2020-TIOL-GST-352, Dated: Thursday, August 21, 2020

GST Council to consider rate revision for compensation kitty only after COVID-19

GST - Compensation - Centre to offer two OPTIONS to States with 7 days to choose + Option - 1: Centre to borrow but compensation cess to be levied for 3 more years + Option -2: Centre to arrange loans in name of States for one year period

GST Council's 41st meeting - Decibel rises; Bihar favours borrowing by States but other States insist on borrowing by Union of India

GST - In the writ petition, it is the case of the petitioners that their request for copies of documents, that were seized by the respondents in connection with the ongoing investigation, has been illegally turned down by the respondents, and further, while the petitioners have their business activities centred around Karunagappally, Thiruvananthapuram, Kollam and Ernakulam respectively, the investigation has been based in Ernakulam, which causes inconvenience to the petitioners in that they have to carry their records pertaining to the other branches all the way to Ernakulam for participating in the investigation proceedings - The prayer in the writ petition, therefore, is for direction to the respondents to issue copies of the seized documents, as also for a transfer of the investigation to Kollam so that the petitioners are not inconvenienced in the investigation process initiated by the respondents.

Held: Petitioners will no doubt be entitled to seek copies of the documents seized from their premises, if and when they are confronted by the respondents with any notice or other proceeding, wherein reliance is placed on the said seized documents - Bench, therefore, makes it clear that in the event of any notice or other proceedings being issued to the petitioners in connection with the investigation that is currently ongoing, wherein reference is made to any document seized from the petitioners, the respondents shall permit the petitioners to take copies of those documents relied upon in the said notice/proceedings, before proceeding further in the matter - As regards the prayer of the petitioners for a transfer of the files to Kollam and to base the investigation in Kollam, Bench is of the view that the said prayer of the petitioners cannot be acceded to - In matters of investigation, the respondents are to be given a certain degree of leeway while deciding such administrative matters such as the place at which an investigation is to be based and the manner in which it is to proceed - With such administrative decisions of the investigating authority, this Court would be loath to interfere, in proceedings under Article 226 of the Constitution of India - Therefore, Writ petition is disposed of by rejecting the prayer of the petitioners for a transfer of the investigation to Kollam, and by directing the respondents to furnish copies of the documents seized from the petitioners, in the manner indicated: High Court [para 6, 7]

GST - Petitioner is aggrieved by an order of detention that was issued to it detaining a consignment of lubricant oil that was being transported at its instance - objection of the 1st respondent is that the consignee was shown as an unregistered person in the e-way bill that accompanied the transportation of the goods and it is also pointed out that the petitioner had collected CGST and SGST in the delivery challan that was used for stock transfer of the goods thereby giving rise to a suspicion with regard to the nature of the transaction itself - Petitioner submits that although the eway bill showed the consignee as an unregistered person, the invoice that accompanied the transportation clearly referred to the GSTIN of the consignee and hence, the mere mention of the consignee as an unregistered person in the eway bill cannot be of any significance - Secondly, the mention of the tax applicable in the delivery challan was by mistake for it is evident that when the goods are stock transferred and not sold, there need not be a payment of tax at all.

Held: Reasons shown in Ext.P5(c) for detaining the consignment are not sufficient to attract the provisions of Section 129 of the GST Act - The detention in the instant case cannot, therefore, be seen as justified - Writ petition is allowed by directing the 1st respondent to immediately release the goods and the vehicle: High Court [para 3]

GST - Petitioner is aggrieved by the rejection of his application for registration under the GST Act - Bench finds that Ext. P6 order does not contain any reason and that no notice containing any proposal to reject the application of the petitioner was communicated to him before passing the said order - Order is quashed as vitiated by non-compliance of the rules of natural justice - respondents are directed to intimate the petitioner of the grounds for not considering his application for registration, and thereafter, to consider the objections of the petitioner to the said grounds and pass a fresh order in lieu of Ext.P6 - aforesaid exercise to be completed within three weeks - Petition disposed of: High Court

GST - Petitioner has prayed for quashing and setting aside the Form DRC 1A dated 23.07.2020, the provisional attachment order Form GST DRC-22 dated 24.07.2020 for both the premises i.e. factory as well as residential premises and pending the admission, hearing and final disposal of the petition to lift the attachment of both the properties, not to take coercive action etc.

Held: Bench takes notice of the fact that no sooner the writ applicant failed to respond to the summons issued to him by the respondent No.4 under Section 70 of the Act, the respondent No.4 proceeded to pass an order in Form GST DRC-01A fixing the liability of Rs.1,07,05,725/- to be paid to the department - It is not in dispute that the writ applicant had no opportunity to make good his case that all his transactions are legal and free from any doubt - Besides the same, the writ applicant had informed the respondent No.4 that he has been medically advised not to get out of his house and during that particular period, the writ applicant had also undergone cataract surgery - Having regard to the fact that a huge liability has been determined to be discharged by the writ applicant, Bench is of the view that one opportunity of hearing should be given to the writ applicant - Order passed by the respondent No.4 in Form GST DRC-01A dated 23rd July 2020 is quashed and set aside and the matter is remitted to the respondent No.4 for fresh consideration of the matter after giving an opportunity of hearing to the writ applicant - However, Bench is not inclined to disturb the order insofar as the provisional attachment of the property of the writ applicant is concerned with a view to protect the interest of the Revenue and so that no third party rights are created during the interregnum period - Petition disposed of: High Court [para 5 to 7]

GST - Petitioner is aggrieved by the detention of a consignment of construction equipment that was being transported at his instance - objection of the 1st respondent is essentially with regard to the documents that had to accompany the transportation of the goods inasmuch as it is the case of the 1st respondent that the documents did not reflect the transaction covered by the transportation that was apprehended.

Held: Bench directs the 1st respondent to release the goods and the vehicle to the petitioner on the petitioner furnishing a bank guarantee for the amount mentioned in Ext.P7 notice - respondents shall, thereafter, transmit the files to the adjudicating authority for an adjudication of the issue under Section 130 of the GST Act - Petition disposed of: High Court [para 3]

GST - The petitioner filed returns for the financial year 2017-18, 20018-19 and 2019-20 at belated stage and availed Input Tax Credit at the time of filing GSTR-3B returns, as Works Contractor - The Superintendent demanded interest of Rs.2,24,487/- on 04.03.2020 under Section 50 (1) of the C.G.S.T Act, 2017 in respect of the above three financial years on the ground that interest is payable on ITC set off - Hence the present Writ Petition - P etitioner submitted that in the 39 th meeting of GST Council held on 14.03.2020 it was decided that interest for delay in payment of GST is to be charged on the Net Cash Tax Liability w.e.f. 01.07.2017 retrospectively but not on the Input Tax Credit; that the petitioner has filed a representation before the Superintendent, Central GST and Central Excise, Berhampur with a prayer not to charge the interest on the availed Input Tax Credit and to drop the proceeding in view of the decision taken in the 39 th meeting of GST Council, h owever, no action has been taken as yet.

Held: Court disposes of this Writ Petition with a direction to the Superintendent, Central GST and Central Excise, Berhampur - opposite party No.3 to dispose of the representation filed by the petitioner on 06.05.2020 under Annexure:3 keeping in view the decision taken in the 39 th meeting of GST Council, as expeditiously as possible, preferably within a period of eight weeks and the decision taken, if any, is to be communicated to the petitioner: High Court [para 4]

GST - Constitutional validity and legality of Section 171 CGST Act as well as Rules 126, 127 and 133 of the CGST Rules are involved in the present petition - Respondent is permitted to file counter-affidavit within four weeks and rejoinder affidavit, if any, to be filed before the next date of hearing - Matter listed on 3rd November, 2020 along-with W.P. (C) 10999/2018 and other connected matters for final hearing: High Court

GST - Petitioner seeks to challenge the constitutionality and legality of Section 171 of the Central Goods and Services Tax Act, 2017 and Rule 126 of the Central Goods and Services Tax Rules, 2017 - Since the legality and validity of the aforesaid Section and Rules have been challenged in a batch of connected matters, which have been tagged with the present writ petition, present application is allowed and the amended writ petition is taken on record -Respondents are permitted to file counter-affidavits within four weeks and Rejoinder-affidavits, if any, within four weeks thereafter - It is agreed between the counsel that issues of Constitutional validity as well as legality and interpretation of the CGST Act and Rules shall be framed by consensus - It is also agreed that Mr. V. Lakshmikumaran, learned counsel, shall be the point person/coordinator for the petitioners and Mr. Zoheb Hussain, learned counsel shall represent the respondents - Interim orders, if any, to continue - Matter to be listed on 3rd November, 2020 along-with W.P. (C) 10999/2018 and other connected matters for final hearing: High Court

GST - Constitutional validity and legality of Section 171 CGST Act as well as Rules 126, 127 and 133 of the CGST Rules are involved - It is agreed between the counsel that issues of Constitutional validity as well as legality and interpretation of the CGST Act and Rules shall be framed by consensus - It is also agreed that Mr. V. Lakshmikumaran, learned counsel, shall be the point person/coordinator for the petitioners and Mr. Zoheb Hussain, learned counsel shall represent the respondents - Let common draft issues/points of law be prepared by the two counsel in consultation with the other counsel within two weeks - parties shall file their written submissions not exceeding five pages alongwith judgments they wish to rely upon within four weeks - Matter to be listed on 3rd November, 2020 along-with W.P. (C) 969/2020 for final hearing - Interim orders, if any, to continue: High Court

GST - Petitioner is challenging the orders dated 17th February, 2020 and 19th June, 2020 issued by Respondent No.2 - By the impugned orders, the respondent seeks to directly recover interest under Section 50 of the GST Act through coercive recovery provisions of Section 79 which the petitioner opines is clearly in contravention of Section 78 of the GST Act, which provides for a three-month breathing period after the passing of any order - Petitioner further submits that the impugned orders are passed without issuing any show cause notice and without giving a hearing to the Petitioner and they are also unaware of how the interest calculation has been arrived at - Petitioner also submits that Respondent No.2 is threatening to initiate coercive recovery proceedings under Section 79 of the GST Act if the amount is not paid within a period of 7 days - In its affidavit-in-reply dated 27 th July 2020, the respondent submits that the email was sent to the Petitioner on 17th February, 2020 and 19th June, 2020 was merely an intimation of payment of interest under section 50 of the Act payable on account of late filing of Return-GSTR 3B from July, 2017; that the office is conscious of the procedure required to be followed by it to recover and will initiate the recovery proceeding with issuance of show cause notice, working of interest calculation and further actions as per provision of law; therefore, the petition is premature and liable to be dismissed - in view of the statements made in the affidavit-in-reply, Petitioner is not pressing for reliefs sought in the Writ Petition - Petition is, therefore, disposed of: High Court [para 5, 6]

GST - Petition is filed under Article 226 of the Constitution of India for issuance of the writ to safeguard the right to life, liberty, dignity & fair investigation and to examine the illegal acts of the CGST officials and to monitor the investigation of the case - petitioner has prayed that records of the investigation be called from the office of the respondents and the court should examine the same on the touchstone of the law relating to the fair investigation - It is further prayed that Court should monitor the investigation of the case till the issuance of Show Cause Notice and/ or till the filing of complaint and further direct the respondents to give bi-monthly reports to this Court about the progress of the investigation - An interim application has also been filed for issuance of direction to the respondents to conduct the investigation without use of any coercive means along with video recording of the statements of the applicant and to allow the presence of the Lawyer at visible yet inaudible distance of the applicant - Petitioner has submitted that applicant was picked up on 07.03.2020 and was kept in illegal detention for three consecutive days; that he was beaten ruthlessly and was coerced to write incriminating statement; that since the investigation by the respondents is not being conducted in accordance with law, the presence of the Advocate be allowed at a visible yet inaudible distance of the applicant.

Held: Petitioner in the present case has been summoned by the Officers under GST Act who are not Police Officers and who have been conferred with the power to summon any person whose attendance they consider necessary to give evidence or to produce a document - The presence of the lawyer, therefore, is not required during the examination of the petitioner as per the law laid down by Hon'ble Supreme Court in Pool Pandi's case ( 1992 AIR 1795 (SC) ) - Insofar as apprehension of petitioner that he may be physically assaulted or manhandled is concerned, Court is of the opinion that it is a well settled law now that no inquiry/ investigating officer has a right to use any method which is not approved by law to extract information from a witness/ suspect during examination and in case it is so done, no one can be allowed to break the law with impunity and has to face the consequences of his action - Counsel for the respondents has categorically stated at Bar that interrogation/ investigation of the petitioner would be conducted as per law and the respondents will not adopt any such method which is not permissible by law - no grounds are, therefore, made out to allow the presence of the Advocate while questioning or examination by the officers of the respondents - application is dismissed: High Court [para 7 to 9]

GST - Anti-Profiteering - s.171 of the Act - Authority has held that the petitioner had profiteered in respect of the supplies made and accordingly directed the petitioner to deposit the profiteered amount of Rs.20,80,087/- within three months along with 18% interest - Petitioner challenges this order and also prays for declaring Section 171 of the CGST Act and Chapter XV of the CGST Rules as arbitrary, discriminatory as well as unconstitutional and in the alternative to be inapplicable to the post transition period i.e. 01st July, 2017 being contrary to the intent and purpose of the CGST Act - Petitioner also prays that Rules 123 and 129 of the CGST Rules be declared as ultra vires the provisions of the CGST Act in the absence of any enabling provision to constitute respondent no.3 or the Standing Committee and other State Screening Committees - Petitioner further prays that due to Covid-19 pandemic, they may be allowed to deposit the aforesaid amount in instalments.

Held: Keeping in view the orders passed by this Court in Phillips India Limited = 2020-TIOL-1092-HC-DEL-GST as well as M/s Samsonite South Asia Pvt. Ltd. = 2020-TIOL-1213-HC-DEL-GST and M/s Patanjali Ayurved Ltd. = 2020-TIOL-1241-HC-DEL-GST , Court directs the petitioner to deposit the principal profiteered amount i.e. Rs.19,81,035/- (i.e. Rs.20,80,087/- minus Rs.99,052/- already paid) in six equated monthly installments commencing 01 st September, 2020 - The interest amount directed to be paid by the respondents is stayed till further orders - Matter listed on 03rd November, 2020: High Court

GST - Present writ petition has been filed seeking a declaration that Sections 69 and 132 of the CGST Act, 2017 are arbitrary, unreasonable and being beyond the legislative competence of the Parliament are ultra vires the Constitution - Counter-affidavits be filed within a period of four weeks and rejoinder-affidavits, if any, to be filed within four weeks thereafter - ASG candidly states that the Supreme Court in a similar case being W.P.(Crl.) No.184/2020 has issued notice and directed that no coercive action be taken against the petitioner therein - Keeping in view the aforesaid order, it is directed that, till further orders, bail of the petitioner shall not be cancelled in the present case – Matter to be listed on 18th November, 2020: High Court

GST - Petitioner was engaged by M/s. Venkataramana Traders to transport 300 bags of arecanut to a recipient registered dealer in Delhi - When the goods were in transit, the officials of the respondent intercepted the vehicle at Sagar, Shimoga District - On enquiry, the driver of the vehicle furnished the E-way bill and invoice which related to a different consignment of 220 bags of areca by the supplier to the same subject recipient registered at Delhi - authorities concerned issued an order dated 07.03.2019 in Form GST MOV-02 and seized the truck and the goods by an order of detention in Form GST MOV-06 dated 07.03.2019 - A notice under Section 129(3) of the CGST Act in Form GST MOV No.7 dated 07.03.2019 was issued requiring the payment of tax of Rs.2,12,100/- and penalty of Rs.2,12,100/- - Upon the payment of tax and penalty on 10.03.2019, the vehicle and the goods were released on 08.03.2019 as per Form GST MOV-05 - On the same day, the vehicle bearing No.HR-55-AF-7882 and the goods were again seized at Bijapur and the statement of the driver was recorded by the Assistant Commissioner of Central Tax - Petitioner, in terms of its letter dated 13.04.2019 requested the Commissioner of Central Tax and by letter dated 15.04.2019 requested the Additional Commissioner of Central Tax to release the vehicle and the goods since the tax and the penalty was paid pursuant to the notice under Section 129(3) of the CGST Act which concluded the proceedings - Since the respondent did not release the goods and the lorry, the petitioner has filed this petition for quashing the second order of detention as without the authority of law - Petitioner submits that once the tax and penalty is paid, all proceedings are deemed to be concluded as provided under Section 129(5) of the CGST Act and, therefore, initiation of subsequent proceedings to seize the very same lorry and the goods is illegal.

+ In so far as the remedy of an appeal, Section 107 of the CGST Act provides that every Order passed by an adjudicating authority is appealable. In the instant case, though there is a direction by the Commissioner of Central Tax, Mysore dated 12.03.2019 to the Assistant Commissioner of Central Tax to seize the vehicle and the goods, there is no authorization in GST Form INS-01 or seizure in GST Form INS-02. Thus, in the eye of law there is no seizure and consequently, there is no Order that the petitioner has to appeal against.

+ It is trite that an alternative remedy is not an absolute bar for maintaining a writ petition. In the present case, having regard to the findings that would follow, this Court holds that in the peculiar facts of this case, this Court is entitled to exercise jurisdiction to set right a palpable illegal proceeding.

+ The driver of the vehicle was carrying documents of another consignment and thus there was a mismatch. Thus, the vehicle was searched, the statement of the driver was recorded and the vehicle was detained and a notice under Section 129(3) was issued. The authorized representative appeared before the authorities at Sagar and handed over the correct e-way bill and the corresponding invoice. Yet, the authorities insisted and the petitioner paid the applicable IGST and the penalty. The vehicle was later released on 08.03.2019. Thus in view of Section 129(3) of the Act, the proceedings in so far as the consignment was concerned stood concluded. [para 22 to 24]

+ Vehicle and the goods were detained for the second time under Section 129 of the CGST Act though the earlier proceedings in respect of the same vehicle and the goods had concluded - It is relevant to note that this subsequent interception and detainment was not in exercise of power under Section 67 of the CGST Act as it was not done by a proper officer who should be an officer not below the rank of a Joint Commissioner - Further any seizure in exercise of power under Section 67 of the CGST Act should be by an officer who is authorized by the proper officer in GST INS-01 and the seizure of goods should be in Form GST INS-02 - Since there is neither the authorization in Form GST INS-01 or the seizure in Form GST INS-02, it can safely be held that the subsequent interception and detainment was not in exercise of Section 67 of the CGST Act - It is, therefore, clear that the department has initiated an action under Section 67 of the CGST Act to identify the fraudulent issue of invoice by the supplier to avail input tax credit: High Court [para 25, 27]

+ Moot question is whether the department is entitled to seize a consignment of perishable goods in transit more particularly when it is accompanied by a lawful e-way bill, invoice and when it has paid the applicable IGST - having regard to the scheme of the CGST Act [section 80] and the rules [141], whenever perishable goods are seized, it is the duty of the seizing authorities to obtain a bond and or security or require the payment of the market price of the goods or the amount of tax, interest and penalty whichever is lower - This is precisely the reason that whenever such perishable goods are intercepted and detained under Section 129 of the CGST Act, the period for payment of tax and penalty in respect of perishable goods can be reduced to seven days - If the supplier has made outward movement of goods worth Rs.73,00,00,000-00, then the recipients must have availed the tax credit and this could not have gone unnoticed by the department - This could be attributed to the lackadaisical attitude of the department and the case of the supplier in the instant case should be an eye opener for the State authorities under the Act to ascertain whether the registered establishments are doing business at the registered places and also to take pro active steps for the installation of Radio Frequency Identification devices as this would help the easy tracking of the movement of goods and for verification of e-way bills and the payment of tax etc. - Revenue has to put its house in order and strive to achieve the lofty targets set by the CGST Act by effectively using the tools of audit, inspection, seizure, prosecution, recovery etc. - In the facts and circumstances of this case, it is held that in a proceeding under Section 67 of the CGST Act against the supplier, the respondent was not justified in seizing the perishable goods in transit, moreso when the goods had suffered tax and penalty - Hence, this writ petition is allowed and the respondent is directed to forthwith release the lorry bearing registration number HR-55-AF-7882 and the goods carried by it which is covered by the E-Way bill - However, liberty is reserved for the proper authority under the CGST Act to continue the proceedings initiated under Section 67 and determine the amount of tax payable on the previous supplies made under Section 74 or initiate any penal action under Section 132 of the CGST Act against the supplier or the registered recipients for the alleged fraudulent availing of input tax credit or the wrongful generation of invoices: High Court [para 28 to 32]

GST - RTI Act, 2005 - Writ petition is filed by the petitioner GSTN seeking an appropriate writ of certiorari for quashing order dated 13.10.2016 passed by respondent No.1/Information Commissioner, CIC - Facts are that the Respondent No. 2 filed an RTI application addressed to CPIO of the petitioner Company on 16.08.2014 seeking the following information viz. A. Number of Meetings of GSTN's Board of Directors held from 28.03.2013 till date along with the date of each meeting. B. Date on which the AGM of GSTN has been held in the year 2013 and 2014. C. Copies of Minutes of all the Board meetings as referred above along with minutes of the AGM. D. Total no. of Resolutions passed by the GSTN's Board of Directors from 28.03.2013 till date, along with the date of each resolution and E. Copies of the Resolutions as referred to above. - CPIO on 17.09.2014 provided information to respondent No. 2 for points A and B above - For points C to E, the said information was in relation to the minutes of the meetings of the Board of Directors which was confidential and hence, could not be made open to the public at large, the CPIO held by treating information sought by respondent No. 2 as above is exempt from disclosure under Section 8(1) (d) and Section 8(1) (j) of the RTI Act, 2005 - Appeal against this order was rejected and hence respondent filed appeal with CIC and by the impugned order dated 13.10.2016, respondent No. 1 has directed the petitioner to provide copies of the minutes of the board meetings as well as the resolutions for the period 01.04.2013 to 31.12.2015 after severance of the record containing information which is exempted from disclosure under the RTI Act - Needful was to be done within four weeks and hence, this writ petition by GSTN.

Held: A perusal of the reply given by the CPIO dated 17.09.2014 to respondent No. 2's application shows that there were in all 10 Board Meetings that had been held - In the facts of this case, it would be for the CIC to go into the minutes of the Board Meetings and of the AGMs and to determine as to which of the information which is contained in the minutes attracts the provision of Section 8(1)(d) of the Act, namely, are exempt from disclosure and which portion of the minutes can be given to respondent No. 2 in response to his application under the RTI Act - The CIC while looking at the aforesaid matter afresh may keep into account the above observations of the Supreme Court [in Subhash Chandra Agarwal, 2019 SCC OnLine SC 1459 ] to determine as to whether the demand of respondent No. 2 for minutes of all the Board Meetings for the stated period would fall in the category of being counterproductive and a misuse/abuse of the RTI Act that was frowned upon by the Supreme Court - It was observed therein that the CIC left the whole thing at the discretion of the petitioner which was held not to be the correct approach - impugned order is contrary to the legal position and is set aside - The matter is remanded back to the CIC for fresh consideration as above - Petition disposed of: High Court [para 20 to 22]

GST - Application filed under section 439 of the Cr.P.C. in crime no.23/2020 registered under section 132(1)(a)(i) of the CGST Act, 2017 - Petitioner claimed parity with co-accused -Amit Bothra and Ashok Daga, who have been granted bail by this Court vide order dated 27.07.2020 passed in M.Cr.C. Nos.21628/2020 and 21618/2020 respectively – Petitioner asserts that case of the petitioner is on better footing than the case of co-accused - Amit Bothra and Ashok Daga, because all the allegations of the department of tax evasion are against their firm M/s Vishnu Essence, while the petitioner is neither a partner nor in any other way concerned or connected with the firm; that he is only a trader, supplier or commission agent of the firm Vishnu Essence; that there is no allegation of the department that he clandestinely removed or transported Pan Masala.

Held: On due consideration of the allegation against the petitioner, evidence produced before the court to show his involvement, the act attributed to him, the part played by him in the alleged tax evasion, parity of his case with the case of the co-accursed persons who have been granted bail and other facts and circumstances of the case, Bench deems it appropriate to allow the application - Therefore, without commenting on the merits of the case, the petition is allowed on the same terms, as is allowed in the case of co-accused Amit Bothra and Ashok Daga: High Court [para 10]

GST - Petition has been filed challenging the show cause notice dated 21st May, 2020 as well as for a direction to the respondents not to proceed with the adjudication proceedings until Rule 142(1A) of the CGST Rules is complied with - Petitioner states that the impugned show cause notice has been issued without communicating the details of tax, interest and penalty in Part A of FORM GST DRC-01A prior in time in accordance with Rule 142(1A) of the CGST Rules.

Held: Cunter affidavit to be filed by Revenue within a period of four weeks and rejoinder affidavit, if any, to be filed before the next date of hearing - Matter listed on 4 th November 2020: High Court

GST - Petition has been filed challenging the orders dated 19th May, 2020 and 10th July, 2020 passed by the Commissioner, Central Goods and Service Tax Delhi East whereby the petitioner's bank account in Axis Bank Ltd. has been attached - Petitioner also prays for de-freezing of its bank account forthwith - Petitioner relies upon a judgment of the Gujarat High Court in M/s Patran Steel Rolling Mill vs. Assistant Commissioner of Sale Tax, - 22018-TIOL-2937-HC-AHM-GST , wherein it has been held that in accordance with Section 83(1) of Central Goods and Services Tax Act, the Commissioner must record the reasons in writing to the effect that the petitioner would not be in a position to pay taxes after assessment proceedings are over before attaching any bank account or taking any such drastic action; that attachment of the petitioner's bank account amounts to closure of its business.

Held: Issue Notice - Counter-affidavits to be filed by Revenue within a period of two weeks and rejoinder-affidavits, if any, be filed before the next date of hearing - Matter to be listed on 21st September 2020: High Court

GST - Bail application filed u/s 439 of the CrPC on behalf of applicants Jagdish Arora and Ajay Kumar Arora who have been taken into judicial custody in connection with Crime no. DGGI/BhZU/1204/03/2020-21/SDPL in respect of the offence punishable u/s 132(1)(a) r/w s.132(1)(i) of the CGST Act - Instant case arises out of proceedings initiated by the GST department in relation to the purported evasion of GST by the company - Som Distilleries Pvt. Ltd. [SDPL] purportedly leviable and evaded on account of production and sale of sanitisers - Petitioners claim that they are neither Directors/Managers/Officers/employees or authorised representatives of the SDPL and as such, they are not responsible for the day-to-day business affairs of the company; that both the applicants had resigned their Directorship from SDPL on 01.04.2009 i.e. nearly 11 years ago; that the department has not collected or placed on record even an iota of documentary evidence in order to substantiate their version; that the applicants are entitled to bail on this ground alone.

Held: Bench has gone through the record in order to ascertain the existence of ‘reasons to believe' for the proceedings being initiated against the applicants - Bench does not perceive any material, except the statement of the employee - Binay Kumar Singh; that there is no documentary material produced on record to show that the present applicants were legally in-charge and responsible for the day-to-day working of the company; that they had already resigned from the Directorship of the company and merely on a bald statement of an employee of the company, it cannot be held that the present applicants were in-charge and responsible for the functions of the company - without commenting on the merits of the case, the application for grant of bail to the applicants stands allowed - It is directed that the applicants be released from custody on their furnishing a personal bond in the sum of Rs.5 lakhs each, with separate sureties of like sum to the satisfaction of the trial Court, for their appearance before it, as and when required and subject to the conditions laid down - Original records of the case to be returned to the respondent in a sealed cover: High Court [para 38, 40]

GST - It is the case of the petitioner that the assessments pertaining to the months April and May 2019 were completed u/s 62 of the SGST Act on best judgment basis, taking note of the non filing of returns by the petitioner assessee for the said month - While the assessment orders are dated 20.8.2019, it is the case of the petitioner that these orders were not served on him till much later and within 30 days after the from the date of receipt of the orders, he filed the returns as permitted under Section 62 of the SGST Act - Petitioner, therefore, contends that the assessment orders have to be treated as withdrawn by virtue of the provisions of Section 62 of the Act.

Held: From a reading of the statement of the respondent, it is found that the assessment orders dated 20.8.2019 were served on the petitioner through publication on the web portal on 20.8.2019 itself - Over and above that, an email was also sent to the petitioner at his registered email id, although the petitioner says that he did not receive the email but received only a copy of the same through registered post much later - Bench notes that the service of an order through the web portal is one of the methods of service statutorily prescribed under Section 169(1)(c) and (d) of the SGST Act and if that be so, then the petitioner cannot deny the fact of receipt of the order on 28.9.2019 for the purposes of filing the returns as contemplated under Section 62 of the SGST Act with a view to getting the assessment order withdrawn - Inasmuch as the return filed by the petitioner for the period April and May 2019 was only on 30.10.2019 i.e. 71 days after the date of service of the assessment order through the web portal (20.8.2019), the petitioner cannot aspire to get the benefit of withdrawal of the assessment orders contemplated u/s 62 of the SGST Act - The assessment orders would, therefore, have to be held valid and the remedy of the petitioner against the said assessment order can only be through an appeal before the appellate authority under the Act - Taking note of the submission of the petitioner that he would require some time to move the appellate authority, Bench directs that the recovery steps for recovery of amounts confirmed against the petitioner by Exts.P1 and P2 assessment orders and Exts. P8 and P9 demand notices shall be kept in abeyance for a period of one month so as to enable the petitioner to move the appellate authority in the meanwhile and obtain orders of stay in the stay application filed along with the appeal - If the petitioner files the appeal within a period of two weeks from the date of receipt of a copy of this judgment, then the appellate authority shall treat the appeals as filed within time, and proceed to consider the stay applications preferred by the petitioner on merits after hearing the petitioner: High Court

GST - Application filed under section 439 of the Cr.P.C. in crime no.23/2020 registered under section 132(1)(a) (i) of the CGST Act, 2017 - petitioner began with the arguments that the only fault of the petitioner is that he is the landlord of the premises where his tenant, who runs a factory, allegedly evaded the tax by clandestine sale of Pan Masala; that the petitioner is neither a Partner of his tenant M/s Vishnu Essence nor in any other way concerned with it; that he has been posed as if he is the only responsible person for whatever has allegedly been done against the law by his tenant, while no document, what-so-ever it may be, has been produced by the department to show his involvement in the alleged tax evasion - Pendency of investigation is also taken as a ground for dismissing the petition, which is countered on the ground that no further custodial interrogation is requested by the department and the respondent is bound to file the chargesheet within 60 days of the arrest of the petitioner and as per date of arrest i.e. 13.06.2020 sixty days have been completed on 12.08.2020; that if still the charge-sheet is not filed, the petitioner is entitled for default bail under Section 167 of the Cr.P.C.

Held: Elaborate discussion of all the evidence, which is otherwise confidential, would not be appropriate as it may affect the case of either party - But on careful consideration of the evidence on record, Bench is of the considered opinion that it would be appropriate to allow the petition, therefore, without commenting on merits of the case, the petition is allowed - Petitioner Kishore Wadhwani S/o Shri Khanchand Wadhwani is directed to be released from custody on his furnishing a personal bond in the sum of Rs.10,00,000/- with one solvent surety to the satisfaction of the Trial Court for his appearance before it as and when required further subject to the conditions laid down: High Court [para 10, 11]

GST - Application is filed under section 438 of the Cr.P.C. seeking anticipatory bail in crime no.23/2020 registered under section 132(1)(a)(i) of the Goods and Services Tax Act GST - petitioner began with the arguments that the only fault of the petitioner is that he is the landlord of the premises where his tenant, who runs a factory, allegedly evaded the tax by clandestine sale of Pan Masala; that the petitioner is neither a Partner of his tenant M/s Vishnu Essence nor in any other way concerned with it; that he has been posed as if he is the only responsible person for whatever has allegedly been done against the law by his tenant, while no document has been produced by the department to show his involvement in the alleged tax evasion - Pendency of investigation is also taken as a ground to press for dismissal of the petition, which is countered on the ground that the department has already completed custodial interrogation of Kishore Wadhwani, who is real uncle of the petitioner and is impleaded for the same charge on the basis of the same set of evidence, therefore, no further custodial interrogation of the petitioner as requested by the department is necessary - It is further submitted that the officials of the department have harassed the co-accused persons and have recorded their statements to suit their whims under threat, coercion and duress - The petitioner have all reasonable apprehension that in case of his arrest, he will be treated in the same fashion and may be forced to signed the statements against his wish under the threat and undue pressure of the officials - It is explained that when the officers came to his house, the petitioner or any other male member was not at home and the officials of the department were trying to enter the house forcibly without disclosing their identity; that when they were asked to show the same, they misbehaved with the women of the house and hence faced rebuttal from the family - It is further alleged that the FIR has been lodged only to pressurize the petitioner and now it cannot be used as a tool to oppose his prayer for bail - It is impressed by Revenue counsel that this Court does not possess the power to grant anticipatory bail as the provisions of Section 438 Cr.P.C. are not applicable in cases registered under the GST Act; cases have been cited in this regard viz. Union of India V. Sapna Jain & Ors. = 2019-TIOL-217-SC-GST , P.V. Ramanna Reddy & Ors. Vs. Union of India = 2019-TIOL-873-HC-TELANGANA-GST , Union of India Vs. Padam Narain Aggarwal = 2008-TIOL-187-SC-CUS .

Held: It emerges from most of the judgments on the issue of granting anticipatory bail cited by the respondent that the Courts have held that the facts of a particular case are the paramount consideration for granting or refusing the protection of a pre-arrest bail - It is nowhere stated that the anticipatory bail is barred by law or cannot be granted in a case registered under the GST Act - Elaborate discussion of evidence, which is otherwise confidential, would not be appropriate as it may affect the case of either party but on careful consideration of the evidence on record, Bench is of the considered opinion that it would be appropriate to allow the petition, therefore, without commenting on merits of the case, the petition is allowed - Bail application is allowed and it is directed that in the event of the petitioner's arrest or surrender before the police within a month of this order, the petitioner Nitesh Wadhwani S/o Late Shri Ashok Wadhwani shall be released on bail on his furnishing a personal bond of Rs.10,00,000/- with one solvent surety of the like amount to the satisfaction of Station House Officer of the Police Station concerned - The petitioner would abide by the conditions mentioned in Section 438 (2) Cr.P.C and subject to conditions as laid down: High Court [para 15, 17, 18]

GST - Petition is filed for issue of writ of declaration to declare the Goods and Services Tax Appellate Tribunal (Appointment and Conditions of Service of President and Members) Rules, 2019 framed vide notification dated 21st August 2019 as void, defective and unconstitutional being violative of Articles 21 and 50 of the Constitution of India and the doctrine of separation of powers and independency of judiciary and also contrary to the principles laid down by the Supreme Court in UOI vs. R.Gandhi - 2010-TIOL-39-SC-MISC - Counsel for respondent UOI informed the Bench that the matter is still under active consideration and the GST council has not been able to meet in order to finalise the qualifications, tenure and selection procedure as well as other conditions relating to the constitution of Tribunal; that the matter has to be revisited in terms of the judgment in the case of Roger Mathew vs. South Indian Bank Ltd. Bench notes that based on the request made on behalf of the UOI on 08.01.2020 the Bench had adjourned the matter twice to enable the Counsel for Revenue to inform the Court about any developments in the matter - Counsel informs the Bench that the meeting of the GST Council has not yet ben convened and, therefore, the matter may be adjourned and listed after two months - Bench finds that the petition was entertained in October 2019 and an interim order had been passed on 03.10.2019 and since the matter continues to be adjourned on account of the respondent, the matter is directed to be listed after two months - interim order dated 03.10.2019 to continue till further orders - Matter to be listed on 28.10.2020: High Court [para 7]

GST - Allegation is circular trading by claiming Input Tax Credit on the materials never purchased and passing on such Input Tax Credit to companies to whom they never sold any goods - Apprehending the arrest on accusation of having committed a non-bailable offence in terms of Section 132(1)(b) and (c) read with Section 132(5) of the CGST Act, 2017 ), applicants are seeking directions under Section 438 of the Criminal Procedure Code, that in the event of their arrest they shall be released on bail – Allegation is that applicant's firm after availing the ITC of Rs.53.50 crores without any actual receipt of goods has also passed on the said ITC of Rs.53.50 crores to six firms, out of which five firms, namely M/s. Chandan Enterprises, M/s. Sheela Sales Private Limited, M/s. Chandan Sagar Sales Pvt. Ltd. M/s. Chandan Sagar Constructions Pvt. Ltd and M/s. Structeco Infrastructure Pvt. Ltd are closely held entities of M/s. Sheela Sales Corporation, inasmuch as proprietor or partner or a Director are common and are related to each other - Investigation also revealed that, above referred five firms have availed and passed on the said credit of Rs.63.50 crores to 360 other firms located in various parts of the country - applicant no.1 in his statement dated 9th December, 2019 and 20th January, 2020 admitted that none of his firms had received goods from M/s. Bajrang Traders on which invoices they have availed ITC of Rs.53.63 crores; and that none of his firms has made payment to M/s. Jai Bajrang Traders - During the course of investigation, seven summonses were issued to applicant no.1 and four to applicant no.2; however, applicant no.1 responded only to two summons dated 25th November, 2019 and 17th January, 2020 and Applicant no.2 did not respond to the summons at all - Applicants have furnished written submissions on 5th August, 2020 and for the first time contended that applicants are in possession of all relevant invoices (running into 2000 pages) and transport bills which the applicants are ready and willing to submit to the respondent no.1 and, therefore, till these bills are verified, applicants be granted protection from arrest - M/s. Jai Bajrang Traders, have filed FIR against the applicants with police at Gyanpur, Uttar Pradesh on 29th January, 2020 alleging therein that the present applicants have taken charge of their firm and forged the invoices in their favour.

Held: Facts emerging on perusal of file notings and statements of applicant no.1 recorded in response to summons issued under Section 70 of the CGST Act, prima-facie suggest, applicants' complicity/involvement in availing fake input tax credit without movement of goods on forged invoices Rs.63.50 crores in breach of provisions of Section 16 of CGST Act, which is cognizable offence under Section under Section 132(1)(b)(c) read with Section 132(5) of the CGST Act - applicants have failed to produce unique E-way bill number (EBN) particulars, transporter's details, proof of receipt of goods either by himself or his agent or warehouse keeper and payment proof either by himself or by agent or otherwise - Applicant no.1 in his statement recorded on 9th December, 2019 and 20th January, 2020 admitted, that neither his firm has received goods from M/s. Jai Bajrang Traders nor, has made any payment to M/s. Jai Bajrang Traders - In terms of Section 136 of the CGST Act, disclosure in the statement is "relevant" for proving any offence under the said Act - It may also be stated that, applicants have not retracted the statements - Under these circumstances, contention of respondents that, fraudulent ITC claim of Rs.63.53 crores is a matter of grave concern and requires thorough investigation for which applicants' presence is absolutely necessary - applicants instead cooperating with the ongoing investigation by submitting relevant documents and making themselves available for recording the statements, filed an anticipatory bail application before the District and Sessions Court, Thane and thereafter before this Court - Upon reading the provisions contained in Chapter-XIX, it may be stated that scheme of the Act, does not make provisions of Section 122 to 138 applicable, subject to "assessment". Both the Chapters, i.e. Chapter-XIX and Chapter-XII are distinct and application of the provisions thereunder are distinct and not subject to each other - If argument of applicants is accepted, it will turn the provisions of the prosecution nugatory - submissions made on 5 th August by the applicants for the first time are prima-facie an afterthought because respondents had afforded sufficient opportunities - invoice and transport bills produced at the eleventh hour, is nothing but an attempt to prolong the proceedings, so that interim pre-arrest protection granted by this Court would continue to operate till the bills are verified – respondent has submitted that many of the vehicle numbers are bogus and further also found that vehicle's registration date is latter then the lorry receipt dates - though the officers under the CGST Act, cannot seek custody of the arrested persons for completing the investigation, respondent's contention that applicant's detention in custody is necessary to prevent him from causing the evidence of the offence to disappear or tampering such evidence is well founded - respondent has correctly placed reliance on Section 41 of the Criminal Procedure Code in support of his argument - In view of the facts of the case and in the larger interest of the public and the State, in serious cases like this, Bench is not inclined to exercise discretion under Section 439 of the Criminal Procedure Code in favour of applicant no.1 – So far as applicant no.2 is concerned, material on record indicates and suggest that, applicant no.2 is wife of applicant no.1, is a housewife, and is a dormant and sleeping partner and she is not participating in the day-to-day business of the firm - Having regard to these facts, custody of the applicant will not further the case/investigation of the respondent and, therefore, pre-arrest bail is granted to the applicant no.2 – Pre-arrest bail of applicant no.2 is granted, subject to conditions viz. that in the event of her arrest, she shall be released on bail on furnishing bond in the sum of Rs.50,000/- with one or more sureties in the like amount - prayer of applicant no.1 for continuing interim relief for a period of 8 weeks is rejected: High Court [para 10, 11, 12, 13, 17 to 21]

GST - TRAN-1 - Assessees herein, who are the identical appellants and writ petitioners, now admit that they uploaded FORM GST TRAN 1; that they sought input tax credit relatable to the Excise Duty paid insofar as the stock retained with them which they purchased from the manufacturers directly - However, insofar as the local purchases made paying Value Added Tax, there was no form uploaded nor was it included in the FORM GST TRAN 1 filed before the Authorities - The appellants/petitioners submit that they filed the earlier Writ Petitions on the mistaken belief that for Excise Duty and Value Added Tax, there should be different FORM GST TRAN-1 filed under the Central Goods and Services Tax Act and the Kerala Goods and Services Tax Act - It was hence, they filed Writ Petitions seeking a relief for consideration under the aforesaid Circular No.39/13/2018-GST dated 03.04.2018 - Now the assessees realise their folly in having not included the Value Added Tax component for which they have a valid claim for input tax, along with FORM GST TRAN 1, which showed their Excise Duty component for the purpose of input tax credit.

Held: Bench is of the opinion that the issue has to be considered first by the learned Single Judge; that the Writ Petition Nos. 9081/2018 and 9067/2018 = 2018-TIOL-2781-HC-KERALA-GST can be permitted to be withdrawn - Writ Appeals are disposed of by recording the prayer for withdrawal and permission of the Bench to do so, with the reservation that it would be without prejudice to their contentions in the later writ petition, as raised to allow the input tax claim on the stock where tax has been paid under the VAT Act - Writ appeals disposed of: High Court [para 6]

GST - Petitioner is aggrieved by the notice issued u/s 129 of the Act - Bench observes that the detention of the vehicle and the goods was on the finding that the goods on inspection were found to be different from those that were covered by the invoice and transportation documents, therefore, Bench is of the prima facie view that the detention cannot be said to be unjustified - Petition is disposed by directing the 1st respondent to permit the petitioner to clear the goods and the vehicle on furnishing a bank guarantee for the amount demanded in Ext.P4 - adjudication of the dispute u/s 130 to be completed within a period of one month: High Court [para 2]

GST - On the allegation that there was a discrepancy in the e-way bill that accompanied the transportation of the goods, the consignment of goods transported were detained u/s 129 of the Act– On perusal of Ext.P4, Bench notices that the reason for detention was that, while the consignment was supported by an invoice which contained the details of the goods transported as also the tax paid in respect of the goods, there was no mention of the tax amounts separately in the e-way bill that accompanied the goods - Petitioner points out that there is no requirement under the Act and Rules for mentioning the tax amount separately in the e-way bill in FORM GST EWB-01 that the petitioner was obliged to use to cover the transportation in question.

Held: Power of detention u/s 129 is to be exercised only in cases where the transportation of goods is seen to be in contravention of the provisions of the Act and Rules and not simply because a document relevant for assessment does not contain details of tax payment - As per the statutory provisions applicable to the instant case, a person transporting goods is obliged to carry only the documents enumerated in Rule 138(A) of GST Rules, during the course of transportation - The said documents are (i) the invoice or bill of supply or delivery challan, as the case may be and (ii) the copy of e-way bill in physical form or e-way bill Number in electronic form etc. - A reading of the said Rule clearly indicates that the e-way bill has to be in FORM GST EWB-01, and in that format, there is no field wherein the transporter is required to indicate the tax amount payable in respect of the goods transported - If the statutorily prescribed form does not contain a field for entering the details of the tax payable in the e-way bill, then the non-mentioning of the tax amount cannot be seen as an act in contravention of the rules - In the instant case, it is not in dispute that the transpiration was covered by a valid tax invoice, which clearly showed the tax collected in respect of the goods and an e-way bill in the prescribed format in FORM GST EWB-01 - Since there was no contravention by the petitioner of any provision of the Act or Rule for the purposes of Section 129, the detention in the instant case cannot be said to be justified - Petition allowed by quashing Ext.P4 series of detention notices and directing the respondents to release the goods forthwith to the petitioner: High Court [para 4]

GST - Subject matter of challenge in this writ application is the order of provisional attachment of Bank Account of the writ applicant maintained with the State Bank of India - Applicant mentions that he was informed by the State Bank of India as regards the attachment of his bank account on 2-8-2019.

Held: A perusal of the Sub-Section-2 of Section 83 makes it abundantly clear that the provisional attachment would cease to have effect after the expiry of a period of one year from the date of the order made under Sub-Section-1 - Although no specific date has been mentioned in the impugned order of provisional attachment of the bank account, yet having regard to the statement made by the counsel that the attachment came into force from 2-8-2019, Bench takes it that the order of provisional attachment has come to an end - In such circumstances, no further adjudication is necessary as regards the other contentions raised in the writ application - Bench directs the State Bank of India i.e. the respondent No.3 to take notice of this order and permit the writ applicant to operate his Bank Account forthwith - Writ application succeeds and is hereby allowed: High Court [para 5, 6]

GST - Impugned order dated 2nd of March, 2020 is passed by the Deputy Commissioner of State Tax, Patna Central Circle, Bihar, Patna who issued a notice asking the petitioner to show cause by a particular date - However, for unexplained reasons and circumstances, without any prior intimation or knowledge, the matter was preponed and without affording any opportunity of hearing, decided, holding the view of the revenue - The order does entail civil and pecuniary consequences, causing prejudice to the petitioner - On all fours, principles of natural justice stand violated - On this short ground alone, the impugned order dated 02.03.2020 and the consequential DRC-07 order dated 04.03.2020 passed by the Deputy Commissioner of State Tax, Patna Central Circle, Bihar, Patna are quashed and set aside with the matter remanded back to the authority for consideration afresh: High Court

GST - Petitioner seeks a certiorari challenging an order dated 14.11.2019 of cancellation of registration under the provisions of the CGST Act, 2017 - Petitioner also brings to the notice of the Bench an order passed by the Central Board of Indirect Taxes, Customs in order No.1 of 2020 Central Board of Indirect Taxes and Customs in S.O. 2064 (E). dated 25.06.2020 clarifying that for the purpose of calculating the period of thirty days for filing application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act for those registered persons who were served notice under clause (b) or clause (c) of sub-section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and where cancellation order was passed up to 12th June, 2020, the later of the following dates shall be considered viz. ( a) Date of service of the said cancellation order; or (b) 31 st day of August, 2020 - Pertinently, Commercial Taxes and Registration Department of the Government of Tamil Nadu has passed G.O.Ms.No.102 dated 26.06.2020 consequent upon the above CBIT Notification - Petitioner has, therefore, sent an email dated 30.07.2020 requesting that it may be permitted to withdraw the writ petition and seeking liberty to approach the Assessing Authority by the cut-off date provided in the Notification seeking restoration of registration - writ petition is dismissed as withdrawn granting liberty as aforesaid: High Court [para 4, 5]

- Petition dismissed : MADRAS HIGH COURT

GST - Petitioner seeks a certiorari challenging an order dated 08.11.2018 of cancellation of registration under the provisions of the CGST Act, 2017 - Petitioner also brings to the notice of the Bench an order passed by the Central Board of Indirect Taxes, Customs in order No.1 of 2020 Central Board of Indirect Taxes and Customs in S.O. 2064 (E). dated 25.06.2020 clarifying that for the purpose of calculating the period of thirty days for filing application for revocation of cancellation of registration under sub-section (1) of section 30 of the Act for those registered persons who were served notice under clause (b) or clause (c) of sub-section (2) of section 29 in the manner as provided in clause (c) or clause (d) of sub-section (1) of section 169 and where cancellation order was passed up to 12th June, 2020, the later of the following dates shall be considered viz. ( a) Date of service of the said cancellation order; or (b) 31 st day of August, 2020 - Pertinently, Commercial Taxes and Registration Department of the Government of Tamil Nadu has passed G.O.Ms.No.102 dated 26.06.2020 consequent upon the above CBIT Notification - Petitioner has, therefore, filed memo dated 12.08.2020 requesting that it may be permitted to withdraw the writ petition and seeking liberty to approach the Assessing Authority by the cut-off date provided in the Notification seeking restoration of registration - writ petition is dismissed as withdrawn granting liberty as aforesaid: High Court [para 4, 5]

- Petition dismissed : MADRAS HIGH COURT

GST - Appellants allege that illegal proceedings were taken against them, purportedly under the Central Goods and Services Tax Act, 2017 , and their residences and offices were raided, both of them kept under illegal custody and an amount of Rupees One Crore extorted from them; that on the intervention of their Advocate at mid-night, they were released, allege the appellants - Single Judge found that the writ petition is premature and there was no evidence produced by the petitioners to substantiate the contention of harassment perpetrated on them - Single Judge refused exercise of discretion under Article 226 and the reliefs sought for were declined - petitioners are in appeal against this order of the Single Judge - in the meantime, their bank accuonts were attached after disposal of the petition by the Single Judge.

Held:

+ Circular Exhibit A6 at its beginning refers to the requirement of DIN, to ensure transparency and accountability - Bench does not think, Exhibit P4 issued to the appellants, which is also an order of seizure of documents, made in the presence of the appellants, to effectuate seizure requires a DIN or even subsequent generation of the same - As far as summons at Annexures A2 and A3, there is proper generation of DIN, which has been verified by the Senior Counsel and the Instructing Counsel: High Court [para 10]

+ The allegations raised of harassment and high-handedness cannot be considered in a petition under Article 226 of the Constitution - An operation carried out by a statutory authority invested with the powers of search, inspection and seizure, by reason only of such activities having been carried out in the residences and offices of any person under investigation for a long time, cannot be labeled as harassment or high-handed - Nor could the inconvenience caused to the person under investigation, especially of remaining in the premises for the entire duration, termed to a detention pursuant to an arres -. A search and seizure operation necessarily brings with it certain discomforts, which are to be endured in the best interest of the person under investigation who witnesses every action of the inspection team - The allegations are also not substantiated which, we perfectly understand, are impossible of substantiation, especially in a petition under Article 226 - Apart from the invalidity urged of the very search, inspection and seizure, we are not considering any of the issues so raised in the writ petition and in the appeal - We do not express any opinion and the appellants, if desirous, could take appropriate proceedings with substantiating material. [para 11]

+ Section 67 is a more onerous procedure which can be initiated only on the satisfaction of an Officer not below the rank of a Joint Commissioner of, suppression of taxable transactions, excess claim of input tax credit, contravention of the provisions of the Act and Rules, keeping of goods and accounts in contravention of the provisions, escapement of tax, secreting of goods or material liable to confiscation or relevant or useful in any proceedings under the Act and any act leading to evasion of tax. Investigation under Section 67 is no routine procedure as is an audit under section 65 - Looking at the various proceedings it cannot be, for a moment, believed that the appellants were taken off guard by the abrupt proceedings taken under Section 67 as they would allege. We do not find any infirmity in the audit and investigation proceeding being continued simultaneously [para 17]

+ When an investigation is in progress and the premises of any person is being searched and seizure effected; again at any time, in the course of the proceedings, the person is enabled payment of tax, interest and penalty at the reduced rate of penalty so as to save himself from a higher penalty. In the course of inspection, often a generation of the prescribed form and deposit in accordance with the Rules may not be possible. This is why Section 87(3) proviso speaks of the restriction for deposit upto ten thousand rupees per challan, in case of over the counter payments being exempted in situations under clauses (a), (b) and (c) of that proviso. An officer above the rank of a Joint Commissioner or one authorized by such officer carrying out the investigation or enforcement activity is so exempted and can deposit any amounts collected, by way of cash, cheque or demand draft, during the investigation or enforcement activity. This does not require generation of the Forms prescribed. The proper officer or the one authorized, hence is enabled to receive cash, cheque or demand draft in the course of an investigation or enforcement activity from the taxpayer. We do not find any extortion having been effected against the statute and Exhibit P3 specifically indicates that it is a voluntary payment, although it is made under protest. [para 22]

+ We have also found that the issuance of the cheque is voluntary and its receipt by the SIO, is sanctioned by the statute and the rules prescribed there under. Hence, the Department could proceed for encashment of the cheque in accordance with the procedure prescribed. [para 24]

+ Principles of Natural justice before ordering attachment of bank accounts - Said principle does not apply insofar as an attachment made to protect the interest of the revenue. If notice is issued before attachment, then the account holder could as well defeat the purpose, by withdrawing the amounts kept in such accounts. The rule for a hearing does not arise prior to attachment. Whether it arises before seeking disbursement of the amounts remaining in the account, we are not called upon to adjudicate as of now. We leave the matter to be adjudicated before the appropriate authorities or forum. We do not think that the proceedings initiated under Section 67 is improper, illegal or that the actions projected before us were in any manner proceeded with, in an arbitrary or high-handed fashion. [para 27]

GST - 1st respondent got issued show cause notice under Section 73 of the Act on 31.01.2020 in Form GST DRC-01 for the tax periods July, 2017 to March, 2018 and April, 2018 to March, 2019 proposing to levy CGST + SGST totaling to Rs.3,27,36,878/- - Petitioner filed detailed objections through its letter dt.18.02.2020 and also sought for a personal hearing before the 1st respondent – However, 1st respondent, after receiving the said objections of the petitioner on 19.02.2020, did not afford any personal hearing to the petitioner, and passed the impugned assessment order dt.13.03.2020 under Section 73 of the Act, and summary of the order in form GST DRC 07 dt.13.03.2020 for the above tax periods demanding the above amount from the petitioner – Petitioner is before the High Court.

Held: Bench is of the opinion that the 1st respondent ought to have provided a personal hearing to the petitioner, since the petitioner requested for it specifically in its objections dt.18.02.2020 filed by it to the show cause notice issued on 31.01.2020 to it by the 1st respondent, and that failure of the 1st respondent to do so is a violation of principles of natural justice warranting setting aside of the impugned order - Writ Petition is allowed; the impugned assessment order passed by the 1st respondent on 13.03.2020 in Form GST DRC-07 for the tax periods 2017-18 and 2018-19 is set aside; the matter is remitted back to the 1st respondent for fresh consideration: High Court [para 11, 12]

- Matter remanded : TELANGANA HIGH COURT

GST - Petitioner Association seeks quashing of show cause notices issued by the Taxation authorities to the manufacturers of the "AUS ingredients based sanitizer" for depositing the GST at the Tariff Rate of 18% under the HS Code 3808-94 instead of 12% - Petitioner submits that the impugned SCNs have been wrongly issued by the respondent-authority by misclassifying the same as "alcohol based sanitizer" whereas the sanitizers being manufactured by them are Ayurvedic/ Unani/ Sidha (AUS) ingredient based sanitizers and thus different from alcohol based sanitizers - It is further argued that the sanitizers manufactured by them come within the 12% GST bracket and not 18% as levied by the authorities; that a comprehensive representation in this regard has already been made to respondents on 27.07.2020, however, no action on said representation has been taken till date - Counsel for Revenue submits that the representation dated 27.07.2020, if already submitted, shall be forwarded to the establishment of the GST Council for appropriate consideration in accordance with law.

Held: Bench hopes that the same (representation) shall be taken up for consideration by the GST Council at the earliest, considering the issue involved - Petition disposed of accordingly: High Court

GST - Petitioner is aggrieved by the inaction on the part of the respondents in not releasing the IGST and amount of duty drawbacks due to them – Bench, therefore, directs the respondent authorities concerned to decide the question of release or otherwise of IGST along with interest as well as the release or otherwise of duty drawback due to the petitioner in accordance with law, rules, regulations and Government policies applicable to the facts of the case, as early as possible and preferably within a period of three weeks - petitioner shall thereafter be at liberty to challenge the order passed by the respondents, if so advised, along with the other grievances raised in this writ petition – Petition disposed of: High Court [para 4 to 6]

GST - Petitioner is aggrieved by the inaction on the part of the respondents in not releasing the IGST and amount of duty drawbacks due to them - Bench, therefore, directs the respondent authorities concerned to decide the question of release or otherwise of IGST along with interest as well as the release or otherwise of duty drawback due to the petitioner in accordance with law, rules, regulations and Government policies applicable to the facts of the case, as early as possible and preferably within a period of three weeks - petitioner shall thereafter be at liberty to challenge the order passed by the respondents, if so advised, along with the other grievances raised in this writ petition - Petition disposed of: High Court [para 4 to 6]

GST - Petitioner has filed a Public Interest Litigation being aggrieved by the fact that there was no extension by the respondents of including masks and sanitizers in the list of "Essential Commodities" under the Essential Commodities Act, 1955 and also regulation in the price of masks and sanitizers after 30 th June 2020 – Also, the petitioner has also sought for reduction in GST rate applicable on alcohol based sanitizers from 18% to either 5% or 12%.

+ None of the prayers can be granted by this Court for the following reasons viz. (a) What items are to be included under the Essential Commodities Act, 1955 as "Essential Commodity", is a policy decision of the respondent/Government and, therefore, unless the decision can be shown to be manifestly unreasonable or arbitrary, this Court will be extremely slow in interfering with the policy decision of the Government; (b) Inclusion of commodities in the list of "Essential Commodities" under the Essential Commodities Act, 1955 is a complex decision based upon varieties of factors such as availability, price etc. -Moreover, the aforesaid notification dated 13th March, 2020 has not been extended beyond 30th June, 2020 as, in the opinion of the Government, masks and sanitizers are now easily available and there is no need to control such commodities or to regulate supply etc. of these commodities. Thus, a conscious decision has been taken by the respondents not to extend the notification dated 13th March, 2020 beyond 30th June, 2020 as, in the opinion of the Government, based upon the facts, there is no need to control the price of the masks and sanitizers, as per the Office Memorandum dated 1st July, 2020; (c) The petitioners have not brought any material on record to demonstrate that the basis for the decision of the respondents is erroneous in any manner; (d) Even during the period of coverage of masks and sanitisers under the Act, the only regulation in place was about the price of the aforesaid two commodities as is clear from the notification dated 21st March, 2020: High Court [para 4]

+ Insofar as the other prayer, which relates to reduction of rate of GST on sanitizers, it ought to be kept in mind that the rate of tax cannot be challenged in a Court of law unless it is abundantly confiscatory in nature - In the facts of the present case, nothing has been argued out about how the present rate of GST is confiscatory in law - Merely because this petitioner feels that the GST rate applied on sanitizers is excessive, this cannot be a reason for issuing a writ of mandamus and direct the respondents to reduce tax on the said commodity. [para 6]

GST - Petition is filed seeking quashing of the impugned penalty order dated 25.11.2019 in Form GST MOV 09 by the respondent No.1 under Section 129 (3) of the CGST Act and for other reliefs - Petitioner submitted that the impugned order is violative of principles of natural justice inasmuch as without giving any personal hearing to the petitioner and without affording sufficient and reasonable opportunity to the petitioner, the respondent NO.1 has proceeded to pass the impugned order at Annexure-E placing reliance upon several documents which were never brought to the notice of the petitioner prior to passing of the impugned order - Counsel for Revenue submits that there is no merit in the petition, particularly in the light of the remedy by way of appeal available to the petitioner and as such, the writ petition is liable to be dismissed.

Held: It is not in dispute that no opportunity of personal hearing was given to the petitioner before passing the impugned order - The material on record also indicates that several documents relied upon by the respondent No.1 in the impugned order at Annexure-E were neither brought to the notice of the petitioner nor was he permitted to cross-examine the witnesses with reference to the said documents - aforesaid facts and circumstances will indicate that in the absence of sufficient and reasonable opportunity being granted in favour of the petitioner, the impugned order is clearly in contravention of principles of natural justice and that the same deserves to be set aside on this ground alone and the matter deserves to be remitted back to the respondent No.1 to consider and dispose of the same afresh in accordance with law after providing sufficient and reasonable opportunity to the petitioner - respondent No.1 is directed to dispose off and conclude the proceedings within a period of one month: High Court [para 5 to 7]

GST - Constitutional validity of the retrospective amendment to s.140 of the CGST Act, 2017 and Rule 117 of the CGST Rules are under challenge - Bench had in its earlier judgment in P.R.Mani Electronics - 2020-TIOL-1198-HC-MAD-GST upheld the validity of Rule 117 of the CGST Rules, 2017- Petitioner sought to distinguish the said judgment by contending that availment of ITC should be distinguished from the transition and utilisation of the ITC; that once an assessee avails ITC by complying with all the conditions relating thereto, a vested right accrues in favour of such assessee and such vested right of ITC cannot be divested by a subsequent enactment; that section 174(2)(c) of the Act protects vested rights; that the CENVAT credit can be taken away only when it was wrongly availed by invoking rule 14 of CCR; that the objects and reasons of the CGST Act are adverted to in order to contend that the primary object was to prevent cascading of taxes and that the relevant provisions viz. section 140 of the CGST Act and rule 117 of the Rules should be interpreted by keeping in mind the said object and purpose - Bench, therefore, is of the opinion that the following questions arise for consideration viz. Whether ITC is a vested right and, therefore, whether the imposition of time limit for transitioning or utilisation thereof is constitutionally impermissible; Whether the time limit imposed in rule 117 of the CGST Rules is mandatory or directory; Whether section 140 of the Act read with rule 117 of the Rules divests the assessee of an alleged vested right or whether it prescribes conditions relating to the enforcement of such right; Whether the assessee has a legitimate expectation that the ITC availed under the erstwhile tax regime should be permitted to be transitioned to the new tax regime without imposing a time limit and Whether the deprivation of the benefit of ITC would amount to double taxation of the assessee - Notice issued - Matter to be listed on 18.09.2020: High Court [para 6]

GST - Issues raised in the application are regarding the requirement of the passing over of the benefit of ITC on goods lying in stock as on the appointed date i.e: 01.07.2017 and in respect of the goods procured after the appointed date, which is outside the purview of the matters listed in sub-section (2) of Section 97 of the CGST/SGST Act, 2017 - Hence, no advance ruling can be issued: AAR

GST - Applicant being a Co-operative Society registered with the Central Registrar of Co-operative Societies and carrying on the business of financing whether by means of making loans or advances or otherwise, of any activity other than its own qualifies to be a "financial institution" as per the Reserve Bank of India Act, 1934 [clauses (c) and (e) of Section 45-I] and consequently also under the CGST Act, 2017 – applicant, therefore, satisfies both the conditions to be eligible for exercising the option provided under sub-section (4) of Section 17 [Apportionment of credit and blocked credits] of the Central / State GST Act, 2017 viz. which prescribes availment of an amount equal to 50% of eligible credit of input tax, on inputs, capital goods and input services in that month and the rest shall lapse: AAR

GST - "Rebuild Kerala" Project - Activity undertaken by the applicant for Sri Sathya Sai Trust as per the agreement dated 16.11.2019 cannot by any stretch of imagination be construed as construction of affordable residential apartments by a promoter in a residential real estate project intended for sale to a buyer and hence the rate of GST prescribed under SI No. 3 (i) of the Notification No. 11/2017 Central Tax (Rate) as amended by Notification No. 03/2019 Central Tax (Rate) dated 29.03.2019 is not applicable in respect of the activity - The activity undertaken by the applicant is construction of 45 individual residential houses at different locations on the land belonging to the individual beneficiaries and the activity squarely falls within the scope of works contract as defined in Section 2 (119) of the CGST Act, 2017 - Services provided by the applicant to Sri Sathya Sai Trust for construction of low cost housing units falls within the ambit of Sl No. 3 (v) of Notification No. 11/2017- Central Tax (Rate) and is liable to GST at the rate of 12% [6% CGST and 6% SGST]: AAR

GST - Applicant has received a work order from Vikram Sarabhai Space Centre for the construction of a building for space transportation system; same is a composite contract which includes supply of materials as well as service - They have also received another work order from Mis. Infrastructure Kerala Ltd, a Public Private Partnership Company promoted by Government of Kerala, for the development of Medical College, Thiruvananthapuram which includes construction of road, bridges and other infrastructure - The applicant has requested for advance ruling on the rate of tax applicable for the above works contracts awarded by the Government authorities.

Held: Services provided by the applicant under both the contracts being composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017 provided to the Central Government and State Government by way of construction, erection, commissioning or installation of a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession is covered under entry at Sl No. 3 (vi) (a) of Notification No. 11/2017 Central Tax (Rate) and attracts GST at the rate of 12% [6% CGST and 6% SGST]: AAR

GST - Activity of renting / leasing the water channel by the Grama Panchayat to the applicant for fish farming for a consideration determined through auction is squarely covered under the exemption entry at Sl No. 54 of Notification No. 12/2017 Central Tax (Rate) as services relating to ‘rearing of all life forms of animals by way of renting or leasing of vacant land': AAR

GST - Manufacture of PVC Tufted Coir Mats / Mattings / Floor coverings by the process of embedding coir yarn into PVC cannot be considered as textile floor coverings of coir covered under HSN 5702, 5703 or 5705 - The process undertaken is a tufting process and, if any, PVC or rubber or any other materials are tufted on the textile of coir, which is used as floor mats or mattings, it will come under the Customs Tariff Head 5703 90 90 and is liable to GST at the rate of 12% as per Entry at Sl No. 144 Schedule II of Notification No. 01/2017 Central Tax (Rate) : AAR

PVC Tufted Coir Mats and Matting cannot be considered as coir mats, mattings and floor coverings covered under HSN 5702 or 5705 and is appropriately classifiable under HSN 5703 90 90 as tufted mats / matting / floor coverings of coir: AAR

PVC Tufted Coir mats/ mattings / floor coverings are classifiable under Customs Tariff Heading 5703 90 90 and attracts GST at the rate of 12% as per Sl No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) : AAR

GST - Cast protector cannot be considered as a pharmaceutical product - It is a reusable water proof plastic covering that keep the casts / wounds dry while coming to contact with water - Hence it comes under the classification HSN 3926 90 99 'Other articles of plastics and articles of other materials of headings 3901 to 3914 -Other' and not under HSN tariff item 9021.10.00 as a fracture appliance: AAR

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges that the respondent had sold tickets of value of Rs.250/-, Rs.200/-, Rs. 150/- at the same prices prior to and after the GST rate reduction vide notification 27/2018-CTR dated 31.12.2018; that the respondent had not passed on the benefit of reduction in the GST rate from 28% to 18% w.e.f 01.01.2019 and instead, had increased the base prices; therefore, had profiteered - DGAP in its report has stated that the respondent had profiteered by an amount of Rs.13,51,519/- w.e.f 01.01.2019 to 06.01.2019 thus the benefit of rate reduction in GST rates was not passed on to the recipients by way of commensurate reduction in the prices of the tickets; however, it is confirmed by the DGAP that the respondent has reduced the prices commensurately w.e.f 07.01.2019 and has also deposited an amount of Rs.13,72,181/- as profiteered amount along with interest of Rs.35,865/- in the Consumer Welfare Funds - respondent has also claimed that one of his sites in the State of Telangana, Hyderabad has started its operation from 30.11.2019 and in terms of Telangana State Regulations, the prices of the tickets were to be fixed after completion of one month; that the prices of the tickets were fixed in terms of the order dated 02.01.2019 passed by the High Court of Telangana in WP no. 48127 of 2018 filed on 31.12.2018; therefore, the rate reduction was not applicable in the above cinema hall.

Held: Telangana State Regulations cannot supersede the provisions of the CGST/Telangana SGST Act, 2017 which governs the fixation of the GST rates as well as the anti-profiteering measures - since the Central government and the Telangana Government have given the benefit of tax reductions out of their precious tax revenue to benefit the common cinema goers the respondent cannot deny the same since it is not to be paid by him from his own pocket - respondent cannot illegally enrich himself at the expense of the general public which is vulnerable, unorganised and voiceless and misappropriate the above benefit - it is also revealed from the perusal of the order dated 02.01.2019 of the High Court that the Court has not exempted the respondent from passing on the benefit of tax reductions, therefore, the respondent has to pass on the rate reduction benefit to the eligible customers as per the provisions of s.171 of the Act - respondent has also averred that he was not allowed to change the ticket prices even on account of increase in his cost without permission of the licensing authorities concerned as per the provisions of the Andhra Pradesh Cinemas (Regulation) Act, 1955 - it is pertinent to note that passing on the benefit of tax reductions has no connection with the costs of the respondents as the CGST/SGST Act, 2017 only require passing on the benefit of tax reductions which does not fall under the provisions of the Andhra Pradesh Cinemas (Regulation) Act, 1955 - moreover, State Authorities always fix the upper price limits of the cinema tickets by taking into consideration the various factors including cost in the interest of cinema goers and the respondent is always at liberty to reduce the prices in accordance with the provisions of s.171 of the Act at the time of rate reductions - no prior approval of the State Government under this Act is required to pass on the benefit of tax reductions as the rates of tax are not fixed under it - it is also apparent from the record that the respondent has not reduced his prices suo motu as the same was done by him due to the intervention of the Central GST Anti-Evasion authorities; therefore, the claim of the respondent that he had passed on the benefit of rate reduction to his customers and no further reduction of ticket prices is required is unacceptable moreso since no evidence is there on record to substantiate this claim - the profiteered amount is determined as Rs.13,51,519/- for the period 01.01.2019 to 06.01.2019 as mentioned in DGAP report dated 31.01.2020 - as the respondent has voluntarily deposited this amount in the Consumer Welfare Funds (as recipients are not identifiable) along with interest and has also reduced the ticket prices commensurately w.e.f 07.01.2019, no further direction is required in the matter - Although the respondent has contravened the provisions of s.171 of the Act and resorted to profiteering, penalty u/s 171(3A) for violation of the above provisions cannot be imposed since the said sub-section has come into force w.e.f 01.01.2020 only - As the infringement pertains to the period 01.01.2019 to 06.01.2019 and the respondent has already deposited the profiteered amount along with interest no penalty is proposed to be imposed - Order is passed taking into account the prevalent pandemic and the notification 55/2020-CT: NAA

GST - 'Luggage trolley bag/suitcases' viz. Weekender & Neolite - Period involved is 15.11.2017 to 31.08.2018 - Anti-Profiteering - S.171 of the CGST Act, 2017 - DGAP in its report concluded that the respondent had increased the base prices despite the reduction in the rate of GST from 28% to 18% - Authority held that the Respondent had acted in contravention of the provisions of section 171 of the CGST Act, 2017 inasmuch as he did not pass on the benefit of reduction in the rate of tax to his recipients by way of commensurate reduction in the prices - respondent was, therefore, directed to deposit the profiteered amount of Rs.18,887/ as computed by the DGAP along with interest calculated @18% from the date when the above amount was collected from the recipients till the date the amount is deposited - since recipients are not identifiable, the amount was required to be deposited in the Central Consumer Welfare Fund and the Kerala State CWF in the ratio of 50:50 along with 18% interest within three months - since the respondent had deliberately and consciously acted, in contravention of the provisions of the CGST Act, 2017, by issuing incorrect tax invoices which is an offence u/s 122(1)(i) of the Act, they were liable for imposition of penalty and in which regard SCN was required to be issued - respondent were issued SCN dated 13.06.2019 asking them as to why penalty mentioned in s.122 r/w rule 133(3)(d) of the Rules should not be imposed - reply was filed on 25.09.2019.

Held: Period involved is 15.11.2017 to 31.08.2018 - Perusal of Section 122(1)(i) makes it clear that the violation of the provisions of Section 171(1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act - Furthermore, vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171(3A) - However, since no penalty provisions were in existence between the period w.e.f. 15.11.2017 to 31.08.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively - Accordingly, the notice dated 13.06.2019 issued to the Respondent for imposition of penalty under Section 122(1)(i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped: NAA

GST - Runway My City Project - Anti-Profiteering - S.171 of the CGST Act, 2017 - DGAP in its report stated that during the period July 2017 to June 2018 the respondent had benefited from additional ITC to the tune of 3.35% of the turnover; that the profiteered amount computed based on the aforesaid ratio comes to Rs.3,20,49,507/- - Authority held that Passing on the benefit of ITC which is not being paid by the respondent from this own pocket does not amount to violation of his fundamental right to carry out his business; that the computation of benefit of ITC as per the revised report indicated that the applicant is entitled to an amount of Rs.15,336/- as benefit of ITC apart from what has been already passed on to him and which has been duly verified by DGAP - in respect of the other flat buyers, the balance amount of Rs.3,19,49,275/- is directed to be passed without taking into account the benefit of ITC which has been claimed to have have been passed on; that interest is payable @18% on the said amount and the amounts are to be paid within a period of 3 months; that penalty is required to be imposed for the offence committed u/s 171(3A) of the Act for which reason SCN is to be issued; that the SCN dated 12.12.2018 issued to respondent proposing penalty u/s 29 and 122-127 was withdrawn - respondent was later issued notice on 18.12.2019 asking him to explain as to why the penalty mentioned in s.171(3A) r/w rule 133(3)(d) should not be imposed on him - respondent made their submissions on 03.01.2020.

Held: Period involved is 01.07.2017 to 30.06.2018 - Perusal of Section 122(1)(i) makes it clear that the violation of the provisions of Section 171(1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act - Furthermore, vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171(3A) - However, since no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.06.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively - Accordingly, the notice dated 18.12.2019 issued to the Respondent for imposition of penalty under Section 171(3A) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped: NAA

GST - Anti-Profiteering - Section 171 of the CGST Act, 2017 - DGAP had submitted a revised investigation report and in which it is concluded that post-GST the respondent had benefited from the additional ITC to the tune of 1.79% - Since the said conclusion was not challenged by the respondent, the Authority treated the same as correct and concluded that the amount of ITC benefit which had not been passed on by the respondent to the customers/the profiteered amount comes to Rs.1,01,06,773/- which includes GST (@12% or 18%) on the base profiteered amount of Rs.89,68,979/- and which also included an amount of Rs.49,169/- (including GST on base amount of Rs.43,655/-) which was profiteered by the respondent from the present applicant; that the ITC benefit is required to be passed by the respondent to the 155 buyers from whom he has received consideration post GST; that the respondent had also realized an additional amount of Rs.15,90,239/- which includes both the profiteered amount @1.79% of the taxable amount and GST on the said profiteered amount from 92 other flat buyers and since these buyers are identifiable as per the documents, the profiteered amount is required to be passed to them along with interest @18% p.a - Authority concluded that in view of the above profiteering the respondent had committed an offence u/s 122 of the Act and is, therefore, liable for imposition of penalty and a SCN was issued in this regard on 15.05.2019 asking as to why penalty mentioned in s.122(1) read with rule 133(3)(d) of the Rules should not be imposed - respondent made submissions on 28.05.2019 and the same has been considered.

Held: Period involved is 01.07.2017 to 30.06.2018 - Perusal of Section 122(1)(i) makes it clear that the violation of the provisions of Section 171(1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act - Furthermore, vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171(1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171(3A) - However, since no penalty provisions were in existence between the period w.e.f. 01.07.2017 to 30.06.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively - Accordingly, the notice dated 15.05.2019 issued to the Respondent for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped: NAA

Director General Of Anti-Profiteering Vs Harish Bakers And Confectioners Pvt Ltd

GST - Anti-Profiteering - S.171 of the CGST Act, 2017 - DGAP had in its report stated that the Respondent had denied the benefit of GST rate reduction to his customers amounting to Rs. 15,958/- pertaining to the period w.e.f. 15.11.2017 to 31.03.2018 and had thus indulged in profiteering and violation of the provisions of Section 171 (1) of the above Act - Authority had accepted this report and determined the profiteered amount as Rs.15,958/- [2018-TIOL-16-NAA-GST] - Respondent was issued notice dated 01.01.2019 asking him to explain why the penalty mentioned in Section 122(1) read with Rule 133 (3) (d) should not be imposed on him - respondent submits that penalty should only be imposed when there is a mens rea and deliberate attempt to violate the provisions of law and as he has complied with this Authority's Order No. 17/2018 which depicted his bonafide intentions, penalty should not be imposed upon him.

Held: Perusal of Section 122(1)(i) makes it clear that the violation of the provisions of Section 171(1) is not covered under it as it does not provide penalty for not passing on the benefits of tax reduction and ITC and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made under Section 171 of the above Act - Furthermore, vide Section 112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of Section 171 (1) which have come in to force w.e.f. 01.01.2020, by inserting Section 171 (3A) - However, since no penalty provisions were in existence between the period w.e.f. 15.11.2017 to 31.03.2018 when the Respondent had violated the provisions of Section 171(1), the penalty prescribed under Section 171(3A) cannot be imposed on the Respondent retrospectively - Accordingly, the notice dated 01.01.2019 issued to the Respondent for imposition of penalty under Section 122 (1) (i) is hereby withdrawn and the present penalty proceedings launched against him are accordingly dropped: NAA

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant alleges profiteering in respect of restaurant service supplied by respondent (franchisee of M/s Subway Systems India P Ltd.) - it is alleged that despite the reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017, respondent had not passed on the commensurate benefit since they had increased the base prices of his products - Based on the report of the DGAP and the submissions made, the profiteered amount is determined as Rs.61,67,097/- as computed in Annexure 15 of the DGAP's report dated 25.10.2019 - respondent is directed to reduce his prices commensurately in terms of rule 133(3)(a) of the Rules - since recipients are not identifiable, respondent is directed to deposit an amount of Rs.61,67,097/- in two equal parts each in the Central Consumer Welfare Fund and the Maharashtra State Consumer Welfare Fund as per the provisions of rule 133(3)(c) of the Rules, 2017 along with interest payable @18% - amount to be deposited within 3 months failing which it shall be recovered by the Commissioners concerned - contravention of s.171(1) of the Act is an offence liable to penal action under section 171(3A) of the Act read with Rule 133(3)(d) of the Rules; SCN to be issued accordingly - DGAP has reported that the respondent has 35 operational outlets at Mumbai International Airport, Terminal 2 and out of these 35 outlets only 2 were franchisees of M/s Subway Systems India P Ltd. - this Authority has reasons to believe that there is a need to investigate all the outlets of the respondent since profiteering on the part of the respondent has already been established in the case of his two Subway outlets as also the fact that supplies from various outlets are being made through a single GST registration and the same ITC pool/electronic credit ledger is being used for all the supplies being made from that registration - Authority, in line with provisions of s.171(2) of the Act and Rule 133(5)(a) of the Rules directs the DGAP to further investigate all the other outlets of the said respondent - Order is passed taking into consideration notification 55/2020-CT: NAA

Director General Of Anti-Profiteering Vs Eldeco Infrastructure And Properties Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - DGAP had conducted an investigation into an allegation of profiteering by the respondent inasmuch as that it had not passed on the benefit of additional ITC to the applicant as well as 124 other house and plot buyers who had purchased them in the project ‘Eldeco County' - DGAO had in its report dated 28.11.2018 concluded that the respondent had denied the benefit of ITC to the aforesaid buyers amounting to Rs.41,82,198/- pertaining to the period July 2017 to 31st August 2018 and had thus indulged in profiteering and violation of the provisions of s.171 of the Act - Authority had after consideration of this report of DGAP had issued notice dated 07.12.2018 to the respondent to show cause as to why the said report should be accepted and his liability be fixed - after hearing the parties the Authority vide its order dated 24.05.2019 [2019-TIOL-34-NAA-GST] determined the profiteered amount as Rs.41,82,198/- and also held the respondent as having violated s.171 of the Act - Respondent was also issued notice dated 27.05.2019 asking him to explain as to why penalty mentioned in s.122 r/w rule 133(3)(d) of the Rules should not be imposed - respondent submitted that they had immediately accepted the amount which had been determined by the Authority and it was paid to all the eligible buyers along with interest of 18% totalling Rs.59,57,306/- and proof of payment was also submitted and which depicted their bonafide intentions to comply with the provisions of s.171 of the Act; that the applicant had also received the benefit of Rs.3,44,455/- vide cheque dated 05.02.2019; that, therefore, no penalty is imposable on them.

Held: It is apparent from perusal of s.122(1)(i) that the violation of the provisions of s.171(1) of the Act, 2017 is not covered under it as it does not provide for imposing penalty for not passing on the benefits of tax reduction and ITC; that it only provides for imposition of penalty for not issuing an invoice or for issuing an incorrect or false invoice in respect of any supply of goods/services; that the proviso covers situations envisaged in s.51 and 52 of the Act; that since the profiteered amount is not a tax imposed under the CGST Act, 2017, the above penalty cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - Further, insofar as imposition of penalty in terms of s.171(3A) of the Act, 2017 is concerned, which provision has been added by s.112 of the Finance Act, 2019 for imposition of penalty for violation of the provisions of s.171(1) of the Act and effective from 01.01.2020, since no penalty provisions were in existence between the period 01.07.2017 to 31.08.2018 when the respondent had violated the provisions of s.171(1), the penalty prescribed u/s 171(3A) cannot be imposed on the respondent - Therefore, notice dated 27.05.2019 issued to respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings launched are accordingly dropped: NAA