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2023-TIOL-117-SC-ST
South Indian Bank Ltd Vs Pr.CCT & CE
ST - Review petition is filed by assessee against the order dated 29.07.2022 passed by the High Court on the ground that there is an error apparent on the face of record - Tribunal had accepted the contention raised by assessee and held that since there was no intention to evade payment of service tax, the invocation of the extended period of limitation is unavailable - Through the judgment under review, Bench has held that, merely because the review petitioner was exonerated from payment of the penalty for reasonable cause, the same yardstick cannot be applied while deciding the aspect of limitation - The intelligence report points out that the short levy was from 10.09.2004 to 31.07.2007, and only on a reference by the department after the intelligence report on 02.08.2007, the bank had remitted the differential amounts - When the correct figures are not brought to the notice of the department and when the suppression is unearthed through an intelligence report, the failure of the bank in remitting the amounts thereafter i.e., nearly three years can be brought under the words 'wilful suppression' - The time for which default occasioned is equally important - Hence the Bench opined that there is no error apparent on the face of the record and there are no grounds to review the judgment.
Held - Notice be issued to the Respondent-Revenue, returnable on 11.09.2023 - Penalty be stayed until further orders: SC
- Notice issued: SUPREME COURT OF INDIA
2023-TIOL-908-HC-AP-GST
Thirumalakonda Plywoods Vs Asstt. Commissioner of State Tax
GST - Petitioner prays for writ of mandamus declaring Section 16(4) of the Act, 2017 as violative of Article 14, 19(1)(g) and Section 300-A of Constitution of India; that non-obstante clause in Section16(2) would prevail over Section 16(4); that notification issued by Government of Andhra Pradesh vide G.O.Ms.No.264, dated 11.09.2020 and providing extension of time for filing returns only to the non-resident and not allowing such extension to the others and thereby distinguishing other tax payers on account of COVID-19 pandemic is arbitrary, illegal and violative of Article 14 of Constitution of India; that action of Respondent No.1 in passing summary order dated 15.3.2022 in Form GST DRC-07 under the GST Acts, without serving proper show cause notice in Form GST DRC-01 and granting sufficient opportunity to the petitioner U/s 74(5) of the Act and not considering petitioner's submissions and COVID- 19 limitations r/w Amnesty Notifications but confirming the demand of tax, interest and penalty is not only violative of principles of natural justice but also arbitrary, improper, illegal and violative of Article(s) of the Constitution of India.
Held : Section 16(2) shall not appear to be a provision which allows input tax credit, rather ITC enabling provision is Section 16(1) - On the other hand, Section 16(2) restricts the credit which is otherwise allowed to only such cases where conditions prescribed in it are satisfied - Therefore, Section 16(2) in terms only overrides the provision which enables the ITC i.e., Section 16(1) - This is evident from the manner in which Section 16(2) is couched - The non-obstante clause in Section 16(2) is followed by a negative sentence "no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless" - This negative sentence pellucidly tells that unless the conditions mentioned in Section 16(2) are satisfied, no credit will be eligible - This stipulation manifests that Section 16(2) is not an enabling provision but a restricting provision - What it restricts is the eligibility which was otherwise given U/s 16(1) - Unless clear inconsistency is established, overriding effect cannot be given over other provisions - In the present case, both Section 16(2) and (4) are two different restricting provisions, the former providing eligibility conditions and the later imposing time limit - However, both these provisions have no inconsistency between them - Influence of a non-obstante clause has to be considered on the basis of the context also in which it is used - Therefore, Section 16(4) being a non-contradictory provision and capable of clear interpretation, will not be overridden by non obstante provision U/s 16(2) - For this reason, the argument that 16(2) overrides 16(4) is not correct - If really the legislature has no intention to impose time limitation for availing ITC, there was no necessity to insert a specific provision U/s 16(4) and to further intend to override it through Section 16(2) which is a futile exercise - Conditions stipulated in Section 16(2) and (4) are mutually different and both will operate independently - Therefore, mere filing of the return with a delay fee will not act as a springboard for claiming ITC - Collection of late fee is only for the purpose of admitting the returns for verification of taxable turnover of the petitioner but not for consideration of ITC - Such a statutory limitation cannot be stifled by collecting late fee - ITC is a mere concession/rebate/benefit but not a statutory or constitutional right and, therefore, imposing conditions including time limitation for availing the said concession will not amount to violation of constitution or any statute - In order to establish legislative arbitrariness, it must be proved that the action was not reasonable or done capriciously or at pleasure, non-rational, not done or acting according to reason or judgment but depending on the will alone - Petition dismissed: High Court [para 19, 20, 21, 25, 27]
Conclusion:
( i ) Point No.1: The time limit prescribed for claiming ITC U/s 16(4) of APGST Act / CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India.
(ii) Point No.2: Section 16(2) of APGST / CGST Act, 2017 has no overriding effect on Section 16(4) of the said Act as both are not contradictory with each other. They will operate independently.
(iii) Point No.3: Mere acceptance of Form GSTR-3B returns with late fee will not exonerate the delay in claiming ITC beyond the period specified U/s 16(4) of APGST / CGST Act, 2017
(iv) Point no. 4: Contentions that the notice was not issued in proper form and that no opportunity was granted for hearing etc., which were taken in objections 1 to 10 of the reply by the petitioners were vividly discussed and rejected by the 1st respondent. No force in the said contentions.
- Petition dismissed: ANDHRA PRADESH HIGH COURT
2023-TIOL-907-HC-JHARKHAND-GST
Pankaj Agarwal Vs UoI
GST - Case of the prosecution is that the Petitioner No.1, with the help of petitioner Nos.2 to 5, had created a web of fake entities with the sole intent to defraud the Government exchequer by availing and utilizing fake ITC to the tune of Rs. 102 crores resulting in the loss of Government revenue of this amount - Order dated 07.05.2022 and 17.08.2022 in connection with Complaint C/1 Case No.1853 of 2019 passed by Special Judge, Economic Offences, Jamshedpur, is under challenge - By the impugned order, bailable and non-bailable warrants have been issued against the petitioners - It is submitted by the petitioners that it is a settled position of law that warrant of arrest cannot be issued against the accused without receipt of service report of the summons earlier issued.
Held: This is a case of tax fraud committed to the tune of more than 100 Crores and the petitioners deliberately avoided the due process of law - There is no quarrel with the legal position that in a warrant triable case, after cognizance, the Court has power to issue warrant of arrest under Section 204 of the Cr.P.C - The Court has power to issue summon even in a warrant case, but there is no mandate of law that in all circumstance, even in warrant cases, the Court is bound to issue summons - In the present case, processes have been issued post-cognizance and it has been rightly contended on behalf of petitioners that once the summons had been issued, the Court could issue warrant only after receipt of the service report - Had such a warrant been issued in the pre-cognizance stage during the investigation things would have been different, as the petitioners had been served summons several times, but they deliberately avoided appearance before the investigating agency, despite the direction of this Court to appear before the said agency - Under the aforesaid facts and circumstance of the case, the impugned order of issuing the warrant of arrest is set aside - The petitioners are, however, directed to appear before the Court below within two weeks - Criminal miscellaneous Petition allowed: High Court [para 18 to 20]
- Petition allowed: JHARKHAND HIGH COURT
2023-TIOL-906-HC-ALL-GST
Tikona Infinet Pvt Ltd Vs State of UP
GST - s.18(3) of the Act, 2017 - Rule 41(1) of the Rules, 2017 - Petitioner is questioning the legality, propriety and correctness of the order dated 17.04.2023 passed by the Deputy Commissioner whereby the demand and recovery of ITC for Rs.3,13,68,997/- availed during the period September 2017 to November 2017 has been confirmed on the ground that the said transfer has been availed through Form GSTR-3B instead of GST ITC-02 - It is the case of the petitioner that the functionality for filing Form GST ITC-02 was not available on the common portal; that the non-availability was communicated to the jurisdictional assessing authority but no response was received; that, therefore, the petitioner manually accepted and availed the ITC of Rs.3,13,68,997/-; that after five years, on 28.02.2023 a SCN was served requiring the petitioner to reverse the differential ITC of Rs.2,88,35,906/- along with interest and penalty - Petitioner submits that they submitted a detailed reply but the respondent no.2 without considering the same has passed the impugned order dated 17.04.2023 confirming the demand.
Held: Prima-facie, Bench finds that the objections filed by the petitioner has not been considered by the respondent No. 2 and the order has been passed on technicalities - Further, observes that the petitioner has been non-suited on the ground that Form ITC-02 for transfer of input tax credit was not available on the GST Portal which was in nascent stage during the initial months after its implementation on 01.07.2017 and it was incumbent upon the petitioner to have raised a proper grievance on the GST portal help-desk and ought to have waited for the relevant Form to go live on the GST portal instead of making illegal adjustment by use of the Form GSTR-3B of the transferor and the transferee company and mere shortage of working capital cannot be an excuse to bypass the legal procedure laid down under the law - Nonetheless, the stand of the Respondent No.2, for rejecting the claim of the petitioner in the wake of the admitted fact that the GST common portal was not online cannot be justified - Impugned order set aside with liberty to respondent no.2 to pass fresh order taking into consideration the objections and also affording the petitioner an opportunity of hearing - Petition is disposed of: High Court
- Petition disposed of: ALLAHABAD HIGH COURT
2023-TIOL-905-HC-AHM-GST
Bhati Enterprise Vs UoI
GST - Challenge is to the show-cause notice for cancellation of registration - As per the show-cause notice, it is the case of the department that the registration has been obtained by means of fraud, wilful misstatement or suppression of facts – Petitioner submits that the show-cause notice violates the principles of natural justice inasmuch as the show-cause notice is vague and cryptic and does not state the exact case against the petitioner firm so as to enable the petitioner to file a reply.
Held: Since the present petition is squarely covered by the order in case of Sarvoday Impex vs. Union of India - 2023-TIOL-658-HC-AHM-GST , the impugned notice being cryptic and without reasons deserves to be quashed and set aside - Impugned show-cause notice dated 10.12.2022 is hereby quashed and set aside – Liberty is granted to the respondent authorities to issue fresh notice with particulars of reasons incorporated with details and thereafter to provide reasonable opportunity of hearing to the petitioner and to pass appropriate order in accordance with law - Petition allowed: High Court [para 6, 7]
- Petition allowed: GUJARAT HIGH COURT
2023-TIOL-904-HC-AHM-ST
FTA HSRP Solutions Pvt Ltd Vs UoI
ST - SVLDRS, 2019 - Petitioner has further prayed to quash and set aside the impugned order dated 07.09.2020 rejecting the SVLDRS application filed by the petitioner and to direct respondent no. 2 to process the same on merits - It is the case of the petitioner that on 21.05.2019 when the petitioner wrote a letter quantifying and informing the respondents of the tax liabilities which were duly admitted and paid, the other amounts towards penalty and interest were also paid and was accordingly intimated to the department - It appears that by communication dated 05.05.2020, the declaration of the petitioner was rejected on the ground that the declared tax had not been quantified and communicated on or before 30.06.2019 - Pursuant to the directions so issued by the High Court and on a representation being made by the petitioner on 25.08.2020, by the impugned order dated 07.09.2020, the request of the petitioner for extension of benefits under the scheme was rejected.
Held : It is apparent from the letter dated 21.05.2019 that it was the case of the petitioner that during the course of verification of records, the petitioner had agreed to the points raised during the verification/scrutiny quantifying the amount - Communications of the revenue authorities of 24.10.2019 as well as SVLDRS forms 1 and 2 indicate that there was no discrepancy in the figures of the outstanding amounts in the perception of the department and the ones that the petitioner had paid and informed accordingly to the department before 30.06.2019 i.e. on 21.05.2019 - Apparently, therefore, the perception of the department that there was no "quantification" before 30.06.2019 is clearly misconceived - Support can be drawn from the circular of the department itself dated 27.08.2019 wherein in para 10 (g) thereof a clarification was made that "quantified" would also include a written communication intimating duty demand or duty liability admitted by a person during inquiry - It can be culled out that the amount in question stood quantified before the cut-off date in accordance with the circulars of the department and thus the action on the part of the department making the petitioner ineligible to file declaration under the scheme is required to be quashed and set aside - Impugned orders dated 05.05.2020 and 07.09.2020 are hereby quashed and set aside - The respondents are directed to accept the declaration filed by the petitioner on 03.12.2019 as per SVLRDS-1 and close the issue including the OIO dated 28.06.2023 - Petition allowed: High Court [para 6, 7, 10, 11]
- Petition allowed: GUJARAT HIGH COURT
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