Rs.36.6 crore to M/s Best Crop Science Pvt. Ltd. and M/s Best Crop Science LLP, without supplying any goods to the said companies, their bank accounts were attached - Respondent no.1 alleged that during the course of investigation, it was found that the petitioner company's office at Kundli, Sonipat, Haryana was not operational - And, although its unit at Sikandrabad, Uttar Pradesh was operational, it had no records in relation to purchase, production, sale, stocks etc. - Petition filed against this order of attachment.
Held: The term 'the Commissioner' as used in Section 83 of the CGST Act would necessarily refer to the Commissioner who exercises jurisdiction under the CGST Act in respect of 'the taxable person' - In the present case, the petitioner is the taxable person - In the given circumstances, Bench finds merit in the contention that the expression 'the Commissioner' would necessarily mean the Commissioner who exercises its powers in respect of 'the taxable person' - Section 83 of the CGST Act must be read in harmony with Section 3 and Section 5 of the CGST Act and the Commissioner, whose territorial jurisdiction is confined by the Board to a particular territory, would not have the jurisdiction to discharge the functions under the CGST Act beyond its territorial jurisdiction - Thus, for the purposes of the CGST Act, the expression 'the Commissioner' must necessarily be read to be the Commissioner who is empowered to discharge the functions under the CGST Act - In the present case, it is conceded that respondent no.1 does not exercise jurisdiction in respect of territories where the petitioner's principal place of business is located - Thus, respondent no.1 had no jurisdiction to pass the attachment order in respect of the petitioner as 'the taxable person' - Bench is unable to agree that respondent no.1 would have the jurisdiction to pass orders in respect of other taxable persons who do not fall within its jurisdiction - Sub-section (1A) of Section 122 of the CGST Act is applicable to any person who retains the benefit of the transaction covered under Clauses (i), (ii), (vii) and (ix) of Section 122(1) of the CGST Act and at whose instance such transaction is conducted - There is no allegation that the petitioner has retained the benefit of any of the alleged transactions covered under any of the specified clauses of Section 122(1) of the CGST Act - On the contrary, the allegation is that the petitioner has facilitated M/s Best Crop Science LLP / M/s Best Crop Science Pvt. Ltd. to avail fraudulent ITC - More importantly, there is no allegation that any of the allegedly offending transactions were conducted at the instance of the petitioner - On the contrary, it is alleged that the petitioner company was set up by the promoters of M/s Best Crop Science Pvt. Ltd. for availing fraudulent ITC - Impugned order is liable to be set aside on this ground alone - The action of respondent no.1 in provisionally attaching the bank account of the petitioner must be decided on the anvil of the parameters as explained by the Supreme Court in Radha Krishan Industries ( = 2021-TIOL-179-SC-GST ) - The order of attachment in Form GST DRC-22 does not indicate any reason that had led respondent no.1 to form an opinion that the petitioner is liable to defeat any demand of tax or dues if its bank account is not provisionally attached -It is necessary to bear in mind that attachment of a bank account would in effect result in the closure of the business of a taxpayer and has the propensity to cause irretrievable harm - The said drastic action is impermissible merely on the basis of suspicion and without any tangible material - The second reason that the petitioner is a dummy company because the director of the petitioner is/was an employee of M/s Best Crop Group is also somewhat in the realm of assumptions - The petitioner had stated that Shri Raman Kumar was employed by M/s Best Crop Group but he had since moved on and had taken up his role as a director of the petitioner company -It is relevant to note that there is no allegation that the shareholders of the petitioner company are non-existent or fictitious persons -Merely because there was some material (although disputed) to indicate that one of the directors of the petitioner was an employee of another company cannot be the basis to believe that the petitioner company is a dummy company given the material as provided -The language of Section 83 of the CGST Act requires the Commissioner to form an opinion that it is necessary to attach the property of a taxable person - However, the said opinion is required to be based on relevant facts and not merely on grounds of suspicion - It is difficult to imagine that a company would survive if its bank accounts are frozen for a protracted period of time -Mere suspicion that the petitioner is a dummy company, which is founded on the basis of statements that one of the directors of the petitioner company was, or is an employee of M/s Best Agrolife Group, and is in complete disregard of the corporate documents of the petitioner, would clearly fall foul of the requirement of forming an opinion, as it does not meet the standards required for taking an action under Section 83 of the CGST Act - Attachment order is set aside - Petition is disposed of: High Court [para 24, 26, 29, 34, 35, 43, 44, 45, 46, 47, 48, 49]
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-600-HC-KAR-ST
Kalegowda Enterprises Vs UoI
ST - Petitioner is the owner of a building which he has leased to Life Insurance Corporation of India - Under the terms of the lease, LIC was required to pay Rs.2,45,600/- per month as rent - Petitioner's contention is that he was merely the service provider and since the tax is payable by the person, who had availed the services i.e., the tenant, his only obligation, in law, was to collect the tax and remit it to the Department - It is his case that he proceeded to discharge his obligation of remitting the tax, but when he called upon LIC to reimburse the service tax paid by him, LIC proceeded to issue the endorsements dated 29.08.2013 and 02.09.2013 by which they basically refused to honour their liability of paying the service tax - LIC fundamentally seeks to rely upon the terms of the lease which according to them indicates that the liability to pay service tax is on the petitioner - Therefore, the present petition.
Held : It is clear that though the person who provides the service, i.e., lessor, is liable to pay tax, he is entitled to pass on this liability to the recipient of the service - In this view of the matter, it is the obligation of the lessor to collect the service tax and thereafter remit it to the Department - A lessee being the person who avails of service cannot deny his liability to pay the service tax - It is not in dispute that since November 2017, LIC is, in fact, paying the service tax that is liable to be paid and this by itself indicates that the LIC acknowledges the liability in its law to pay the service tax - It is to be borne in mind that LIC being an instrumentality of the State should not take up technical pleas and attempt to evade its liability to pay a tax which it is bound to pay in the eye of law - Sums paid by the petitioner shall be paid by the LIC to the petitioner within a period of one month: High Court [para 10, 11, 12, 13, 15]
- Petition allowed: KARNATAKA HIGH COURT
2023-TIOL-599-HC-DEL-CUS
Addl. Director General Vs Its My Name Pvt Ltd
Cus - Smuggling of gold - Returning a positive finding of fact that the gold imported had been verified and found to tally with the gold earlier exported, the Tribunal, vide Final Order dated 13th November 2019 [ 2019-TIOL-3519-CESTAT-DEL ], directed provisional release of the gold, on terms fixed by it - ADG, DRI assailed this order of the Tribunal before the High Court and an order dated 1st June 2020 came to be passed by the High Court [ 2020-TIOL-991-HC-DEL-CUS ] upholding the said order of the Tribunal to release, provisionally, and forthwith, the gold, gold jewellery and silver, seized from the warehouse premises of the respondent, as well as 25400.06 grams of gold jewellery, covered by Bill of Entry No. 107190 dated 17th April, 2019, on furnishing of a bond, by the respondent, covering the entire value of the said goods, along with a Bank Guarantee for Rs. 10 crores, containing an auto-renewal clause - However, the direction for release of 25299.68 grams of gold jewellery, the Bill of Entry in respect of which was unsigned by the respondent as well as by the Customs Import Clerk, unregistered and unaccompanied by any Job ID No., was quashed and set aside - A Special Leave petition was filed before the Supreme Court by the ADG, DRI and by its order dated 1 st October 2020 [ 2020-TIOL-158-SC-CUS ], the Apex Court enhanced the quantum of the bank guarantee directed to be furnished by the High Court from Rs 10 crores to Rs 15 crores and while maintaining the other conditions laid down by the High Court - Present Review Petition has come to be filed by the respondent against the said Final Order of the Tribunal, under Section 130(1) of the Customs Act - Respondent has filed the present Review Petition, seeking review of High Court's decision to set aside the judgment of the Tribunal, which had permitted provisional release of the said consignment of 25299.68 grams of gold jewellery as well. Held : These review proceedings arise out of a judgment in an appeal filed by the DRI under Section 130 of the Customs Act - As has been pointed out, even in the judgment under review, the scope of examination, in a statutory appeal under Section 130, is limited to substantial questions of law - Findings of fact cannot be interfered with, under Section 130, unless they suffer from manifest perversity - The scope of the present review proceedings stands further curtailed by the fact that the DRI actually moved the Supreme Court against the judgment under review which declined to interfere with it, except for enhancing the amount of B/G to be furnished for securing provisional release of the goods - The only reason why Bench did not choose to extend, to the said imported gold jewellery, the same approach as was extended to the other imports, was on account of its view that, in respect of the 25299.68 grams of gold jewellery, no signed and endorsed B/E was available - The review petitioner has sought to point out that the said 25299.68 grams gold jewellery was imported as baggage - Once there was an acknowledgement, in the passages from the show cause notice, that the 25299.68 grams gold jewellery was in fact imported as baggage, at least for the purposes of the present review petition, arising out of an appeal under Section 130 of the Customs Act, the scope of which is itself extremely limited, Bench has, prima facie, to accept that the 25299.68 grams gold jewellery was in fact imported as baggage - Keeping in mind the fact that a substantive show cause notice stands issued to the review petitioner, it would not be proper for this Court to enter in detail into the aspect of whether import of the goods as baggage was, or was not, justified - Show Cause Notice issued to the review petitioner, too, acknowledges that the jewellery was imported as baggage - In these circumstances, Bench is of the considered opinion that the review petitioner is justified in its prayer that the 25299.68 grams gold jewellery be extended the same treatment as has been extended to the remaining gold - Review petition accordingly stands allowed: High Court [para 21, 22, 26, 27, 28, 30, 34, 37]
- Review petition allowed: DELHI HIGH COURT
2023-TIOL-598-HC-DEL-GST
Roxy Enterprises Vs UoI
GST - Cancellation of registration - Petitioner challenges the SCN dated 25.01.2023 as well as the order dated 14.02.2023 - Respondent issued a SCN dated 25.01.2023 calling upon the petitioner to show cause as to why his GST registration should not be cancelled and the reason for proposing the aforesaid adverse action was stated to be: "Others" - Officer passed the impugned order cancelling the petitioner's registration on the ground that the taxpayer is not existing - Petitioner contends that the said reason as stated in the impugned order is ex facie erroneous as the petitioner continues to carry on his business from the Premises, which is also registered as his principal place of business - It is further submitted that the Rule 25 of Rules, 2017 was not complied with as the petitioner had no notice of any inspection, if at all, carried out at the Premises. Held : It is apparent that the show cause notice is inadequate and fails to meet the requisite standards of a show-cause notice - The impugned show cause notice does not disclose any discernible reason for proposing adverse action against the petitioner - The purpose of a show-cause notice is to apprise the noticee regarding the reason for the proposed action to enable him to respond to the same - This, in turn, enables the authority concerned to make an informed decision - No adverse order could be passed against the petitioner without informing the petitioner the reasons for the same and affording him an opportunity to respond to the same - Thus, the impugned order dated 14.02.2023 is void as having been passed in violation of the principles of natural justice - Bench is of the view that neither the show cause notice dated 25.01.2023 nor the impugned order can be sustained - Since respondents proposed to cancel the petitioner's registration on the assumption that he was not-existent at his principal place of business, Court considers it apposite to set aside the impugned order and remand the matter to the officer concerned to consider afresh after affording the petitioner a full opportunity to be heard: High Court [para 9 to 11]
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-597-HC-DEL-NDPS
Shankar Kumar Sinha Vs Narcotics Control Bureau
NDPS - Amphetamine was recovered hidden inside the car spare parts which weighed 700 grams – Application has been filed for seeking regular bail. Held : Court is of the considered opinion that prima facie it seems that the petitioner was not the owner of the package and had merely facilitated the booking of the package with the courier company on behalf of and at the request of the Nigerian national - To suggest that the petitioner was in conscious possession of the contraband would be premature - There was no recovery from the petitioner - There is no evidence in the complaint that the package belonged to the petitioner, in that he was the one who was packing and dispatching the contraband - There are call records to show that messages have been received from the Nigerian and that the return parcel was to be collected by the person sent by the Nigerian - At this stage, the benefit of doubt would have to go to the petitioner as not being the owner and possessor of the said package of contraband - In the considered opinion of this Court, there are reasonable grounds for believing that the petitioner is not guilty of the offence as alleged - Furthermore, considering he has no previous involvements and that his conduct and work has been certified by his employer and there is no adverse information regarding his past, it would be prudent to believe that he is not likely to commit any offence while on bail - Fact that the trial in the matter is likely to take some time, and it would not be prudent to keep the petitioner behind bars for an indefinite period, this Court finds it to be a fit case for grant of bail to the petitioner - Consequently, the petitioner is directed to be released on bail on furnishing a personal bond in the sum of Rs. 50,000/- with one surety of like amount and subject to further conditions as laid down – Petition disposed of: High Court [para 13, 14, 16, 18]
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-415-CESTAT-DEL
Pr.CC Vs Vintek Circuits India Pvt Ltd
Cus - Revenue is in appeal against the order passed by Commissioner(A) - Issue is whether anti-dumping duty under the notification dated 06.12.2021 on 'flat rolled products of aluminum falling' under Chapter Heading 7606-7607 originating in or exported from China could have been imposed on 'aluminum based copper clad laminates' imported by the respondent, which is a manufacturer of 'printed circuit boards. Held : Commissioner(A) has recorded a categorical finding that the product imported by the respondent is not manufactured in India and, therefore, there is no question of injury being caused to the domestic industry - In the Revenue appeal, no ground has been taken that this product is being manufactured in India - As this finding has not been controverted by the appellant, the three appeals filed by the department deserve to be dismissed and are dismissed: CESTAT [para 5]
- Appeals dismissed: DELHI CESTAT |
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