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GST - Case Laws
Showing 101 to 120 of 161 Records
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2023 (3) TMI 678 - DELHI HIGH COURT
Power of respondent to attach the bank account of petitioner - petitioner is not the tax payer against whom any proceedings have been initiated - petitioner also contends that the respondent has no extra territorial jurisdiction to pass such draconian order in respect of persons who are not tax payers - HELD THAT:- The petitioner is a registered dealer in Delhi. Its bank accounts in Delhi have been attached and, therefore, we do not consider it apposite that the petitioner be relegated to avail its remedies in another jurisdiction - Concededly, there is no material against the petitioner, at this stage, except that a sum of Rs.16,50,000/- were transferred from the bank account of M/s. Hello Enterprises to the petitioner.
The action of attachment of bank accounts is a draconian measure and must be resorted to as a measure of last resort.
As an interim measure, it is considered apposite to suspend the order of attachment of the petitioner’s bank account in question and direct that the petitioner be permitted to operate the same subject to the petitioner depositing a sum of ₹16,50,000/- with the Registry of this Court within one week from date.
List on 10.05.2023.
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2023 (3) TMI 677 - DELHI HIGH COURT
Refund of CGST and SGST paid alongwith interest - typographical error had crept in the return regarding the declared turnover - petitioner’s request for processing of refund has been rejected as the return was not rectified - HELD THAT:- The respondents, states that she has received instructions that the petitioner has provided documents for rectification of the error that had crept in its return and if the matter is remanded to the Adjudicating Authority, the petitioner’s request for refund would be considered afresh.
The order dated 11.12.2020 passed by the Adjudicating Authority rejecting the petitioner’s application for refund as well as the order dated 25.10.2021 (sent on 01.11.2021) are set aside - the petitioner’s application for refund is restored before the Adjudicating Authority to be decided afresh.
The petition is disposed of.
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2023 (3) TMI 629 - SC ORDER
Maintainability of petition - availability of alternative remedy of appeal - Violation of principles of natural justice - validity of assessment order - HELD THAT:- The present special leave petition is dismissed with liberty to file a petition assailing the same order afresh.
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2023 (3) TMI 628 - MADRAS HIGH COURT
Rectification of clerical errors in the details uploaded by it in Form GSTR -1 for the period 2017-18 and cause amendment of the Forms - recipients GSTIN/name has been wrongly mentioned - invoice number/date have been wrongly mentioned - some of the invoice wise details have been omitted to be reported in Form GSTR 1 - IGST was inadvertantly remitted under the heads SGST and CGST.
HELD THAT:- The fact remains that this Court has taken a view in very similar circumstances as in the present case, in the case of M/S. SUN DYE CHEM VERSUS THE ASSISTANT COMMISSIONER (ST) , THE COMMISSIONER OF STATE TAX [2020 (11) TMI 108 - MADRAS HIGH COURT] in PENTACLE PLANT MACHINERIES PVT. LTD. VERSUS OFFICE OF THE GST COUNCIL, NEW DELHI, OFFICE OF THE ASSISTANT COMMISSIONER (ST) , PALLAVARAM ASSESSMENT CIRCLE, CHENNAI, OFFICE OF THE SUPERINTENDENT OF CENTRAL TAX, OFFICE OF THE SUPERINTENDENT, CENTRAL GOODS & SERVICE TAX, RANGE V,U.P. [2021 (3) TMI 524 - MADRAS HIGH COURT] to the effect that those petitioners must be permitted the benefit of rectification of errors where there is no malafides attributed to the assessee. The errors committed are clearly inadvertant and, the rectification would, in fact, enable proper reporting of the turnover and input tax credit to enable claims to be made in an appropriate fasion by the petitioner and connected assessees.
In light of the consistent view taken by the Court and in deference to the position that such matters, where an expansive view of the issue is called for, are few and far between, as on date, this Court is inclined to accept the prayer of the petitioner and issues mandamus to the respondents to do the needful to enable uploading of the rectified GSTR 1. Let the parties ensure that this exercise is completed within a period of six (6) weeks from today.
Petition allowed.
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2023 (3) TMI 627 - GUJARAT HIGH COURT
Refund of service tax paid in cash along with the applicable interest under the transitional provision of Central Goods & Service Tax - It is the case of the petitioner that under Rule 6(3) of the Service Tax Rules, the petitioner is entitled to claim credit of the differential service tax paid in advance - HELD THAT:- While learned advocate for the petitioner raised various contentions on merits to assail the impugned order including on the aspect of applicability or otherwise of section 142(6)(a) of the Act, the Court does not find it necessary to go into all those contentions inasmuch as there is no gainsaying that the petitioner has alternative statutory remedy under section 35B of the Central Excise Act, 1994 read with section 86 in Chapter V of the Finance Act, 1994 read with section 174 of the Central Goods and Services Tax Act, 2017. Thereunder, the appeal is available to the appellate tribunal.
It is trite that when the statutory alternative remedy is available, High Court would be slow to entertain the petition directly to exercise the writ jurisdiction. The petitioner is required to exhaust the statutory alternative remedy before invoking the extraordinary jurisdiction of this Court.
The Court is of the view that the issues and aspects raised in the petition on merits with regard to the challenge to the impugned order and rejecting the refund claim of the petitioner could be better agitated before the appellate tribunal.
While permitting the petitioner to approach the Tribunal, the present petition is dismissed on the said ground alone without expressing any opinion of the merits.
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2023 (3) TMI 626 - TELANGANA HIGH COURT
Cancellation of GST registration of petitioner - non-filing of GST returns for more than six months - HELD THAT:- This Court in NITHYA CONSTRUCTIONS VERSUS THE UNION OF INDIA [2022 (7) TMI 186 - TELANGANA HIGH COURT] where it was held that we remand the matter back to the file of respondent No.2 to consider the grievance expressed by the petitioner against cancellation of GST registration and thereafter pass an appropriate order in accordance with law. Needless to say, when the respondent No.2 hears the matter on remand, petitioner shall submit all the returns as per the statute.
The matter remanded back to respondent No.3 to consider the grievance expressed by the petitioner against cancellation of GST registration and thereafter pass an appropriate order in accordance with law.
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2023 (3) TMI 625 - ANDHRA PRADESH HIGH COURT
Provisional attachment of property - power to issue a direction to stop payment by the summoning party to the assessee - Section 70 (1) of G.S.T Act - HELD THAT:- The impugned notice was issued under Section 70(1) of GST Act but not under Section 83 of GST Act. Section 70 (1) of GST act only says that the proper officer shall have the power to summon any person whose attendance is considered necessary either to give evidence or to produce a document or any other thing in the enquiry and nothing more. Therefore, it is obvious that under Section 70 (1) of GST Act the proper officer cannot exercise powers to direct the summoning party to stop payment to the assessee which is beyond the scope of 70 (1) of GST Act. Of course, under Section 83 of GST Act, if the Commissioner is of the opinion that for the purpose of protecting the government revenue, he may by order provisional attachment of any property including bank account belonging to the taxed person or any person specified in Sub Section 1 (A) of Section 122 in such manner as prescribed. The impugned notice was issued under Section 70 (1) of GST Act but not in exercise of powers conferred under Section 83 of GST Act.
This writ petition is allowed and the impugned portion of the notice issued under Section 70 (1) of GST Act i.e., “in view of the above explanation you are hereby requested stop all further payments from here onwards until clearance is given by the undersigned” is set aside and liberty is given to the 3rd respondent to proceed in accordance with law so far as the other part of the notice issued by him under section 70 (1) of GST Act is concerned.
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2023 (3) TMI 624 - MADRAS HIGH COURT
Liability to pay towards CGST and SGST in respect of tax invoices - alleged mismatch - According to the respondent though the input tax credit in respect of the invoices has been claimed by the petitioner, the supplier has not paid the tax amounts to the respondent - HELD THAT:- Admittedly, the petitioner has challenged only the notice in this writ petition. No final orders have been passed by the respondent in respect of the amounts claimed by them in the impugned notice against the petitioner. Even before a final order has been passed, the petitioner has chosen to file this writ petition, which in the considered view of this Court is premature. However, the adjudicating authority will have to necessarily consider the reply submitted by the petitioner in respect of the impugned notice dated 12.12.2022 on merits and in accordance with law. As seen from the impugned notice only an intimation has been made by the respondent to the petitioner about the proposal to reverse the input tax credit availed by the petitioner and no final order has been passed. Hence, the question of entertaining this writ petition at this stage will not arise.
This writ petition is disposed of by directing the adjudicating authority to give due consideration to the reply dated 06.01.2023 submitted by the petitioner and to take a final decision on merits and in accordance with law and the respondent, if they come to the conclusion that the reply is acceptable to them, they shall drop any further proceedings against the petitioner, but if they decide otherwise, the respondent shall follow the due procedure established under law for taking further action against the petitioner.
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2023 (3) TMI 623 - MADRAS HIGH COURT
Maintainability of appeal - appeal rejected for the reason that it was beyond the period of limitation - HELD THAT:- This Court is of the view that restoring the registration would not cause any harm to the department on the other hand it would be beneficial for the state to earn revenue.
Further, reliance placed in the case of TVL. SUGUNA CUTPIECE CENTER VERSUS THE APPELLATE DEPUTY COMMISSIONER (ST) (GST) , THE ASSISTANT COMMISSIONER (CIRCLE) , SALEM BAZAAR. [2022 (2) TMI 933 - MADRAS HIGH COURT]. There some of the petitioner had filed an appeal beyond the period of limitation either for filing application for revocation of cancellation, while some of them had directly filed a writ petition against the order cancelling the registration. While some of them filed appeal beyond the statutory period of limitation, there was further delay in filing the writ petition. However, considering the over all facts and circumstances of the case, it was held that no useful purpose will be served by keeping those petitioners out of the Goods and Services Tax regime, as such assessee would still continue to do business and supply goods/services. By not bringing them back to the Goods and Services Tax fold/regime, would not further the interest of the revenue.
Petition allowed.
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2023 (3) TMI 622 - AUTHORITY FOR ADVANCE RULING, ODISHA
Levy of GST - Forward Charge Mechanism (FCM) or Reverse Charge Mechanism - Service Received by a registered person by way of renting of residential premises used as guest house of the registered person - HELD THAT:- It is clear that GST will be applicable even if the residential property is rented out to a registered person w.e.f. 18th July 2022. Liability to pay GST @ 18% under the reverse charge mechanism will arise on the recipient (tenant), if he is a registered person under GST with no other condition. Further, It may be noted that type or nature/purpose of use of residential dwelling i.e. for residence or otherwise by the recipient, has not been a condition in the said RCM notification. Hence, service of renting of residential dwelling to a registered person, would attract RCM irrespective of the nature of use.
A residential property given on rent to a registered person whether for residential purpose or otherwise shall attract RCM provisions. At the outset it is pertinent to understand whether in this case, the property on rent is a residential property or not and what shall be the GST implication if the same is being used as guest house by the Applicant? In the instant case, the Applicant has stated that it has taken on rent certain premises at New Delhi and Jajpur in Odisha, for use as guest house. The guest house is used to provide food and accommodation for the employees of the company. From the written submission made, contentions advanced by the representatives of the Applicant company and rent agreement copies furnished, the nature of rented properties under discussion clearly appear to be residential properties used for commercial purpose.
Thus, it may be concluded that irrespective of the purpose of use, if the residential dwelling is rented to a registered person under GST, the tenant has to discharge the GST liability under RCM as per Notification No. 05/2022 Central Tax (Rate) dated 13th July 2022.
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2023 (3) TMI 568 - TRIPURA HIGH COURT
Condonation of delay in filing an appeal before the appellate authority - Section 107(4) of GST - Seizure of goods alongwith the vehicle - expiry mismatch of E-way bill with tax invoice
HELD THAT:- The writ petition should be disposed of setting aside the impugned order dated 14.10.2022. The impugned order passed by the appellate authority do not disclose the reasons as to how the said appeal is barred by limitation. The respondent authority ought to have passed a speaking order by computing the limitation in the light of Section 107(4) of the GST Act. The matter is remanded back for consideration.
The petition is disposed off.
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2023 (3) TMI 567 - GAUHATI HIGH COURT
Cancellation of GST registration of petitioner - petitioner is aggrieved that there was no personal notice served upon the petitioner prior to suspension and cancellation of the GST registration rather a notice was simply uploaded in the website of the department - violation of principles of natural justice (non-issuance of SCN as well as audi alterem partem) - time limitation - HELD THAT:- Under Rule 23(1) of the GST Rules of 2017 it is provided that no application for revocation shall be filed unless such returns are furnished and any amount due as tax in terms of such returns has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns. The reasons for default on the part of the petitioner to submit its periodical returns as required under GST Act and the Rules, as pleaded in the present proceedings, are attributed to the financial losses suffered by the petitioner because of the COVID-19 Pandemic situation. It is the further case of the petitioner that against the order of cancellation of its GST registration, the petitioner had preferred an appeal before the Appellate Authority under Section 107 of the GST Act, 2017.
The purpose of limitation being prescribed in a statute is two fold, namely, to ensure compliance of the statutory provisions by the persons on whom the provisions of the statute are applicable and further to ensure that no third party rights which may have been created in the meantime are permitted to be nonsuited/ unsettled. Under the scheme of GST Act and Rules, the non-revocation of cancellation of GST registration is likely to prejudice the assessee alone. In cancellation of such GST registration for the reasons mentioned under the Section, it cannot be said that any third party rights are created against the assessee. No prejudice is caused to any other person, if the GST registration of the petitioner/assessee is revoked. No prejudice is caused to the revenue. Rather as discussed above, it will be in the interest of the revenue to permit the revocation of a cancellation of GST registration of an assessee like the petitioner so that it felicitates collection of revenue as mandated under the GST Regime.
A writ Court is empowered to condone the delay of any statutory or quasi judicial authority. Such power is inherent in a COMMISSIONER OF INCOME-TAX VERSUS PHEROZA FRAMROZE AND CO. [2017 (5) TMI 436 - SUPREME COURT]. Accordingly, in view of the above discussions and on the facts and circumstances of this case, this Court is of the considered view that the appeal before the Appellate Authority should be re-heard on merits by passing appropriate orders regarding the revocation of cancellation of GST.
This Court is of the considered view that the appeal before the Appellate Authority should be re-heard on merits by passing appropriate orders regarding the revocation of cancellation of GST. The impugned order dated 25.01.2023 dismissing the appeal is hereby set aside - petition disposed off.
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2023 (3) TMI 530 - CALCUTTA HIGH COURT
Storage of goods at unreported location after expiry of e-way bill - Contravention of Section 67(2) read with Section 129 of the State Goods and Services Tax Act, 2017 - It has been contended that if the goods were inspected and seized in transit then provision of Section 68 ought to have been invoked and not Section 67, as has been done in the present case - non-affording of an opportunity of hearing to the petitioner prior to passing the order of penalty under Section 129 of the Act - violation of principles of natural justice (audi alterem partem).
HELD THAT:- It appears that an e-way bill was generated in respect of the vehicle no. RJ04GC1737 on 9th February, 2022 for transporting fifteen thousand kilograms of cumin seeds by road from Gujrat to Siliguri. The e-way bill was valid upto 20th February, 2022. On receiving information about illegal storage of goods, the authority inspected a godown on 22nd February, 2022 where 12,840 kilograms of cumin seeds were found. The stock of the goods was assessed. The person in charge of the godown produced the tax invoice, consignment note and the e-way bill of the said goods - On scrutiny of the aforesaid documents it was found that the goods were in order but the corresponding e-way bill expired. The authority was of the opinion that as the goods did not reach the end point as mentioned in the e-way bill, the goods were in transit. According to the respondent authority, the goods ought to have been covered with valid e-way bills till the time of delivery to the recipient.
Section 67(2) of the Act empowers the proper officer to confiscate goods, if secreted in any place, for evading payment of tax. The place may be searched and goods seized and the same shall be released on payment of applicable taxes. The proper officer, if has reasons to believe that the goods are stored in a warehouse or godown or any other place without paying tax or not paying requisite tax, may cause inspection, search and seizure. The provision relates to a particular ‘place’ where inspection, search and seizure can be made - Section 129 deals with detention, seizure and release of goods and conveyances, ‘in transit’. The said provision is to be invoked when the goods are in movement on a conveyance.
In the present case, admittedly, the goods were seized two days after expiry of the e-way bill on being offloaded and stored in a godown not mentioned in the e-way bill. The e-way bill is for the purpose of moving/transporting the goods from one place to the other. Law does not require a way bill to remain valid for such period the goods remain in the godown. The petitioner submits, with conviction, that the godown from where the goods were seized is the final destination and the goods were duly delivered to the recipient. The authority has not come up with a case that the goods ought not to have been offloaded and stored at the said godown but should have been transported to the place mentioned in the e-way bill - the authority erroneously opined that as the goods were yet to reach the final destination mentioned in the e-way bill, accordingly, the same may be treated as ‘on transit’; for which the e-way bill ought to have been extended. The authority ought not to have imposed penalty without resorting to the proper provision.
The petitioner was certainly at fault in not recording the additional godown at the time of generation of the e-way bill, but at the same time, the petitioner ought not to be penalized with two hundred percent penalty for such trivial offence. As the goods were not confiscated while on the move, imposition of penalty under Section 129 of the Act is erroneous and bad in law. The aforesaid section cannot be relied upon to penalize the RTP when the goods are seized from a godown.
In Magnum Steel [2023 (3) TMI 251 - SC ORDER] the Hon’ble Supreme Court held that the person authorizing the search must express his satisfaction that the material is sufficient for conducting a search and a reasonable belief that some objective material exists on the official record to trigger searches. The report of the proper officer is an unsatisfactory one, not enough to initiate search in the godown.
In the case at hand it does not appear that the authority acted in accordance with the appropriate legal provisions and instead penalised the petitioner in a mechanical manner without proper application of mind.
The impugned order of the adjudicating authority and the appellate forum are liable to be set aside and, are accordingly, set aside. The respondent authority is directed to refund the amount collected from the petitioner as penalty positively within four weeks from the date of communication of this order - Petition disposed off.
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2023 (3) TMI 529 - DELHI HIGH COURT
Refund of the unutilized Input Tax Credit (ITC) - Export of goods - rejection on the ground that the supplier has issued fake invoices - genuineness of the purchase - refund applications were rejected for the reason that “it appeared that they are to be part of a supply chain involving fake Input Tax Credit” - HELD THAT:- There is merit in the petitioner’s contention that it is not required to examine the affairs of its supplying dealers. The allegations of any fake credit availed by M/s Shruti Exports cannot be a ground for rejecting the petitioner’s refund applications unless it is established that the petitioner has not received the goods or paid for them. In the present case, there is little material to support any such allegations.
In ON QUEST MERCHANDISING INDIA PVT. LTD., SUVASINI CHARITABLE TRUST, ARISE INDIA LIMITED, VINAYAK TREXIM, K.R. ANAND, APARICI CERAMICA, ARUN JAIN (HUF) , DAMSON TECHNOLOGIES PVT. LTD., SOLVOCHEM, M/S. MEENU TRADING CO., & MAHAN POLYMERS VERSUS GOVERNMENT OF NCT OF DELHI & ORS. & COMMISSIONER OF TRADE & TAXES, DELHI AND ORS. [2017 (10) TMI 1020 - DELHI HIGH COURT], a Coordinate Bench of this Court had held that the purchasing dealer is being asked to do the impossible, i.e. to anticipate the selling dealer who will not deposit with the Government the tax collected by him from those purchasing dealer and therefore avoid transacting with such selling dealers. Alternatively, what Section 9(2)(g) of the DVAT Act requires the purchasing dealer to do is that after transacting with the selling dealer, somehow ensure that the selling dealer does in fact deposit the tax collected from the purchasing dealer and if the selling dealer fails to do so, undergo the risk of being denied the ITC. Indeed Section 9(2)(g) of the DVAT Act places an onerous burden on a bonafide purchasing dealer.
Thus, the petitioner would be entitled to the refund of the ITC on goods that have been exported by it - petition allowed.
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2023 (3) TMI 528 - CALCUTTA HIGH COURT
Levy of penalty - failure to produce a valid e-way bill - petitioner contends that the imposition of penalty is illegal as the petitioner did not have any deliberate intention to evade tax - Reasonable opportunity of hearing was not granted to the petitioner - Principles of natural justice (audi alterem partem) - HELD THAT:- The petitioner admits that when the vehicle was intercepted, the e-way bill was invalid. The petitioner, being aware of the legal consequences, did not raise objection and paid the penalty that was imposed. The appeal filed was also very formal and the petitioner was unable to rebut the charge of transporting goods without a valid e-way bill - From the documents available before the Court it does not appear that the petitioner genuinely intended to contest the charge brought against her. On the contrary, the petitioner without any objection deposited the penalty amount. It seems that the petitioner is raising all the issues for the first time before the High Court in the present proceeding.
The practice and procedure to obtain way bill electronically from the portal suggests that there is minimal manual interference and there is no scope to exercise discretion at any stage. Opportunity of hearing is given to allow the person in charge of the goods and/or the conveyance to produce relevant documents to rebut the charge and not for examining the reason or ground for not being able to act in accordance with law - In RAMJI JAISWAL & ANR VERSUS STATE TAX OFFICER, BUREAU OF INVESTIGATION (SOUTH BENGAL) KHARAGPUR ZONE & ORS. [2022 (7) TMI 1384 - CALCUTTA HIGH COURT] the Hon’ble Court opined that the respondents could not make out any case of deliberate or wilful intention to avoid and evade payment of tax.
In GULJAG INDUSTRIES VERSUS COMMERCIAL TAXES OFFICER [2007 (8) TMI 344 - SUPREME COURT] while considering the provision of Section 78 and its various sub-Sections of Rajasthan Sales Tax Act, 1994, the Hon’ble Supreme Court held that in penalty for statutory offences, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant.
The Supreme Court on repeated occasions has held that a statutory authority does not have any power to do anything unless such powers are specifically enumerated in the Statute which creates it. The authority merely performs the statutory obligation - Here, it does not appear that the authority acted in any manner contrary to law. Travelling without a proper e-way bill attracts penalty. The authority assessed the penalty amount and the petitioner deposited the same without a murmur.
There is hardly any reason to interfere in the instant proceeding - Petition dismissed.
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2023 (3) TMI 527 - GAUHATI HIGH COURT
Cancellation of GST registration of petitioner - petitioner could not file its return regularly, due to ill health and certain reasons beyond the control of the petitioner - HELD THAT:- Learned counsel for the petitioner submits that his client has already deposited all necessary dues but if any further amount is still payable under the Rules, the same will be paid.
If that be so, there is no justification for keeping this matter pending before this Court any further. Therefore, with the consent of both the sides, this writ petition is being disposed of by directing the respondents to restore the GST registration of the petitioner immediately on filing return along with deposit of statutory dues by the petitioner, in accordance with the Rules.
The writ petition stands disposed of.
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2023 (3) TMI 526 - PATNA HIGH COURT
Maintainability of petition - availability of alternative remedy - appeal rejected on the ground of non-filing of the certified copy of the essential documents - opportunity of hearing not provided - ex-parte order - violation of principles of natural justice.
HELD THAT:- This Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie, we form an opinion that the order is bad in law. This we say so, for two reasons-(a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences; (c) Also the authorities not to have adjudicated the matter on the attending facts and circumstances. All issues of fact and law ought to have been dealt with, even if the proceedings were ex parte in nature.
The writ petition is disposed off.
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2023 (3) TMI 489 - DELHI HIGH COURT
Blocking of ITC and the subsequent appropriation of the said amount to satisfy the demand as raised by the impugned order - Proper/competent Officer to block the credit - HELD THAT:- The ITC can be blocked by a Commissioner or an officer authorised by him in his behalf, not below the rank of an Assistant Commissioner, provided that he has reasons to believe that the ITC available in the ECL has been “fraudulently availed or is ineligible” on account of the reasons as set out in Clauses (a) to (d) of Sub-rule (1) of Rule 86A of the Rules - In SUNNY JAIN VERSUS THE UNION OF INDIA ANR ORS. [2022 (12) TMI 653 - DELHI HIGH COURT] this Court had examined the language of Rule 86A(1) of the Rules and had held that the reasons set out in Clauses (a) to (d) of Rule 86A(1) of the Rules exhaustively set out the conditions of ineligibility. Thus, unless the competent officer has reasons to believe that the conditions in the said clauses are satisfied or the ITC was fraudulently availed, the ITC in the ECL cannot be blocked.
Blocking of the ITC effectively deprives the taxpayer of a valuable resource to discharge its liability and realise the value in monetary terms. Thus, undisputedly, the said action is a drastic step and it is necessary that all legislative checks and balances, enacted in respect of exercise of power to take such measures, are duly satisfied.
In the present case, the respondents had no material to form any opinion that the ITC had been availed wrongly on account of any fraud or any wilful-misstatement or suppression of facts to evade tax. Concededly, the respondents had no material to form any independent opinion whatsoever. It is apparent that the impugned show cause notice was issued in a mechanical manner to comply with the impugned instructions.
There are no hesitation in holding that the impugned show cause notice is not in conformity with the provisions of Section 74 of the CGST Act and is, thus, without authority of law - It is also clear from a plain reading of the impugned instructions that it suggests that the exercise of issuing a show cause notice and creating a demand should be completed before unblocking the ITC notwithstanding that the period of one year has elapsed after the blocking of the ITC. This is contrary to the express provisions of Rule 86A(3) of the Rules. It is apparent that the impugned instructions, to the aforesaid extent, has been issued only to overcome the provisions of Rule 86A(3) of the Rules and the impugned instructions, to this extent, cannot be sustained.
The impugned show cause notice and the impugned order are set aside - petition allowed.
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2023 (3) TMI 488 - BOMBAY HIGH COURT
Constitutional Validity of section 132(1)(b) and (c) of the CGST Act - violation of Articles 14 and 21 of the Constitution of India, 1950 or not - seeking to issue a writ declaring that the power under section 69 of the Central Goods and Services Tax Act, 2017 can be only exercised upon determination of liability and a failure on part of the assessee to pay make payments towards such liability.
HELD THAT:- In the case of NAGPUR CABLE OPERATORS' ASSOCIATION VERSUS COMMISSIONER OF POLICE, NAGPUR AND ORS. [1995 (8) TMI 342 - BOMBAY HIGH COURT], the Division Bench of this court (Nagpur Bench) has expounded procedure with reference to the Rules and the law as to in which circumstances criminal writ petition and which circumstances civil writ petition is to be filed and placed before the court as per the allocation of work.
On a query was put to learned counsel for the Petitioners as to whether the Petitioners intends to prosecute the challenge to the provisions of the CGST Act, the learned counsel for the Petitioners states that instructions have been taken that the Petitioners would not press these challenges, and the interim order be continued for some time. The learned counsel for the Petitioners states that this is so because complaint has now been filed and as regards the remedy concerning liberty of the Petitioners, the Petitioners, would take necessary action by approaching the criminal court and for that purpose seek extension of the interim order passed in these petitions.
Be that as it may, since the Petitioners are not pressing the petitions and seeking only the extension of the protective measures, this request is to be considered. The Petitioners have been at liberty for almost two years under the interim order which the Respondents have not challenged. Therefore, in these circumstances, the interim order in these petitions are continued for a period of six weeks, for the Petitioners to take steps for the purpose mentioned above.
Writ petition disposed off.
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2023 (3) TMI 487 - AUTHORITY FOR ADVANCE RULING, PUNJAB
Input Tax Credit - purchases made from the seller who had discharged its tax liability but the preceding seller has not discharged its liability under the Act - eligibility for ITC when no infrastructure has been provided by the Govt, in order to ensure discharging of tax liability by the sellers falling in the queue of a transaction - non-payment of tax by the seller even though the purchaser is in possession of the invoice, other relevant documents and the payments have been made through banking channels and there is no connivance or collusion between the purchaser and seller.
HELD THAT:- Section 16 of the CGST Act, 2017, inter alia, prescribes conditions and restrictions for a registered person for availing ITC of input tax charged on supply of any goods or services or both to him which are used or intended to be used in the course of furtherance of his business. In terms of Clause (b) of Sub Section (2) of Section 16 ibid inter alia states that notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless he has received the goods or services or both.
From the perusal of provisions of the section 16(2)(c) CGST Act and PGST Act, it is very much clear that no registered person shall be entitled to take the credit of any input tax in respect of any supply of goods or services or both unless the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply. If the seller or preceding sellers have not deposited the tax either in cash or through utilization of input tax credit admissible in respect of the said supply, purchaser is not eligible to claim ITC on such supply.
Thus, keeping in view the relevant provisions of Section 16(2)(c) of CGST Act read with PGST Act, there are no doubt in holding that the purchaser is not entitled to claim Input Tax Credit on the purchases made by it from the seller who had discharged its tax liability but the preceding seller has not discharged its liability under the Act - application disposed off.
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