2019-TIOL-2950-HC-AHM-GST

Synergy Fertichem Pvt Ltd Vs State of Gujarat

GST - The present writ petitions were filed seeking release of goods and the vehicle ferrying them, which had been detained by the Revenue in exercise of powers u/s 129 and 130 of the CGST Act - The petitions also sought that directions be issued to quash the detention notices and the orders passed pursuantly - The petitioners also claimed that the Revenue authorities sought to confiscate the goods and the vehicle as per Section 130, whuch was entirely arbitrary and not involving application of mind.

Held: Although both Section 129 and Section 130 begin with a non obstante clause, yet a harmonious reading of both, keeping in mind the object and purpose behind their enactment, indicates that they are independent of each other - Section 130 which provides for confiscation of goods or conveyance is not in any manner, dependent or subject to Section 129 - Both provisions are mutually exclusive - Moreover, in Section 130, the phrase with an intent to evade the payment of tax is of importance - When the law requires an intention to evade payment of tax, then it is not mere failure to pay tax and it has to be something more - The term evade in the context means defeating the provisions of law of paying tax - It is made more stringent by the use of the term intent - The assessee must deliberately avoid payment of tax which is payable as per law - However, the element of mens rea cannot be read into Section 130 - Besides, for issuing confiscation notice u/s 30 at the threshold, the case has to be of such a nature that on the face of the entire transaction, the authority concerned should be convinced that the contravention was with definitee intent to evade payment of tax - The action should be in good faith and not a mere pretence - In plain terms, the Revenue has to make a very strong case and mere suspicion is not enough to invoke Section 130 straightaway - Even if the goods or conveyance is released on payment of tax and penalty u/s 129, later if the authorities find something incriminating against the owner of the goods in the course of the inquiry, if any, then it is permissible to initiate the confiscation proceedings u/s 130 of the Act - For purposes of Section 129(6) of the Act, it is not necessary for the Revenue to establish intent to evade payment of tax - If the tax and penalty as determined u/s 129 is not deposited within the statutory time period, then the goods and conveyance would be liable to be auctioned - It is seen that all the petitions are at the stage of notice for the purpose of confiscation - In all cases, the court directed interim release of the goods as well as the conveyance - Such release is subject to the final outcome of the confiscation proceedings - The court has not delved into individual petitions for finding out whether the notice for confiscation u/s 130 is justified - Only general principles have been laid down regarding the application of Section 129 and Section 130 of the Act - The issue of as to whether or not the confiscation notice merits being quashed may be notified before the court taking up tax matters: HC

Held: The foremost task of a court in interpreting a statute is to ascertain the legislative intent, actual or implied - It then must strive to interpret the statute so as to promote and advance the object and purpose of the enactments - If two constructions are possible upon the language of the statute, the court must choose the one which is consistent with good sense and fairness and avoid the other which makes its operation unduly oppressive, unjust or unreasonable or which would lead to strange or inconsistent results or induce an element of bewildering uncertainty and practical inconvenience in the working of the statute - Where necessary, the court may even depart from the Rule that plain words be interpreted as per their plain meaning - To avoid patent injustice, anomaly or asburdity, the Court would well be justified in departing from the so-called golden rule of construction so as to give effect to the object and purpose of the enactment by supplementing the written word if necessary - Hence the legislature should examine the provisions of Section 129 and Section 130 to amend them and remove certain inconsistencies: HC

- Writ petitions disposed of: GUJARAT HIGH COURT

2019-TIOL-2948-HC-KOL-GST

Arvind Kumar Munka Vs UoI

GST - The petitioner is a Chartered Accountant - He claimed to have been falsely arraigned as an accused on the allegation that he connived with other accused persons for issuing GST invoices without actual supply of goods to the buyers - It was alleged that such activities caused a loss of about Rs 98 crores - The petitioner was subsequently arrested and was produced before the jurisdictional CJM, before whom the petitioner filed an application for bail - However, the same was rejected - Thereafter, the petitioner filed for bail before the jurisdictional Sessions Judge, but its application was rejected again, on account of the nature and magnanimity of the unlawful acts done by the accused including the petitioner, as emerging from the final report of the investigating agency - It was also found that there were possiblities of attempts to influence witnesses or destroy the evidence or evade further investigation and trial - The present petition was filed seeking bail - It was claimed that both courts erred in not granting bail on the 61st day in terms of Section 167 of the CrPC, that the offence u/s 132 of the CGST Act is bailable and that without previous sanction by the Commissioner for filing charge sheet, the entire proceeding had been rendered otiose.

Held - Considering the decision of the Apex Court in Uday Mohanlal Acharya in respect of indefeasible right for being released on bail upon default in filing challan/chargesheet within the prescribed time frame, the same is not applicable to the facts and circumstances of the present case as the petitioner was remanded in custody and bail application was filed on the same day of submission of final report - Ergo, the indefeasible right under proviso to Section 167(2) of the CrPC for release of the petitioner in default in filing challan within the prescribed time does not arise in view of the Apex Court's decision to the effect that the indefeasible right accruing to the accused in such a situation is only prior to the filing of the challan and does not survive or remain enforceable on the challan beiong filed, if already not availed of - Moreover, the legislative intent stemming from the provision of Section 132 is clear and leaves nothing to supposition except that the authority empowered to interfere with the liberty of a person by issuing an order of arrest on reasonable belief about necessity of arrest u/s 69(1) of the CGST Act, is also statutorily obligated to decide, albeit on logical assessment of facts, that the person concerned is to be prosecuted - Such requirement of sanction must be evident from the records and must be backed by reasons which are prima facie intelligently acceptable - In the present case, the loss caused to the Govt exchequer amounts to about Rs 141.76 crores - Therefore considering such huge economic offence, the petitioner should not be enlarged on bail - Moreover, the decision of this court in Sanjay Kumar Bhuwalka vs Union of India is also distinguishable from the facts and circumstances of the instant case - Hence the petitioner is not entitled to be released on bail - Nonetheless, the petitioner is entitled to seek compounding of offence u/s 138 of the CGST Act: HC

- Bail petition dismissed/In favor of Revenue: CALCUTTA HIGH COURT

2019-TIOL-2943-HC-AHM-GST

Kushal Ltd Vs UoI

GST - The petitioner-company manufactures and sells paper and paper waste and is also engaged in trading in various commodities - The petitioners were also duly registered under the GST Acts and regularly filed returns and discharged tax liability - The petitioner claimed to have entered into transactions on as is where is basis in the relevant year - The goods were purchased from registered persons under the GST Acts on payment of tax and were in turn sold to other registered persons - ITC was claimed of tax paid on purchases which was utilized towards payment of output tax liability and differential tax amount was paid through electronic cash ledger - Thereafter search proceedings were conducted at the petitioner's premises whereupon enquiry was made into the trading transactions and evidence regarding sales and purchases was called for - The petitioners claimed that since the goods were sold on as is where is basis, there was no evidence of their movement - While it was not disputed that the goods were purchased from registered vendors who had paid the taxes due - Later, summons were issued to the petitioner & statements were recorded - The petitioners submitted the documents as called for and claimed there to be no evasion of GST - The Revenue officers visited the petitioner's premises again for scrutiny of the same transactions whereupon the second petitioner was called to the commissionerate and was arrested immediately - The second petitioner was later granted bail u/s 167(2) of the CrPC 1973 - The petitioner claimed to have been issued no notice u/s 73 or 74 of the GST Acts - It was also claimed that no proceedings were pending u/s 62, 63, 64, 67, 73 or 74 of the GST Acts, yet the Revenue provisionally attached the petitioner's bank accounts in exercise of powers u/s 83, which in such circumstances, was wholly without jurisdiction.

Held - A reading of Section 83 of the CGST Act makes it clear that a sine qua non for exercising powers under this provisions is that proceedings should be pending u/s 62, 63, 64, 67 or 74 of the CGST Act - Presently, the proceedings u/s 67 are no longer pending and pursuant to search, proceedings under any of the other sections mentioned in Section 83 were not initiated - In these circumstances, on the date when the orders of provisional attachment came to be passed, the basic requirement for exercising powers u/s 83 have not been satisfied - Hence the provisional attachment is not in consonance with the provisions of Section 83 and cannot be sustained - In such circumstances, it is also not necessary to enter into merits of the petitioner's contentions and the same are left open to be raised in appropriate proceedings before the appropriate forum - Hence the orders attaching the petitioner's bank accounts are unsustainable and merit being quashed: HC

- Writ petitions allowed: GUJARAT HIGH COURT

2019-TIOL-2935-HC-KERALA-GST

Larsen And Toubro Ltd Vs UoI

2019-TIOL-2934-HC-KERALA-GST

2019-TIOL-2932-HC-DEL-GST

Soni Traders Vs UoI

GST - The petitioner is engaged in the purchase and sale of bearings - Upon introduction of CGST Act, the petitioner had some opening stock on which it was entitled to CVD duty credit and VAT input tax credit - The petitioner was also entitled to transition of CVD credit as per Section 140(3), 140(4) & 140(5) - In order to avail transition of credit, the petitioner was required to file declaration in Form GST TRAN-1 within the stipulated period of 90 days - Although the time period for filing Form TRAN-1 had been extended several times, the same could not be uploaded due to technical glitches - The petitioner could not avail transition of credit on account of low bandwidth, considering the huge number of assessees across India trying to submit the form before the due date - The petitioner also approached the authorities concerned, whereupon it was asked to produce evidence of technical glitches faced - The petitioner claimed that filing Form GST TRAN-1 was a new concept for it, due to which the petitioner was unaware of keeping a screenshot in case it faced technical glitches - As the petitioner received no response from the authorities, the present petition was filed in order to claim the CVD credit refund.

Held - As per Notfn No. 49/2019 dated 09.10.2019 issued by CBIC the deadline for filing Form GST TRAN-1 has been extended to 31.12.2019 - This itself demonstrates that the authorities were aware of the inability of registered persons to upload Form GST TRAN-1 due to technical glitches in the system - Hence it is not fair to expect that each person who may not have been able to upload the Form GST TRAN-1 should have kept some evidence of it - Many dealers and traders come from rural and semi literate backgrounds and may not have had the presence of mind to create any record of having tried and failed to upload the Form GST TRAN-1 - Hence they cannot be made to suffer, more so when the system itself is not efficient - From the documents on record, it emerges that the Revenue authorities have no cogent grounds to deny the benefit of Notfn No 49/2019 - Besides, the credit in favour of an assessee is property & the assessee could not be deprived of the said property save by authority of law in terms of Article 300 (A) of the Constitution of India - Hence the authorities are directed to either open the online portal to enable the petitioner to file Form GST TRAN-1 electronically or accept the same manually before 31.12.2019 - The form may then be processed as per law: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-2931-HC-DEL-GST

SRC Aviation Pvt Ltd Vs UoI

GST - The petitioner is engaged in the purchase and sale of bearings - Upon introduction of CGST Act, the petitioner had some opening stock on which it was entitled to CVD duty credit and VAT input tax credit - The petitioner was also entitled to transition of CVD credit as per Section 140(3), 140(4) & 140(5) - In order to avail transition of credit, the petitioner was required to file declaration in Form GST TRAN-1 within the stipulated period of 90 days - Although the time period for filing Form TRAN-1 had been extended several times, the same could not be uploaded due to technical glitches - The petitioner could not avail transition of credit on account of low bandwidth, considering the huge number of assessees across India trying to submit the form before the due date - The petitioner also approached the authorities concerned, whereupon it was asked to produce evidence of technical glitches faced - The petitioner claimed that filing Form GST TRAN-1 was a new concept for it, due to which the petitioner was unaware of keeping a screenshot in case it faced technical glitches - As the petitioner received no response from the authorities, the present petition was filed in order to claim the CVD credit refund.

Held - As per Notfn No. 49/2019 dated 09.10.2019 issued by CBIC the deadline for filing Form GST TRAN-1 has been extended to 31.12.2019 - This itself demonstrates that the authorities were aware of the inability of registered persons to upload Form GST TRAN-1 due to technical glitches in the system - Hence it is not fair to expect that each person who may not have been able to upload the Form GST TRAN-1 should have kept some evidence of it - Many dealers and traders come from rural and semi literate backgrounds and may not have had the presence of mind to create any record of having tried and failed to upload the Form GST TRAN-1 - Hence they cannot be made to suffer, more so when the system itself is not efficient - From the documents on record, it emerges that the Revenue authorities have no cogent grounds to deny the benefit of Notfn No 49/2019 - Besides, the credit in favour of an assessee is property & the assessee could not be deprived of the said property save by authority of law in terms of Article 300 (A) of the Constitution of India - Hence the authorities are directed to either open the online portal to enable the petitioner to file Form GST TRAN-1 electronically or accept the same manually before 31.12.2019 - The form may then be processed as per law: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-2930-HC-DEL-GST

AB Pal Electricals Pvt Ltd Vs UoI

GST - The petitioner is engaged in the purchase and sale of bearings - Upon introduction of CGST Act, the petitioner had some opening stock on which it was entitled to CVD duty credit and VAT input tax credit - The petitioner was also entitled to transition of CVD credit as per Section 140(3), 140(4) & 140(5) - In order to avail transition of credit, the petitioner was required to file declaration in Form GST TRAN-1 within the stipulated period of 90 days - Although the time period for filing Form TRAN-1 had been extended several times, the same could not be uploaded due to technical glitches - The petitioner could not avail transition of credit on account of low bandwidth, considering the huge number of assessees across India trying to submit the form before the due date - The petitioner also approached the authorities concerned, whereupon it was asked to produce evidence of technical glitches faced - The petitioner claimed that filing Form GST TRAN-1 was a new concept for it, due to which the petitioner was unaware of keeping a screenshot in case it faced technical glitches - As the petitioner received no response from the authorities, the present petition was filed in order to claim the CVD credit refund.

Held - As per Notification No. 49/2019 dated 09.10.2019 issued by CBIC the deadline for filing Form GST TRAN-1 has been extended to 31.12.2019 - This itself demonstrates that the authorities were aware of the inability of registered persons to upload Form GST TRAN-1 due to technical glitches in the system - Hence it is not fair to expect that each person who may not have been able to upload the Form GST TRAN-1 should have kept some evidence of it - Many dealers and traders come from rural and semi literate backgrounds and may not have had the presence of mind to create any record of having tried and failed to upload the Form GST TRAN-1 - Hence they cannot be made to suffer, more so when the system itself is not efficient - From the documents on record, it emerges that the Revenue authorities have no cogent grounds to deny the benefit of Notfn No 49/2019 - Besides, the credit in favour of an assessee is property & the assessee could not be deprived of the said property save by authority of law in terms of Article 300 (A) of the Constitution of India - Hence the authorities are directed to either open the online portal to enable the petitioner to file Form GST TRAN-1 electronically or accept the same manually before 31.12.2019 - The form may then be processed as per law: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-2929-HC-DEL-GST

Triveni Needles Pvt Ltd Vs UoI

GST - The petitioner is engaged in the purchase and sale of bearings - Upon introduction of CGST Act, the petitioner had some opening stock on which it was entitled to CVD duty credit and VAT input tax credit - The petitioner was also entitled to transition of CVD credit as per Section 140(3), 140(4) & 140(5) - In order to avail transition of credit, the petitioner was required to file declaration in Form GST TRAN-1 within the stipulated period of 90 days - Although the time period for filing Form TRAN-1 had been extended several times, the same could not be uploaded due to technical glitches - The petitioner could not avail transition of credit on account of low bandwidth, considering the huge number of assessees across India trying to submit the form before the due date - The petitioner also approached the authorities concerned, whereupon it was asked to produce evidence of technical glitches faced - The petitioner claimed that filing Form GST TRAN-1 was a new concept for it, due to which the petitioner was unaware of keeping a screenshot in case it faced technical glitches - As the petitioner received no response from the authorities, the present petition was filed in order to claim the CVD credit refund.

Held - As per Notification No. 49/2019 dated 09.10.2019 issued by CBIC the deadline for filing Form GST TRAN-1 has been extended to 31.12.2019 - This itself demonstrates that the authorities were aware of the inability of registered persons to upload Form GST TRAN-1 due to technical glitches in the system - Hence it is not fair to expect that each person who may not have been able to upload the Form GST TRAN-1 should have kept some evidence of it - Many dealers and traders come from rural and semi literate backgrounds and may not have had the presence of mind to create any record of having tried and failed to upload the Form GST TRAN-1 - Hence they cannot be made to suffer, more so when the system itself is not efficient - From the documents on record, it emerges that the Revenue authorities have no cogent grounds to deny the benefit of Notfn No 49/2019 - Besides, the credit in favour of an assessee is property & the assessee could not be deprived of the said property save by authority of law in terms of Article 300 (A) of the Constitution of India - Hence the authorities are directed to either open the online portal to enable the petitioner to file Form GST TRAN-1 electronically or accept the same manually before 31.12.2019 - The form may then be processed as per law: HC

- Writ petition disposed of: DELHI HIGH COURT

2019-TIOL-2918-HC-DEL-GST

Vision Distribution Pvt Ltd Vs Commissioner State Goods and Services Tax

GST - Petitioner, engaged in the business of sale and purchase of mobile phones, has preferred this petition to seek a direction to the Respondents to issue the refund of Rs. 3,05,09,355/- - Facts are that the Form GST TRAN-1 was not made available on the web portal of the Respondents upto 25.08.2017 and on account of the allege aforesaid lapse on the part of the Respondents, the Petitioner could not upload its Form GST TRAN-1 either in the month of July, 2017, or for most part of month of August 2017 - However, the business activity of the Petitioner continued, namely, of undertaking exports - Petitioner states that in the month of July, 2017 it made exports entailing deposit of tax in cash to the tune of Rs. 1,37,37,029/, even though the Petitioner was entitled to CGST credit of Rs.3,13,06,050/- as on 01.07.2017 - Petitioner points out that the ITC lying in the Petitioner's ledger account has swollen to the tune of more than Rs. 7 crores on account of lack of avenues for it to be utilized.

Held: The business activity in the country could not be expected to come to a standstill, only to await the Respondents making the GST system workable - The failure of the Respondents in first putting a workable system in place, before implementing the GST regime, reflects poorly on the concern that the Respondents have shown to the difficulties that the trade faced throughout the length and breadth of the country - Unfortunately, even after passage of over two years, the Respondents have not remedied their omissions and failures by taking corrective steps - They continue to take shelter of the limitations in, and the inability of their software systems to grant refund, despite the same being justified - The rights of the parties cannot be subjugated to the poor and inefficient software systems adopted by the Respondents - The software systems adopted by the Respondents have to be in tune with the law, and not vice versa - The system limitations cannot be a justification to deny the relief, to which the Petitioner is legally entitled - Bench, therefore, rejects the hyper technical objections sought to be raised by the Respondents to the effect, that no refund can be granted, because the system did not reflect any credit lying in the ITC ledger of the Petitioner for the months of July and August, 2017 - If that is so, it is entirely the Respondents making - To permit the Respondents to get away with such an argument would be putting premium on inefficiency, therefore, such submission is rejected: High Court [para 7]

So far as the Petitioner's claim for refund of cash deposit to the tune of Rs. 1,37,37,029/- is concerned, Bench is of the view that it can certainly not be denied - Respondents are directed to refund the amount Rs. 1,37,37,029/- to the Petitioner within four weeks from - Insofar as the Petitioner's claim for the refund of the remaining amount is concerned, the Petitioner has already submitted the documents in that regard - The Respondents are directed to pass a reasoned order on the same within four weeks - Petition disposed of: High Court [para 8, 9]