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2023-TIOL-1655-HC-MAD-FEMA
S Jagathrakshakan Vs Special Director
Whether the power of seizure under the FEMA will be construed as an interim arrangement in aid of final adjudication, and as per settled position in law, the reasoning of an interim order will have no impact on the reasoning for a final decision - YES: HC
Whether an interim seizure of assets, conducted to aid final adjudication of the matter, can be assailed in court when the seizure is squarely within the powers of the Adjudicating Authority and where principles of natural justice are satisfied - NO: HC
- Writ petitions dismissed: MADRAS HIGH COURT
2023-TIOL-1654-HC-MP-GST
Raymond Ltd Vs UoI
GST - Petitioner assails the SCN dated 03.09.2022 and the subsequent order of demand dated 12.09.2022, both issued u/s 73 of the Act, 2017 - Petitioner restricts his argument to the ground of denial of reasonable opportunity arising from the fact that despite show cause notice dated 03.09.2022 affording 30 days' time for the petitioner to respond, the impugned order u/s. 73 was passed on 12.09.2022 i.e. within nine days; that the SCN dated 03.09.2022 is not self-contained inasmuch as it fails to inform about material of adverse nature which constituted the foundation of the notice thereby disabling the petitioner from responding to the same; that an opportunity of personal hearing was also not afforded.
Held : From the language employed in Section 73, it is obvious that Section 73(1) affords opportunity to noticee to show cause which means to respond as to why he should not pay the amount specified in the notice with interest and penalty, if any - Though no time period is stipulated in Section 73 for the noticee to respond but it is obvious that the statute contemplates affording of reasonable opportunity to reply to show cause notice - Concept of reasonable opportunity demands that reasonable period of time to reply to the notice should be not less than 15 days, if not more - It is evident that the time gap provided between show cause notice dated 03.09.2022 and impugned order dated 12.09.2022 was only 8 clear days which, in the considered opinion of this Court, falls desperately short of satisfying the concept of reasonable opportunity of being heard - Court merely observes that any show cause notice, whether u/s. 73 or otherwise can withstand the test judicial scrutiny only when the same contains enough and adequate material which motivated the notice issuing Authority to take a prima facie view against the noticee - If the contents of impugned show cause notice are lacking in material particulars or are vague in regard to any of the entries contained therein then such show caused notice becomes vulnerable to judicial review - Show cause notice not only falls short of the minimum period of 30 days to afford reasonable opportunity to noticee to respond but also appears to be lacking in material particular - Impugned SCN and order, both passed u/s 73 of the Act, 2017 are set aside with liberty to Revenue to issue fresh legal and valid SCN and thereafter proceed to adjudicate after affording reasonable and sufficient opportunity of being heard to petitioner - Petitioner shall be entitled for cost of Rs.10,000/- to be paid by respondents by depositing the same in the bank account of the petitioner within a period of sixty days - Petition allowed [para 6, 6.1, 9.1, 10, 10.1, 10.2]
- Petition allowed: MADHYA PRADESH HIGH COURT
2023-TIOL-121-AAR-GST
2 Win Residency Ladies Hostel
GST - Applicant submits that they are providing best hostel facilities to college female students and also to working women as most of the students and working people travel far and wide from their remote villages - The total charges collected for lodging ranges between Rs. 66/ per day to Rs. 100/- per day - Thus, the monthly tariff per student or per inmate ranges between Rs. 2000/- to Rs. 3000/ per month per inmate - They provide single room occupation, or double room sharing or dormitory style of accommodation and rates vary accordingly - Applicant contends that hostels attached to educational institutions are exempt from GST in terms of notification 12/2017-CTR as also 9/2017-ITR and their hostel which essentially caters to students at very nominal charges in contrast to hostels attached to educational institutions, also has to be exempt from the levy of GST and ought to fall outside the scope of levy; that they expend the nominal amount collected from the inmates on their food and clean environment with no profit motive.
Held: Hostels are nothing but accommodations which provide temporary lodging to the inmates, whether students or working people - It is clear that hostels refer to a place where someone is accommodated or provided with lodging or boarding and lodging facilities against a charge or fees for the services rendered - Further, Authority finds that there are certain regulatory provisions for running hostels and licence/certificates are to be obtained by a person running hostels in the state of Tamil Nadu under the respective enactments - Said provisions are not mandatory or applicable to a typically residential building or " residence dwelling for use as residence ", whereas it is mandatory for a hostel building - This also shows that hostel building cannot be considered as residential dwelling but a non-residential complex - It is, therefore, evident that the premises rented out by the Applicant cannot be construed as residential dwelling - Judgments cited by the Applicant are not applicable as the facts of those cases are entirely different from the present case; that they were not in the context of GST laws - Under the given circumstances and factual evidences produced, it is clear that the exemption is specific and particular about the housing residence sector and NOT to other places which are not residential that are rented out - It is clear that the purpose and objective of the notification is nothing but to avoid taxing residential properties taken on rent by family or individuals and the benefit of exemption is not extended to the premises which do not qualify as residential dwelling for use as residence - Further, unless the twin conditions of 'renting of residential dwelling' for 'use as residence,' being inter-twined and inseparable, are not met, the exemption is not available - Held that hostel accommodation is not equivalent to residential accommodation and hence Authority holds that the services supplied by the Applicant would not be eligible for exemption under Entry 12 of Exemption Notification No. 12/2017-CT(Rate) and also under Entry 13 of Exemption Notification No. 09/2017 IT(Rate) - Hostel services cannot be equated to a hotel accommodation and hotel GST rates cannot be applied to a hostel - Therefore, Authority holds that supply of hostel accommodation services (Tariff heading 9963) is taxable (9% CGST + 9% SGST under SI.No. 7(vi) of the above Notification (SI.No. 7 (ix) as per original notification) - The principal activity of the Applicant is supply of accommodation Services - While providing such services, the charges are being realised in a consolidated manner for the value of food and other like services rendered, thus, the services provided by the Applicant are composite in nature - Since the Applicant provides a number of services in a composite manner, the hostel accommodation services provided, being the principal supply, which is taxable @18%, will be tax rate, as per s.8 of the Act, 2017 , for the composite supply provided by them - Application disposed of: AAR [para 7.1.6, 7.1.7, 7.1.8, 7.1.13, 7.1.15, 7.1.17, 7.2.1, 7.3.2]
- Application disposed of: AAR
2023-TIOL-23-AAAR-GST
VBC Associates
GST - Applicant provides the services of maintenance of immovable property, covered under the main SAC 9972 - The applicant has stated that they have procured Solar Panels and the power so generated is proposed to be used for electrical consumption - The TNEB, on the electricity consumption charges of the building, would give a credit of the units generated against the overall bill raised for the building as a whole - Hence, the applicant has to pay the net cost of electricity consumption and remit the same to the TNEB -
Applicant had sought a ruling on the question - Whether ITC on Solar power panels procured and installed is blocked credit u/s 17(5)(c) and (d) of the Act, 2017 - AAR had held that the applicant is not eligible for claim of ITC as per s.17(2) of the Act, 2017 on the goods/services used in installation of solar power panels, which are considered as plant and machinery - AAR observed that Electrical Energy is goods classified under HSN 2706 and exempted by Notification No. 02/2017-CTR vide Sl. No. 104; therefore, electrical energy generated by Solar Panel installed by the applicant is exempted goods supplied to tenants and consequently input tax paid on the Solar Panels are ineligible as credit in terms of s.17(2) r/w rule 43(1)(a) - Aggrieved, the present appeal before the AAAR-M ain ground of appeal is that the AAR had exceeded its jurisdiction in delivering a ruling on apportionment of credit in terms of Section 17(2) of the CGST Act, 2017 , rather than delivering a ruling on the question of blocked credit.
Held: Appellants are not supplying works contract service for construction of an immovable property and since such activity does not fall within the ambit of the Section 17(5)(c) or (d) of CGST Act, 2017 , the question whether ITC is blocked or otherwise, in terms of the said provisions, does not arise at all and the issue raised before the AAR was totally irrelevant - Moreover, the issue raised is extraneous to provide a ruling, as it is not within the scope of Section 97(2)(d) of the Act i.e. admissibility of input tax credit - The Appellants being the maintenance service provider is required only to maintain the back-up generator and other infrastructure provided by the owners of the impugned property - Thus, it is clear that Electricity is not an input for the provision of maintenance service by the Appellant - Moreover, the electrical energy generated by Solar Panel installed by the Appellant at Dindigul and supplied to Electricity Board concerned is exempted in terms of CGST Notification No. 2/2017-Central Tax (Rate) - Consequently, the tax paid on the inputs namely, Solar Panels are not eligible for input tax credit as the same are used exclusively for supply of exempted goods - Held that the tax paid on the inputs i.e. Solar Panels are not eligible for input tax credit as the same are used exclusively for supply of exempted goods in view of the provisions of Section 17(2) of the CGST Act, 2017 read with Rule 43(1) (a) of the CGST Rules, 2017 - Issue framed for consideration by AAR was not relevant at all; and there is no case to deviate from the decision of the AAR against which the present appeal is filed - Appeal rejected: AAAR [para 8.3, 10.2, 10.3, 10.4, 10.5, 11, 12]
- Appeal rejected: AAAR |
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