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SUPREME COURT OF INDIA CASES

2020-TIOL-115-SC-GST-LB

UoI Vs Brand Equity Treaties Ltd

GST - Delhi High Court had read down the provision viz. Rule 117 of CGST Rules, 2017 as being directory in nature insofar as it prescribes the time-limit for transitioning the credit and held that the same would not result in the forfeiture of the rights in case the credit is not availed within the period prescribed; that petitioners assessees who have filed or attempted to file form TRAN-1 within the aforesaid period of three years as prescribed by the Limitation Act shall be entitled to avail the Input Tax Credit accruing to them; that they are permitted to file relevant TRAN-1 form on or before 30.06.2020 - accordingly, the High Court had directed the respondents Revenue to either open the online portal so as to enable the petitioners to file the declaration TRAN-1 electronically or accept the same manually; that other taxpayers who are similarly situated should also be entitled to avail the benefit of this judgment; that it would be an erroneous approach to attach undue importance to the concept of “technical glitch” only to that which occurs on the GST Common portal, as a pre-condition, for an assessee/tax payer to be granted the benefit of Sub-Rule (1A) of Rule 117; that the time limit prescribed for availing the input tax credit with respect to the purchase of goods and services made in the pre-GST regime, cannot be discriminatory and unreasonable; that there has to be a rationale forthcoming and, in absence thereof, it would be violative of Article 14 of the Constitution - Revenue has filed Appeal before the Supreme Court.

Held: Notice to be issued - Matter to be heard along with SLP(C) No. 26626 of 2019 and SLP (C) D. No. 38404 of 2019 and in the meantime, the operation of the impugned order shall remain stayed: Supreme Court Larger Bench

- Order stayed: SUPREME COURT OF INDIA

2020-TIOL-114-SC-GST-LB

UoI Vs Chogori India Retail Ltd

GST - Petitioner assessee had approached High Court for a direction to the Respondent Revenue to allow the Petitioner to file form GST TRAN-1 online or accept the form manually to enable the Petitioner to avail of the transitional credit (TC) of Rs.1,74,71,030.67 - Petitioner had averred that it tried to file the TRAN-1 Form prior to the above deadline of 27th December, 2017 numerous times but the system displayed an error and it was unable to upload the form - High Court had issued a direction to the Respondent to either re-open the Portal to enable the Petitioner to file its TRAN-1 Form electronically failing which to permit it to file manually on or before 13th September, 2019 - Aggrieved, Revenue is in appeal before Supreme Court.

Held: After condoning delay, Supreme Court observed that it is not inclined to intefere in the special leave petition - Accordingly, SLP filed by Revenue is dismissed but the question of law is kept open: Supreme Court

- Petition dismissed : SUPREME COURT OF INDIA

HIGH COURT CASES

2020-TIOL-1047-HC-KAR-GST

Poonam Anand Kishore Vachhani Vs ACCT

GST - Petitioner had granted lease of property owned by her to M/s. Alfara'a Infra Private Limited ('Alfara') under a lease agreement dated 1st July 2017 - Certain proceedings were initiated by the Assistant Commissioner of Commercial Taxes under the provisions of the CGST Act, 2017 and KGST Act, 2017 pursuant to which the premises were sealed on 22 nd September 2018; that although the property was unsealed on 17 th July 2019, it was again sealed on the very same day - Petittioner has, therefore, prayed for - (a) Direct the 1st Respondent to un-seal the premises and handover the physical possession of the schedule premise to the Petitioner forthwith, by issuance of the Writ of Mandamus or any order or writ in the nature of a Writ of Mandamus; or in the alternative (b) Direct the 1st Respondent to instruct the 2nd Respondent to participate in the un-sealing proceedings and consequently direct the Respondents to handover the possession of the schedule premise to the Petitioner forthwith, in a time bound manner, by issuance of writ of Mandamus or any other order or writ in the nature of a Writ of Mandamus - Petitioner further argues that she is not getting monthly rents and is facing hardship for no fault on her part.

Held: Undisputed fact is that the petitioner has leased her property in favour of Alfara - It is petitioner's claim that Alfara has defaulted in paying monthly rent - In view of the admitted position that Alfara is in possession of the premises in question as a tenant on the strength of lease deed dated 1st July 2017, the prayer to issue a writ of mandamus and handover the premises in question to the petitioner cannot be granted in writ proceedings, as parties shall be governed by terms of lease - In the circumstance, petition is misconceived and is accordingly dismissed - Bench clarifies that dismissal of this petition does not come in the way of petitioner seeking recovery of possession of the leased premises from Alfara by approaching appropriate forum in appropriate proceedings: High Court [para 7, 8]

-Petition dismissed : KARNATAKA HIGH COURT

2020-TIOL-1046-HC-P&H-GST

Amba Industrial Corporation Vs UoI

GST - Petitioner challenges vires of Rule 117(1A) of CGST Act, 2017 and seeks direction to Respondent to permit Petitioner to electronically upload form TRAN-1 or avail input tax credit in monthly return GSTR-3B - Petitioner contends that issue involved is squarely covered by judgment of this Court in the case of Adfert Technologies Pvt. Ltd. - 2019-TIOL-2519-HC-P&H-GST , SLP filed by Revenue against aforesaid decision havine been dismissed – Petitioner also submits that Delhi High Court in the case of Brand Equity Treaties Ltd. 2020-TIOL-900-HC-Del-GST has permitted Petitioners to file TRAN-I on or before 30.06.2020 and further directed the Respondents Revenue to permit all other similarly situated tax payers to file TRAN-I on or before 30.06.2020; that this opinion has been approved in SKH Sheet Metals Components = 2020-TIOL-1031-HC-DEL-GST .

Held: Delhi High Court though has not declared Rule 117(1A) ultra vires the Constitution, nonetheless treated as violative of Article 14 of Constitution of India being arbitrary, discriminatory and unreasonable – in the instant case, the Petitioner has challenged vires of Rule 117 (1A) of Rules, however Bench does not think it appropriate to declare it invalid as it is of the considered opinion that Petitioner is entitled to carry forward Cenvat Credit accrued under Central Excise Act, 1944 - Repeated extensions of last date to file TRAN-1 in case of technical glitches as understood by Respondent vindicate claim of the Petitioner that denial of unutilized credit to those dealers who are unable to furnish evidence of attempt to upload TRAN-1 would amount to violation of Article 14 as well Article 300A of the Constitution of India - In view of decision of this Court in the case of Adfert Technologies Pvt. Ltd. (supra) and Delhi High Court in the case of Brand Equity Treaties Ltd. (supra) present petition deserves to be allowed and is accordingly allowed - The Respondents are directed to permit Petitioner to upload TRAN-1 on or before 30.06.2020 and in case Respondent fails to do so, the Petitioner would be at liberty to avail ITC in question in GSTR-3B of July 2020 - respondents would be at liberty to verify genuineness of claim(s) made by Petitioner: High Court [para 7 to 9]

-Petition allowed : PUNJAB AND HARYANA HIGH COURT

2020-TIOL-1037-HC-DEL-GST

Mangla Hoist P Ltd Vs UoI

GST - Petitioner seeks directions to the respondents to open the Portal to enable it to file its claim of CENVAT tax credit as on 30th June, 2017, in Form TRAN-1; that despite the categorical order passed by the co-ordinate bench in Brand Equity Treaties Limited = 2020-TIOL-900-HC-DEL-GST, the respondents have not made compliances and the petitioner has been compelled to approach this court for seeking directions to the respondents to open the common portal to enable it to upload its claim in Form GST Trans-1 well before 30.06.2020 - The second relief in the present petition is for declaring Rule 117 of the CGST Rules, 2017 as ultra vires and quashing the same - counsel for Revenue submitted that the respondents have decided to challenge the judgment in Brand Equity Treaties Limited (supra) and are in the process of filing an appeal before the Supreme Court.

Held: Division Bench in Brand Equity Treaties Limited = 2020-TIOL-900-HC-DEL-GST, has held that the time limit of 90 days prescribed in Rule 117 of the CGST Rules is not mandatory but directory in nature; that the judgment is to be publicised by uploading it on the respondent's website and that all the Assessees, who were unable to upload Form/GST Trans-1, could do so on or before 30th June, 2020 - Admittedly, the judgment in Brand Equity Treaties Limited (supra), has not been stayed so far and, therefore, the respondents are under an obligation to abide by the directions issued therein by adequately publicising the said decision and uploading it on their website as also by opening its common portal to enable the petitioner and all similarly placed parties to upload Form GST Trans-1, for claiming CENVAT tax credit - The respondents are directed to ensure compliance of the captioned judgment by 19.06.2020, particularly since the cut of date fixed by the court in the said case is 30th June, 2020, which would leave only ten clear days for the petitioner and similarly placed assessees to take necessary steps - Petition disposed of: High Court [para 7, 8]

- Petition disposed of: DELHI HIGH COURT

2020-TIOL-1036-HC-AHM-GST

Remankhan Belin Vs State of Gujarat

GST - Petitioners have challenged the order dated 14.5.2020 passed under Section 130 of the GST Act in Form GST MOV-11 - predominant ground raised in the petition is that no opportunity of actual hearing was given.

Held: Impugned order dated 14.5.2020 smacks of vice of breach of principles of natural justice - Because of pandemic Corona Virus Covid-19, the petitioner could not remain present and/or preferred to stay safe because of Corona Virus Covid-19 and meanwhile, the impugned order is passed - It is an admitted position that the impugned order dated 14.5.2020 is passed without hearing the petitioner and only on the short ground, the impugned order dated 14.5.2020 is hereby quashed and set aside and the authorities concerned shall pass a fresh order on merits without being influenced by the order impugned after giving an opportunity of hearing to the petitioner - petitioner shall remain present for hearing on the date fixed by the authorities and the authorities shall inform the petitioner in advance - petition is allowed to the aforesaid extent: High Court [para 4, 5]

- Petition allowed : GUJARAT HIGH COURT

2020-TIOL-1035-HC-AHM-GST

SK Green Home Appliances Pvt Ltd Vs UoI

GST - Petition preferred under Article 226 of the Constitution seeking directions to the respondents to permit the petitioner to file revision of GST TRAN-1 electronically or manually and allow the credit of the Input Tax Credit (ITC) of Rs. 16,07,556/- for the goods held in stock - Petitioner claims that they had already filed GST TRAN 02 and claimed Rs.11,29,000/- as a credit - It is averred that by a bona fide misunderstanding of the Accountant who was under the impression that the petitioner was only entitled to 60% of the credit, GST TRAN 02 came to be filed - It is further submitted that the petitioner would be entitled to the entire amount of credit by filling GST TRAN 01, therefore, there remains differential amount of credit of Rs. 4,78,556/- - Petitioner urges that mere procedural mistake in filling of form GST TRAN 01 could not be held as a ground for precluding the petitioner to claim the right even under the existing provisions and they rely on the decision in M/s. Siddharth Enterprises 2019-TIOL-2068-HC-AHM-GST in support.

Held: Having noticed that the petitioner had already filled-in the form GST TRAN 02 and has taken credit worth of Rs. 11,29,000/- which is now sought to be changed to TRAN 01 giving reason of procedural mistake committed by an accountant of the petitioner, it would be apt for this court not to entertain this petition at this stage - Whether there is a procedural lapse and whether such filling of GST TRAN 01 is permissible, are the aspects to be gone into and decided by the competent authority, to which the petitioner has already addressed communication way back in August and September, 2019 - Let the department respond to the same as it is its bounden duty to either accept the request or to deny and it is only after the decision is rendered by the authorities, it will be open for the petitioner to take a further legal recourse in accordance with law - respondent Nos. 6 to 8 are directed to respond to the communication of the petitioner within four weeks from the date of receipt of this order – Petition disposed of: High Court [para 8 to 10]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-1034-HC-AHM-GST

SK Impex Vs UoI

GST - Petitioner seeks directions to the respondents to permit the petitioner to file revision of GST TRAN-1 electronically or manually and allow the credit of the Input Tax Credit (ITC) of Rs. 16,61,040/- for the goods held in stock - Petitioner claims that while filling GST TRAN 01, by mistake in table 7A amount was shown as 'Nil', instead of Rs. 16,61,040/- - It is averred that the same happened due to the bona fide mistake on part of the Accountant of the petitioner - Petitioner also submits that in this regard two communications have already been sent to Deputy State Tax Commissioner as well as State Tax Commissioner respectively on 2.8.2019 and 19.11.2019 but both these communications have not been replied to though much of time is elapsed; that the decision of this court of September, 2019 in Siddharth Enterprises 2019-TIOL-2068-HC-AHM-GST holding that mere procedural mistake in filling of form GST TRAN 01 could not be held as a ground for precluding the petitioner to claim the right even under the existing provisions would bind the authorities.

Held: While the case of the petitioner is that mistake committed was procedural, the court considers appropriate not to entertain the petition at this stage - Whether there is a procedural lapse or otherwise are the aspects to be gone into and decided by the competent authority, to which the petitioner has already addressed communication way back in August and September, 2019 - The authority of the respondent department has not decided to respond to the same so far and it is only after the decision is rendered by the authorities, it will be open for the petitioner to take a further legal recourse in accordance with law - While not entertaining this petition and not touching the merit part of the case of the petitioner, the respondent Nos. 6 to 8 are directed to respond to the communication of the petitioner within four weeks from the date of receipt of this order - Petition is disposed of: High Court [para 8 to 10]

- Petition disposed of: GUJARAT HIGH COURT

2020-TIOL-1032-HC-AHM-GST

Colgate Palmolive India Ltd Vs State of Gujarat

GST - Petitioner is aggrieved by the SCN issued on 01.06.2020 under Section 129 (3) of the CGST Act/SGST Act and the detention order dated 01.06.2020 under Section 129(1) of the CGST Act / SGST Act, 2017 - It is the say of the petitioner that it applied for single registration number under the CGST Act having the principal place of business as his warehouse at Vadodara and additional place of business as his factory which is located at Ahmedabad in the registered certificate - It is further averred that the Goa Unit had issued the E-way bill incorporating all the details as required in terms of provisions of E-way Rules, however, the address of the place of the delivery in the E-way bill was inadvertently mentioned as Vadodara Warehouse unit instead of factory address of Ahmedabad of the petitioner and, therefore, the truck bearing No. GJ-01-CU-7154 carrying goods mentioned in the invoice issued by the Goa Unit was intercepted on 01.06.2020 for verification on the Ahmedabad Express Highway and because of this mismatch of the place of delivery in the invoice and Eway bill, the goods have been detained and the show-cause notice has been issued - Petitioner have shown the readiness to deposit the entire amount of tax being Rs.14,53,788/- and also have shown readiness to appear before the concerned authority for hearing of the show-cause notice on the scheduled date i.e. on 16.06.2020.

Held: While permitting the petitioner to serve the respondent nos. 2 and 3 both by an e-mode, considering the issue of closure of the business in the pandemic for a long time and also bearing in mind the material which is being carried from Goa Unit of the petitioner to Sanand, Ahmedabad, for preparing one of the necessaries and also noticing that there are two units within the state of Gujarat of the Petitioner registered with the Respondent authorities, Bench is inclined to accede to the request of release of the goods with truck bearing No. GJ-01-CU-7154 detained in exercise of the powers, pending the service of notice and admission of this matter, subject to the deposit of the entire amount of tax of Rs. 14,53,788/- with the department within three days and also the deposit of Rs. 1.45 lakhs, 10% of amount of penalty for now with the department, by way of a bank guarantee, initially for the period of 90 days or till the pendency of Petition, whichever is later - Petitioner shall appear before the authority concerned and shall cooperate with the hearing of the same and the Authorities shall expedite the hearing - On deposit of the amounts as directed, the release of the truck and the goods shall be made within 48 hours - Notice issued returnable on 26.06.2020: High Court [para 9 to 11]

- Notice issued: GUJARAT HIGH COURT

SKH Sheet Metals Components Vs UoI

GST - Petitioner has sought a writ of mandamus directing the respondent to allow it to avail the ITC amounting to Rs.5,51,33,699/- by either updating the electronic credit ledger at their back-end or allowing them to revise the Form GST TRAN-1 inasmuch as the petitioner had apparently failed to fill in the correct details in the right column.

Held: A comparison of the figures reflected in the screenshot with those in the statutory returns reveals that the credit which was reflected in Form 231 under the Maharashtra VAT Act of Rs.101,24,382/- instead of being added to the remaining amount reflected in the tax returns under the Excise Act (ER-1) and Services Tax (ST-3) was instead ‘erroneously' reflected under the heading “CENVAT credit admissible as ITC” - for this clerical mistake, there has been short transitioning of the credit as result whereof, the petitioner stands to lose huge amount of ITC totalling to Rs.5,51,33,699/- that stood vested in its favour under the erstwhile regime - Rule 117(1A) suffers from the vice of vagueness and concept of ‘technical difficulty on common portal' and its applicability has not been adequately defined anywhere - In the absence of a criteria, the application of the provision would suffer from arbitrariness - Office memorandum of GST Council dated 19 th February 2019 indicates that the GST Council recognised that there could be errors apparent on the face of the record that could be non-technical in nature and merit leniency - In line with the spirit of the decision of the GST Council and the blurring thin line between technical and non-technical difficulty, keeping in view that the entire filing is electronic, Bench finds that the restrictive applicability of Rule 117(1A) is arbitrary as is demonstrated in the facts of the present case - An uninterrupted and seamless chain of ITC is the heart and soul of Goods and Services Tax - The transitional provisions and the language of section 140 of the Act, in particular, even after amendment, manifests the intention behind the said provision is to save the accrued and vested ITC under the existing law - This is the reason that the Courts have held that CENVAT credit which stood accrued to the petitioner is a vested right and is protected under Article 300A of the Constitution of India and could not be taken away by the Respondents, without authority of law, on frivolous grounds which are untenable - The purpose of the timelines prescribed is just to hasten the migration of taxes from the erstwhile regime to the new GST laws and for swift streamlining of the ITC - The timeline introduced by Rule 117 is purely procedural and the same was not treated as sacrosanct, the Central government having continuously extended the same, by carving out an exception under rule 117(1A) - Bench also cannot decipher any intent to deny extension of time to deserving cases where delay in filing was on account of human error - such interpretation would run counter to the object sought to be achieved u/s 140 of the Act which is the governing provision and exhibits the true legislative intent - after the retrospective amendment of Section 140, it can be interpreted that the power to fix the timeline and its extension has been prescribed to the Central government which was done vide rule 117 - under rule 117(1A) multiple extensions beyond 180 days have been granted for taxpayers who faced ‘technical difficulties on common portal' yet deserving ‘non-technical' cases like the present one have been ignored and this exclusion is arbitrary and irrational - moreover, there is no provision in the statute that would stipulate a consequence for failure to adhere to the timelines - rule 117 also does not indicate any consequence for non-compliance of the condition - Both the Act and the Rules do not provide any specific consequence on failure to adhere to the timelines - since the consequences for non-compliance are not indicated, the provision has to be seen as directory - If the timelines are interpreted as mandatory, the failure to fulfil the obligation of filing TRAN-1 within the stipulated period would seriously prejudice the taxpayers for whose benefit section 140 has been provided by the legislature - Interpreting the procedural timeless to be mandatory would run counter to the intention of the legislature and defeat the purpose for which the transitory provisions have been provided and have to be construed as directory and not mandatory - In the instant case, the Form TRAN-1 was filed promptly, within the stipulated period and when the petitioner noticed that the entire credit had not been transitioned, they started corresponding with the respondent with the hope that the matter would be resolved and the mistake would be rectified, however, petitioner's case was differentiated on the ground that the petitioner faced no technical glitch at the stage of filing the form TRAN-1, in which case the petitioner's case does not qualify for any relaxation - Visibly, there is an error apparent on the face of the record - TRAN-1 form was filed within the stipulated period and revision thereof, to correct an error, will relate back to the said date of filing - There is no convincing reason to hold that as on date, the revision of the said return will be time-barred and treated to be a fresh return - Revised data can be easily verified and correlated with the tax returns filed in the erstwhile regime - In fact, Rule 120A of the CGST Rules is an enabling provision that can be resorted to by the taxpayers to revise the form GST TRAN-1 on the common portal within the time specified in the rules or such further period as may be extended by the Commissioner - In the present case, the mistake was clerical in nature and it is the respondents who have, for specious reasons, denied this opportunity to the petitioner - Revision cannot be treated as a fresh filing, especially keeping in view the spirit of the 32nd meeting of the GST Council -  Restriction that prevents the petitioner from taking the entire credit by revising the return, based on the footing of a “human error” and not “technical difficulty on common portal” is wholly unreasonable, being irrational and arbitrary and, therefore, violative of Article 14 of the Constitution -  Viewed from another angle, one can construe Petitioner's difficulty as technical in nature as the short credit is reflected as blocked credit on the portal with no provision to rectify the same electronically - GST laws required taxpayers to embrace transformative new ways - The use of technology can be daunting for many taxpayers who hitherto before, were largely dependent on conventional manual filings of returns - In order to overcome the resistance to change and encourage transformation and remodelling of the entire accounting structure at taxpayers' end, the electronic mode should be user friendly but sadly the respondents have not helped the situation, despite all the good intentions they may have - The exactness required in compliance of tax provisions should not be construed so rigidly that permissible flexibility is completely disregarded - In fact, the ITC has been expropriated without any lawful sanction - Instead of offering a restitutive solution, Respondents have stonewalled all the attempts made by the petitioner - Stand of the Respondent which is founded on some illogical understanding of the Rules cannot be upheld - Bench adds that it has time and again made adverse remarks on the procedural working of the GST system in several decisions and that it (Bench) does not derive any pleasure when it makes such observations as comments of the Court affect the reputation of the administration in the Country -  Only if the Respondents were to engage with the taxpayers with a genuine intention to solve the problems, confidence in the system can be built up and such matters would not reach the courts - Petition is allowed and petitioner is permitted to revise TRAN-1 form on or before 30.06.2020 and transition the entire ITC, subject to verification by the respondents - Bench also issues a writ mandamus to the Respondents to either open the online portal so as to enable the petitioner to file revised declaration TRAN-1 electronically or to accept the same manually - Petition is allowed: High Court [para 23 to 30]

- Petition allowed: DELHI HIGH COURT

2020-TIOL-1030-HC-KOL-GST

SMVD Polypack Ltd Vs Commissioner of CGST & CX

GST - Petitioner submits that the website concerned of the respondent department is not functioning properly and, therefore, they are not able to file an online application regarding its GST transition credit, last date for which is fixed as 30 June 2020 - That, therefore, they pray that they be allowed to present the application prior to such cut-off date, if necessary, manually.

Held: None appears for the respondent - In view of the innocuous nature of the order proposed to be passed, no prejudice would be caused to the respondents, in any event - Petition is disposed of by directing the respondents to accept manual filing of the GST Transition Credit applications as well as to reopen the website concerned, enabling all applicants, including the petitioner, to file such applications prior to June 30, 2020 - authorities to act on urgent basis in view of the emergent pandemic situation so that the online portal is opened for such filing at the earliest, positively before June 30, 2020: High Court

-Petition disposed of : CALCUTTA HIGH COURT

Sri Hanumanthappa Pathrera Lakshmana Vs State

GST - Petitioner is a dealer in ferrous and non-ferrous scrap and has purchased goods from various registered and unregistered dealers and issued tax invoices as per law - Petitioner has been issued notice/summons to appear before the Authorized Officer on 12.05.2020; that before filing the petition and after filing the petition, another summon has been issued - Petitioner has filed petition u/s 438 of the CrPC for grant of anticipatory bail - Petitioner submits that in case he is arrested and sent to judicial custody, he will be put into hardship and irreparable loss as he is having a old age mother and also a daughter and due to COVID-19 lockdown situation, his health may affect; that even though, he has not committed any offence, there is likelihood of his arrest for the non-bailable offence; that he is ready to abide by any condition imposed by this Court and he is ready to offer any surety - Counsel for Revenue submits that if the bail is granted to the petitioner, he will destroy the evidentiary material and other documents; that the anticipatory bail is not maintainable and it is pre-mature; that in similar cases, the Telangana High Court has dismissed the petitions in P.V.Ramana Reddy - 2019-TIOL-873-HC-TELANGANA-GST which was upheld by the Supreme Court by dismissing the SLP and the Supreme Court has reaffirmed P.V.Ramana Reddy's case in the case of Union of India vs. Sapna Jain and Others - 2019-TIOL-217-SC-GST and hence the bail petition be dismissed.

Held: Telangana High Court in P.V.Ramana Reddy (supra) has held that writ petition under Article 226 of the Constitution of India in the matter of pre-arrest bail is maintainable, but on the merits, the writ petitions were dismissed as huge amount of tax evaluation was involved in the said case - Even otherwise, the Telangana High Court has not held that Section 438 of the Cr.P.C. bail application is not maintainable in the case of the offence which is punishable under the CGST Act - It is relevant to mention that as per the provisions of Section 70 of the CGST Act, the Officer has power to summon any person whose attendance is considered as necessary either to give evidence or to produce document or any other thing in any inquiry in the same manner as provided in the case of Civil Court under the provisions of the Code of Civil Procedure, 1908, and every such inquiry referred to subsection (1) shall deemed to be "judicial proceedings" within the meaning of Section 193 and Section 228 of the Indian Penal Code - Special Public Prosecutor for the respondent fairly admits that there is no statutory bar in the CGST Act either expressly or impliedly for entertaining the bail petition under section 438 of the Cr.P.C - Once a person apprehends his arrest in the hands of the Commissioner under Section 69 of the CGST Act, the assessee has a statutory right to seek anticipatory bail under Section 438 of the Cr.P.C - Therefore, the petition under Section 438 of the Cr.P.C. is maintainable for the offences committed under the CGST Act and there is no statutory bar for invoking or exercising power under section 438 of the Cr.P.C. for the offence committed under the provisions of the CGST Act - It is alleged by the prosecution that the petitioner is said to have involved in fraudulent input tax credit on the basis of invoices without actual supply of goods in contravention of Section 16 of the CGST Act and caused loss to the exchequer for Rs.9.05 crore approximately - Therefore, summons have been issued by the authorized officer under Section 70 of the CGST Act which clearly goes to show that the petitioner is reasoned to believe that he is apprehending his arrest in the hands of the respondent in case after his appearance before the authorized officer as per Section 69 of the CGST Act - In case the petitioner is arrested, he is likely to be remanded to judicial custody after his production before the Magistrate and by looking to the present COVID-19 situation, if he is remanded to the judicial custody, he will be put to hardship and definitely, his health would likely be affected - The offences are not punishable with death or imprisonment for life - There is no statutory bar in the CGST Act for granting anticipatory bail by exercising power under Section 438 of the Cr.P.C - Merely, there were number of notices/summons issued by the respondent during the lockdown for COVID-19 that itself is not a ground to reject the bail petition - if an anticipatory bail is granted, no prejudice would be caused to the respondent - petitioner is ordered to be enlarged on bail in the event of his arrest under Section 69 of the CGST Act subject to conditions laid down in the order: High Court [para 10, 12, 13, 15, 16, 17]

-Petition disposed of : KARNATAKA HIGH COURT

2020-TIOL-1028-HC-P&H-GST

Tarun Bassi Vs State of Punjab

GST - Petitioner is proprietor of M/s Broadway Sales Corporation engaged in the business of trading in iron and steel products - Petitioner was arrested on 25.09.2019 u/s 69 of the Punjab GST Act on the allegation that the petitioner had passed on Input Tax credit by issuing sale bills to various parties without supply of goods - petitioner was granted interim bail on 18.02.2020 and the bail application is pending for 07.08.2020 and the trial is at the stage of pre-charge evidence since last 08 months and till date no witness has been examined - Petitioner challenges the vires of section 69 and 132 of the Act, 2017 by submitting that as per the Scheme of the Constitution of India there are two sources from which power to legislate follows viz. Schedule VII r/w Article 246 and a specific Article for example Article 35, 323B, Article 369; that Article 246A inserted w.e.f 16.09.2016 empowered the Union and State Legislatures to levy tax on goods and services; that the power to levy tax includes the power to make law with respect to ancillary and incidental matters, however, the power of arrest and prescription of sentence are neither covered under ancillary and incidental matters; that the provision for arrest or sentence for an offence against the law may be inserted in any enactment, if permitted, by the Constitution; that the criminal trial for the offences under section 132 of the Punjab GST Act, 2017 as also the arrest u/s 69 are without jurisdiction having no backing of the constitutional provisions.

Held: Bench finds considerable force in the submissions raised by the petitioner - Notice of motion is fixed on 30.07.2020 - Trial Court is directed to adjourn the case beyond the date fixed by the High Court: HC

- Matter listed : PUNJAB AND HARYANA HIGH COURT

AAR CASES

2020-TIOL-134-AAR-GST

Dipesh Anil Kumar Naik

GST - Activity of the sale of developed plots would be covered under the clause 'construction of a complex intended for sale to a buyer' - Thus, the said activity is covered under 'construction services' and GST is payable on the sale of developed plots: AAR

- Application disposed of: AAR

2020-TIOL-133-AAR-GST

Pratham Agro Vet Industries

GST - Information provided by the applicant indicates that the product under consideration has not been obtained by milling rice but rather consists of Rice husk of poha and mamra and Sludge/ Wax oil - Thus, the product is clearly not Rice Bran in light of the meaning of Rice Bran as defined in Merriam Webster Dictionary - Rice Bran (22+Oil) shall be classified under Chapter heading 3825 9000 as the residual entry of the miscellaneous chemical products and attracts rate 9 % CGST and 9 % SGST under vide Sr no 98 of Schedule III of notification 1/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-132-AAR-GST

Jay Jalaram Enterprises

GST - J.J.'s POP CORN manufactured from raw corn/maize grains, which, by heating turn into puffed corns/popcorns and then to make it palatable other ingredients like salt and turmeric powder along with oil are added to it fits the description as 'Prepared foods obtained by the roasting of cereal' -classifiable under residual tariff entry CSH 1904 10 90; attracts GST @18%, Entry Sr. No. 15 of Schedule III of Notification No.1/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-131-AAR-GST

Deendayal Port Trust

GST - "Input Tax Credit" shall be NOT be available on the project development services like Programme management consultancy, Marketing Consultancy, Land levelling and other related works, Roads, Water, Electricity, & Drainage Infrastructure and other related works for development of Smart Industrial Port City (SIPC) i.e. construction of an immovable property - clauses (c) and (d) under sub-section (5) of Section 17 of the CGST Act, specifically deny input tax credit in respect of works contract services or goods and services used for construction of an immovable property: AAR

- Application disposed of: AAR

2020-TIOL-130-AAR-GST

Sawai Manoharlal Rathi

GST - Going by the definition of "aggregate turnover", the Applicant is required to consider the value of both the taxable supply i.e. "Renting of immovable property" and exempted supply of service provided by way of extending deposits, loans or advances for which they earned interest income, to arrive at "Aggregate Turnover" to determine the threshold limit for the purpose of obtaining registration under the GST Act: AAR

- Application disposed of: AAR

2020-TIOL-129-AAR-GST

Magnam Netlink Pvt Ltd

GST - Applicants have been awarded a contract for design, construction, supply, installation and commissioning of a Dairy Plant for the Bihar State Milk Cooperative Federation Ltd. - applicant contends that since in the present contract they have fulfilled all the requirements stipulated under Entry No. 3(v)(f) of Notification No. 11/2017-Central Tax (Rate) , the applicable tax rate should be CGST 6%; that without prejudice since Part - B of the referred contract clearly includes design, supply, installation & commissioning of the dairy plant and machinery, the same must at least be included in the referred Entry No. 3(v)(f) of the said Notification.

Held: Supply of Pouch Filling Machine with online pouch coding machine of Make-Domino, is not an immovable property and hence supply of the same cannot be termed as supply of 'works contract' - moreover, Pouch Filling Machine with online pouch coding machine of Make-Domino, is already in existence before supply and there is no construction at site to bring up a new original item in existence - Furthermore, Pouch Filling Machine with online pouch coding machine of Make-Domino is to be used for packing the milk - This process is to take place after the milk has already gone under various processes of filtration, straining, chilling, pasteurizing, cream processing, standardising etc. - Agricultural Produce as defined under clause (vii) of Paragraph 4 of Notification No. 11/2017-Central Tax (Rate) shall not include further processed produce other than such processing as done by a cultivator or producer which does not alter its essential characteristics - Therefore the milk on which processes have been carried out by other than a cultivator or a producer shall not fall under Agricultural Produce - The milk when brought to process by the said Pouch Filling Machine would have already gone under various processes of filtration, straining, chilling, pasteurizing, cream processing, standardising curding etc and the essential characteristics of milk would have been already altered, therefore the said machinery cannot be said to be used for processing agricultural produce - Concluded that the supply of Pouch Filling Machine with online pouch coding machine of Make-Domino, as well as other supplies of civil work and electro-mechanical work will NOT fall under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate) : AAR

- Application disposed of: AAR

2020-TIOL-128-AAR-GST

Mount Fab Packaging Llp

GST - BOPP (Biaxially Oriented Polypropylene) Laminated PP Woven Sacks used in packaging industries are appropriately classifiable under Chapter 39 of the GST Tariff and not 6305 of the GST Tariff: AAR

- Application disposed of: AAR

2020-TIOL-127-AAR-GST

Raj Quarry Works

GST - Services provided by State of Gujarat to M/s Raj Quarry Works for which Royalty is being paid by applicant - Activity undertaken by the applicant is classifiable under Heading 9973 (Leasing or rental services, with or without operator), Serial No. 257 (Licensing services for the right to use minerals including its exploration and evaluation) sub-heading 997337 of Notification Number 11/2017-C.T. (Rate), dated 28-6-2017; activity attracts 18% GST under RCM - applicant is not covered under exclusion clause 1 of Sr. No. 5 of the Notification 13/2017-CTR, therefore, applicant is liable to discharge tax liability under reverse charge mechanism vide Notification No. 13/2017-C.T. (Rate): AAR

- Application disposed of: AAR

2020-TIOL-126-AAR-GST

NEC Technologies India Pvt Ltd

GST - Automatic Fare Collection System (AFC) is to provide seamless travel with single smart card/ticket on city BRTS and City Bus Services - Supply made by applicant under the Automatic Fare Collection (AFC) project would qualify as ‘composite supply'; it does not qualify as an Original works meant predominantly for use other than commerce, industry or any other business or profession so as to attract GST @12% - Supply is classifiable under HSN Code 8470 and attracts GST @18%: AAR

GST - Maintenance and Management Services to be provided post implementation of AFC system under proposed contract would qualify as ‘composite supply' with the AFC system being the principal supply - such supply would not be eligible for exemption under 12/2017-CTR as value of supply of all goods under the proposed contract constitutes more than 25% of the value of the said composite supply and the said composite supply is to be made to the Surat Municipal Corporation (SMC) and M/s Surat Smart City Development Limited (SSCDL) which is a company incorporated under the Companies Act, 2013, hence would not fall under the definition of ‘local authority' or ‘governmental authority' or a ‘government entity': AAR

- Application disposed of: AAR

2020-TIOL-125-AAR-GST

Nagri Eye Research Foundation

GST - Applicant is a Charitable Trust and are running a medical store where medicines are given at a lower rate and the motive of the trust is not profit - applicant seeks a ruling on the following questions viz. (1) Whether GST Registration is required for medical store run by Charitable Trust? & ( 2) Whether medical Store providing medicines at a lower rate amounts to supply of goods?.

Held: The applicant is a charitable trust which appears under the definition of 'person' and falls at clause(m) of sub-section 84 of Section 2 of the CGST Act, 2017 - The applicant is providing (selling) medicines from its medical store at lower rate, so activity of dealer is to provide medicines with less pecuniary benefit - As per the definition of 'business' any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit is termed as business, hence it is to be held that the applicant is carrying out business activity as per CGST Act, 2017 - Furthermore, Medicine is goods as per sub-section 52 of Section 2 of the CGST Act, 2017 and supply of Medicine is a taxable supply as per sub section 108 of section 2 of CGST Act, 2017 and GST is leviable on medicine as per Chapter-30 of HSN code, therefore, sale of medicine by the applicant is a taxable supply of goods - Applicant is providing medicines from its medical store at lower rate so price paid by the customers is consideration for the applicant as defined in sub-section 31 of Section 2 of the CGST Act, 2017 - Further, the activity of supply of goods by the applicant does not fall under the list appearing in Schedule-III of the CGST Act, 2017 - Hence, it is concluded that the applicant is making taxable supply from its medical store and hence as and when aggregate turnover (of medicine) of applicant exceeds threshold limit as specified in sub-section(1) of Section 22 of the CGST Act, 2017, the applicant has to obtain registration under the relevant provisions of the CGST Act, 2017 - Gujarat High Court decision in Saurashtra Kidney Research Institute = 2016-TIOL-2204-HC-AHM-CT is distinguished: AAR

- Application disposed of: AAR

2020-TIOL-124-AAR-GST

Sterlite Technologies Ltd

GST - Applicant proposed to undertake transaction and supply of hardware, commercially known as 'Merchant Trade Transaction', wherein the applicant will receive an order from the customer located outside India and as per their instruction, Vendor would directly ship the goods to customer located outside India - Vendor would issue invoice on applicant against which payment would be made in foreign currency and applicant would raise invoice on customer and would receive consideration in foreign currency - In the above transaction, goods would not physically come into India, but would move from place outside India to another place outside India - Applicant has sought a ruling on the following questions viz. (i) Whether GST is payable on goods procured from vendor located outside India in a context where the goods so purchased are not brought into India & (ii) Whether GST is payable on goods sold to customer located outside India, where goods are shipped directly from the vendor's premises (located outside India) to the customer's premises.

Held: GST is not payable on goods procured from vendor located outside India, where the goods so purchased are not brought into India - However, applicable GST is payable on goods sold to customer located outside India, where goods are shipped directly from the vendor's premises (located outside India) to the customer's premises - This is because goods under consideration are supplied to overseas buyers as declared by the applicant and as such the place of supply will be a place outside India - Further, the supplier is the applicant who has declared the principal place of business within India and issues the invoices for sale of such goods - as the supplier is located in India and the place of supply is outside India and as such the same would be Inter-state supply in terms of the provisions of Sec. 7(5) of the IGST Act, 2017 - In the instant case the applicant has not stated the nature of goods and has not declared that such goods are exempted under any notification issued under the powers of Sec. 11 of the CGST Act, 2017 and the corresponding State Act or Section 6 of the IGST Act and, therefore, the only possibility of goods not being subject to levy of IGST would be the circumstances where the goods are exported - In the instant case, the goods have not crossed the Indian customs frontier and as such it is clear that the goods are not physically available in the Indian territory - When the goods are not available in the Indian territory, the question of taking goods out of India does not arise, therefore, the subject transaction does not qualify as export of goods as defined under sub section 5 of Section 2 of IGST Act, 2017: AAR

- Application disposed of: AAR

2020-TIOL-123-AAR-GST

Uttarakhand Forest Development Corporation

GST - Royalty payable to Govt. of Uttarakhand in respect of Reta, Bazri & Boulders extracted as per permission of govt. authorities is chargeable to tax under RCM at the same rate as on supply of like goods involving transfer of title in goods i.e. 5% and w.e.f 01.01.2019 @18%: AAR

-Application disposed of: AAR

2020-TIOL-122-AAR-GST

Uttarakhand Forest Development Corporation

GST - Services received from unregistered transporters by applicant falls under GTA service [11/2017-CTR refers] and the same are covered under RCM in terms of 13/2017-CTR - Form 2.1 issued by applicant is to be treated as a consignment note: AAR

- Application disposed of: AAR

2020-TIOL-121-AAR-GST

Ruby Mills Ltd

GST - Fusible Interlining Fabrics of cotton (FIFC) is correctly classifiable under HSN Code 5903: AAR

- Application disposed of: AAR

2020-TIOL-120-AAR-GST

Sunil Kumar Gehlot

GST - Mehendi/Henna powder is a preparation for use on the hair and is covered under Chapter 33 (Heading 3305) and will attract GST @18%, Sr. no. 59, Schedule III of 1/2017-CTR - Not covered at Sr. no. 78A of Schedule I of 1/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-119-AAR-GST

Sarda Bio Polymers Pvt Ltd

GST - Psyllium Husk Powder/Isabgol, a preparation made from Psyllium plant or its parts is classifiable under HSN 1211 9302 and attracts GST @5%, Sr. no. 73, Schedule I of 1/2017-CTR - product specific entry cannot be overridden by general/residual entry - CBIC clarification 332/2/2017-TRU dt. December 2017 relied upon - applicant's contention that it is chargeable @18% under Entry 453, Schedule III of 1/2017-CTR is unacceptable: AAR

- Application disposed of: AAR

2020-TIOL-118-AAR-GST

Prasar Bharti Broadcasting Corporation Of India

GST - Applicant, a public service broadcaster, avails services of hiring taxis for different purposes viz. pick up/drop for shift duty-staff at odd hours etc. and seeks to know as to whether ITC is available to them on the services availed through contractors and the rate of GST applicable.

Held: Applicable rate of tax on renting of cabs is 5% with limited ITC (of input services in the same line of business) and 12% with full ITC - if facility provided by a taxpayer for transportation of employees is not obligatory under any law then no ITC will be available: AAR

- Application disposed of: AAR

2020-TIOL-117-AAR-GST

KSC Buildcon Pvt Ltd

GST - Work undertaken by applicant for development work of mines including the earthwork of drilling, excavation, removal, transportation of green marble/serpentine and dumping of waste material is a ‘support service to mining' and is covered under HSN 998622 and attracts GST @18% in terms of 11/2017-CTR: AAR

- Application disposed of: AAR

2020-TIOL-116-AAR-GST

ARG Electricals Pvt Ltd

GST - Work undertaken by the applicant as per Contract entered between applicant and Ajmer Vidyut Vitran Nigam Limited (AVVNL) along with two Work Orders viz. supply of materials/equipments and erection, testing and commissioning of materials/equipments in building of rural electricity infrastructure is a Composite supply of Works Contract - such supply is not covered under Entry no. 3(vi)(a) of 11/2017-CTR and not eligible to be taxed @12% GST because to enjoy the exemption the activity should be predominantly used for other than commerce, industry or any other business or profession - in the present case AVVNL is involved in the business of supplying electricity (goods) and is receiving consideration for the same - supply is rightly chargeable @18% GST: AAR

- Application disposed of: AAR

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GST - An agenda for reforms - Part - 83 - Compensation to States - Borrowing to bridge the gap

Refund of EC and SHE CESS - controversy revisited

Blocking of E-way Bill generation - Vice of excessive delegation?

LB settles cenvatability of DICGC insurance service

GST Credit relating to setting up operations

Powers of Arrest in GST and its interplay with Indian Criminal Law

Faceless Assessment - Dawn of a new era - Part III

Magic or mischief - non-composite combined supply of goods and services - no GST?

GST in a stressed environment - Need for empathy

JEST GST by Vijay Kumar

Transitional Credit - Intransient Litigation

The Cob(Web) by Shailendra Kumar