HIGH COURTS

DELHI HIGH COURT

Gaurav Yadav & Anr.

v.

Union of India & Ors.

[D.N. Patel, CJ & Prateek Jalan, J]

W.P 5222 of 2020

Date of Decision: August 13, 2020

GST Rate—Essential commodities—Masks and sanitizers—Rate reduced by bringing the said goods under ‘Essential Commodities’ vide notification dated March 2020 – Notification to be in force till June 2020—No extension given—Held mere feeling of petitioner that GST rate is excessive cannot be a reason to reduce it beyond that period—No argument given regarding the tax being confiscatory in nature—writ dismissed.

During the initial pandemic period, the GST rate applicable on masks and sanitizers was regulated by including them in Essential Commodities under the Essential commodities Act, 1955 vide notification dated march 2020 which was in force till June 2020.

The petitioner has sought reduction in GST rate applicable on these commodities.

The Hon’ble Court has held that rate of tax cannot be challenged in a court of law unless it is abundantly confiscatory in nature and it has not been argued if it is confiscatory in any way. Merely feeling that GST rate applied on masks and sanitizers is excessive, cannot be a reason to direct the respondents to reduce tax on the said commodities.

MADRAS HIGH COURT

TV. Sri Ganea Granites

v.

The State Officer Krishnagiri Assessment Circle

[Dr. Anita Sumanth, J]

WP No 30725 of 2019 and
WMP No 30811 of 2019

Date of Decision: August 4, 2020

Period of limitation—Assessment—For assessment year 2011-12, assessment order passed dated April 2019—Assessment Order set aside by Honble high court as no reasonable opportunity was afforded to hear the appellant—Assessment Proceedings reinitiated pursuant thereto—Writ filed invoking bar of limitation—Assessment order ought to have been passed within six years of deemed assessment—first notice served in February 2019 for framing original assessment itself was challenged on grounds of limitation—Writ allowed

For the Assessment Year 2011-12 a pre-assessment notice was issued in 2019 which culminated into an assessment order dated April, 2019. The petitioner challenged it on the grounds of violation of Principal of Natural Justice as well as on the bar of statutory limitations. The Hon’ble High Court set aside the assessment order pursuant to which the authorities again proceeded by issuing notice in July, 2019.

The petitioner contends that the original assessment should have been completed on 30.06.2018 as the period of limitation for completing assessment expires in six years from the date of deemed assessment. The pre-assessment notice issued earlier had already been challenged on grounds of bar of limitation.

Held, assessment in Sec.9(2) includes reference to deemed assessment and the time lines set out for the bar of limitation under the VAT Act would apply in matters of CST as well. Therefore, the writ is allowed.

KERALA HIGH COURT

Faisludeen P.M.

v.

Assistant State Tax Officer

[A.K. Jayasankaran Nambiar, J]

WP No. 16357 of 2020

Date of Decision : August 11, 2020

Detention of goods—Absence of Original Invoice—goods detained for absence of original invoice and variation in goods under transport than described in invoice—Goods ordered to be released on furnishing of bank gurantee pursuant to which matter to be adjudicated u/s 130 of GST Act, 2017

The goods in transit were detained as the consignment was not supported by original invoice and there was variation detected in the goods being transported from those described in the invoice. A writ is filed.

It is held that the respondents will permit the petitioner to clear the goods on furnishing of bank guarantee and thereafter, shall adjudicate the dispute under Sec.130 of the GST Act after hearing the petitioner.

KERALA HIGH COURT

ABCDO Trades (P) Ltd.

v.

The Assistant State Tax Officer

[A.K. Jayasankaran Nambiar, J]

WP(C). No. 17377 of 2020

Date of Decision : August 08, 2020

Detention of goods—Consignee shown as unregistered in E-way bill—Allegedly CGST and SGST collected in delivery challan used for stock transfer—contention by petitioner that invoice bore the GSTIN number of consignee—mentioning of tax applicable on delivery challan was by mistake—Held reasons shown for detention not sufficient to attract section 129 of GST Act—writ allowed.

The goods were in transit were detained on the ground that the consignee was shown as an unregistered person in the e-way bill. Also that the petitioner had collected CGST and SGST in the delivery challan that was used for stock transfer of the goods there by giving rise to suspicion regarding nature of transaction.

The petitioner contends that the GSTIN number was duly mentioned in invoice. Moreover, tax applicable in delivery challan was by mistake.

Held, the contentions of the respondents are not enough to detain the goods under Sec.129 of the GST Act. Therefore, the writ is allowed directing the first respondent to enable release of goods.

KERALA HIGH COURT

K.U. Niyas

v.

Assistant Commissioner State Goods and Service Tax Department

[A.K. Jayasankaran Nambiar, J]

W.P. NO.13647 OF 2020

Date of Decision : August 20, 2020

Assessment order—Communication of—Validity of mode of communication—Assessment order served on common portal of department—Returns filed pursuant to issuance of demand notice i.e after a month of service of assessment order—Held no benefit of withdrawal of assessment orders is permitted as contemplated u/s 62 as the assessment order served on portal are a valid way of communication in terms of section 169 of GST Act—no relief can be given ignoring the fact that said orders were brought to notice on the given dates of uploading itself.

It is the case of the petitioner that no assessment order were served on him but after the demand notices were issued it immediately took steps and filed returns for the assessment years within 30 days in order to get the benefit of withdrawal of assessment orders as contemplated U/s 62 of the GST Act.

The department contends that the assessment orders were uploaded on the web portal on the given dates and the petitioner did not file returns for the period covered by the said orders within 30 days to avail the benefit of withdrawal of assessment orders.

Held, as per Sec. 169 (c) and (d) of the GST Act, the service of any communication to the e-mail address given by assessee at the time of registration, and also making available on the common portal of the department, is to be treated as effective communication under the statute. No benefit of withdrawal of assessment orders can be given to the petitioner. The recovery proceedings under the assessment orders shall be kept in abeyance for period of 6 weeks to enable the petitioner to move the appellate authority through appeals.

KERALA HIGH COURT

Krishna Kumar

v.

The Assistant State Tax Officer

[A.K. Jayasankaran Nambiar, J]

W.P. NO. 16961 OF 2020

Date of Decision : August 19, 2020

Detention of goods—Absence of tax payable on e way bill—Rule 138 A of the rules envisages no such requirement to show tax payable on e-way bill—tax payable shown in invoice undisputedly—writ allowed

The goods in transit were detained as the IGST payable was not mentioned in the e-way bill accompanying the goods. Held, as per SGST Act and Rule 138A of the Rules there is no requirement to mention the details of the Tax payment in the e-way bill copy. It is undisputed that the tax paid was shown in invoice in the present case. Therefore, writ is allowed and the goods are ordered to be released.

MADRAS HIGH COURT

TVL Sarathas

v.

The Assistant Commissioner (ST)

[GR Swaminathan, J]

WP No 7858 of 2020

Date of Decision: July 30,2020

Penalty—Mensrea—Non filing of returns—Goods imported for renovation purpose—Entry tax paid readily on being pointed out—Returns not filed—Penalty imposed—Held non filing of returns not important since goods imported not for trade—Omission to pay entry tax observed but payment done readily on being checked—Mensrea not indicated in impugned order—No personal hearing given to petitioner before passing order—Impugned order set aside

The petitioner had imported some material for renovation of business premises after paying Entry tax of 3%. However, on inspection it was pointed out to pay another 7% in addition thereto which it readily paid. It imported the said goods thrice in two assessment years for which a pre assessment notice was issued. Penalty on the grounds of non filing of returns is levied. A writ is filed invoking section 10 of Tamil Nadu Tax on Entry of Goods Into Local Area Act, 2001. It is held that the petitioner is not a regular importer of these goods hence non filing may not really matter in this case. Though it has omitted making declaration at relevant time, but had paid balance entry tax immediately after being pointed out. Nothing is there to show in impugned order that there was mens rea on part of petitioner. Moreover, no personal hearing has been afforded to petitioner before passing the order. Hence, impugned order is quashed and writ is accepted.

MADRAS HIGH COURT

Madurai Power Corporation Ltd

v.

The Assistant Commissioner

[C. Saravanan, J]

WP 34583 to 34585 of 2015

Date of Decision: February 10, 2020

Penalty—Low Sulphur Heavy Stock Furnace oil –‘Low Sulphur Heavy Stock Furnace oil’ used for power generation—Specifically included only after amendment of RC in 2012—Absence of specific mention of said commodity for period prior thereto leading to penalty—Writ filed— ‘Furnace oil’ and ‘oil’ observed to be specifically mentioned in RC for disputed assessment years—Hence oil of every type could be procured for power generation—Penalty deleted

The petitioner is a power generating company. It obtained registration in 2020 under which it was entitled to procure furnace oil. On amendment of RC, in 2001, it was permitted to procure oil w.e.f. 2000. In 2012, Low Sulphur Heavy Stock Furnace oil was specifically included. The respondent contends that the petitioner company was not permitted to procure Low Sulphur Heavy Stock Furnace oil before the period of 2012 as the said commodity is specifically included in the year 2012 only and hence penalty is imposed. A writ is filed in this regard.

It is held that the petitioner was entitled to procure oil of every description as long as it was meant for generating electricity. The oil specified in the RC includes Low Sulphur Heavy Stock Furnace Oil. It is undisputed that the said oil was used for generating electricity and power. Therefore, writ is allowed and the impugned orders are set aside.

MADRAS HIGH COURT

The State of Tamil Nadu

v.

Chola Textiles Ltd.

[Dr. Justice Vineet Kothari & R. Suresh Kumar, JJ]

W.P. NO. 35797 OF 2004

Date of Decision: February 11, 2020

Penalty—Goods not covered by Registration Certificate—Mensrea being absent and honestly believing the goods to be covered by the RC, no penalty can be imposed u/s 10A of the CST Act for purchasing the goods against C forms

The Tribunal had allowed the appeal of the assessee and held that no penalty could be imposed under section 10-A r/w Section 10(b) of the CST Act for purchase of diesel for the generator set against the C-Forms at concessional rates, even though the said goods weren’t mentioned in the RC of the Assessee. The revenue has filed a writ in this regard. It is held that for imposition of penalty mens rea is required. If the registered honestly believed that any particular goods are embraced by the RC and believing that makes a representation, he cannot be held guilty under Section 10(b) of the Act and no penalty can be imposed u/s 10A of the Act. Therefore, the judgment of the Tribunal is upheld as no mens rea can be attributed to the assessee for purchase of the fuel against C-Forms even though it is not separately included in the RC.

UTTARAKHAND HIGH COURT

Commissioner of Commercial Taxes

v.

Raja Biscuit Industries

[Ravi Malimath, ACJ & N.S. Dhanik, J.]

CTR No.16 of 2010

Date of Date: August 18, 2020

Penalty—Misuse of C forms— Penalty imposed for s. 10A and 10(b) of CST Act—Conclusion by Appellate authority that the assessee bonafidely believed that articles imported by it were used for manufacturing purpose—Penalty reduced, not deleted—On Revision held once assessing authority concluded the mistake was due to bonafide belief of assessee, complete relief should be given—Limited relief inappropriate—Order of first Appellate authority set aside.

The assessee who is manufacturing biscuits was issued a notice by the Commissioner for misusing C Forms and consequently penalty was imposed U/s 10A r/w 10(b) of the CST Act. An appeal was partly accepted and penalty was reduced. The second appeal before Tribunal was dismissed. Hence a revision is filed before the Hon’ble High Court.

It is held that the First Appellate Authority concluded that the assessee bonafidely believed that the articles imported by it are used for purpose of manufacturing and were covered under the C Form. In such a situation absolute relief should have been granted and complete waiver of penalty would have been appropriate. The Tribunal was not justified in affirming the penalty order while affirming the finding of fact that the goods purchased against C Forms were used according to the provision of Section 8(3)(b) of the CST Act. Therefore penalty imposed by the First Appellate Authority is set aside.

KERALA HIGH COURT

SAMS Property Developers & Hotels

v.

State of Kerala

[K. Vinod Chandran & T.R. Ravi, JJ]

S.T. (Rev.) Nos. 25/2019, 22/2019, 23/2019, 24/2019 & 1/2020

Date of Decision: June 25, 2020

Estimation of Turnover—validity of—the assessing officer has no rational basis to reject books of accounts and estimation made has no nexus to the nature of transaction carried out in the two licenced premises of the assessee where liquor is sold—nothing to rely to suggest that any of the brands were sold at a higher rate than that disclosed in invoices—purchase value cannot be a reference to decide sale price—Revision allowed

The assessee sells foreign liquor through an AC Bar and ordinary one. The billing of liquor sold in the former is at higher rate than that sold in ordinary one. The Assessing Officer has taken the highest gross profit of a brand as available in the invoices of the ordinarily bar and that in the AC Bar and computed an average and estimated the GP percentage. The assessee has filed a revision contending that it is against the basic principle of best judgment assessment and there is no reason to reject books of accounts and gross profit as shown by books.

Held, the Assessing Officer has not adopted a rational basis for estimating. The purchase value cannot be a reference to decide the sale price as the Assessee offers premises to the customer to consume alcohol. The assessee also sells the same brand at different prices in different premises. It is not open to the authorities to prescribe the price for selling liquor. There is nothing to rely on to suggest that assessee had sold any of the brands at a higher rate than that disclosed in invoices. Therefore, there is no rational basis to reject account books and the estimation made has no nexus to the nature of business and transaction carried out in the two premises. Therefore, revisions are allowed.

KERALA HIGH COURT

Pee Bee Enterprises

v.

Asst. Commissioner of the State Goods and Service Tax Dept

[AK Jayasankaran Nambiar, J]

WP No 14376 of 2020

Date of Decision: August 17, 2020

Assessment order—validity of mode of service—Assessment order on best judgment basis served through web portal within time—Such service is statutorily prescribed and hence valid—Petitioner cannot claim benefit of withdrawal of the order contemplated u/s 62 of the SGST ACT on the grounds of non service or delayed service

The petitioner contends that the assessment orders were not served on him till much later and within a period of 30 days after the date of receipt of the orders it had filed returns as permitted u/s 62 of SGST Act. Therefore, the assessment orders should be treated as withdrawn by virtue of section 62 of the Act.

The Hon’ble High Court has held that the assessment orders were published on the web portal. The service of an order through the web portal is one of the methods of service statutorily prescribed. The petitioner cannot deny service of order to claim the benefit of withdrawal contemplated u/s 62 of the Act.

MADHYA PRADESH HIGH COURT

Smt Kanishka Matta

v.

Union of India & Ors.

[S.C. SHARMA AND SHAILENDRA SHUKLA, JJ]

WRIT PETITION NO. 8204/2020

Date of Decision: August 26, 2020

Search and seizure—scope of section 67(2) of CGST Act, 2017—cash seized by authorities on search of premises– writ filed contenting cash not included in ‘things’ under section 67(2) of the Act, 2017-Held conjoint reading of sec 2(17), 2(31), 2(75) and section 67(2) makes it clear that money can be seized—intent and purpose of sections to be unlocked in applying provisions of the Act—reference to black’s Law Dictionary in interpreting meaning of ‘things’—cash rightly confiscated

After a search was conducted suspecting illicit supply goods without invoices and without payment of GST, cash amount was seized. The petitioner contends that the word “money” is not included in Sec.67(2) and it cannot be seized. The court has observed that it is important to unlock the intent and purpose of various sections and expressions used when the provisions are put to implementation. Sec.2(17) defines “Business” and Sec.2(31) defines ”consideration”. A conjoint reading of the Sections and 67(2) makes it clear that money can also be seized by authorized officer. Therefore, in interpreting the word “thing”, money is included. The word “thing” has to be given wide meaning as per Black’s Law Dictionary according to which any subject matter of ownership within the spear of proprietary or valuable right would come under the definition of ‘thing’. Hence, writ is disallowed.

KERELA HIGH COURT

Hydrolic Corporation Kerala

v.

The Assistant State Tax Officer

[A.K. Jayasankaran Nambiar, J]

WP No.16384 of 2020

Date of Decision: August 11, 2020

Detention of goods—section 129 of GST Act—Goods detained on grounds of difference given in description in invoice than those found on inspection—Detention held to be justified—Goods to be released on furnishing of bank guarantee.

The goods in transit were detained as it was allegedly that the description of goods on invoice was different than those found on inspection. The court has held that Detention cannot be said to be unjustified. Goods are permitted to be released on furnishing of bank guarantee.

KERALA HIGH COURT

Steel and Pipes

v.

Asst State Tax Officer

[A.K. Jayasankaran Nambiar, J]

W.P. No. 16356 of 2020

Date of Decision: August 12, 2020

E-way bill—Discrepancy of—Detention notice—e-way bill accompanying the goods in transportation short of mentioning tax amount—Writ allowed as no such requirement is given in provision of the Act—E-way bill form nowhere indicates any field to be filled in respect of tax amount thereby implying that there is no such requirement by law—Detention notices quashed

A writ is filed against the detention notices served on the petitioner. The goods in question were detained on the grounds that the e-way bill accompanying the goods fell short of mentioning tax amounts and hence it was alleged to be invalid.

It is held that the power of detention u/s 129 of the GST Act is exercised only where transportation of goods is in contravention of the Act or Rules and not because the document relevant for assessment is short of detail of tax payment. Moreover, there is no field in the form of e-way bill which indicates that tax is required to be filled in. Therefore, non -mentioning of the tax amount cannot be seen as contravention of the provisions of the Act. Thus writ is allowed and notices are quashed.

KERELA HIGH COURT

Ambady Enterprises

v.

The State of Kerela

[K.Vinod Chandran and T.R. Ravi, JJ]

O.T. Revision No. 67 and 69 of 2017

Date of Decision: July 30, 2020

Delayed claim of refund of ITC – Assessing officer contends delay could be condoned only by Deputy Commissioner u/s 20A of VAT Act – Held that Rule 47 specifically empowers an assessing officer to condone – section 20A is only an enabling provision for purpose of empowering an officer where no other officer is given the power to condone

The assessee, an exporter, made a delayed application for claim of ITC u/s 13. The assessing officer found that delay could be condoned only by the Deputy Commissioner u/s 20A of the KVAT Act. The First appellate authority and the Tribunal affirmed the decision of the Assessing officer against which a revision is filed before the Hon’ble High Court. It is held that section 20A of VAT Act is an enabling provision applicable only in cases where no other officer has been conferred the power to condone the delay in filing of refund. Rule 47 of the Rules specifically empowers the assessing officer to condone the delay and deputy commissioner can’t usurp the power of the officer Therefore, the question of law is answered in favour of assessee.

PUNJAB AND HARYANA HIGH COURT

Ranjit Singh

v.

State of Haryana

[G.S. Sandhawalia, J]

CRM-M14856-2020

Date of Decision: August 21, 2020

Bail—Condition of deposit of outstanding liability—Condition to pay huge amount of surety and outstanding liability for grant of bail imposed— Inability to comply with—Condition held to be onerous being violative of Article 21 of Constitution of India—liberty not to be deprived—Investigation completed and document in possession of prosecution, therefore, petitioner not to be detained merely because bail order in form of recovery proceedings is passed—Bail order modified—

A petition is filed seeking quashing of the condition given in order passed by Addl. Sessions Judge whereby bail is granted to the petitioner subject to furnishing of bail bonds of ₹ 50 lacs and to pay the outstanding liability of almost 2 crores along with interest. It is contended that the petitioner is not in a position to pay the outstanding amount. It is held that the condition is onerous and liable to be set aside. The petitioner has already undergone a period of 1 year punishment out of the maximum five years which can be awarded. The onerous condition violates article 21 of the constitution of India as the liberty of the petitioner is being deprived. The investigation and inquiry are complete and the relevant documents are in possession of the prosecution. Therefore, the petitioner cannot be detained merely for the fact that a bail order in the form of recovery proceedings is passed. Hence the impugned order is modified by reducing the amount of surety and setting aside the condition of outstanding liability.

DELHI HIGH COURT

Amit Joshi

v.

Commissioner of CEST &ST, CGST (EAST) AND ANR

[Brijesh Sethi, J]

W.P. (CRL) 766/2020

Date of Decision: March 20, 2020

Investigation—Presence of lawyer prayed for—Apprehension that the petitioner might be treated ruthlessly and tortured during investigation by GST officers—Presence of lawyer prayed for during investigation—Held following the order of Supreme court in Pool Pandi’s case , no requirement of lawyer during investigation—No officer can use method disapproved by law for extracting information from suspect—Prayer refused

A writ is filed praying for permission of presence of a lawyer during the course of investigation. The petitioner contents that it was detained for three days by the officers under GST Act and coerced to write incriminating statements and was beaten up ruthlessly. It is held that presence of a Lawyer is not required during the examination of the petitioner in law laid down by Supreme Court, in Pool Pandi’s case. No investigating officer can use a method to extract information from the suspect by using ways not approved by law. Therefore, no grounds are made out to allow the prayer.

TELANGANA HIGH COURT

R.C.C. Sales P. Ltd

v.

The Annual Commissioner ST

[M.S. Ramachandra Rao & T. Amarnath Goud, J.]

WP No. 12043 of 2020

Date of Decision: August 13, 2020

Stay of Recovery—Principles of natural justice—Suo moto revision of assessment order—Tax levied consequently on sales earlier exempted—Stay of recovery applied for till pendency of appeal—Application dismissed—Writ filed—Held grounds urged by petitioner not considered by authorities—Failure to provide opportunity of hearing observed—Background facts wrongly mentioned by the officer—Writ allowed with a direction to hear the assessee’s contentions

After the assessment order was passed, a suo motto revision of the said order was taken up by the Respondent, thereby withdrawing the exemption granted on a turnover relating to stock transfers treating it to be local sale and thus imposed tax. The petitioner filed a stay application against recovery of disputed tax till pendency of the appeal before Tribunal. The stay application was dismissed, hence a writ is filed.

The Court has held that it has not been explained why the background facts relating to the filing of the stay petition were incorrectly mentioned in the impugned order and that none of the grounds mentioned by petitioner are even considered. The observation that the petitioner did not avail the opportunity of personal hearing is factually correct. When dealing with substantial rights, the respondent cannot mention wrong facts or ignore grounds taken by petitioner or dismiss the stay application without giving any valid reasons. The writ is thus allowed. The respondent shall permit a personal hearing and consider the contentions of the assessee.

GUJARAT HIGH COURT

Synpol Products (P) Ltd.

v.

Union of India

[J.B. Pardiwala & Bhargav D. Karia, JJ]

Civil Application NO.21744 of 2019

Date of Decision: February 27, 2020

Redemption and Confiscation fine—Whether waiver of covered under Sabka Vishwas Scheme, 2019—Held yes, said fines are not excluded under the exclusion list given u/s 125 of Finance Act, therefore considered inclusive—Intent and Object of the scheme observed—Redemption fine not to be treated separately than other amount of duty while determining arrears u/s 121 of the scheme—Clarification given by govt that only fines u/s 9 of Central Excise Act 1948 to be included and not under section 34 is unacceptable—Writ allowed

The declaration made by the petitioner under the “Sab Ka Vishwas Scheme 2019” was rejected on the ground that the case of the petitioner was involved confiscation and redemption fine which was not covered under the Scheme. A letter/clarification issued by the Designated Committee allowed waiver of ₹fine’ under Sec.9 of Central Excise Act 1948 and not redemption fine under Sec.34 of the Act. Hence a writ is filed.

It is held that the scheme relates to ‘redemption fine’ also because no other fine is contemplated under the Act. Also the exclusion list as given in Sec.125 of the Finance Act does not contain confiscation/fine under it which means that redemption and confiscation are covered under the Scheme. The contention of excluding fine under Sec.34 cannot be accepted considering over all intent and object of the scheme. To determine the amount in arrears U/s 121 of the Scheme, both the amount of duty as well as the amount of redemption fine is to be ascertained. The redemption fine cannot be treated separately than the amount of duty under the Scheme. Therefore, allowing the petition the respondents are directed to issue discharge certificate under Sec.129 to the petitioners subject to fulfillment of all other conditions as per the scheme.

PATNA HIGH COURT

Sanyog Construction (P) Ltd.

v.

State of Bihar & Ors.

[Hon’ble Chief Justice & S. Kumar, J]

Civil Writ Jurisdiction Case No.7202 of 20200

Date of Decision: August 27, 2020

Statutory appeal u/s 107 of GST Act—Permission to upload—Permission granted to upload the appeal under S.107 of GST Act subject to payment of tax, interest , penalty admitted in addition to 10% of disputed amount of tax—

In this petition it is prayed that the petitioner be permitted to file the statutory appeal against the assessment order on the GST Portal under Sec.107 of the Act of 2017 It is held if the petitioner deposits the tax, interest, penalty admitted by him and also a sum equal to 10% of the disputed tax, the authority will allow for uploading statutory appeal. The petition stands disposed of.

TELANGANA HIGH COURT

CSK Relators Ltd.

v.

Assistant Commissioner ST

[M.S. Ramachandra Rao & T. Amarnath Goud, JJ]

W.P. NO.11843 OF 2020

Date of Decision: August 13, 2020

Principles of natural justice—show cause notice served—objections filed in addition to specific request of personal hearing—impugned order passed without opportunity of personal hearing—order set aside on grounds of violation of principles of natural justice

In response to the show cause notice issued, the petitioner had filed detailed objections and sought for a personal hearing before the respondent. However, the respondent did not afford a personal hearing to the petitioner and passed the impugned assessment order. A writ is filed in this regard. It is held that a personal hearing ought to have been provided as it was specifically requested for and it is a violation of principle of natural justice on part of the respondent. Therefore, writ is allowed and the impugned order is set aside.

ORISSA HIGH COURT

Prasanna Kumar Bisoi

v.

Union of India & Ors.

[S. Panda & K.R. Mohapatra, JJ.]

W.P. (C) No. 13190 of 2020

Date of Decision: 21.08.2020

Interest—delayed payment of tax—Interest demanded u/s 50 of CGST Act for delayed filing of returns and availing ITC—Held No interest to be charged on ITC set off as per the 39th meeting of GST council

The returns were filed at belated stage and ITC was availed at the time of filing GSTR-3B returns. Interest u/s 50(1) of the CGST Act was demanded on the head that demand of interest is payable on ITC set off. It is held that as per the 39th meeting of the GST Counsel held in 20.3.2020 it was decided that interest for delayed payment of GST is to be charged on net cash tax liability but not on the ITC. The writ petition is disposed of accordingly.

KERALA HIGH COURT

Pazhayidom Food Ventures

v.

Superintendent Commercial Taxes

[A.K. Jayasankaran Nambiar, J]

WP (C) No.14275 of 2020 (H)

Date of Decision: July 24, 2020

Payment of arrears in installments—Permission sought to pay arrears of tax in monthly installments alongwith interest and late fee thereon due to problem in business for the reason of pandemic — Bonafides proved by paying certain amount of liability – Permission granted by High court— Petitioner to lose benefit of the permission in case of a default- writ allowed

The petitioner had requested to pay the arrears of tax for the assessment year in installments on account of the COVID pandemic situation which is prohibiting him to generate the funds for making a lump sum payment. On refusal to grant permission, a writ is filed contending that the petitioner would pay tax alongwith interest on each installment. It is held that the petitioner does not dispute its liability and has established its bonafides by paying a certain amount towards tax liability. Therefore, the respondents are directed to accept the belated return for the period Nov. 2018 to March, 2019 and permit it to discharge its balance liability including interest and late fee thereon in equal monthly installments commencing from 25.8.2020 culminating on 25.3.2021. However, if the petitioner defaults he will lose the benefit of the judgment.

KERALA HIGH COURT

Suresh Kumar P.P. & Anr.

v.

The Deputy Director & Ors.

[K. Vinod Chandran, J]

W.A. No.943 of 2020

Date of Decision: August 14, 2020

Search and seizure—Validity of proceedings—search and seizure conducted—cash seized—validity of said proceedings challenged—Held absence of DIN No. not a ground as search conducted in presence of petitioner raising no suspicion—Investigation brings with it necessary discomfort which cannot be termed as harassment—simultaneous proceedings conducted while audit was in progress—no infirmity found as section 65 is a routine procedure and section 67 is an onerous one—collection of tax through cheques held to be valid in view of Rule 87(3) as the officer has the authority to collect deposits without requiring forms— no extortion concluded since payment is made voluntarily—opportunity of hearing before attachment cannot be done as it defeats the purpose of procedure- proceedings u/s 67 held to be valid

The petitioner has challenged the validity of search and seizure conducted U/s 67 of the CGST Act in its premises during which ₹ 1 Crore was seized. The argument of absence of DIN No. on the relevant documents does not survive as the seizure order was issued in the presence of the appellants and no suspicion is raised about its issuance.

The petitioner has contended that there was harassment and high handedness by the respondents in respect of which the Court has held that inconvenience caused to the persons under investigation cannot be termed to a detention pursuance of arrest. Such investigations necessarily brings with it discomfort. The petitioner has challenged the simultaneous proceedings conducted when audit was already in progress. The court has rejected this argument in view of Sec.65 which is a routine procedure independent of any investigation under Sec.67 which is more onerous. No infirmity is opined in this regard. The petitioner has challenged the collection of cheques when tax was not determined under Section 49 and 50 and no forms were generated. The court has observed that during the investigation Rule 87(3) authorizes the officer to collect deposit of any amounts without requiring forms. No extortions can be concluded since there is a voluntarily payment made though under protest. Lastly, taking the ground of violation of principle of natural justice, the petitioner contends that no attachment could be made without hearing it. The court has considered the argument and held that if notice is issued before attachment then the account holder could withdraw the amounts kept in such accounts defeating the purpose of investigation. Therefore, proceedings u/s 67 is proper, legal and not arbitrary in any way. The writ is dismissed.

GUJARAT HIGH COURT

IHI Corporation

v.

State of Gujarat & Other(s)

[Vikrant Nath & J.B. Pardiwala, JJ]

R/Special Civil Application No. 8116 of 2020

Date of Decision: August 17, 2020

Alternative Remedy—Whether writ is maintainable against the penalty order under VAT Act—Held that an appeal should be filed against the order of Deputy Commissioner of Tax—complete machinery is provided by VAT Act to challenge the impugned order— a statute creating a right or liability also gives a special remedy for enforcing it which should be availed of—Writ is maintainable when there is violation of principles of natural justice or fundamental principles of judiciary or failure to act as per law by authority concerned—writ not entertained

A writ is filed by the petitioner against the penalty order passed by the Deputy Commissioner under the VAT Act. The question arose whether writ is maintainable. The Hon’ble Court held that the Gujarat VAT Act, 2003 provides for a complete machinery to challenge the assessment order under the Act and not by a writ under Article 226 of the Constitution of India. Where a right or liability is created by a statute its give a special remedy for enforcing it and it must be availed of. A writ is maintainable if the authority has not acted in accordance with provisions or against fundamental principles of judicial procedure or against the principle of natural justice. Therefore, the petitioner is relegated to avail the alternative remedy of filing an appeal u/s 73 of the GVAT Act 2003.

GUJARAT HIGH COURT

State of Gujarat

v.

Advanced Systek (P) Ltd.

[J.B. Pardiwala & Bhargav D. Karia, JJ]

R/Tax Appeal No.652 of 2017

With

R/Special Civil Application No.8391 of 2019

Date of Decision: July 24, 2020

Refund of excess tax paid —sale of machinery agreed at fixed price irrespective of rate of tax to be paid by company as per contract—No C forms issued by recipient consequently—Tax paid @ 10-12.5% by company mistakenly instead of 4%— excess tax forfeited by respondent—Held by Hon’ble High Court that section 8A of CST Act is attracted to calculate turnover—it is not the case where the company collected excess tax and passed it over to buyer—Sale was done at fixed price as per contract—rate of 4% is applicable—No provision in CST to respondents to forfeit the refund—Therefore, refund to be granted

A purchase order was received by the assessee – company for delivery of goods at fixed prices irrespective of tax payable or any cost incurred by the company. The seller company was not supposed to reflect the component of tax on the invoice separately. The recipient did not issue Form-C though there was an interstate transaction since fixed price was to be paid. The assessee without considering the amendment in Sec.8(2) of the CST Act mistakenly considered the applicable rate at 10-12.5% instead of the correct of rate of 4% while making reverse working in its sales invoices. The assessee deposited excess tax with returns. The authorities impounded the return amount under Sec.9(2) of the Act. The Tribunal allowed the appeal against which the revenue has filed an appeal before the Hon’ble High Court.

The Court has observed that in the instant case the turnover is to be calculated as per the Formula given in Sec.8A of the CST Act and rate of 4% tax is to be applied. It cannot be said that the assessee has collected excess amount of CST from the buyer. It received fixed price only and it cannot be said that a CST of 10% or 12.5% was collected in view of the contract of fixed price. Therefore, there is no question of passing over the same to its buyer. Also the provisions of CST Act do not contemplate any power to forfeiture of refund by the revenue. In absence of any power to forfeit excess tax, the assessee is entitled to refund of the same. Hence the appeal is dismissed and answered in favour of assessee company.

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