HIGH COURTS MADHYA PRADESH HIGH COURT
Uma Shree Tour and Travels
State of Madhya Pradesh & Ors. [Sheel Nagu & Sunita Yadav JJ] Writ Petition No. 2333 OF 2022
Date of Decision: February 2, 2022
Writ—maintainability of—Registration— Cancellation of without opportunity of hearing being provided as alleged by petitioner—question of fact involved— Disputed question of fact cannot be gone into in a writ—Therefore, petitioner to avail remedy u/s 30 of the Act for revocation of registration—Petition disposed of
The petitioner had earlier filed an appeal u/s 107 of CGST Act, 2017 against the impugned order passed u/s 29 of the said Act which became infructuous for the reason that appeals u/s 107(1) are only against the orders passed by the adjudicating authorities. Hence, this by way of writ petition, petitioner assails the order of cancellation of registration passed u/s 29 of the CGST Act, 2017. In this regard, petitioner contended that no opportunity of being heard was given to him and the order of cancellation of registration was never served upon him and therefore, he could not avail statutory remedy u/s 30 for seeking revocation of the cancellation of registration. But the impugned order reveals that a show cause notice was issued in response to which the petitioner preferred a reply which was also taken into account. In this context, Hon’ble Court held that the contention that impugned order was not served on the petitioner involves disputed questions of fact specially in the face of unavailed remedy u/s 30 which enables a person aggrieved by an order of cancellation of registration to apply for revocation within 30 days and also confers jurisdiction on the competent authority to condone the delay if there is sufficient cause. The present Writ Petition disposed off.
BOMBAY HIGH COURT
Dee Vee Projects Ltd.
Union of India & Ors.
[Sunil B. Shukre & Anil S. Kilor, JJ] Writ Petition No. 2693 OF 2021
Date of Decision: February 11, 2022
Blocking of Electronic Credit ledger—Exercise of powers under Rule 86A of CGST Rules, 2017—Electronic Credit Ledger cannot be blocked for an amount which is more than the amount found to be fraudulent or wrongful availment—Order passed by officer blocking more ITC was not independent as compelled by commands of Senior Officer—Settled principle of administrative law not followed while passing the impugned order—Petition partly allowed quashing the order – Sections 62, 63, 64, 67, 73, 74 & 83 of CGST Act, 2017
Petitioner has filed this writ petition for quashing of action of blocking of Electronic Credit Ledger. Electronic Credit Ledger was blocked by the Deputy Commissioner. In this regard, petitioner contends that the credit amount available in the ECL being the property of the petitioner, its blocking amounts to illegal provisional attachment of the property u/s 83 of the CGST Act, 2017 which can be done only if any proceeding is pending or initiated under any of sections such as sections 62, 63, 64, 67, 73 and 74. The procedure under the provisions of Rule 86A was also not followed.
Hon’ble Court held that action has been taken by Deputy Commissioner holding the rank above an Assistant Commissioner, who was duly authorised by the Commissioner to initiate action under Rule 86-A of the CGST Rules, 2017. For invoking the power under rule 86- A, there is no necessity that proceeding under any of the said sections is initiated and, any order passed under Rule 86-A cannot be treated as the order amounting to the provisional attachment of property u/s 83 of CGST Act. Further, such blocking of the ECL cannot be for an amount which is more than the amount found to be fraudulently availed. Moreover, exercise of powers under Rule 86-A made by respondent was not independent as the officer was compelled to obey the commands of its superior and this non- following of well established principle of administrative law making the order illegal. Thus, the Hon’ble court quashed the impugned order of blocking of Electronic Credit Ledger and partly allowed the present petition.
DELHI HIGH COURT
Commissioner of Central Taxes GST Delhi East
[Manmohan, Navin Chawla, JJ] CWP No. 2408 OF 2022
Date of Decision: February 8, 2022
Provisional attachment—Seeking direction to release the immovable properties and de- freeze bank account—Orders neither renewed nor any fresh orders of attachment passed except a SCN issued U/s 74 of CGST Act, 2017—Provisional attachment ceased to have effect after one year –– Writ petition disposed of—Section 83 of CGST Act, 2017
Petitioner has filed this Writ petition seeking direction to the Respondent to release the property and defreeze the accounts of the Petitioner. The Petitioner is neither a taxable person as defined under Section 2(107), CGST Act, 2017 nor registered under the CGST Act, 2017. He states that the provisional attachment of the bank accounts of the petitioner ’s daughter has already been quashed by this Hon’ble Court. The major contention was that the provisional attachment order, in any event, has ceased to have effect after the lapse of one year. On the other hand, Respondent states that the impugned attachment orders have neither been renewed nor any fresh orders of attachment have been passed. However, a show-cause notice has been issued to the Petitioner and admitted that every provisional attachment ceases to have effect after the expiry of a period of one year. Consequently, the Hon’ble Court allows as prayed by the petitioner. Writ Petition disposed of.
TRIPURA HIGH COURT PODDER AND PODDER INDUSTRIES
STATE OF TRIPURA AND OTHERS
[INDRAJIT MAHANTY & S.G. CHATTOPADHYAY, JJ]
WP(C) No.285 of 2022
Date of Decision: March 29, 2022
E- way bill—expiry of—Goods in question covered by proper documents—Expiry of e way bill due to technical problem in the vehicle—Held such goods could not be stopped from entering the state—Instead an ‘undertaking’ could have been taken for informing assessing officer to comply with required steps—Petitioner to appear before Gate officer with a n undertaking an the latter to release the goods and vehicle
In this case the goods were in transit from one state to another. The required documents were being carried along with. On the way the vehicle in which the goods were being carried faced some technical problems. The e-way bill expired and the vehicle was detained. The driver was informed about the seizure of the goods. Hence a writ is filed seeking release of the vehicle and the goods.
The Hon’ble Court has observed that in a case where there is no doubt that a transaction is made between 2 register dealers and is covered by proper documents .Even if the they e-way bills has expired just before entry into the State such vehicle could not be stopped. Instead an undertaking can be taken from the buyer or the seller and the Assessing Officer can be informed accordingly to make necessary compliance. The writ is disposed of directing the petitioner to appear before the Check Gate Officer along with an undertaking and the Check Gate Officer shall release the goods and vehicle thereby.
CALCUTTA HIGH COURT
Shivaco Associates & Anr. v.
Joint Commissioner of State Tax & others [Amrita Sinha, J]
WPA No.54 of 2022
Date of Decision: March 11, 2022
Inverted duty structure—Claim of ITC u/s 54(3) of CGST Act wherein input and output goods are same—Denial by authorities based on circular dated 31/3/2020—Held circular is meant to supplement law and not supplant law—no distinction is made by legislature in respect of goods wherein input and output supplies remain same—refund is permissible in respect of all cases where input tax is higher than the output tax
The petitioner’s claim on the unutilized input tax credit was rejected. The said refund was sought under Section 54(3) of CGST Act as the rate on inputs stood higher than the rate on output supply.
The petitioner ’s claim was rejected by the Authority relying on a circular issued by the Board i.e. Circular No.135/2020-GST dt. 31.03.2020 where it is mentioned that the taxpayers cannot claim refund in terms of Clause 2 of Section 54(3) of the CGST Act in case where the input and output supplies remain the same. After the appeal was rejected the writ was being filed before the Hon’ble High Court.
The Hon’ble Court has held that any circular issued under Section 168 of the Act is only for the purpose of bringing uniformity in the implementation of the Act. The Act does not restrict refund only in respect of supplies which are different at the input and output stage. There is no reason why the benefit of a cumulative ITC should not be passed to the petitioner. A Circular cannot supplant or implant any provision which is not available in the Act. The circular in question is imposing a restriction to release certain benefits which are provided under the Act.
The circular is creating a class inside the class, which is impermissible according to the Act and refund is permissible in respect of all cases where input tax is higher than the output tax. The circular is curtailing the said benefit and making the refund permissible only if the input and output supplies are different .This amounts to over-reaching the provisions given in the Act.
It cannot be said that the legislature was unmindful of the fact that there may be instances where input tax supplies are same. On the contrary, the legislature consciously has not created any distinction for allowing refund in cases where input tax is more than output tax. The said benefit is applicable to all similar cases. Therefore, the impugned orders are hereby quashed and the petitioners are entitled refund as claim.
GUJARAT HIGH COURT
Khodiar Export Import
State of Gujarat
[JB Pardiwala & Ms. Nish Thakore, JJ]
R/Special Civil Application No.5220 of 2022
Date of Decision: March 16, 2022
Registration—Natural Justice—Non filing of returns—Cancellation of registration—Order challenged for being non speaking—Appeal dismissed by holding that on basis of spot visit made by officer, restoration appeal is disallowed—Held principles of natural justice violated—Ground absent in SCN considered for dismissal of appeal—No chance to reply to the notice given—Restoration allowed on filing of returns and payment of interest and penalty
The registration of the firm was cancelled on the ground of not filing of return as the firm was unable to file few monthly returns and payment of tax is a prerequisite before acceptance of the returns on the GST Portal. The order of cancellation was non-speaking order which was challenged before the Appellate Authority. The Appellate Authority also dismissed the appeal by holding that on the basis of the spot visit made by the Officer the appeal for restoration is dismissed. The Hon’ble
Court has held that it is unable to understand how the Appellate Authority behind the back of the firm would have taken into consideration the report of the spot visit undertaken by the Respondent No.3 for the purpose of dismissing the appeal. The firm was not given a chance to reply to the notice put forward. The ground which is not at all in the show cause notice has been considered and the appeal has been dismissed. The entire procedure followed by the respondent and the Appellate Authority is against the principles of natural justice. The petitioner is allowed to file returns along with payment of interest and penalty. The GST registration will have to be revived.
ALLAHABAD HIGH COURT
Commissioner of State Tax, U.P. & 2 Ors. [Saumitra Dayal Singh, J]
W.P. No.1126 of 2021
Date of Decision: April 1, 2022
Detention of goods—Onus to prove malafides—A part of Goods in transit detained for being without documents—Subsequently documents produced by driver—Acceptance declined by authorities—Complete invoices produced by petitioner at time of SCN— No genuiness doubted- no enquiry held to establish malafides—Held onus on department to prove ingenuiness now—Seizure, confiscation, demand and penalty based on no cogent material—Impugned orders set aside
The goods were being transported from Punjab to Gwalior. Since the value of goods was below Rs.50,000, issuance of e-way bills was not required. However, the goods were checked in the State of U.P. where a part of consignment was found covered by the documents produced and the respondent detained the remaining part for not being covered with any invoice or documents. It is alleged by the petitioner that it was due to inadvertence of the driver that the entire documents were not produced at the time of physical verification. On realizing his mistake, the driver produced the remaining documents but the authorities declined to accept them. A show cause notice was issued and the petitioner presented original invoices to establish the genuineness of the transaction. The authorities imposed tax and penalty on account of absence of such documents required to be produced at the stage of interception.
It is held, that no enquiry has been conducted by the authorities to doubt the transaction. The petitioner has discharged the onus at the stage of show cause notice itself. Thereafter it is for the authorities to lead evidence to establish that the goods in question are related to bogus transaction or otherwise .Thus seizure and confiscation and demand of tax and penalty is based on no cogent material and evidence. The impugned orders are set aside and petition is allowed.
ORISSA HIGH COURT
State of Odisha [S.K. Panigrahi, J.]
B.A. No. 6498 of 2021
Date of Decision: April 4, 2022
Bail- Fraudulent ITC—In custody for alleged offence to the tune of Rs 5 crore for over 1 year—Bail application filed— Held: Respondent has not contended that enlargement of accused would cause hurdle in investigation—Seriousness of crime not to deter courts in granting bail—In custody for over one year—Only bread earning son of the family—No justification for holding him in custody—Bail granted subject to conditions
After a search enquiry was conducted on firm Rs.X’, the petitioners’ firm was allegedly found availing fraudulent ITC from the sham subsidiary of Firm Rs.X’. The petitioner was arrested for availing ITC to the tune of Rs.5,00,00,000. A bail is sought in this regard.
It is held that there is no justification for classifying offences into different categories and refusing bail on the ground that the offence belongs to a particular category. It is not in the interest of justice that petitioner should be in jail for indefinite period. Though the offence alleged is a serious one it should not deter this court from granting bail when there is no serious contention given by the respondent that petitioner’s bail would interfere with the trial. Considering the fact that the petitioner is the only bread earning son of a family and has been in custody for over a year now, there is no justification for his detention any longer.
The bail is allowed subject to conditions.
MADHYA PRADESH HIGH COURT
Technosteel Infraprojects Pvt. Ltd.
State of Madhya Pradesh & Ors.
[Sheel Nagu & Maninder S. Bhatti, JJ]
Writ Petition No. 6118 OF 2021
Date of Decision: March 30, 2022
E-way Bill—Address wrongly mentioned— Intention to evade tax—Section 129 of CGST Act, 2017—Held : Mistake in question is bonafide—Principle of parity invoked—Writ allowed
The Petitioner had to get goods delivered outside the state. For this purpose, a tax invoice and E way bill was generated. However, the address on the E-way bill was mentioned at registered office of the consignee at Jabalpur, instead of Rewa and thus, the Revenue Authorities initiated proceedings u/s 129 of CGST Act, 2017 which ultimately imposed additional tax as well as penalty against the petitioner and the appeal against the said order was also dismissed. It is alleged by the petitioner that the mistake while generating E-way bill was an inadvertent human error and there was no intention to evade the tax, when the vehicle number which was transporting the goods was same.
Hon’ble Court while relying upon the decision in the case of Robbins Tunnelling and Trenchless Technology (India) Pvt. Ltd. vs. The State of M.P. and others, held that the mistake in question being bonofide this Court invoking the principle of parity, and quashed the impugned orders. Writ petition allowed.
MADRAS HIGH COURT
Golden Cashew Products Private Limited
The Commercial Tax Officer & Ors.
Writ Petition No. 33124 OF 2019
Date of Decision: February 3, 2022
Tran-1—Denial of ITC—ITC denied on account of technical error as alleged by petitioner—Contrarily, Tran-1 stood unsubmitted as per respondent—No proof submitted regarding timely submission as alleged—Held: ITC credit lying unutilized before the introduction of GST to be refunded back by way of credit in the electronic cash register
In the present case, the petitioner was required to file form GST TRAN-1 on or before 27.12.2017 which stood extended from time to time and petitioner did not file the same within time. Instead, the petitioner sent a representation dated 15.03.2019 to the Commercial Tax Officer stating that it came to know that there was a technical error only through the findings of the order and decided to claim Input Tax Credit by resubmitting form TRAN-1 as per Notification No. 48/2018– Central Tax. Petitioner also appeared before the Commercial Tax Officer who informed that the petitioner was not entitled to the benefit for the reason that the due date to file form TRAN- 1 had been extended upto 31.03.2019 as per Order No. 1/2019 dated 31.01.2019 and it was applicable only for a certain class of registered persons who could not submit declaration in GST TRAN-1 within due date on account of technical difficulties in the common GST portal. In this regard, Respondents contended that on verification of the GST portal, it was found that no such return was filed by the petitioner within the period i.e. before due date and therefore, the petitioner was asked to resubmit the letter alongwith evidence for having entered TRAN-1 in GSTN portal as stipulated in the circular of the Government. Respondents further contended that without submitting any evidence on account of technical/system error faced by the petitioner while submitting TRAN-1 to the jurisdictional/proper officer, the petitioner has clandestinely claimed to reopen TRAN-1 and therefore, the proper officer was not able to forward the petitioner’s claim to the nodal officer.
After hearing the contentions of both sides, the Hon’ble Court held that if Input tax credit was lying un-utilized in the CENVAT account or VAT returns prior to the implementation of GST, such amount cannot be denied for being utilized for discharging the tax liability under the respective GST enactments. It further decided to dispose of this Writ Petition by directing the jurisdictional officer to examine the petitioner’s CENVAT account or VAT returns and ascertain whether any such credit was lying un-utilized as on 30.06.2017 and if such credit existed in the CENVAT account or VAT returns of the petitioner, the amount shall be either refunded back by way of credit in the Electronic Cash Register of the petitioner or allowed to be transitioned notwithstanding the fact that the petitioner may have failed to file TRAN-1 in time.
GUJARAT HIGH COURT
Arya Metacast Pvt. Ltd. & Another
State of Gujarat & Another
[J.B.Pardiwala, Nisha M. Thakore, JJ]
R/Special Civil Application No. 2787 of 2022
Date of Decision: March 17, 2022
Provisional attachment—Amidst other properties laptop, mobile phone and documents seized u/s 83 of the Act—Such seizure contested against—Held: Power u/s 83 draconian in nature—Formation of opinion of commissioner to be strictly adhered to—Demat account and current account being valuable assets for business – Provisional attachment qua the stock of goods, two demat accounts and current account set aside.
The respondents initiated the search proceedings u/s 67 of the Gujarat GST Act, 2017 at the business premises of the writ applicants on the suspicion that they had shown ingenuine purchases from fictitious firms. Orders of provisional attachment of various properties were passed. Apart from the other properties, the respondent authorities have also seized the mobile phone, laptop and other documents from the business premises of the writ applicants by passing the seizure order. The writ applicants have made representation followed by subsequent reminders, but the same are not responded. In this regard, Petitioner contended that exercise of power for ordering the provisional attachment must be preceded by formation of an opinion by the Commissioner that “it is necessary so to do for the purpose of protecting the interest of the Government revenue”. He further submitted that while exercising such power of provisional attachment of the properties of the taxable person including bank account, demat account is draconian in the nature and such condition of forming opinion by the Commissioner should be strictly adhered to before passing order of provisional attachment. Petitioner relied upon the decision of the Supreme Court in the case of Radhe Krishan Industries Vs. State of Himachal Pradesh reported in (2021) 6 SCC 771 And has further drawn attention to the Circular bearing No. CBEC-20/16/05/2021-GST dated 23.02.2021, whereby the CBIC has laid down various guidelines for provisional attachment of the property u/s 83 of the CGST Act, 2017.
On the other hand, It is submitted by the Respondent that in order to protect the interest of Revenue respondents have provisionally attached various properties of the writ applicants in exercise of power conferred u/s 83 of the Act.
The Hon’ble Court held that inspite of the guidelines to be adhered while exercising powers conferred upon the respondent authority under Section 83 of the GST Act. Respondent has also provisionally attached the demat account and current account which are the valuable assets of the writ applicants, more particularly, raw material and the finished goods are valuables which are also necessary for running of the business of the applicants. The Hon’ble Court quash and set aside the order of the provisional attachment qua the stock of goods, two demat accounts as well as current account of the writ applicants is concerned. So far the release of electronic items including Mobile Phone, laptop and other documents seized during the search proceedings are concerned, same is also directed to be released forthwith on condition that the writ applicants shall file an undertaking thereby declaring that the aforesaid goods electronic items including mobile phone, laptop and other seized documents shall be retained in its original form and shall not be disposed of pending the investigation.
ALLAHABAD HIGH COURT
Calcutta South Transport Co.
State of U.P. & Another
[Surya Prakash Kesarwani & Jayant Banerji, JJ]
Writ Tax No. 406 of 2022
Date of Decision: March 28, 2022
Detention of truck—Petitioner/transporter leased truck which was intercepted and detained during transit of goods—Tax and penalty stood unpaid by owner—Order of confiscation of truck u/s 130 passed without hearing—Writ filed—Held: Considering the contention that the said vehicle stood detained without any valid confiscation order causing undue harassment, order of release passed— Cost imposed on respondents
The petitioner is engaged in the business of leasing trucks and other vehicles on hire freight basis to various transporting entities. In the course of its business, the petitioner has given on hire the aforesaid truck in question to one Company (‘hirer’) for the purpose of transportation of goods from Delhi to Vijayawada (Andhra Pradesh). In the course of journey, the aforesaid truck was passing through the State of Uttar Pradesh when it was intercepted by the respondent, who found that some of the goods loaded in the truck are over and above those covered by invoices, therefore, he issued an order of detention in MOV-06. Since neither the owner of the goods nor the transporter, i.e., the hirer, came forward to deposit the tax and penalty as demanded by order dated 31.10.2020, respondent initiated proceedings u/s 130 of the CGST/UPGST Act, 2017 for confiscation of the truck in question. In this regard, a notice in GST MOV-10 was issued to the petitioner fixing the date for hearing. Immediately on the receipt of the aforesaid notice, the petitioner submitted an application before the respondent bringing to his notice the entire facts and requested to release the truck. However, in the meantime, the respondent without affording any opportunity of hearing to the petitioner, passed an order of confiscation in GST MOV-11.
Feeling aggrieved with the aforesaid order, petitioner approached the Hon’ble Court Seeking release of detained goods alongwith the vehicle. In this regard, Hon’ble Court held that about 18 months have passed since the detention of the aforesaid truck without any valid order for confiscation or any proceeding of confiscation in existence, yet, the truck in question is being detained by the respondent arbitrarily, illegally and un-authorisedly, resulting in harassment of the petitioner. For all reasons stated above, Hon’ble Court allowed the writ petition with cost and directed the respondents to release forthwith the truck.