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2023-TIOL-1007-HC-DEL-GST
Shri Shyam Metal Vs CCGST
GST - Allegation is that "the petitioner had filed ineligible / bogus GST Input Tax Credit on the strength of fake / goodless invoices issued by various bogus / non-existent firms" - Petitioner prays that directions be issued to the respondents to unconditionally release the two silver bars (weighing 29.5 Kgs. and 14.5 Kgs.); Rs. 7,00,000/- Indian currency; and, Mobile Phones, which were seized by the respondents from the residential premises of the petitioner - On 29.01.2020, the petitioner was arrested by the Central Tax Officers, as it was alleged that he had committed offences, punishable under Clause ( i ) of Sub- section (1) of Section 132 of the Act - The petitioner was released on bail on 21.03.2020 - Petitioner, by letter dated 23.03.2021, requested the Additional Commissioner to release the goods, documents and cash seized from his premise on 28.01.2020 - The petitioner contended that even if the proviso to Sub-section (7) of Section 67 of the Act was applicable, no notice was issued with respect to the seizure of goods, within a period of six months from the date of seizure; that, therefore, the seized goods were liable to be restored - Being aggrieved by the failure on the part of the respondents to release his goods even after lapse of one year from the date of the seizure, the present petition.
Held : Principal controversy to be addressed in the present petition is whether the proper officer has the power to seize the currency and other valuable assets under Section 67 of the Act, even though he has no reason to believe that the same are liable for confiscation - Power of inspection under Sub-section (1) of Section 67 of the Act is conferred to unearth any evasion of tax or any attempt to evade tax - Sub-section (1) of Section 67 of the Act is not a provision for recovery of tax or for securing the same - It is clear from the plain language of Sub-section (2) of Section 67 of the Act that only those goods can be seized, which the proper officer has reasons to believe are liable for confiscation - Insofar as seizure of documents or books or things is concerned, the same is permissible provided the proper officer is of the opinion that the said documents or books or things shall be useful or relevant to any proceedings under the Act - It is, thus, clear that seizure of documents or books or things are only for the purpose of examination or inquiry or any proceedings under the Act. And, the seized documents or books or things can be retained only so long as it is necessary for the said purpose - for their examination, any inquiry, or proceedings under the Act - In terms of Sub-section (7) of Section 67 of the Act where goods are seized under Sub-Section (2) of Section 67 of the Act and no notice, in respect thereof, is given within the period of six months (extendable on sufficient cause being shown) of seizure of the goods, the goods are required to be returned to the person from whom the same were seized - The expression 'goods' covers all movable property other than 'money' and 'securities' - The expression 'securities' as defined in Sub-section (101) of Section 2 of the Act has the same meaning as assigned to it in Clause (h) of Section 2 of the Securities Contract (Regulation) Act, 1956 - Silver bars being movable assets are not securities within the meaning of Clause (h) of Section 2 of the Securities Contract (Regulation) Act, 1956 - Cash (Indian currency) is clearly excluded from the definition of the term 'goods' as the same falls squarely within the definition of the word 'money' as defined in Sub-section (75) of Section 2 of the Act - A plain reading of Clauses ( i ) to (iv) of Sub-Section (1) of Section 130 of the Act indicates that the goods, which are supplied or received in contravention of the provisions of the Act with the intent to evade payment of tax; goods which are unaccounted for and chargeable to tax; supply of goods chargeable to tax, by a taxpayer, without applying for registration; and cases where the taxpayer contravenes any provision of the Act with the intent to evade payment of tax, are liable for confiscation - Illustratively, in an office premises, one may find furniture, computer, communication instruments, air conditioners etc. - Those assets although falling under the definition of 'goods' cannot be seized, if the proper officer has no reasons to believe that those goods are liable to be confiscated - Purpose of Section 67 of the Act is not recovery of tax; it is not a machinery provision for enforcing a liability; it is for ensuring compliance and to aid proceedings against evasion of tax - It is clear from the Scheme of Section 67 of the Act that the word 'things' is required to be read, ejusdem generis , with the preceding words 'documents' and 'books' - Contextual interpretation of all Sub-sections of Section 67 of the Act clearly indicates that the same do not contemplate seizure of valuable assets, for securing the interest of Revenue - Search and seizure operations under Section 67 of the Act are not for the purpose of seizing unaccounted income or assets or ensuring that the same are taxed; the said field is covered by the Income Tax Act, 1961 - Concededly, there is no material to indicate that the particular silver bars or cash were received by the petitioner in specie against any particular fake invoice - It is, thus, clear that the silver bars and the cash were seized only on the ground that it was 'unaccounted wealth' and not as any material which was to be relied upon in any proceedings under the Act - Even if, it is accepted, which Bench does not, that the proper officer could seize the currency and other valuable assets in exercise of powers under Sub-section (2) of Section 67 of the Act, the same were required to be returned by virtue of Sub-section (3) of Section 67 of the Act because the silver bars and currency have not been relied upon in the notice issued subsequently - Petition is allowed - The respondents are directed to forthwith release the currency and other valuable assets seized from the petitioner during the search proceedings conducted on 28.01.2020: High Court [para 14, 16, 18, 20, 23, 28, 30, 31, 33, 34, 40, 46, 50, 54, 55, 56, 62, 63]
- Petition allowed: DELHI HIGH COURT
2023-TIOL-1006-HC-AHM-GST
Vodafone Mobile Services Ltd Vs UoI
GST - Petitioner was merged with the Idea Cellular Limited vide order dated 30.8.2018 passed by the National Company Law Tribunal - With the introduction of the Goods and Services Tax, the petitioner migrated to GST regime and was registered under the provisions of the CGST / GGST Act, 2017 - Taxes were paid in respective States wherever liability was supposed to be discharged and compliances including filing of GSTR-3B & GSTR-1 were streamlined - There were instances where, excess payment of tax was made in the State of Gujarat - The petitioner applied for refund of excess tax after having made good the short payment of tax through the annual returns, however, claim for refund under Section 54(5) of the CGST Act, 2017 was rejected but without any reasons, therefore, the present challenge - Counsel for Revenue submitted that the petitioner ought to be relegated to an alternative remedy of filing an appeal under Section 107 of the CGST Act.
Held: Considering the various orders passed by this Court in the case of the petitioner itself, the petitioner is directed to make a fresh application for refund in terms of Circular No. 125/44/2019-GST dated 18.11.2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, within a period of three weeks from today - On such application being made, the authorities shall dispose of the same on merits in accordance with law as early as possible, preferably within a period of four weeks - Petition stands allowed, accordingly: High Court [para 10, 11]
- Petition allowed: GUJARAT HIGH COURT
2023-TIOL-1005-HC-DEL-GST
Cuthbert Oceans LLP Vs Supdt. Of CGST
GST - Petitioner impugns the SCN dated 09.05.2023 calling upon the SCN as to why its registration should not be cancelled; as well as the order dated 29.05.2023 passed pursuant to the impugned SCN - SCN proposes to cancel the petitioner's registration for the reason that "registration obtained by means of fraud, wilful misstatement or suppression of facts" - Petitioner filed a response to the said SCN belatedly - after the respondent had passed the impugned order.
Held: I mpugned show-cause notice was bereft of any particulars and it is difficult to accept that the said show-cause notice could elicit any meaningful response - It is trite law that a show-cause notice must set out the allegation in order to enable the noticee to respond to the same - Merely making a bald statement that the registration was obtained by fraud, wilful misstatement or suppression of facts without alluding to any such misstatement or the allegedly suppressed facts, provides no clue to the noticee as to the allegation against him - Petitioner's response to the impugned show-cause notice indicates that the petitioner has referred to the transactions carried out by him and had quizzed the respondent - "So what is fraud in this transaction?" - This question resonates with the Bench as well -Impugned show-cause notice cannot be sustained and is liable to be set aside - Impugned order cancelling the petitioner's registration is equally cryptic - Counsel for Revenue is also unable to shed any light on the reasons why the petitioner's registration was cancelled, and that too retrospectively - Impugned show-cause notice as well as the impugned order are set aside: High Court [para 7, 8, 9, 11, 13]
- Petition allowed: DELHI HIGH COURT
2023-TIOL-768-CESTAT-KOL
Vedanta Ltd Vs CC
Cus - Export of Iron Ore fines - Based on the Test Report, received from the CRCL, the Department issued Show Cause Notice on the ground that in all the seven cases, the 'Fe' content was more than 64% whereas the Appellant was claiming that in all these cases, the Fe content was between 63 to 63.97, hence less than Fe content of 64% - As per the Department, if the Fe content was more than 64%, no export can be taken up by the parties directly and the same had to be exported through Channelizing Agency MMTC Ltd. Only - Taking the view that the consignment were illegally exported by resorting to gross mis-declaration about the 'Fe' content, the Show Cause Notice was issued to the Appellant - Adjudicating Authority held that 161625 MT of Iron Ore Fines having Fe content of more than 64%, valued at Rs.368,21,722/- are liable to be confiscated - He ordered confiscation and gave the option to pay Redemption Fine of Rs. 1 crore - He also imposed penalty of Rs.50,00,000/- - Being aggrieved, the Appellant is before the Tribunal.
Held : It is not seen from anywhere that Test reports, though, were generated in November and December 2010, were provided to the Appellant - This deprives the Appellant from approaching higher authorities when the Reports of CRCL are totally different from the Test Reports of Private Labs - Even when the Appellant has provided their Test Reports in June 2013, the Department has not given copies of CRCL Test Reports to the Appellant - Since the Department did not provide the copies of the test report, till they finally issued the Show Cause Notice in 2016, the Appellant was deprived to make any further appeal against the test report already generated by the chemical examiner - The Department, even after receiving all the documentary evidence, including the Test Report of Private Labs, BRC, etc. from the Appellant, in June 2013, failed to complete the finalization of the assessment of the Shipping Bills - It is seen that the Appellant has been regularly taking up with the Department and higher officials, including the Ministry in 2013, 2014, 2015, and 2016 to complete the assessment process but nothing was done by the Department till they issued the Show Cause Notice in August 2018 - Test Reports were supplied to the Appellant after six years, leaving no scope to the Appellant to prefer any Appeal against them - Department has taken time between 105 days to 138 days to complete the sample testing and give the Report - On the other hand, the Government Recognized Private Laboratories engaged by the Appellant have taken just 6 to 9 days to complete this entire exercise - Fe content values arrived at by the Government Recognized Private Laboratories' Reports are likely to be more accurate since they had completed the Testing nearer to the date of drawing of samples - Appellant has taken the Fe content of Dry Metric Ton (DMT) given by the Private Laboratories and has raised the bill based on such DMT values on the overseas importer - Impugned OIO set aside and Appeal is allowed with consequential relief: CESTAT [para 12, 14, 17, 20, 24]
- Appeal allowed: KOLKATA CESTAT |
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