GIST OF RECENT PRONOUNCEMENTS ON GST (PART-XXII)

[Dr. Sanjiv Agarwal]

Goods and Services Tax (GST), introduced from July 1, 2017 is almost two years old now but has resulted in operational and implementation disruptions affecting all stakeholders.  GST law, as drafted and legislated, is not free from the interpretational hassles. GST Council is however, making regular changes to fix the anomalies and hardships faced by taxpayers.  34 meetings of GST Council have been held till 15^th June, 2019.

Taxpayers have already challenged various provisions of GST laws and rules framed thereunder with over 400 writs being filed in different courts. High courts and Supreme court have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBIC may move to Supreme court where the verdict is against the Government. In recent past, CBIC had issued directions to be officers to defend the writs. Further, we have over 500 rulings from Authority for Advance Ruling (AAR) and over 80 Orders from National Anti-profiteering Authority (NAA) out of which two Anti-profiteering cases have gone to Delhi High Court. Even the orders from Appellate Authority for Advance Ruling have also started pouring in and we have over sixty Appellate Orders from AAAR.

Here are few more judicial pronouncements for information and guidance of various stakeholders. It is expected that the litigation by way of writs is bound to go up as time passes by unless the Government comes out with proactive approach and solutions.

• In Re: Manu International v. State of U.P.  2018 (2) TMI 39 - ALLAHABAD HIGH COURT;  in the instant case, assessee was a partnership firm registered under U.P VAT Act who applied for migration to GST on the enforcement of the GST w.e.f. 1^st July, 2017, and for issuance of a fresh registration certificate. Department issued ID/password to the petitioner to get registration migrated but said ID/password was defected in a way that instead of containing PAN number of partnership firm, it depicted PAN number of one of its partner. The Department sought a few days time to rectify the said mistake. The court directed that in the meantime, no penal action could be initiated against the assessee for non-filing of GST returns for said period and for not depositing the tax in respect thereof provided the returns of July/August 2017 are filed within two weeks of the issuance of the correct ID/password and the tax is accordingly paid within another two weeks.

• In Radhey Lal Jaiprakash Neadarganj Dadri v. State of U.P  2017 (11) TMI 1022 - ALLAHABAD HIGH COURT, in the instant case, the provisional ID and password allotted to the petitioner for the purposes of GST was not working, with the result that petitioner was unable to migrate its certificate of registration and to file its return under the GST. In the meantime, it was directed by the court that no coercive action would be taken against the petitioner for not filing the GST return within the time stipulated.  Petitioner submitted that no cause of action survives and does not wish to press this writ petition, accordingly, dismissed vide Order dated 04.10.2017.

• In Rajasthan Tax Consultant's Association v. Union of India   2017 (10) TMI 254 - RAJASTHAN HIGH COURT;  based on the facts and averments made, where it appeared that the system was not working upto the desired level and the same was required to be corrected and updated to meet requirements. The following interim directions were given to come out with the immediate solution:

 (i)    Whosoever try to log-in to the system, if the same is not responding, assessee or Chartered Accountant/or Tax Practitioner will inform immediately by e-mail to the District Information Officer of the concerned District, appointed by Central/State Government.

(ii)    Address of the each District Head will be provided.

(iii)   Those who inform so by e-mail, their problem would be resolved expeditiously.

Whereas the period for applying under ‘composition scheme’ was extended upto 30.9.2017, it was held that those assessees who could not apply under Composition Scheme upto 16.8.2017, their applications ought to be accepted and shall have effect from 1.7.2017.

It was further directed that in the meantime no coercive action (penal interest, late fees, and prosecution) against any of the assessee who is informing by e-mail, will be protected. Since the composition scheme is extended upto 30-9-2017, therefore, the desirous assessee could apply. In that view of the matter, those who could not apply under composition scheme upto 16-8-2017, their applications would be accepted and if their case does not fall under composition log-in, they will send it by e-mail and their applications will be accepted w.e.f. 1-7-2017.

Vide Order dated 01.08.2018, the writ petition challenging various notifications/orders issued under Central Goods and Services Tax Act/ Rajasthan Goods and Services Tax Act, which related to filing of returns, composition levy, registration and refund of tax, it was held that it would be appropriate that issues involved be decided by GST Council.

• In Padmavati Enterprises v. Union of India  2018 (3) TMI 480 - BOMBAY HIGH COURT, this order is a common order in two writ petitions, i.e., WP (L) No. 424 of 2018 and WP (ST) No. 2230 of 2018. There was a meeting held on 1st March, 2018 between representatives of GST Practitioners Association of Maharashtra and GST Central & State level Commissioners in respect of operation of systems strictly in terms of Act and Rules. On the other hand, Union of India through Additional Solicitor General (ASG) objected to these minutes and filed a one-page note about part compliances done and remaining grievances pending. The court hoped that such grievances would be addressed and system would operate strictly is terms of Act/Rules soon. The Court took on record the Additional Solicitor General (ASG)’s statement that insofar as the grievances of returns without late fees, the petitioner may file their GSTR-3B returns with the late fees first. If that is paid and proof of such payment is produced, that will also be auto-credited/refunded in their cash ledger by the CSTN within a period of one week from the date the payment is made. The ASG was advised to appraise the Commissioners of these grievances and, thereafter, ensure that they are followed up either with the Council or with the appropriate Authority in the Ministry. The court further observed that it expected the competent authority in the Ministry, particularly at the State and the Central level, to coordinate and resolve the issues which are raised in this petition on or before 24^th April, 2018.

• In KNR Walayar Tollways Pvt. Ltd. v. Commercial Tax Officer (Works Contracts), Palakkad  2018 (4) TMI 1010 - KERLA HIGH COURT;   where petitioner was an assessee under Kerala VAT Act and desired to file revised returns for the period 2014-15 and 2015-16 and permission for revision was pending with authorities, the court directed the authorities to decide application within one month from date of receipt of this order in terms of Circular No. 14/2017 issued under SGST Act, 2017 on right of assessees to submit revised return.

• In Arihant Superstructure Ltd. v. Union of India  2018 (3) TMI 1268 - RAJASTHAN HIGH COURT  , in the instant case, where assessee was not able to access its GST TRAN-1 and other returns on Central Goods and Services Tax common portal, Competent Authority was directed to provisionally entertain GST TRAN-1 and other returns of assessee either by way of opening the portal or manually. The petitioner relied on Bombay High Court in the case of Abicor & Binzel Technoweld (P) Ltd. v. Union of India 2018 (2) TMI 766 - BOMBAY HIGH COURT.

• In Bharti Airtel Ltd. v. Union of India 2018 (6) TMI 1625 - DELHI HIGH COURT, in the instant case, petitioner questioned the postponement of GST returns, GSTR-2 and GSTR-3 and notifying GSTR-3B in lieu thereof which result in adverse financial implications. The notice was issued to respondents and matter posted for hearing on 09.09.2018.

(Some more cases to follow)