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2023-TIOL-1421-HC-MAD-GST
Chennai Silks Vs Assistant Commissioner
GST - Petitioner challenges the impugned order passed by the respondent - According to the petitioner, though the petitioner filed a reply and their reply was also recorded by the respondent, the impugned order dated 04.7.2023 came to be issued without considering the replies and passed a non-speaking order - Counsel for respondent Revenue fairly conceded that the reply filed by the petitioner has not been considered by the respondent while passing the impugned order and submitted that the matter may be remanded to the respondent for passing a fresh order. Held: Apparently, the impugned order is a non-speaking order and no doubt, the petitioner can very well challenge the same before the Appellate authority by filing an appeal under Section 107 of the Act - Even though the petitioner is having appeal remedy before the Appellate Authority, but the Appellate Authority is not conferred with the power to remand the matter to the Assessing Officer for fresh consideration - Further, the petitioner is entitled to have two occasions of the matter to be adjudicated by two Authorities, viz., the Assessing Officer and the Appellate Authority and thereby, can avail two well considered opinions - Order to be passed by the Appellate Authority cannot be equated with the order that would be passed by the Assessing Officer, who would pass orders after considering the reply/objection and the evidence put forth by the petitioner pursuant to the show cause notice - That apart, the assessee virtually would lose one well considered opinion of the Assessing Officer, for which the assessee is entitled to legally under the provisions of law - Therefore, once the assessee filed reply/objections pursuant to the show cause notice, it is bounden duty of the Assessing Officer to pass a speaking order, providing reasons for rejection of the reply/objections raised by the assessee - If any cryptic order is passed without touching upon the queries/contentions of the assessee , ultimately, it would be fatal to the assessee and also cause huge revenue loss to the revenue - Therefore, the orders to be passed by the Assessing Officer should always be a speaking order, safeguarding both the interest of the assessee and the Revenue - Court is inclined to set-aside the impugned order and remit the matter back for re-consideration - Petition allowed: High Court [para 6, 8, 9, 11, 13, 14]
- Petition allowed: MADRAS HIGH COURT
2023-TIOL-1420-HC-MAD-GST
Sakthi Enterprises Vs Assistant Commissioner
GST - Petitioner challenges the impugned assessment order dated 08.08.2022 - P etitioner was issued with a Notice in DRC-01A on 04.01.2021 followed by a Show Cause Notice dated 05.05.2021 in DRC-01 - The petitioner, however, failed to respond to the same - The petitioner was also asked to appear for a personal hearing on 13.12.2021 but this too the petitioner failed to, therefore, the impugned order - Aggrieved by this order, the present petition. Held: Petitioner should have filed an appeal against the impugned Assessment order dated 08.08.2022 before the Appellate Commissioner under Section 107 of the GST Act, 2017 on or before 08.11.2022 or by 08.12.2022 with an application to condone the delay of 30 days - The fact remains that the present writ petition has been filed only on 03.08.2023 long after the impugned order came to be passed on 08.08.2022 followed by issuance of a summary in GST DRC-07 dated 10.08.2022 - As per the decision of the Hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited, reported in (2020) 19 SCC 681 2020 SCC Online SC 440 - 2020-TIOL-93-SC-VAT , this Court cannot entertain the writ petition under Article 226 of the Constitution of India after limitation for filing an appeal has expired - writ petition is dismissed: High Court [para 3, 4, 5]
- Petition dismissed: MADRAS HIGH COURT
2023-TIOL-1419-HC-RAJ-GST
Nahar Industrial Enterprises Ltd Vs UoI
GST - Petitioner seeks to assail orders dated 06.10.2020 and 11.05.2021 passed by Respondent No. 3, Additional Commissioner (Appeals whereby, petitioner's appeals, against the orders rejecting its claim for refund, have been disposed of - A show cause notice was issued proposing rejection of claim for refund on the statement that the petitioner's case does not fall under the category of " inverted duty structure " - Vide order dated 24.08.2020, the adjudication proceedings eventually culminated in rejection of petitioner's claim for refund - Appellate Authority vide two common orders dated 06.10.2020 and 11.05.2021, affirmed the findings recorded by the Adjudicating Authority - Though Section 112 of the CGST Act, 2017 provides for further appeal before Goods and Services Tax Appellate Tribunal (GSTAT), there being no Appellate Tribunal in existence, rejection of petitioner's claim by the Adjudicating Authority and its affirmation by the Appellate Authority is under challenge in these writ petitions. Held: + Single input/output concept fallacious : The petitioner-company manufactures cotton yarn, cotton blended yarn, polyester/viscose yarn, polyester/viscose blended yarn. The rate of GST on these output supplies varies from 0.1% to 12% - Raw material used for manufacturing of aforesaid goods is cotton, manmade fibre, packing material, store consumables and spares and other inputs on which rate of GST varies from 5% to 28% - It is clear that while rate of GST on many inputs and output supplies are the same, yet, rate of GST on various inputs (raw materials) is higher than the rate of GST on output supplies - Comparative analysis clearly shows that all the inputs taken together and utilised through the process of manufacturing, the output supplies would carry higher rate of GST as compared to the rate of GST on such inputs, either taken individually or collectively both - The provision contained in proviso (ii) to Section 54(3) of the CGST Act, 2017 , as it stands and on its plain reading, uses the expression, "where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies" - The language of the aforesaid provision is plain and simple signifying the plurality of both inputs and output supplies - The statute purposely uses the words, "inputs" and "output supplies" - It is well settled that a taxing statute is to be strictly construed - Conscious use of the plural words, "inputs" and "output supplies" by the legislature has to be given full effect to - Use of the word, "inputs" signifies a situation where there may be more than one input and it is not possible to read "inputs" as "input" alone, so as to restrict its meaning - The words "inputs" and "output supplies" need to be given full effect to without placing any restriction on these words, much less restricting the same to a situation of singular input and singular output supply - In other words, the scheme of refund of unutilised input tax credit which has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies cannot be restricted only to those cases where there is single input and single output supply - Consequently, the scheme of refund in case of inverted duty structure will continue to apply irrespective of the number of inputs and number of output supplies - Therefore, in a case where there is accumulation of unutilised ITC as a direct result of rate of tax on inputs exceeding the rate of tax on output supplies, the scheme of refund as embodied in Section 54(3) of the CGST Act, 2017 gets attracted - In the present case, the rates of tax on inputs are 5%, 12%, 18% and 28% whereas the rates of tax on output supplies are 0.1%, 5% and 12% - Merely because present cases involve multiple inputs and multiple output supplies, the scheme of refund based on inverted duty structure cannot be held to be inapplicable: High Court + Erroneous assumptions and presumptions - Legislative scheme cannot be altered : The premise on which the claim for refund has been outrightly rejected is that the output sales is to the extent of 80% of goods having 5% duty only and input too is majorly of 5% rate - On that basis, it has been concluded that the rate is more or less the same - This approach that "rate is more or less the same", runs contrary to the statutory scheme - This patently violates not only the letter but also the spirit of the law - The statutory prescription being that where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies is sought to be substituted on the consideration that where the rate of tax is more or less the same - That would amount to altering the legislative scheme - Once all the inputs and output supplies on comparative basis lead to a situation where the rate of tax on inputs is higher than the rate of tax on output supplies, the scheme of refund is required to be given full effect to and it cannot be denied on such considerations that rate of tax, on comparative analysis, is more or less the same - Therefore, we have to accept the submission of the petitioner that even if the overall rate of all inputs is marginally higher than rate of output supplies, the accumulation of unutilised input tax credit on such account will bring it within the net of inverted duty structure - The determining factor for applicability of Section 54(3) of the CGST Act, 2017 read with Rule 89(5) of the CGST Rules, 2017 is rate of tax and quantum of ITC content and not the value/quantum of individual inputs (going into an output) and the outputs - The stock based approach, therefore, violates the statutory scheme of refund: High Court + Circulars not a beacon : Circular No. 79/53/2018-GST dated 31.12.2018 and Circular No. 125/44/2019-GST dated 18.11.2019 do not provide necessary guidelines in dealing with claims for refund where there are multiple outputs - It is clear that the competent authority has issued clear guidelines for application of refund mechanism even in those cases where there are multiple inputs which are in line with the statutory scheme of refund engrafted under Section 54(3) of the CGST Act, 2017 - However, the situation as to how the refund scheme would be applied in cases of more than one output supplies has not been dealt with in any of the aforesaid circulars - Where the rates of tax on some of the inputs are higher than the rates of tax on output supplies, where the outputs are more than one, the statutory scheme of refund based on inverted duty structure shall become applicable - Since in all the cases, the legal premise on which claim of refund has been rejected is contrary to the letter and spirit of the scheme of refund as provided under Section 54(3) of the CGST Act, 2017 read with Rule 89(5) of the CGST Rules, 2017 , Bench is inclined to set aside all the orders, impugned in these writ petitions, passed by the Adjudicating Authority and the Appellate Authority with a direction to the Adjudicating Authority to undertake fresh exercise of consideration of claim of refund in the light of the observations made by this Court in this order applying the same on case to case basis - Writ petitions are allowed in the manner indicated: High Court [para 7.1, 7.2, 7.3, 7.4, 7.5, 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14]
- Petitions allowed: RAJASTHAN HIGH COURT
2023-TIOL-979-CESTAT-CHD
Tower Vision India Pvt Ltd Vs CST
ST - Appellant is engaged in providing telecom network infrastructure support services to various telecommunication companies providing mobile services - Appellant been issued IP1 licence - The telecommunication infrastructure support services so provided by appellant at telecom sites is on non exclusive basis - Issue of Cenvat Credit on input/input services on impugned items and capital goods has been decided in favour of appellant by High Court in a bunch of appeals in case of Vodafone Mobile Services Ltd. 2018-TIOL- 2409-HC-DEL-ST - By relying upon decision of Delhi High Court in appellant's own case, Tribunal in case of Bharti Infratel Ltd. and Indus Towers Limited have allowed the cenvat credit on tower, tower material and telecom shelter - By following the ratio of said decision in appellant's own case decided by High Court of Delhi and various decisions of coordinated bench of Tribunal, impugned order denying cenvat credit on input and input services, capital goods on tower, tower material and shelter are not sustainable in law and therefore, same is set aside: CESTAT
- Appeal allowed: CHANDIGARH CESTAT
2023-TIOL-978-CESTAT-MAD
Jansons Industries Ltd Vs CCE
ST - Assessee is in appeal against impugned order, whereby first appellate authority has confirmed demand of Service Tax along with applicable interest and penalty under category of 'business auxiliary service' on commission paid to overseas agents under reverse charge mechanism as per Section 66A of Finance Act, 1994 invoking proviso to Section 73(1) of Finance Act, 1994 - The period of dispute involved is from April 2007 to March 2011 - This Bench in case of M/s. Texyard International 2015-TIOL-1618-CESTAT-MAD had occasion to analyse an identical issue wherein the Bench had observed that demand of service tax under reverse charge confirmed against appellants is set aside - The ratio laid down in said case has been followed in case of M/s. Madras Security Printers Pvt. Ltd. 2023-TIOL-399-CESTAT-MAD - Further, a similar view was also expressed by this Bench in case of M/s. Stahl India Pvt. Ltd. 2023-TIOL-752-CESTAT-MAD - Hence, following the consistent view as held in various cases, impugned order is set aside: CESTAT
- Appeal allowed: CHENNAI CESTAT
2023-TIOL-977-CESTAT-DEL
Ajay Upadhyay Vs CCGST & CE
Cus - The appellant has not made pre-deposit and has filed an application seeking waiver because of financial constraints and for the reason that appellant has a good case on merits - In view of decisions of Supreme Court, Delhi High Court and Madhya Pradesh High Court, it is not possible to permit the appellant to maintain the appeal without making required pre-deposit - As the law relating to pre-deposit has been settled by Supreme Court and High Courts, it would also not be possible to accept the prayer made by appellant that application should not be decided at this stage as the matter in case of a co-noticee, after his plea for waiver of pre-deposit had been rejected by Tribunal and High Court had maintained the order of Tribunal is pending in Supreme Court - Thus, the application filed for waiver of pre-deposit is rejected - As the application has been rejected, appeal stands dismissed: CESTAT
- Appeal dismissed: DELHI CESTAT |
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