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2023-TIOL-161-SC-CUS
UoI Vs Mahalaxmi Rubtech Ltd
Cus - Writ applicant has prayed for striking down of Circular no. 36/2010-Cus dt. 23.09.2010 as ultra vires Section 149 of the Customs Act and also ultra vires Articles 14 and 19(1)(g) of the Constitution of India - It is the case of the writ applicant that the goods were exported for the fulfilment of the export obligations arising in respect of the EPCG (Export Promotion Capital Goods) Licences and as the writ applicant was under an impression that the due drawback was not allowed for the goods exported for fulfilment of obligations under the EPCG Scheme, the claim for drawback was not declared on the export document - Sometime in December, 2018, the writ applicant came to know that the duty drawback at 1.5% of the FOB value was being allowed for the goods in question despite the fact that such goods were exported for the fulfilment of the obligations under the EPCG Scheme - Therefore, they preferred an application dated 28th January 2019 requesting the Commissioner of Customs to allow, in terms of s.149 of the Customs Act, the amendment of 41 shipping bills lodged during the period between October, 2017 and November, 2018 by converting such shipping bills into drawback shipping bills by mentioning the claim for duty drawback on the shipping bills and invoices - Commissioner of Customs, after giving an opportunity of hearing to the writ applicant, rejected the application preferred by the writ applicant on the ground that the CBEC in its circular No. 36/2010 dated 23rd September 2010 in para 3(a) has provided that a request for conversion of the shipping bills should be made by the exporter within three months from the date of the Let Export Order (LEO) and as the request was beyond the time limit of three months, the benefits cannot be granted.
On Writ, the High Court held that in Section 149 of the Act, no time period has been prescribed and if in a substantive statutory provision of law, if no time period has been prescribed, then the CBEC could not have issued the circular providing for three months' time period to make a request for conversion from the date of the LEO. In the case on hand, the request is for conversion of the EPCG shipping bill into the EPCG-cum-Drawback shipping bill, for Drawback at all India rate of 1.5% of value of the exported goods. In the present case, no verification whatsoever of the goods or any examination of the exported goods is required, because the claim for Drawback is at the All industry rate, which is the common and general rate fixed by the Central Government for all exporters of the goods in the country. If the writ applicant herein had been claiming Drawback at the special brand rate, then the amendment of shipping bills by allowing conversion into Drawback shipping bill may not be possible only on the basis of the documentary evidence which was in existence at the time the goods were cleared for export. Since in the present case, the amendment of shipping bills by converting them into Drawback shipping bills is possible on the basis of the documentary evidence which was in existence at the time the goods were cleared for export and the benefit of Drawback at All industry rate of 1.5% of value of the exported goods is also possible to be allowed, the CBEC Circular No. 36/2010 to the extent of para 3(a) is ultra vires Articles 14 and 19(1)(g) of the Constitution of India as also ultra vires Section 149 of the Customs Act, 1962.
Having heard the parties, the Supreme Court condoned the delay and refuses to interfere with the judgment passed by the High Court in declaring that the writ applicant is entitled to the drawback of Rs. 11,18,458/- being the principal amount with statutory interest as provided in Rule 14 of the Drawback Rules.
- Revenue's SLP dismissed: SUPREME COURT OF INDIA
2023-TIOL-160-SC-FEMA
Thanesar Singh Sodhi Vs UoI
SAFEMA - The present appeals seek to assail the orders passed by the Division Bench of the High Court of Delhi, wherein the Court sustained an order confirming forfeiture of properties under Section 7 of The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 - The main ground for challenging the order of forfeiture, was that the detention order passed under Section 3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) had been subsequently revoked - Therefore, the proceedings under the SAFEMA would become non est - Another ground was that even criminal complaint filed against the Appellant under the Customs Act 1962, had been dropped due to lack of evidence - This too, would render the SAFEMA proceedings as untenable, it was canvassed.
Held - The order of detention had not been revoked on the report of the Advisory Board or before the receipt of the report of Advisory Board or before making a reference to the Advisory Board - Further, it was an order of detention passed under Section 3 of COFEPOSA - Section 9 and Section 12 A of COFEPOSA had no application to the detention order - As such, clause (i) would not be applicable - Clause (ii) would also not be applicable in as much as neither the detention order was made to which provisions of Section 9 of COFEPOSA would apply nor had it been revoked before the expiry of the time on the basis of review on the report of the Advisory Board - Further, clause (iii) would also not be applicable as Section 12A of COFEPOSA had no application to the detention order - Lastly, the detention order had not been set aside by the Court of competent jurisdiction - Therefore, clause (iv) would have no application - To the contrary, in the present case against the detention order, the appellant had made a representation which had been rejected - Thereafter the said order was challenged before the High Court by way of a writ petition which had also been dismissed on merits by a detailed order upholding the detention order - The revocation however had been made on a statement given on behalf of the Union of India before this Court in order to institute a complaint under the relevant statute - The said revocation is not contemplated under Section 2(2)(b) and its proviso, and, therefore, no benefit can be extended to the appellant(s) on the said count. Therefore, in our view, the impugned judgment does not suffer from any infirmity warranting interference - The appeals lack merit and are, accordingly dismissed: SC
+ Now coming to the first argument relating to revocation of the detention order passed under COFEPOSA. SAFEMA was enacted to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and for matters connected therewith or incidental thereto as such activities were having a deleterious effect on the national economy. Section 2 provided for the application of the provisions of the Act only to the persons specified in sub-section (2) thereof. According to sub-section (2)(b) every person in respect of whom an order of detention has been made under COFEPOSA, the Act would be applicable subject to four clauses mentioned under the proviso thereto. For the purposes of this case, the relevant provisions are confined to Section 2(2)(b) and its proviso;
+ Perusal of the above quoted provision makes it clear that apart from the four contingencies given in clauses (i) to (iv) above, every person against whom an order of detention has been passed under COFEPOSA, the provisions of SAFEMA would apply. In the present case, it is an admitted position that an order of detention under COFEPOSA was made against the appellants.
- Appeal disposed of: SUPREME COURT OF INDIA
2023-TIOL-1546-HC-DEL-GST
Rajni Mittal Vs State GST
GST - The petitioner filed the present petition in capacity as legal heir of a deceased assessee - The Petitioner sought to challenge an order cancelling the GST registration of the deceased assessee, with retrospective effect - After the passing away of the Assessee, the petitioner had filed an application seeking cancellation of the GST registration held in the name of the Assessee - In response thereto, the Proper Officer issued SCN dismissing the petitioner's application, citing certain inaccuracies in the information furnished - The petitioner claimed that that the said notice was not received and therefore, the petitioner did not reply to the same - It was also stated that the said notice was issued in the name of the deceased Assessee, which is impermissible - Therefore, the Proper Officer passed an order rejecting the application of the petitioner for cancellation of its GST registration in the name of the deceased Assessee - The order did not state any reasons and that the space available in the said letter for recording the reason is left blank, the petitioner canvassed - Thereafter, another SCN came to be issued, proposing to cancel the deceased tax payer's GST registration on the ground of failure to furnish the returns for a period of six months - The GST registration was suspended with effect from the date of the impugned SCN.
Held - Since the Proper Officer was informed of the demise of the tax payer and the stoppage of business, the question of filing the returns after the demise did not strictly arise - Hence, the registration of the deceased tax payer be cancelled from the date of the application for cancellation of registration filed by the petitioner, that is from 30.04.2022: HC
+ It is material to note that the impugned SCN was also issued in the name of the deceased tax payer and called upon the deceased tax payer to reply to the impugned SCN and appear before the concerned officer on 10.02.2023. The petitioner claims that the impugned SCN was also not received and therefore, the petitioner did not respond to the same. It is contended that the impugned SCN is illegal as it was issued in the name of deceased tax payer even after the Proper Officer was informed of the said demise. The registration of the deceased was cancelled by a cancellation order dated 16.02.2023 with retrospective effect from 01.07.2017;
+ It is material to note that the impugned SCN did not propose to cancel the GST registration with retrospective effect. Although the Proper Officer is empowered to cancel the GST registration with retrospective date, the said power cannot be exercised arbitrarily and without any reason for cancelling the GST registration with retrospective effect. In the present case, the allegation against the deceased tax payer is of non-filing of returns. Obviously, a failure to furnish returns for a period of six months, absent any other reason, does not warrant cancellation of the GST registration with retrospective effect.
- Writ petition allowed: DELHI HIGH COURT
2023-TIOL-1545-HC-DEL-GST
Omkara Footwear Vs CCGST
GST - The petitioner had preferred applications seeking refund of an aggregate amount in respect of Central Goods and Services Tax Act, 2017 for the period January, 2020 to March, 2020 - It is the petitioner's case that payments were made within stipulated time and that suppliers from whom the petitioner had availed of supplies were existent dealers - Petitioner has produced a screenshot from website indicating that GST registration of M/s. Yamuna Overseas is still active and extant - In addition, petitioner had also produced invoices, along with e-waybills mentioning registration number of vehicles in which the goods received from said supplier, were transported - The counter affidavit also does not shed any light as to why the screenshot of GST Portal still reflects M/s Yamuna Overseas as an active registered supplier - Although, it is contended that petitioner had paid for invoices beyond stipulated period of one hundred and eighty days, there is no re-conciliation statement on record, which establishes the same - It is material to note that SCNs issued to petitioner by Adjudicating Authority did not propose to reject refund applications on the ground that it had made payments for supplies beyond period of one hundred and eighty days from date of issuance of invoices - Thus, the orders passed by Adjudicating Authority proceed on a ground, which was not put to the petitioner at material time - The SCN also did not mention specific registered dealer (M/s Yamuna Overseas) which is alleged to be non-existent - Since the allegation that M/s Yamuna Overseas is non-existent and that petitioner had not paid the amount due as per invoices within the period of one hundred and eighty days is articulated in impugned order, it would not be necessary for Adjudicating Authority to issue a fresh SCN - The petitioner is at liberty to respond to said allegations and provide all relevant material as petitioner considers necessary - The petitioner shall also furnish a reconciliation statement showing date of invoices and dates on which the payments have been made - The same may be filed before Adjudicating Authority within a period of four weeks - Adjudicating Authority shall consider the refund applications afresh and decide the same after affording the petitioner an opportunity to be heard: HC
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-1544-HC-DEL-GST
Kordient Ventures Pvt Ltd Vs Commissioner Delhi GST
GST - The petitioner was issued SCN proposing to cancel petitioner's GST registration for the reason that it was not found functioning / existing at its principal place of business - They were directed to furnish a reply to SCN and also appear before concerned officer at appointed date and time, but no such date or time was specified - The petitioner's GST registration was also suspended w.e.f. 09.09.2022 - It is the petitioner's case that it had changed its place of business and had duly applied for same on 23.10.2020 - The said application is not on record - However, pursuant to said application, Proper Officer had issued a SCN proposing to reject the same and stating reasons for doing so - The petitioner was also directed to furnish a reply to said SCN by 10.11.2020 - Thereafter by an order dated 11.11.2020, petitioner's application for adding / amending the place of business was rejected - Said order does not disclose any reasons for the same - The space where reasons were supposed to be set out, is left blank - It is apparent that petitioner's registration has been cancelled as respondents have not permitted the petitioner to update the records to reflect its current place of business - Petitioner is permitted to file an application for revocation of cancellation of its GST registration and also substantiate that it is carrying on its business from another premises - If said application for revocation of cancellation of GST registration is filed within a period of two weeks alongwith relevant documents, the Proper Officer shall consider the same and pass a speaking order within a period of one week from the said date, uninfluenced by previous order(s) - The Proper Officer shall also consider petitioner's request for altering the records to amend its current place of business, notwithstanding the order dated 11.11.2020, as the said order being unreasoned, is clearly unsustainable: HC
- Petition disposed of: DELHI HIGH COURT
2023-TIOL-1543-HC-KERALA-GST
Global Plasto Wares Vs Asstt. State Tax Officer
GST - The Assessee filed the present appeal to challenge an order in which penalty had come to be imposed upon it - The penalty was imposed on grounds that entire tax dues owed by the Assessee were not paid within 30 days from the date of Show Cause Notice that informed it of the fact that differential tax was due from it - The Assessee claimed that while the Show Cause Notice intimating it of the differential tax dues was issued in Feb 2022, it had paid the tax dues by March of 2022 - The Assessee further claimed that the Show Cause Notice did not specifically refer to the provisions of Section 73(11) of the CGST/SGST Act but had proceeded on the assumption that what the appellant was liable to was only a penalty under Section 73(8) of the CGST/SGST Act, which, on the facts of the instant case, did not apply.
Held - While the said argument of the counsel may appear persuasive on first blush, the same is not acceptable - It is not in dispute that the differential tax amount demanded from the Assessee pertains to transactions covered by invoices in which the appellant had clearly shown the price of the goods and also the tax amounts due from the customer concerned - While paying the tax due to the State along with the returns filed by the appellant, the Assessee had failed to include the tax amounts covered by the invoices considered by the Assessing Authority for the issuance of the demand for differential tax, and it was under those circumstances that the demand for differential tax came to be made as against the Assessee - While it may be a fact that the notice issued to the Assessee did not specifically refer to Section 73(11) of the CGST/SGST Act, when we find that, on the admitted facts, the Assessee had not paid tax due to the State despite collecting the same from its customers, then, as per the statutory provisions, it is the provision of Section 73(11) and not the provision of Section 73(8) that will apply to determine the penal liability of the Assessee - The Assessing Authority, having found that as per the provisions of Section 73(11) of the CGST/SGST Act, the Assessee would be liable to penalty in view of the non-payment of tax collected from its customers, we see no reason to interfere with the findings of the Single Judge that upheld the order of the Assessing Authority laying down the correct position in law - Merely because the show cause notice issued to the Assessee did not refer to a particular statutory provision, the Assessee cannot be said to have been prejudiced when the facts leading to the invocation of the statutory provision concerned were admitted by the Assessee - Hence there is no merit in the present appeal: HC
- Writ appeal dismissed: KERALA HIGH COURT
2023-TIOL-1542-HC-MUM-GST
Afzal Husain Saiyed Vs Pr.CIT
GST - The Petitioner filed the present petition to challenge order proposing to cancel the GST registration held by the Petitioner, as well as proposing attachment of the Petitioner's bank account - The Petitioner is engaged in trading of metal scrap - In the relevant period, Summons under Section 70 of the CGST Act were issued to the Petitioner on account of a charge involving availment of ITC using fake invoices - Subsequently, SCN was issued to the Petitioner proposing cancellation of registration and attachment of bank accounts - The Petitioner contended that the Show Cause Notice and order for cancellation of the registration do not provide for any reasons which is an incurable defect, and therefore, the same be quashed and set aside - The Petitioner further claimed to be unable to respond to the Show Cause Notice within the due time limit on account of being in judicial custody - The Petitioner also claimed that the provisions of Section 83 of the CGST Act 2017 had been contravened since the Commissioner had not formed an opinion.
Held - The Show Cause Notice and order cancelling the registration clearly does not provide for any reason whatsoever for such action being taken against the petitioner and, therefore, there is an incurable defect in the order which cannot be improvised in the reply of the Revenue - Hence the order cancelling the registration ought to have contained reasons for the said cancellation of the registration and in the instant case, no such reason can be found in the order cancelling the registration - This bench in an identical situation, has quashed and set aside such order of cancellation of registration which was bereft of any reason - The Petitioner is justified in placing reliance on the decision in case of Makesburry India Pvt. Ltd. - Hence the Show Cause Notice and order are both set aside - The registration of the Petitioner stands restored: HC
- Writ petition allowed: BOMBAY HIGH COURT
2023-TIOL-1541-HC-MAD-GST
MKN Coconut Industries Vs State Tax Officer
GST - The Assessee filed the present petitions to contest the vires of certain assessment orders passed in respect of the relevant AYs - The Assessee manufactures dessicated coconut (coconut copra) from Kancheepuram - The Assessee was registered as a dealer under Tamil Nadu Shops and Establishments Act,1947 and Tamil Nadu VAT Act,2006 - The Assessee later obtained registration under the respective GST enactment and started filing returns in GSTR-1 under Rule 59(1) of the Rules and GSTR-3B under Rule 61(5) of the Rules till November 2017 - The Assessee failed to pay tax on the outward supplied made - Such non-payment of tax was attributed to set backs in the Assessee's business, caused due to defaults by debtors of the Assessee - Due to the same reason, the Assessee also defaulted in regular filing of GST returns - The Assessee continued to upload GSTR-1 Returns under Rule 59(1) without filing GSTR-3B under Rule 61(5) of the Rules - Thereafter, an inspection was carried at the Assessee's premises on 28.05.2019 by the Deputy State Tax Officer, Enforcement Group-V, Salem along with the State Tax Officer, Enforcement Group-V, Salem - Statements were obtained from the petitioner on 28.05.2019 - The Assessee admitted to tax liability and also agreed to pay the arrears of tax for the period from July 2017 to March 2019 - The Assessee was issued another SCN and was informed that the Assessee had still not filed Returns in Form GSTR-3B from July 2017 to March 2019 and filed only monthly Returns in Form GSTR-1 by quantifying the taxes payable under the various heads - Since the Assessee failed to file Returns in Form GSTR 3B, the Assessee was informed that proceedings would be initiated against it - Thereafter, notice under Section 46 of the TN GST Act was issued to the Assessee and the Assessee was called upon to file GST returns for the relevant period within 15 days' time, failing which action would be taken against the Assessee - Later, the Assessee was issued with another notice dated 23.07.2019 fixing personal hearing citing the earlier demanded notice dated 01.07.2019 - A further demand was made for the composite period between April 2018 and March 2019 by including tax liability to the petitioner for the period from April 2018 to March 2019 - The Assessee however did not comply with the requirements, claiming to have no money - The Assessee merely asked for further time for filing returns - Meanwhile, the Assessee sent a request for further time to pay tax and file returns pursuant to notice issued on 01.07.2019 under Section 46 of the TNGST Act, 2011 r/w 100 TNGST Rules, 2017 - However, the Assessee still failed to pay either the tax or file the returns - Thus, the impugned orders came to be passed on 15.10.2019.
Held - Reading of the orders in challenge, indicates that the tax liability determined is the net liability after adjustment of ITC in GSTR-2A - Therefore, even on this count there is no case made out for interfering with the Assessment Orders - If the Assessee had furnished a valid return within thirty days of the service of the aforesaid assessment orders under sub-section (1) of section 62 of the Act, the said assessment orders would have been deemed to have been withdrawn under sub-section (2) of Section 62 of the Act but the liability for payment of interest under Sub-section (1) of Section 50 or for payment of late fee under Section 47 was to continue - Thus, there is no scope for interfering with the orders - Therefore, these writ petitions are liable to be dismissed - However, liberty is given to the Assessee to seek time from the Revenue for discharging the tax liability in installments which shall be considered: HC
- Writ petition dismissed: MADRAS HIGH COURT
2023-TIOL-1540-HC-ORISSA-GST
Pravat Kumar Vs Addl. Sate Tax Officer
GST - The Petitioners filed the present petitions to challenge the first appellate orders, whereby the appeals filed by the Petitioners had come to be rejected on grounds of limitation, as per the provisions of Section 107 of the Odisha GST Act - The petitioners claimed that as the GST Appellate Tribunal was yet to be formed, the Petitioners could not access alternate remedy provided as per Section 112 of the Act.
Held - During pendency of these writ petitions, the Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs) has issued Notification No.53/2023-Central Tax [S.O.4767(E)] , dated 2nd November 2023, by which it has been notified that taxable persons, who could not file an appeal on or before the 31st day of March, 2023 against the order passed under section 73 or 74 of the Central Goods and Services Tax Act, 2017 by the proper officer within the time period specified in sub-section (1) of section 107 read with sub-section (4) of section 107 of the Act, and the taxable persons whose appeal against the said order was rejected solely on the grounds that the said appeal was not filed within the time period specified in section 107, as the class of persons, shall follow certain special procedure for filing appeals in such cases - Hence the orders, against which the writ petitions are filed, are set aside and the matters are now remanded to the Appellate Authority to proceed with it in accordance with law: HC
- Writ petitions disposed of: ORISSA HIGH COURT
2023-TIOL-1539-HC-MAD-ST
David Stansislaus Vs Asstt. CGST & CE
ST - The Petitioner is the proprietor of a proprietorship entity - The present petition was filed to challenge the vires of an order wherein tax demand proposed to be raised through a Show Cause Notice issued to the Petitioner, had been confirmed by the Original Authority - The Show Cause Notice had invoked extended period of limitation under Section 73(1) of the Finance Act 1994, to raise tax demand - The specific case of the petitioner is that the petitioner has not received the aforesaid Show Cause Notice No.10/2021 (ST) dated 28.04.2021. It is submitted that the petitioner was directly called upon to appear for a personal hearing. Therefore, the Petitioner appeared before the Revenue who has now passed the impugned order confirming the demand proposed in Show Cause Notice No.10/2021(ST) dated 28.04.2021 - It was therefore submitted that Show Cause Notice No.10/2021(ST) issued on 28.04.2021 was clearly barred by limitation under Section 73 (6)(i)(b) of the Finance Act, 1994 - Hence, it is submitted that the impugned order passed on the strength of Show Cause Notice issued long after expiry of limitation was liable to be quashed.
Held - The decision of the Supreme Court in 2022(3) SCC 117 , Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (2 of 20) and the notification issued therein makes it clear that the limitation was saved for issuance of notices and for passing order - Moreover, the High Court of Madras in the case of M/s.GNC Infra LLP Vs. Assistant Commissioner (Circle), Chennai, in W.P.Nos.18165 and 18168 of 2021 dated 28.09.2021 , has considered the decision of the Supreme Court and the Circular cited above in the context of refund arising under the GST regime and has concluded that refund applications made on 19.04.2021 has to be entertained beyond the two years period - Thus, there is no scope for setting aside the impugned order on the ground of limitation - However, since the order has been passed without following the principle of natural justice and without giving an opportunity to the petitioner to reply to the Show Cause Notice No.10/2021 (ST) dated 28.04.202, Court is inclined to set aside the impugned order and remits the case back to the respondent to pass a fresh order on merits in accordance with law within a period of six months from the date of receipt of a copy of this order - The Revenue shall furnish a copy of the Show Cause Notice No.10/2021 (ST) dated 28.04.202, to the petitioner within a period of 30 days from the date of receipt of a copy of this order: HC
- Writ petition disposed of: MADRAS HIGH COURT
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