SUPREME COURT OF INDIA
RADHA KRISHAN INDUSTRIES
STATE OF HIMACHAL PRADESH
[Dr. Dhananjaya & Y. Chandrachud, JJ]
Civil Appeal No.1155 of 2021
Date of Decision: April 20, 2021
Provisional attachment – Power u/s 83 – Draconian power to attach any property but should be exercised considering points like forming opinion before passing order – order ought to be in writing – live nexus should exist between attachment order and protecting interest of revenue – merely cause proceedings are pending or concluded against another party , order of attachment cannot be passed
An appeal is filed before the Supreme Court challenging the orders of provisional attachment issued by the Joint Commissioner for attaching the receivables of the appellants while invoking Sec.83 of CGST Act. It is also questioned if the writ filed for challenging the impugned order was maintainable under Article 226 of the Constitution of India.
The Apex Court has observed that the High Court had erred in saying that the petition is not maintainable as under the GST Act the Appellate Authority can entertain appeals only against order of adjudication authority and not the Commissioner, so the appellant had no other remedy but to file a writ to challenge the impugned order.
The Apex Court has observed that the power of provisional attachment is draconian in nature and in its exercise any property belonging to taxable person including a bank account may be attached. However, certain steps must proceed such an order:
Opinion of the Commissioner should be formed before ordering provisional attachment and it must bear approximate and live nexus to protect the interests of the Govt. revenue. Such an order has to be in writing in observance of the rules on the manner of the attachment by the Commissioner. The exercise of unguided discretion will leave the business activities to the peril of arbitrary power. The Apex Court has held that merely because the proceedings were pending/concluded against another taxable entity, power U/s 83 cannot be attracted against the appellant.
ANDHRA PRADESH HIGH COURT
OCEAN SPARKLE LIMITED
ASSISTANT COMMISSIONER (ST)
[A.V. SESHA SAI & J. UMADEVI, JJ]
WRIT PETITION No.9162 OF 2021
Date of Decision: April 28, 2021
Opportunity of hearing—non compliance of Subsection 4 of Section 74 of CGST Act, 2017—Assessment order is short of compliance of mandatory provision of S. 74(4) of the Act before passing of—Thus set aside for deviation from mandatory provision as well as violation of natural justice
It is argued that the impugned order of assessment should be set aside as it is short of mandatory provision of S 75(4) of CGST Act. As per the said provision, when an adverse action is to be taken against the assessee, an opportunity of hearing is to be provided to the assessee. Therefore, the Hon’ble court has held that since the aforesaid provision was not complied with, the impugned order is set aside for deviating from mandatory provision of law as well as violation of natural justice.
RAJASTHAN HIGH COURT
ABHISHEK SINGHAL S/O SHRI ASHOK KUMAR SINGHAL
UNION OF INDIA
[INDERJEET SINGH, J]
Criminal Miscellaneous Bail Application No. 6304/2021
Date of Decision: May 17, 2021
Bail—Fraudulent ITC—Bogus firms created by petitioner, a CA by profession—Bail denied on account of non appearance in pursuant to show cause notices issued—Absconding for over a year—Mastermind behind the crime—Application rejected
A bail application has been filed by the petitioner a CA by profession, for availing wrongful ITC be creating 38 fake firms. The bail is declined for the reason that the petitioner was absconding for a year; and he is the master mind behind the scam since he is a CA.
RAJASTHAN HIGH COURT
BHAGWAN SAHAY GUPTA
UNION OF INDIA
[PANKAJ BHANDARI, J]
Criminal Miscellaneous Bail Application No. 5882/2021
Date of Decision: May 4, 2021
Bail—Fraudulent ITC—Chartered Accountant instrumental in creating bogus firms—Bail granted on account of the fact that the applicant has already been in custody for a period of 1 year 5 months and has a child.
It is contended that petitioner was instrumental in registration of 11 fake firms and availed input tax credit to the tune of ₹ 146 crores. It is also contended that petitioner was aware as he was filing GST returns of non-existent firms. A bail application is filed. Considering that the Chartered Accountant has remained in custody for a period of one year and five months and that petitioner is also having a child, bail is granted on condition of furnishing a bond and sureties.
MADRAS HIGH COURT
BAJAN LAL BISHNOI @ ROHAN
THE SUPERINTENDENT OF GST & CENTRAL EXCISE HQRS PREVENTIVE UNIT GST CHENNAI SOUTH COMMISSIONERATE
[M. DHANDAPANI, J]
CRL. O.P. NO. 7672 OF 2021
Date of Decision: April 30, 2021
Bail—Middleman for procuring details of defunct units and getting registration –Fake invoices involved in filing statutory returns—Full awareness of the said act—Cannot take plea of being mere middleman—Not that it has been in custody for a length of time—Nexus with many administrative people cannot be ruled out for which full-fledged investigation is required—bail not granted
The petitioner was acting as a middleman by procuring details of defunct companies for getting them registered. The details were further given to a person to raise fake invoices which were used to file statutory returns. Thus the petitioner has caused huge loss to public exchequer. The offence is cognizable and non bailable u/s 132 of CGST Act.
Dismissing the petition, It is held that the petitioner was well aware that the said credentials were to be used for fake/fraudulent transactions. The petitioner cannot feign ignorance on this aspect. The petitioner cannot absolve himself from the said offence by holding a lifeline that he is only a middleman.
Without his role as middleman, the whole crime could not have been perpetrated. The nexus of many persons within the administrative framework could not be ruled out and a proper investigation is necessary to unearth the larger conspiracy involved behind the above. It is not as if the petitioner has been under incarceration for a long length of time. Hence, the prayer for grant of bail by the petitioner cannot be acceded to.
DELHI HIGH COURT
SUPER INDIA PAPER PRODUCTS BENLON INDIA LTD., AND OTHERS
UNION OF INDIA
[MANMOHAN & SANJEEV NARULA, JJ]
W.P. (C) 1150/2020 & CM APPL. 3814/2020
Date of Decision: May 27, 2021
Transitional credit—Tran 1—Inadvertent error—Form TRAN 1 filed within prescribed time—Error in filing details—Transitional credit denied thereof—Held by Hon’ble court that a genuine mistake should not lead to extinguishing of right granted under A-300 of the Constitution—Respondents directed to either open online portal for rectification or accept manual documents
Undisputedly, the Petitioners filed the TRAN-1 Form within the prescribed time, however, they were precluded from claiming their transitional credit on account of inadvertent error on their part due to filling in of wrong details or omissions. The Hon’ble court has held that a genuine mistake should not result in the Petitioners’ losing out on their accumulated credit which is protected by Article 300A of the Constitution. Respondents are directed to either re-open the online portal so as to enable the Petitioners to file TRAN-1 Form electronically, or to accept the same manually on or before 30th June, 2021.
MADRAS HIGH COURT
SUBAYA CONSTRUCTIONS COMPANY LTD.
TAMIL NADU WATER SUPPLY AND DRAINAGE BOARD
[G.R. Swaminathan , J]
W.P.(MD)No.15967 of 2020
Date of Decision: March 8, 2021
Works contract—Enhanced GST rate—Contract between petitioner and respondent municipal corporation envisaged tax component @ 2% and 5% in pre GST era—Contract price stood inclusive of cost, profit and tax—Tax component enhanced to 12% with coming of GST—Reworking of contractual terms required—writ filed—Held that reworking has to be done in terms of paragraph 10(a) of the government order since the bills specified number of items and price of each item separately—moreover government policy envisaged that such additional tax burden to be borne by purchaser and not contractor—Therefore, rework to be done within the period specified in the order—Petition allowed
The petitioner entered into a contract with Tamil Nadu Water Supply and Drainage Board for laying Under Ground Sewerage works. In pre GST regime, the contract mentioned that deduction at source towards sales tax shall be made at 2% for civil works contract and at 5% for all other works contract. After GST Regime came into force, all the works contract for construction activities came to be taxed at 12%. Therefore, it became necessary to re-work the terms of the contract. Hence a writ is filed.
The Hon’ble court has held that this contract price included cost factor, profit margin and tax component (TNVAT and Excise Duty).The Government itself has taken a policy decision that this additional tax burden will have to be borne only by the purchaser and not by the contractor. It can be seen there from that the bill of quantities contains number of items and for each item, the petitioner had quoted a particular rate. Thus, it will not be difficult to arrive at the exact price for each item after deducting the tax component.
The reworking has to be done only in terms of paragraph No.10(a) of the said Government Order and Paragraph No.10(c) of the said Government Order will be applicable only if along with the tender notification, the TWAD Board has also enclosed their schedule of rates. In the case on hand, no such schedule of rates was enclosed.
Hence, the contention of the petitioner that the quotation in the instant case was on itemwise basis is sustained. The respondents are directed to rework the terms of the contract and enter into a revised agreement with the petitioner. The entire exercise shall be concluded within a period of eight weeks from the date of receipt of a copy of this order.
KARNATAKA HIGH COURT
BANGALORE TURF CLUB LIMITED
THE STATE OF KARNATAKA
[M. NAGAPRASANNA, J]
WRIT PETITION No.11168/2018
Date of Decision: June 2, 2021
Vires—Rule 31A(3) of CGST Rules—Petitioner is a race club providing services of a totalisator for money collected through bet and redistributing it to the winner while retaining its commission on the service so delivered—Rule 31A (3) as amended indicates collection of GST on entire bet amount—Vires challenged—Held that neither the said Rule is defined as a taxable event under the Act nor charging section confers any such power—Therefore, Rule 31A(3) is struck down being ultra vires
The petitioner is a company carrying on a business of race club. It conducts horse racing and facilitates betting by the punters. The price money is distributed by petitioners to the winning punter and out of the amount Commission is set apart to be taken by the petitioners.
After the CGST regime began, an amendment was brought into Rule 31A by insertion of Rule 31A(3) to the CGST Rules. The amendment made GST payable by the petitioners on the amount of bet that gets into the ‘totalisator;. It is this amendment that is called in question on the ground that the Rule is made beyond the powers conferred under the CGST Act thereby seeking a consequential declaration that the CGST and KSGST be restricted only to the Commission that the petitioners get on holding the amount in the totalisator for a brief period.
The Hon’ble court has held that the Totalisator is only a system that holds the bet money for a short period in a fiduciary capacity which would be available for distribution among the winner who placed his stake. The totalisator is brought under a taxable event without it being so defined under the Act nor power being conferred in terms of the charging section 9 of the Act.
The issue is answered in favour of the petitioners striking down Rule 31A(3) of the CGST Rules and Rule 31A of the KSGST Rules as being contrary to the CGST Act and hold that the petitioners are liable for payment of GST on the commission that they receive for the service that they render through the totalisator and not on the total amount collected in the totalisator – petition allowed.
KARNATAKA HIGH COURT
M/S. ARYAN TRADELINK
THE UNION OF INDIA, THE CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, THE SUPERINTENDENT OF CENTRAL TAX, THE SUPERINTENDENT OF CENTRAL TAX, THE COMMISSIONER OF CENTRAL TAX, THE DEPUTY COMMISSIONER OF CENTRAL TAX, THE ASSISTANT COMMISSIONER OF CENTRAL TAX,
[S. SUNIL DUTT YADAV, J]
WRIT PETITION No.8046/2021
Date of Decision: April 21, 2021
Electronic credit ledger—blocking of—continuance beyond one year of passing of order—Held order of blocking of credit ledger cannot continue beyond one year after imposition of order in light of Rule 86-A(3) of CGST Rules
The petition is filed challenging the blocking of credit ledger and its continuance beyond one year. Without entering into the merits of the order of blocking of the credit ledger, in light of Rule 86-A (3), restriction in blocking of electronic credit ledger cannot be extended beyond one year from the date of imposing it. Therefore, the unblocking of credit to the electronic credit ledger is ordered herewith.
MADRAS HIGH COURT
THE SENIOR INTELLIGENCE OFFICER, DIRECTORATE GENERAL OF GST INTELLIGENCE, MADURAI THE ADDITIONAL DIRECTOR GENERAL, THE JAIL SUPERINTENDENT, THE JAILER
[G.R. SWAMINATHAN, J]
W.P.(MD)No.3855 of 2021 And W.M.P.(MD)Nos.3082 & 3132 of 2021
Date of Decision: March 24, 2021
Bail—offence u/s 132 of CGST Act—observing that petitioner kept in custody for 6 days, remitted a sum towards tax dues, time yet to be taken for completion of investigation—no purpose to be served with re-arrest—interim bail made is therefore, absolute
The petitioner was arrested for the offences u/s 132(1)(a) of the CGST Act, 2017 and Sections 9 and 9A of the Central Excise Act. It is argued that the case of the petitioner falls under the above mentioned sections which is the non cognizable offence. It is observed that the petitioner was kept in the custody for 6 days, remitted a sum towards tax dues. The investigation by the respondents does not appear to be over as yet. Earlier the petitioner was asked to appear before the respondents twice a week. The court has viewed the re-arrest of the petitioner will not solve any purpose interim bail granted to the petitioner is now made an absolute.
ORISSA HIGH COURT
SHREE JAGANNATH TRADERS
COMMISSIONER OF STATE TAX ODISHA
[DR. S. MURALIDHAR, J]
W.P.(C) No.15058 of 2021
Date of Decision: June 7, 2021
Condonation of delay—Section 107(4)& Rule 108(3)—Appeal filed within time but rejected on grounds of delayed supply of certified copy of impugned order—Order set aside by Hon’ble Court on grounds of substantial compliance—mere delay in supply of certified copy cannot come in way of justice—explanation tendered is plausible—Courts should be liberal in condoning in these Covid times—petition allowed
The petitioner had filed an appeal before Appellate Authority within the time prescribed, though the certified copy of order appealed against was supplied after 7 days of delay. The appeal was rejected on grounds of delay for not being presented within the limitation period. It is held that difficulties faced in obtaining certified copies are known. Reason for delay ought to have been accepted by the Appellate Authority. Since downloaded copy was submitted within time and the explanation tendered is plausible, mere delay in enclosing certified copy should not come in way of justice. Writ is thus allowed.
ORISSA HIGH COURT
STATE OF AP
[C. PRAVEEN KUMAR & J. UMA DEVI. JJ]
W.P. No. 10350 of 2020
Date of Decision: November 11, 2020
Composite scheme—whether applicable to previous year under VAT regime as contemplated u/s 10(1) of GST Act—held while calculating tax liability under section 10(1) of GST Act, turnover of ‘previous year’ is to be taken into account in extending benefit under GST Act– contention of petitioner that previous year being under VAT regime is to be excluded is wrong—intention of legislature to include previous year falling under VAT regime is clear from the word of the clause—therefore, there is no illegality in including the previous year’s turnover—writ is dismissed.
The petitioner had paid tax under composite scheme under section 10(1) of GST Act from the quarter ending September 2017, which postulated payment of 1% of GST on the turnover if turnover for preceding year is less than 50 lakhs. The respondent rejected the claim contending that the turnover for the ‘Previous Year’ under the Vat Regime was about 2 crores and that Tax amounting to 28% from July 1, 2017 was payable. A writ is filed.
The petitioner argues that the word ‘preceding financial year’ has no relevance for taxes paid for the financial year 2017-18 as the provisions of GST Act are not retrospective in operation. Moreover, the turnover after July 2017 is less than 1 crore.
If the intention of the legislature was to exclude the declarations made under VAT Regime, it would have found place in section 10(1) of the Act itself. Therefore, the turnover of the previous year under VAT Regime has to be reckoned for extending benefit under GST Regime. Such a narrow interpretation cannot be given to exclude the tax liability of previous year. Therefore, there is no illegality in taking in to consideration the previous year’s turnover under VAT regime for the purpose of extending benefits under the composite scheme.