HIGH COURTS

DELHI HIGH COURT

CENTRAL GOODS AND SERVICE TAX DELHI EAST

v.

SH. NAVAL KUMAR & ORS.

[RAJNISH BHATNAGAR, J]

CRL.M.C. 231/2021

Date of Decision: June 4, 2021

Cancellation of bail – Bail granted challenged by department – Petition dismissed on the ground that there are no supervening circumstances which are not conducive to fair trial – no misuse of bail seen – respondent has joined in investigation – no evidence of tampering evidence or likelihood of absconding inferred – bail granted cannot be cancelled in a mechanical manner

The respondent company was earlier granted bail by A.S.J which is now challenged by the department before Hon’ble High court.

It is Held that once bail is granted it should not be cancelled in a mechanical manner without there being any supervening circumstances which are not conducive to fair trial. It cannot be cancelled until it is established that the same is being misused and it is no longer conducive in the interest of justice to allow the accused to remain on bail.

In the instant case, the respondents have joined the investigation and there are no allegations that they have not co-operated in the said investigation. There are no allegations of any tampering or influencing of the witnesses or likelihood of their absconding. The petitioner has not been able to make out a case of supervening circumstances on the basis of which the bail granted to the respondents should be cancelled and nothing has been brought on record to show that the respondents have such a towering personality that their mere presence out on bail would in any manner thwart the further investigation .There are no reason for pre-trial incarceration of the respondents in the present case – petition dismissed.

ORISSA HIGH COURT

AJAJ AHAMAD

v.

STATE OF ODISHA (CGST)

[S. K. PANIGRAHI, J]

BLAPL No. 1660 of 2021

Date of Decision: June 9, 2021

Bail – Offence u/s 132 of CGST Act – Application for bail rejected considering gravity of alleged offence, evidence, magnitude of amount involved, risk of tampering of evidence.

Considering the nature and gravity of the accusation, the nature of supporting evidence, availability of prima facie case against the petitioner, coupled with the fact that a huge amount of public money has been misappropriated and also the fact that further investigation of the case is under progress and taking into account the apprehension of the petitioner in tampering with the evidence, in the larger interest of society, the petitioner is not allowed to be released on bail – bail application dismissed.

GUJARAT HIGH COURT

COMSOL ENERGY PRIVATE LIMITED

v.

STATE OF GUJARAT

[J.B. PARDIWALA & ILESH J. VORA, JJ]

R/SPECIAL CIVIL APPLICATION NO. 11905 of 2020

Date of Decision: December 21, 2020

Refund of IGST on ocean freight—Tax paid under RCM—Grant of refund declined on account of delay in claim—Held denial of refund would go against A 226 of Indian Constitution

The petitioner has sought refund of the Integrated Goods and Services Tax paid on the Ocean Freight under the reverse charge mechanism after the decision of this Court in the applicant’s own case whereby it was held that the Notification No.8/2017—Integrated Tax (Rate) dated 28.06.2017 and the Entry No.10 of the Notification No.10/2017 under the Integrated Tax (Rate) dated 28.06.2017 lack legislative competency and the same were accordingly declared as unconstitutional. This Hon’ble court had held that the levy of the IGST under the RCM on the Ocean Freight for the service provided by a person located in a non-taxable territory by way of transportation of goods through vessel from a place outside India to customs frontier of India is unconstitutional.

However, the respondent denied it alleging that the refund claims were not filed within the statutory time limit as provided under Section 54 of the CGST Act.

The Court has observed that in an earlier case, the Madras High Court held that the service tax paid under mistake of law is to be returned to the assessee irrespective of the period covered under the refund application. It was held that refusing to return the amount would go against the mandate of Article 265 of the Constitution of India.

Allowing the writ, it is held that Period of limitation u/s Section 54 of the CGST Act is not applicable – general provisions provided under the Limitation Act is applicable to claim refund of such duty

ANDHRA PRADESH HIGH COURT

BENQ CATERING AND ALLIED SERVICES PRIVATE LIMITED

v.

ASSISTANT COMMISSIONER

[JOYMALYA BAGCHI & K.SURESH REDDY, JJ]

WRIT PETITION NO.11178 OF 2021

Date of Decision: June 17, 2021

Natural Justice – No opportunity of hearing given before passing an adverse order – Held Section 74 makes it mandatory to provide an opportunity of hearing before passing an adverse order – Present case indicates a prayer being made in this regard which was left unheeded

An assessment order was passed against which the petitioner has approached the Hon’ble court contending that no opportunity of hearing was provided before passing the adverse order against it.

The Hon’ble court has held that plain reading of S. 74 indicates that it is incumbent upon the assessing authority to give an opportunity of personal hearing to the assessee when a request in that regard is received in writing from it or where any adverse decision is contemplated against the assessee. In the present case, a clear and unequivocal prayer for personal hearing had been made by the petitioner-assessee which remained unheeded to and the impugned assessment order came to be passed.

Hence the impugned order is set aside and the petitioner shall be heard before passing the order.

PATNA HIGH COURT

SHANKAR PRASAD

v.

THE STATE OF BIHAR AND OTHERS

[SANJAY KAROL, C.J. & S. KUMAR, JJ]

CIVIL WRIT JURISDICTION CASE NO. 9781 OF 2021

Date of Decision: June 11, 2021

Appeal – Maintainability of – order passed u/s 74 of the Act – appeal filed dismissed on grounds of delay – writ filed – Held that the order passed is bad in eyes of law as no opportunity of hearing was given – assessment order passed ex parte is short of sufficient reason showing amounts payable by assessee – impugned order set aside

The petitioner has approached the Hon’ble court contesting against the order passed by the respondent holding that the appeal filed by it against the order passed earlier is delayed and thus dismissed. The respondent contends that there is a remedy of appeal available to the petitioner.

The court has observed that the respondent has passed the order in (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order of assessment passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences. Therefore, writ is allowed.

MADRAS HIGH COURT

ARS STEELS & ALLOY INTERNATIONAL PVT. LTD.

v.

THE STATE TAX OFFICER, GROUP—I, INSPECTION, INTELLIGENCE—I, CHENNAI

[DR.ANITA SUMANTH, J]

W.P. Nos.2885, 2888, 2890,3930, 3936 and 3933 of 2020 &

WMP Nos.3341, 3345, 3336, 4664, 4656 and 4661 of 2020W.P.No.2885 of 2021

Date of Decision: June 24, 2021

Reversal of ITC – Inputs consumed during manufacture – scope of section 17(5)(h)of GST Act, 2017 – ITC reversed on inputs used invoking section 17(5)(h) of the Act contending that some inputs are lost during manufacturing process – writ filed – Held the said section entails goods lost, stolen, destroyed etc. and not loss occasioned by process of manufacture – loss occasioned by manufacture is inherent and misconceived by revenue – thus petition is allowed

The ITC was reversed invoking section 17(5)(h) of the Act as per which ITC on goods lost, stolen, destroyed, written off or disposed by way of gift or free samples would not be granted.

However, the Hon’ble court has held that the loss that is occasioned by the process of manufacture cannot be equated to any of the instances. Therefore, The reversal of ITC involving Section 17(5)(h) by the Revenue, in cases of loss by consumption of input which is inherent to manufacturing loss is misconceived, as such loss is not contemplated or covered by the situations adumbrated under Section 17(5)(h). Thus, petition is allowed.

MADRAS HIGH COURT

NCR CORPORATION INDIA PVT. LTD.

v.

THE COMMISSIONER OF GST & CENTRAL EXCISE

[S.M.SUBRAMANIAM, J]

W.P.No.19976 of 2018
And W.M.P.No.23388 of 2018

Date of Decision: June 29, 2021

Writ – Entertainment of – Principles of natural justice allegedly violated – Entertainment of writ declined on the ground that mere violation of principles of natural justice is insufficient to entertain a writ – Mostly writ are filed with a view to avoid pre-deposit

A writ is filed seeking quashing of assessment order. Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy if there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings The practise of filing the Writ Petition without exhausting the statutory remedy is done with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming.

The petitioner is at liberty to approach the appellate authority, by preferring an within a period of two weeks from the date of receipt of a copy of this order – Petition disposed off.

UTTARAKHAND HIGH COURT

VIMAL PETROTHIN PRIVATE LIMITED

v.

COMMISSIONER, CGST AND OTHERS

[MANOJ KUMAR TIWARI, J]

WRIT PETITION (M/S) NO. 1128 OF 2021

Date of Decision: June 24, 2021

Credit ledger – blocking of – Blocking of credit ledger cannot continue beyond a period of one year in view of Sub rule 3 of Rule 86 (A)

Petitioner’s input tax credit available in its electronic trading ledger was provisionally blocked on the ground that petitioner had availed input tax credit, based on fake invoices issued by non-existing firms. The blocking of the ledger has been beyond a period of one year .It is held that as per Sub- Rule 3 of Rule 86(A), the continuance of blockage cannot continue beyond 1 year. Hence the ledger is order to be unblocked.

KERALA HIGH COURT

KERALA PRADESH GANDHI DARSHANVEDHI

v.

UNION OF INDIA

[S. MANIKUMAR, CJ & SHAJI P. CHALY, J]

WP(C) NO. 12481 OF 2021

Date of Decision: June 21, 2021

Levy of state tax on petrol and diesel – inclusion of petrol and diesel in the GST regime – Article 279 A (6) of the Constitution of India – representation filed by petitioner to the respondents –

HELD THAT:- It is directed that the Goods and Services Tax Council represented by the Special Secretary, Office of the GST Council Secretariat, New Delhi to forward Exhibit P-2 representation to the Union of India, represented by the Finance Secretary, New Delhi, to take an appropriate decision within a period of six weeks from the date of receipt of a copy of Exhibit P-2 representation. Similarly, Chief Secretary, Government of Kerala, Thiruvananthapuram (respondent No.4), to dispose of Exhibit P-3 representation.

Material on record discloses that the petitioner has submitted Exhibit P-2 representation to the Special Secretary, Office of the GST Council Secretariat, New Delhi to recommend inclusion of petrol and diesel under the GST regime. Material on record further discloses that the petitioner has also submitted Exhibit P-3 representation to the Chief Secretary, Government of Kerala, Thiruvananthapuram to request the GST Council to include the petrol and diesel in the GST regime and till a decision is taken by the GST Council, Government of Kerala may refrain from levying the state tax on petrol and diesel.

The Hon’ble court has ordered that in view of WA No 2061 of 2017 whereby it was held that no mandamus can be issued to the GST Council to take any decision, this court only directs the Goods and Services Tax Council represented by the Special Secretary, to forward Exhibit P-2 representation1 to the Union of India, represented by the Finance Secretary, New Delhi, to take an appropriate decision within a period of six weeks from the date of receipt of a copy of Exhibit P-2 representation. Similarly, Chief Secretary, Government of Kerala, Thiruvananthapuram to dispose of Exhibit P3 representation.

MADRAS HIGH COURT

BHARAT ELECTRONICS LIMITED

v.

COMMISSIONER OF GST & CENTRAL EXCISE, ASSISTANT COMMISSIONER OF GST

[ANITA SUMANTH, J]

W.P. No.2937 of 2019, WMP.Nos.3205 of 2019

Date of Decision: June 21, 2021

Rectification of TRAN-1 – Error noticed and rectified by petitioner – filing and revision date being same – No further errors allowed to be rectified later as revision date had passed and moreover revision can be done only once as per Section 120A – Honble court has permitted rectification of inadvertent error as filing of form and revision date being same could not have occasioned revision of the error in that form – time gap between the two dates ought to be there – respondent to enable filing of revised form

The petitioner has filled TRAN-1 form in October after coming of GST claiming its transitional credit. However, an inadvertent error occurred which was rectified by revision on 27/12/07.The petitioner noticed more errors but was not allowed to amend it on the grounds that the last date of revision/ filing was 27/12/ 2007 and revision could be done only once.

Thus a writ is filed. The Hon’ble court has held that It does not stand to reason that the date of filing of Form-1 and date for revision of the same be one and the same and in order to be viable, there must be a sufficient gap of time in between the two – Section 120A which grants only one opportunity to the petitioner to rectify the Form TRAN-1 has no basis for such restriction. The petitioner has uploaded the TRAN-1 on 27.12.2017 and there was thus, no time available for the petitioner to have sought revision of the error that was occasioned in the Form. The respondent will enable the filing of revised Form TRAN-1 by opening of the portal.

BOMBAY HIGH COURT

JAYCHEM ENTERPRISE PVT. LTD.

v.

ADDITIONAL DIRECTOR GENERAL, NAGPUR ZONAL UNIT & ORS.

[DIPANKAR DATTA, CJ & G. S. KULKARNI, J]

WRIT PETITION NO. 2583 OF 2021

Date of Decision: July 8, 2021

Provisional attachment u/s 83 – No recourse to Sub rule 5 of Rule 159 taken – Writ filed – Hon’ble court has declined to interfere at this stage since the petitioner should take recourse to the abovementioned Rule which is not an inefficient remedy to seek relief

In the given facts, the petitioner’s bank account was attached u/s 83 of the Act. The petitioner has approached the High court contesting against the same though it has not taken recourse to Sub-rule 5 of Rule 159 of CGST Rules. As per the said Rule if the petitioner is able to make its case before the additional director that the said attachment ought not to have been made it could have sought relief under it. Since the said recourse has not been taken, the Hon’ble court is not inclined to interfere at this stage. The petitioner may approach the Additional Director General under the said provision and if such an approach is made, a reasoned order shall be passed after extending an opportunity of hearing.

MADRAS HIGH COURT

TVL. NAGGARAJ ANOORADHA

v.

THE STATE TAX OFFICER (CIRCLE) , CHENNAI

[ANITA SUMANTH, J]

W.P. No.174 of 2021 And WMP Nos.239 and 240 of 2021

Date of Decision: July 8, 2021

Input tax credit – Denial of – Mismatch in export value and returns – No reason given by respondent before passing of order – No opportunity given to explain the deficiency – Order set aside on grounds of violation of natural justice

The ITC claimed was rejected by the respondent on account of mismatch between the export value and net ITC as shown in monthly returns. The mismatch was due to inadvertent omission of two invoices for month of March. Had an opportunity of hearing been given the petitioner would have explained the deficiency. But the respondent passed a non speaking order and the column for mentioning the reason of rejection has been left blank. The Hon’ble court has set aside the impugned order on grounds of violation of natural justice.

ORISSA HIGH COURT

SANTOSH KUMAR GUPTA

v.

UNION OF INDIA

[D.DASH, J]

BLAPL No.3282 of 2021

Date of Decision: June 30, 2021

Bail – Offence u/s 132 – something fishy indicated by search – materials still to still with regard to summons issued – grave economic offence involved – bail declined

An application seeking bail for allegedly having committed an offence under Section 132 of CGST Act, 2017 has been filed. It is contended by the respondent that the petitioner had created 10 firms conspiring in carrying business activities without those taking place in reality and thereby availing fraudulent ITC. When the search at the business premises of the petitioner was conducted certain documents were seized and statement was taken which indicated something fishy on part of the petitioner. The Hon’ble Court has held that materials are yet to surface as to the developments with regard to the summons issued to those entitles for deposit of the ITC. The petitioner is involved in grave economic offence which stands in way of development of the country. Therefore, the court is not inclined to accept the prayer for bail.

MADRAS HIGH COURT

GREENWOOD OWNERS ASSOCIATION, OCEANIC OWNERS ASSOCIATION, M/S. TVH LUMBINI SQUARE OWNERS ASSOCIATION VERSUS

v.

THE UNION OF INDIA

[DR. ANITA SUMANTH, J]

W.P. Nos.5518 & 1555 of 2020

Date of Decision: July 1, 2021

Exemption on specified service – RWA – Whether tax is payable on whole amount if amount of contribution exceeds the given limit or only the difference – Held the exemption notification is unambiguous – exemption is available upto contribution an amount of ` 7500/- meaning that any excess amount is exigible to tax – conclusion of AAR and circulars impugned giving a contrary view are quashed By the Hon’ble court

The petitioner has contested against the order of the AAR and circular dated 22/7/2019. On coming of GST, exemption vide Notification 12/17CT dated 28.06.2017. was granted on certain services leviable to GST. Accordingly contributions of services upto ` 7500/- was exempted and was taxable only on the amount exceeding the said amount. The exemption was granted for sourcing of goods and services from a third person for the common use of the members of RWA.

Held:

The intention of the Circular appears clear, that is, to grant exemption in regard to the receipts from services that answer to the description set out therein. The description of the services is also clear, that is, services to the members of an unincorporated body or non-profit by way of reimbursement of charges or share of contribution upto an amount of ` 7,500/- in the sourcing of goods or services from a third person for the common use of its members. No ambiguity presents itself on a plain reading of the Entry and the intention is clear, so as to remove from the purview of taxation contribution upto an amount of ` 7,500/-. The plain words employed in Entry 77 being, ‘upto’ an amount of ` 7,500/- can thus only be interpreted to state that any contribution in excess of the same would be liable to tax. The term ‘upto’ hardly needs to be defined and connotes an upper limit. It is interchangeable with the term ‘till’ and means that any amount till the ceiling of ` 7,500/- would exempt for the purposes of GST.

As regards the argument concerning slab rate, a slab is a measure of determining tax liability. The prescription of a slab connotes that income upto that slab would stand outside the purview of tax on exigible to a lower rate of tax and income above that slab would be treated differently. The intendment of the exemption Entry in question is simply to exempt contributions till a certain specified limit. The clarification by the GST Department even as early as in 2017 has taken the correct view.

Therefore, the conclusion of the AAR as well as the Circular to the effect that any contribution above ` 7,500/- would disentitle the RWA to exemption, is contrary to the express language of the Entry in question and both stand quashed. To clarify, it is only contributions to RWA in excess of ` 7,500/- that would be taxable under GST Act. Petition is allowed.

RAJASTHAN HIGH COURT

AVON UDHYOG

v.

STATE OF RAJASTHAN

[DINESH MEHTA, J]

CIVIL WRIT PETITION NO.7463 OF 2021

Date of Decision: July 5, 2021

Registration – Cancellation of – No opportunity of hearing granted as alleged – respondent had issued show cause notice asking for reply within 7 days which is itself contrary to law – However, the petitioner did not either file reply within 30 days as required – thus petition is disposed of directing petitioner to put forth its submission

The petitioner has challenged the order suspending its registration certificate contending that no opportunity of hearing was granted to him. The Hon’ble Court has observed that the respondent had issued a show cause notice calling for reply within 7 days of issuance which itself is contrary to the statutory provisions. However, the petitioner has not filed reply even within 30 days of receiving the notice as required under law. The proceeding of cancellation of registration cannot be kept hanging fire and the authority is bound to pass an order as per sub-rule 3 of Rule 22 of the Rules. Thus the petition is disposed of with a direction to the petitioner to put forth its submissions.

MADRAS HIGH COURT

F1 AUTO COMPONENTS P LTD

v.

THE STATE TAX OFFICER, CHENNAI

[DR. ANITA SUMANTH, J]

W.P. No.6631 of 2021 And WMP No.7188 of 2021

Date of Decision: July 9, 2021

Interest – levy of – Wrongful claim of ITC – Error on part of assessee in filing returns as there is a mismatch between returns filed by it and purchasing dealer – Interest levied by revenue on wrongful claim of ITC – Petitioner contests the order on the ground that a notice was ought to be issued u/s 42 of the Act – Held section 42 can be invoked only when error is on part of revenue not assessee – Levy upheld

The petitioner has challenged the order levying interest on u/s 50 relating to both interest on cash remittances as well as remittances by way of adjustment of electronic credit register. It is contended that the respondent should have issued a show cause notice in case there is a mismatch of particulars at the end of the assessee, vis-a-vis, particulars/details furnished in the returns of the selling/purchasing dealer. The Hon’ble court has observed that the said section could have been invoked only if there was an error on part of revenue not on an error on part of assessee as here there was a wrongful claim of ITC by the assessee. Levy is thus upheld to this extent.

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