SUPREME COURT OF INDIA
VVF (INDIA) LTD.
STATE OF MAHARASHTRA
[DR. DHANANJAYA Y. CHANDRACHUD, J]
CIVIL APPEAL NO.7387 OF 2021
Date of Decision: December 3, 2021
Predeposit—whether payment made under protest can be adjusted towards payment of predeposit after passing of assessment order—Held: plain reading of the statute indicates that 10% of the entire disputed tax liability would have to be deposited as per Sec 26(6A)- Amount deposited anterior to the order of assessment cannot be excluded from consideration in the absence of the statutory language to that effect impugned order set aside
After a notice was issued to the appellant in November 2016, proposing tax liabilities for the year 2013-14, a payment under protest was made towards tax and interest for the said Assessment Year. In the same year in April, 2017 Sections 26(6A), 26(6B) and 26(6C) were introduced into the VAT Act mandating a pre-deposit for filing of appeals. An assessment order in December 2017 was passed imposing tax, interest and penalty. The department adjusted the amounts paid under protest towards the demand raised. An appeal was filed which was rejected on the ground that payments made under protest could not be considered towards pre-deposit for the purpose of Sec.26(6A). The writ filed against the assessment order was dismissed against which an appeal is filed before the Apex Court.
It is contended that since the entirety of tax is disputed, 10% of the amount required to be deposited for the hearing of the appeal cannot be excluded from the consideration. On the other hand, the respondent has contended that since the dispute arose after passing of assessment order, 10% of the amount of tax has to be paid in pursuance of the order passed.
The court has observed that the plain language of the statute says that 10% of the entire disputed tax liability would have to be deposited as per Sec 26(6A). The amount deposited anterior to the order of assessment cannot be excluded from consideration in the absence of the statutory language to that effect. A taxing statute is to be construed strictly without any intendment. There is no reason why the amount paid under protest cannot be considered towards payment of predeposit. Therefore, rejection of appeal by the Appellate Authorities was not in order and the appeal shall be restored to the file of the appellate authority. The appeal is allowed and the impugned order of the High Court of judicature at Bombay is set aside.
ORISSA HIGH COURT
ASHOK KUMAR MEHER
COMMISSIONER OF SALES TAX & GST, ODISHA, CUTTACK AND OTHERS
[DR. S. MURALIDHAR & B. P. ROUTRAY, JJ]
W. P. (C) No. 12763 of 2021
Date of Decision: December 1, 2021
Registration—cancellation of—Registration cancelled for failure to file returns –restoration of RC ordered by Revisional authority– New Registration applied by petitioner in meanwhile due to compelling circumstances to carry on business – Old RC not restored by authorities contending that application of new registration did not permit restoration of old RC under the portal—technical difficulty thus pleaded by department- Held technical difficulty not to come in way of right of petitioner – directions given to authorities accordingly to enable petitioner to avail its ITC
The registration of the petitioner was cancelled for failure to file returns under the erstwhile VAT Act. The petitioner filed for revision which was allowed as the said registration had been cancelled without issuance of show cause notice. However, in the meanwhile, it had applied for fresh RC in order to transact its business.
The department did not implement the order of Revisional authority contending that since a new registration was applied for, the portal did not support restoration of old RC. The Hon’ble court has held that it cannot be held against him that his application for the new RC should be construed as his having given up his claim for restoration of his old RC. On the contrary, he has an order in his favour by the Revisional authority for restoration of his old RC. The plea of technical difficulties or technical glitches will not come in the way of the above order being given effect to. For this purpose a direction is issued to GSTN to either modify or make changes in the portal to facilitate the Petitioner filing TRAN-1 to claim the ITC or accept returns manually against the old RC so that the Petitioner can avail of the ITC.
GUJARAT HIGH COURT
ARCELORMITTAL NIPPON STEEL INDIA LTD.
[MS. SONIA GOKANI & MS. NISHA M. THAKORE, JJ]
R/SPECIAL CIVIL APPLICATION NO. 11043 OF 2020
Date of Decision: November 24, 2021
Show cause notice—refund—rejection of—application for refund u/s 54 of CGST Act r/w section 16 of IGST Act filed—Show cause notice issued with ambiguous reasons—reply by petitioner pointing out deficiency in notice not taken into account—contrary thereto order of rejection passed—Held : impugned show cause notice passed in violation of natural justice- arbitrary act of authority—order set aside—authorities to grant opportunity of hearing to petitioner and process its application within two weeks
The application for refund of unutilized compensation cess under Section 54 of the CGST Act read with Section 16 of the IGST Act read with Rule 89 of the CGST Rules was accompanied by the requisite documents. The refund was rejected . The show cause notices stated that the petitioners’ refund applications were liable to be rejected on the ground that rejection as per the said show cause notices was “other”. A writ is thus filed.
It is held that the show cause notice has no foundational facts contained in it. The reply to the show cause notices given by the petitioners also clearly pointed out to the authority that the show cause notices given lack any reason since it simply mentions the reason as “other” without elaborating or specifying the grounds on which the proposal to reject the refund the amount is made. The column of remark as mentioned refers only as “error in adjusted total turnover.” Instead of correcting the error in the notice, the respondent had chosen to pass the orders of rejection. The order of rejection also is a non-speaking order and the same had been passed without giving any reasons for rejection. The entire proceedings initiated by the respondent in rejecting the refund claim since is in complete violation of the principles of natural justice and can be termed as an arbitrary act on the part of the authority, the same deserves interference by quashing and setting aside. The respondent is directed to consider of the applications of the refund claim and process after granting the opportunity of personal hearing to the petitioner within two weeks from the receipt of copy of the order.
BOMBAY HIGH COURT
MERITAS HOTELS PVT. LTD.
State of Maharashtra
[DIPANKAR DATTA, C.J. & M.S. KARNIK, J]
W.P. NO. 7793 OF 2021
Date of Decision: December 3, 2021
Limitation—Appeal—whether period to be reckoned from date of uploading of order on GSTN portal or date of email sent— Impugned order posted on email to General manager in April 2019 – non reporting to petitioner—attempt to file appeal after uploading of order on portal in Jan 2020- expiry of limitation—writ filed—Held : As per section 107(1) of MGST Act appeal to be filed within 3 months from date of communication—date of communication being date of email sent—no case that recipient not authorized or competent to receive e mail—Court cannot add or subtract words in a statute—Rule 108 specifies the requirement to file appeal electronically or as notified by commissioner—subrule 3 mentions copy of impugned order to be submitted alongwith within a period of 7 days from date of filing—nowhere mentioned that appeal to be filed after uploading of order on GSTN Portal— period of imitation to be reckoned from date of communication being April 20, 2019- writ dismissed
Due to delay in filing GST returns for February 2019, a summary assessment order was passed under Section 62 of MGST Act, 2017 which was neither served physically nor uploaded on GST portal but was sent through email to the General Manager of the Petitioner company on April 20, 2019. The petitioner came to know about it only after attachment of bank account in July. The petitioner filed a physical appeal after obtaining the certified copy of the order on November 06, 2019. However, it was refused to be accepted. When the impugned assessment order was uploaded on GSTN Portal on January 10, 2020, the petitioner tried to file online appeal which showed that there was delay in filing of appeal. Hence, a writ is filed alleging that the period of limitation should have been reckoned from the date of uploading on GSTN Portal and not from the date of posting it on e-mail.
It is held that as per Section 107(1) of the Act the appeal should have been filed within three months from the date of communication of order. The said order was communicated on April 20, 2019. It is not the case that the General Manager was not competent or not authorized to receive the communication on behalf of the petitioner. Failure of the General Manager to inform the petitioner will not have the effect of extending the period of limitation prescribed under the above mentioned section.
The contention that the date of limitation should be reckoned from the uploading of the order on the portal is in the teeth of the provision of sub-section 1 of Section 107. The court cannot add or subtract the words to a statute.
As per Rule 108(1) of the Rules the appeal under Section 107 is to be filed either electronically or as notified by the Commissioner. Further Sub-rule 3 says that the copy of order appealed against shall be submitted within 7 days of filing of appeal under Sub-rule 1. The proviso to Sub-rule 3 prescribes that if the certified copy of the impugned order is filed after 7 days, the date of filing of appeal shall be the date of submission of such copy. Therefore, Rule 108 nowhere prescribes that the appeal is to be filed only after impugned assessment order is uploaded on GSTN portal.
Therefore, for the purpose of limitation the date of communication of the impugned assessment order is regarded as April 20, 2019 i.e. the date on which the order was sent by e-mail to the petitioner. The petitioner has lost the statutory remedy of appeal. The writ petition is dismissed.
CHHATTISGARH HIGH COURT
NAGORAO AUTO ENGINEERING WORKS
UNION OF INDIA
[P. SAM KOSHY, J]
WRIT PETITION NO. 129 OF 2021
Date of Decision: December 2, 2021
Transitional Credit—TRAN 1—Expiry of proprietor of establishment in the year of GST regime introduction—non submission consequently—Technical glitches later preventing submission—Representation before commissioner not dealt with—Hon’ble court approached for seeking its credit—Following decision of High court all over the country, considering compelling circumstances of death of proprietor and technical glitches, respondent directed to permit submission of the Form online or manually and process the claim of ITC
After the introduction of the new GST regime the petitioner wanted to avail the benefit of ITC by submitting TRAN-1 Form for which the cut off date was specified initially and extended subsequently till December 2017. The proprietor of the petitioner establishment expired on September, 2017 and because of the compelling circumstances the Form could not be submitted uptil the extended period. Later the date was extended upto March 2019 during which an attempt was made to file TRAN-1 for the year 2017. But because of technical difficulty the Form could not be uploaded. Despite representation to the Commissioner being made to submit TRAN-1 electronically or manually nothing was done. Therefore, the petitioner has approached the Hon’ble Court.
Following the authoritative decisions given by the High Courts in the country and taking note of the fact that the husband of the petitioner who was the proprietor who expired in the midst of the introduction of GST regime and further technical glitches preventing from submissions of the Form, this Court allows the writ petition in similar terms as decided by the various High Courts. Therefore, the respondent is directed to permit submission of the Form online or manually and process the claim of ITC within a period of 60 days from the date of receipt of this order.
GUJARAT HIGH COURT
NAYARA ENERGY LIMITED
UNION OF INDIA
[SONIA GOKANI, J AND HEMANT M. PRACHCHHAK, JJ]
CIVIL APPLICATION NO.12860 OF 2021
Date of Decision: October 28, 2021
Disbursement of refund—section 56 of CGST Act—refund sanction order issued—bifurcation of amount towards petitioner and consumer welfare fund required—technical glitch / system not supportive of said bifurcation—delay in grant thereof—respondents directed to outsource experts for solving software problem—if nothing works, petitioner to be granted refund alongwith interest
The Refund Sanction Order had been issued in favour of the petitioner by the Principal Commissioner whereby credit of sum of Rs.50 lacs approx in favour of petitioner and about Rs.39 lacs towards Consumer Welfare Fund was ordered. However, the Refund Sanction Order was issued online and needed bifurcation for crediting the amount. Since the option of bifurcation was not available in the system the amount could not be disbursed in favour of the petitioner due to limitation of the software system. The petitioner has thus approached the Court.
It is held that the refund order was passed in August, 2021 and circular dated November 2019 mentioned about imposing of interest on the refund amount after expiry of 60 days from the date of receipt of application till the date of refund. Considering that the issue is not attended which is otherwise not disputed by the respondent but has caused hardship to the petitioner the Court has directed that the authority may outsource experts for solving the problem. However, if nothing works out the amount shall be paid at the end of 4 weeks with interest. If unpaid at the end of four weeks the rate of interest on the sum due shall be 12% from the due date of payment till the actual date of payment.
MEGHALAYA HIGH COURT
PIONEER CARBIDE PVT. LTD.
UNION OF INDIA AND ORS
[SANJIB BANERJEE, CJ & W. DIENGDOH, J]
WP (C) No.404/2021
Date of Decision: December 6, 2021
Transitional Credit—Inadvertent mistake—Revising of Declaration—TRAN 1 filed—show cause notice served—reply filed explaining that inexperience led to mistake in filing—no request for revising Form made specifically—Held- petitioner permitted to make a request to commissioner for extending period for revising of declaration—in case of denial of opportunity commissioner to furnish reasons- writ allowed
As contended an inadvertent mistake was made while submitting a declaration electronically in Form GST TRAN-1. Consequently, a show-cause notice was issued which was challenged and the petitioner was permitted to respond to the show-cause notice. It was explained through the reply that that it was due to lack of experience due to which the mistake had been committed, though no specific request for any revised declaration to be filed was made. A writ is filed against the impugned order passed thereafter.
The court has observed that the petitioner doesn’t appear to have availed of such opportunity or requested the relevant Commissioner for a specific extension so that the petitioner could revise the declaration already furnished. Accordingly, the petition is allowed by permitting the writ petitioner to make a specific request to the relevant Commissioner under Rule 120A of the said Rules of 2017 to extend the time for the petitioner to file a revised declaration. If such request is made by the petitioner within a fortnight from date, the Commissioner will consider the matter in appropriate perspective. In the unlikely event that the Commissioner declines the request, due reasons in support of such decision should be communicated to the petitioner.
BOMBAY HIGH COURT
XEC METALS AND M/S. S.M. CONSTRUCTIONS
COMMISSIONER OF COMMERCIAL TAXES, GOA, STATE OF GOA
[REVATI MOHITE DERE & M. S. JAWALKAR, JJ]
WP NO.2177 OF 2021 (Filing No.) WITH WP NO.2180 OF 2021 (Filing No.)
Date of Decision: November 27, 2021
Provisional attachment- No pendency of proceedings—no notice issued prior to freezing—Impugned orders passed by officer appointed to determine tax liability—Held: mere appointment of appropriate officer is no ground to take such an action—petition allowed
The bank account was provisionally attached u/s 83 of Goa GST Act, 2017. It is contended that neither any proceedings were pending nor any notice was issued to the petitioner.
It is held that the impugned order is passed only because the respondent No.1 has appointed an appropriate officer for determining the tax liability of the petitioners. Mere appointment of an appropriate officer for determining the tax liability will certainly not be a ground to initiate any action, like the present one i.e. of provisionally freezing the bank accounts of the petitioners under the Goa GST Act. The impugned order cannot be sustained – petition allowed.
KERALA HIGH COURT
THE STATE OF KERALA
[BECHU KURIAN THOMAS, J]
WP(C) NO. 24176 OF 2021
Date of Decision: November 19, 2021
Goods in transit—notice issued u/s 130 of CGST Act—interim relief sought –notices issued suspecting invoice and e way bill—Held not a fit case to issue interim order or direct release of goods which are subject matter of proceedings—courts ought to be slow in interfering with powers conferred by statute u/s 130 of the Act—alternative remedy available—writ disallowed
Two notices were issued u/s 130 of CGST Act, 2017 to furnish an explanation regarding confiscation of goods and imposition of tax and penalty as estimated. A writ is filed challenging the notices and seeking interim relief for stay of proceedings. It is contended by the petitioner that the issuance of notice is illegal as there were sufficient documents accompanying the goods. The respondent contends that an attempt to evade tax existed as the goods were loaded from places unregistered and were different from addresses mentioned in invoices.
Considering the circumstances it is held that it is not a fit case for issuing any interim order or directing release of goods confiscated which are subject matter of proceedings. The statute itself provides for a remedy. The courts must be slow in exercising power under Article 226 in such matters as it will interfere with the power conferred by the statute.
KERALA HIGH COURT
THOMAS MATHEW, LILLYKUTTY MATHEW, M/S. K.E. AGRO PRODUCTS (P) LTD., M/S. GEE YEM AGRO MILLS
THE STATE TAX OFFICER (IB)
[BECHU KURIAN THOMAS, J]
W.P.(C) Nos.20447, 20453 20455 & 20475 of 2021
Date of Decision: November 19, 2021
Supply of copy of statements—pursuant to summons issued request for copy of statements recorded made by petitioner—Reply stated that such request cannot be considered—No reasons recorded—Held: reasons ought to be recorded in impugned order—affidavit filed later stating risk to investigation cannot supplement reasons for impugned order—difference between refusing an application and rejecting an application for reasons pointed out—Respondent directed to consider the applications afresh
The tax payers against whom summons were issued had requested for copies of statements already recorded. The officer had replied stating that such a request ‘cannot be considered.”
It is held that it is pleaded by the respondent that issuing copies at this stage will prejudicially affect the investigation, such a reason is absent in the impugned order.”. The Proper Officer did not have a case in Ext.P10 that giving copy of statements would cause prejudice to the investigation. He refused to consider the request. It is the settled proposition of law that an affidavit cannot enlarge or supplement reasons which the order did not contain at the time it was issued. Reasons recorded in the pleadings of an affidavit cannot contribute to the validity of an order when impugned. The reason must be reflected in the order impugned.
There is a marked distinction between refusing to consider and rejecting an application for reasons. The respondent is directed to reconsider the application of the petitioners for giving a copy of the statements already obtained in the course of investigation and pass fresh orders.
ALLAHABAD HIGH COURT
CALCUTTA SOUTH TRANSPORT CO.
STATE OF U.P. AND 3 OTHERS
[JAYANT BANERJI, J]
WRIT TAX NO. – 650 OF 2021.
Date of Decision: November 15, 2021
Natural Justice—Show cause notice—Petitioner, the owner of vehicle, served with SCN raising demand u/s129 of the Act—contention raised that SCN is defective—held: SCN reflected date of appearance prior to date of issuance—improper notice—deprivation of right to opportunity of hearing leading to order of confiscation u/s 130—had notice been proper, petitioner would have got an opportunity to present its case against the imposition of liability u/s 130 of GST Act—impugned order is thus quashed –
The petitioner, owner of vehicle, had given the vehicle to a transporter for transporting interstate transfer of goods of a dealer. On interception the goods and conveyance were seized. An order of demand under Section 129 was issued against which neither tax nor penalty was deposited by the owner of the goods or the transporter but proceedings were initiated against the petitioner. It is contended before the Court that the show cause notice issued reflected the date of appearance which was prior to the date of issuance of the said notice. Moreover, the confiscation order was passed without affording an opportunity of hearing.
The Court has observed that the show cause notice in the given case does not comply with the requirement as the date of appearance is prior to the date of issuance. Had the show cause notice been properly prepared, the petitioner would have got adequate opportunity to present his case and furnish proof to prevent himself from being saddled with liability under Section 130 of the Act. The defective show cause notice resulted in denial of opportunity to the petitioner and cannot be said to be a notice in the eyes of law. There is non-compliance of principle of natural justice. There is nothing on record to show that opportunity of hearing as mandated by sub-Section 4 of Section 130 of the Act was granted. Therefore, the impugned order is hereby quashed. Petition allowed.
KERALA HIGH COURT
STATE TAX OFFICER
[BECHU KURIAN THOMAS, J]
W.P. NO. 18169 OF 2021
Date of Decision: November 29, 2021
Release of goods—confiscation proceedings pending—payment of fine in lieu of confiscation—whether goods can be released provisionally before adjudication of confiscation proceedings; Held: Yes, section 130(2) envisages the words’ Officer adjudging it’ which indicates that goods can be released while proceedings are going on—two stages of release as per section 130 observed- during proceedings and after adjudication
Stage of payment of fine—dealer not to be compelled for payment of tax and penalty before adjudication as adjudication requires hearing—tax, penalty and other charges fall due not necessarily alongwith payment of fine—
Quantum of fine—Section 130(2) states that the fine leviable is not to exceed the market value of the goods confiscated.
The perishable goods, Beedis were seized from the godown for which an interim order was passed permitting release of such goods from the Officer. In the meanwhile show cause notices proposing to confiscate the said goods was issued under Section 130 of the Act specifying imposition of tax, penalty and fine in lieu of confiscation of the goods. A Writ was filed whereby the Tax Officer was directed to release the goods to the dealer on payment of amount contemplated under Section 130(2) of the Act. The State Tax Officer has filed a review against the order directing it to release goods in question against payment of amount in lieu of confiscation.
(i) Whether the provisions of section 130 of the Act contemplate any provisional release of goods, as directed in the interim order of this Court?
(ii) Whether the amount payable for release of the goods under Section 130 of the Act is fine alone or is it fine, penalty and tax to be paid together for securing releases of the goods? and,
(iii) What is the basis or rate of calculating the fine under section 130 of the Act?
Section 129 incorporates provisional release of goods by referring to Section 67(6) of the Act which is absent in Section 130. As per Section 130(2) it can be discerned that the option to pay fine in lieu of confiscation is mentioned twice: once in sub-Section 2 and in sub-Section 7 of Section 130. As per the words in sub-Section 7 of the Section 130 it can be assumed that it deals with post-adjudicatory situation. But sub-Section 2 of Section 130 reveals that the words ”Officer adjudging it” indicate that there is an option to the owner to redeem the goods while the process of adjudication is going on. Incorporating provision in the form of Section 130(2) apart from Section 130(7) is an indication of the wisdom of the legislature that even before owner is divested of his ownership he must have an option to pay fine in lieu of confiscation. Sub-Section 2 of Section 130 authorizes that the owner may get his goods released at such prior to final order of confiscation.
Absence of the words “provisional release” or non-reference to Section 67(6) of the Act is not determinative of the intent of the Section. Section 130 must be viewed independently. Section 130 incorporates a provision for release of goods at two stages-during adjudication and after adjudication. The two different stages as mentioned are created with the purpose. The owner of goods may pay the fine for release its goods without going into unnecessary procedural formalities without causing prejudice to the revenue. By virtue of Section 130(7) the fine can be paid after adjudication order is issued. Therefore, the Section 130(2) is not a case of provisional release of goods on payment on fine in lieu of confiscation while proceedings of confiscation are continuing.
Regarding the stage of payment of fine, the words ”pay liable” suggest that tax, penalty and charges will fall due upon the owner of goods at any point thereafter and not unnecessary along with payment of fine in lieu of confiscation. The words “in addition” “be liable” “payable” in sub-Section 3 of Section 130 indicate that the obligation will be fall over an apart from fine and not immediately. There is need to ascertain the quantum of tax, penalty other charges payable. Before such adjudication the dealer cannot be compelled to pay tax or penalty. And adjudication required hearing.
The words in a statute take their meaning from the context of the statute as the whole. As is clear from the magazine “exposition ex visceribus actus”. The words “be liable” only import a possibility of attracting liability. Lastly, the provision to Section 130(2) states that the fine leviable is not to exceed the market value of the goods confiscated. Market value is defined in Section 2(73) which means that it is a sale price that is agreed to between bonafide supplier and bonafide purchaser not related to each other.
Petition is dismissed.
ALLAHABAD HIGH COURT
AAMIR AND SONS
COMMISSIONER COMMERICAL TAX AND 2 OTHERS
[NAHEED ARA MOONIS & SAUMITRA DAYAL SINGH, JJ]
WRIT TAX NO. – 910 OF 2021
Date of Decision: November 17, 2021
Parallel proceedings—civil proceedings u/s 74 and criminal proceedings arising out of offence under section 132—no principle in law to grant injunction against proceedings u/s 74 merely because criminal proceedings are pending arising out of same transaction—both may continue simultaneously
Arising from investigation carried out on the basis of certain information received from the petitioner’s bank, two proceedings have arisen – one under Section 74 of the Central Act and another seeking prosecution, under Section 132(1)(c) of the Central Act. A writ is filed contending that the respondent the respondent cannot initiate or continue parallel proceedings under Section 74 of the Act while criminal proceedings are going on. It is held that there is no difficulty in recognizing the principle that the single transaction may give rise to both criminal and civil consequences. There is no principle in law as may warrant any interference in the present petition to either grant injunction against the pending proceedings under Section 74 of the Central Act or to quash the same, merely because the criminal proceedings is pending against the petitioner arising from the same transaction under (Section 132(1)(c) of the Central Act). Both proceedings may continue simultaneously such that the rule of evidence applicable to each may be applied independently. While criminal prosecution may conclude applying the rule of strict proof, the civil proceedings may conclude on the rule of balance of probabilities. Also, at the conclusion of a criminal prosecution, punishment may be awarded, whereas at the conclusion of a civil proceeding, only recoveries may be made.