Supreme Court of India has been pronouncing judgments on various petitions and appeals on Goods and Services Tax (GST). Obviously, these are important judgments deciding the issues or settling the relief in larger public interest. There pronouncements have far reaching impact and bearing on GST administration and powers of field formations, besides directly impacting the taxpayer. Some of the recent judgments are covered in this piece for wider reach to taxpayers and professionals.
Bail granted to applicant as investigation was complete
- The petitioner sought bail in the proceedings initiated under Section 132 before the High Court in relation to the allegation with regard to the transportation of unmanufactured tobacco.
- It was alleged that such procurement of unmanufactured tobacco was for clandestine manufacture and supply of zarda without payment of leviable duties and taxes. However, the High Court of Rajasthan dismissed the application. Therefore, the petitioner filed special leave petition before the Supreme Court.
- The Honorable Supreme Court held that the petitioner was arrested on 21.07.2022 and while in custody, the investigation had been completed. It was also held that the bail should be granted as there can be no apprehension of tampering, intimidating or influencing in view of the fact that evidence to be tendered by the department would essentially be documentary and electronic.
[Source: RATNAMBAR KAUSHIK VERSUS UNION OF INDIA - 2022 (12) TMI 263 - SUPREME COURT]
Pre Show Cause Notice Consultation
- Pre-show cause consultation notice not issued but high court directed show cause notice to be considered was communication for pre-SCN consultation.
- Assessee provided with sufficient opportunity to satisfy tax authorities that there was no case for issuance of SCN.
- Thus, principles of natural justice stood substantially complied with.
- Assessee was granted liberty to raise all legal grounds before assessing officer to be decided on merits.
[Source: M/S YADUKA AGROTECH PRIVATE LIMITED VERSUS COMMISSIONER OF CGST & ORS. - 2022 (12) TMI 262 - SC ORDER]
Modification in Bail Order
- An appeal was preferred by Union of India against Allahabad High Court Order dated 15.09.2021 in SH. HARDEEP SINGH BANGA AND 6 OTHERS VERSUS STATE OF U.P. AND 4 OTHERS - 2021 (9) TMI 1005 - ALLAHABAD HIGH COURT.
- In High Court Order, anticipatory bail was granted till the inquiry was to be concluded by the Proper Officer of GST Department under Section 70 (1) of the GST Act, on their execution of a personal bond of Rs. 5 crore and Indemnity bond to the tune of Rs. 25 crore on behalf of applicants before the Proper Officer concerned on certain conditions.
- It was held that the personal liberty guaranteed under Article 21 of the Constitution of India is a fundamental right and in every case, arrest is not necessary.
- Where the implication of a person is for a non-bailable offence, he can apply for anticipatory bail under Section 438 Cr.PC. If the applicants cooperate with the inquiry, there is no requirement of their arrest.
- For one of the aged 92 years respondent, it was directed that keeping in view his age, he shall be permitted to participate in inquiry through online mode as already directed by the High Court.
[Source: Union of India v. Hardeep Singh Banga UNION OF INDIA & ORS. VERSUS HARDEEP SINGH BANGA & ORS. - 2022 (9) TMI 1206 - SC ORDER]
Maintainability of Writ when alternate Remedy is available
- The appellant preferred a writ appeal before Apex Court by way of Special leave petition against dismissal of writ in BM Construction, Coochbehar v. Additional Commissioner of CGST- C.O. No. 72 of 2021 decided on 14.12.2021 by Calcutta High Court.
- In view of the fact that appellate remedy was available under section 107 of CGST Act, 2017, the apex court held that the writ jurisdiction was not maintainable against the High Court order and that High Court was right in not entertaining the writ petition.
- The appeal was therefore, dismissed.
[Source: BM CONSTRUCTION COOCHBEHAR VERSUS ADDITIONAL COMMISSIONER CENTRAL GOODS AND SERVICE TAX AND CENTRAL EXCISE & ORS. - 2022 (11) TMI 86 - SC ORDER]
Exemption from IGST / Cess under Advance Authorization Scheme
- Exemption from levy of IGST under section 3 (7) and compensation cess leviable under section 3 (9) of Customs Tariff Act, 1975 were subject to the conditions that the export obligation shall be fulfilled by physical exports only and shall also be subject to 'pre-import condition'.
- Mandatory fulfilment of 'Pre-import condition' incorporated in Foreign Trade Policy of 2015-2020 and Handbook of Procedures 2015-2020 through Notification No. 33/2015-20 and Notification No. 79/2017-Customs, both dated 13-10-2017 for availing exemption from IGST and GST compensation cess, can not be characterized as arbitrary or unreasonable.
- The introduction of the 'pre-import condition' may have resulted in hardship to the exporters, because even whilst they fulfilled the physical export criteria, they could not continue with their former business practices of importing inputs, after applying for Advance Authorization (AA), to fulfil their overseas contractual obligations.
- Inconvenience or hardship is not a ground for the court to interpret the plain language of the statute differently, to give relief.
- The exemption from the requirement of pre import conditions continues in respect of the old levies, which are, even as on date, not part of the GST regime. That clearly sets them apart from the new levies, the payment of which is insisted (after which refund can be sought) as a part of a unified system of levy, assessment, collection, payment, and refund.
- When reform by way of new legislation is introduced, the doctrine of classification cannot be applied strictly, and that some allowance for experimentation, to observe the effect of the law, is available to the executive or legislature.
- There is no constitutional compulsion that whilst framing a new law, or policies under a new legislation - particularly when an entirely different set of fiscal norms are created, overhauling the taxation structure, concessions hitherto granted or given should necessarily be continued in the same fashion as they were in the past.
[UNION OF INDIA & ORS. VERSUS COSMO FILMS LIMITED - 2023 (5) TMI 42 - SUPREME COURT]
GST on one-time lease premium
- Levy of GST on one-time lease premium towards letting of plots of land on lease basis (long term lease) is constitutionally valid (Bombay High Court Judgment upheld).
- The question of exemption granted by Notification No. 12 of 2017-CT (Rate) dated 28.06.2017 w.e.f., 01.07.2017 has not been gone into and kept open.
- Scope and ambit of the expression in Clause 2 (a) of Schedule-II “licence to occupy land is a supply of services” of the Central Goods and Services Act, 2017 is also not examined.
- The special leave petition was dismissed and high court order not interfered with.
[Source: BUILDERS ASSOCIATION OF NAVI MUMBAI VERSUS UNION OF INDIA AND OTHERS - 2023 (6) TMI 637 - SC ORDER]
Anticipatory Bail vis-à-vis Revenue Interest
- Uttarakhand High Court rejected the anticipatory bail in connection with summons issued to appellant.
- It was submitted that that since Section 132 (i) (iii) prescribes punishment for a term which may be extend to one year and the entire case is based on documentary evidence and other electronic evidence which are available on record, thus the appellant is not required for any custodial interrogation.
- The respondents objected on the ground to protect the interest of revenue.
- The Apex Court allowed appeal and held that appellant is entitled to be granted anticipatory bail without imposing any condition as suggested by Learned Additional Solicitor General. In such circumstances, it is provided that in case the appellant is arrested, he shall be liable to be released forthwith, subject to such terms and conditions which the Trial Court/Investigating agency may deem fit and proper to impose.
- The Apex Court relied upon SUBHASH CHOUHAN VERSUS UNION OF INDIA & ANR. - 2023 (1) TMI 1168 - SC ORDER; Criminal Appeal No. 523/2023, ANATBHAI ASHOKBHAI SHAH VERSUS STATE OF GUJARAT & ANR. - 2023 (3) TMI 684 - SC ORDER.
[Source: RAJESH KUMAR DUDANI VERSUS THE STATE OF UTTARAKHAND & ANR. - 2023 (3) TMI 682 - SC ORDER
