TMI Blog2021 (6) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... lity within the stipulated time for earlier period i.e. July 2017 to Nov 2017 also. The appellant did not file the GSTR-3B return for subsequent period August-2018 to March-2019. The continuous failure of filing of returns and not discharging its tax liability within the stipulated time by the appellant itself indicate the ill intention of the appellant. Non filing of returns and non discharging of liability is clear cut violation/ contravention of provisions of Section 37,39,49,50 59 of CGST Act and rules made thereunder - the appellant has issued the tax invoices for its outward supplies to his customers mentioning the tax liability on its and as per provisions of Section 12 13 of CGST Act, tax liability is arise on the date of issuance of invoices only - thus, the appellant failed to discharge his tax liability with intent to evade the same. In the instant case, there is no doubt in the fact that the appellant is regular defaulter of the payment of tax and filing of returns which shows contraventions of the GST laws and rules made thereunder. This act of omission and commission itself establish the charge of suppression - any offence can not be proved without the records/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Rules, 2017 (CGST Rules, 2017 in short) and Section 20 of IGST Act,2017. The GST so evaded and not paid by them appeared to be recoverable from them in terms of Section 74 read with Section 76 the Goods and Service Tax Act, 2017 and Rajasthan Goods Service Tax Act, 2017 as per facts mentioned below 2.2 Based on an intelligence, an investigation was initiated and the business premise of the appellant was searched on 12.06.2018. During the course of investigation, it was gathered that the appellant is engaged in providing taxable supply of goods/services viz. Flex printing, Signage, Board etc. on which the appellant appeared liable to pay GST. It was gathered that the appellant has not discharged its complete GST liability. Documents which appeared to be relevant for investigation were resumed under INS 02 on 12.06.2018. 2.3 During the course of search and preliminary scrutiny of the documents, it was observed that the appellant had filed their GSTR 3B monthly return only upto November, 2017 for the period December, 2017 onwards the appellant had neither filed any GSTR 3B nor deposited any GST payable on the supplies made from December, 2017 onwards. 2.4 In order to asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 19,83,435/-, CGST ₹ 11,51,406/- and SGST ₹ 1,151,406/- as per Invoices/sales ledger and has deposited IGST ₹ 19,83,435/-, CGST ₹ 11,61,298/- and SGST ₹ 11,61,298/- in their GSTR- 3B filed for the respective periods. Further informed that they will amend the same in the Annual return to be filed for the period 2017-18 (GST period). The total GST liability for the period April- 2018 to March- 2019 is IGST ₹ 26,61,189/-, CGST ₹ 14,81,696/- and SGST ₹ 14,81,696/-. Out of which IGST ₹ 17,68,865/-, CGST ₹ 3,32,503/- and SGST ₹ 3,32,503/- has been deposited by filing the returns April 2018 to July-2018. Further, informed that they will file return for the period Aug-2018 to Mar- 2019 very soon and also deposit the GST payable for that period alongwith interest. The invoices so missing pertain to the invoices against which orders have been cancelled and no taxable supply made to the buyers. 2.8 During the course of search and preliminary scrutiny of the documents, it was observed that at the time of search conducted by the department, the appellant had filed their monthly GSTR 3B returns for the period July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble invoices and other documents it has been observed that the appellant has been charging and collecting GST from their clients, but they had not deposited that GST so collected in govt. exchequer within the stipulated time period. It therefore, appears that the notice intentionally and wilfully suppressed the fact of charging and collecting the GST from their clients and deliberately avoided depositing the GST and furnishing of the GST returns within the stipulated time period with a clear and wilful intention to evade payment of GST. In the era of self-assessment as stipulated under the provisions of GST, responsibilities to make correct classification of supply, determine the GST payable, pay GST and follow the provisions of the Act and Rules framed thereunder lie with the appellant, which they have completely failed to fulfil. As per Section 122(1) (iii) of the CGST Act, 2017, where a taxable person who collects any amount as tax but fails to pay the same to the Govt. beyond a period of three month from the date on which such payment becomes due, he shall be liable to penalty under these provisions. It appeared that there has been a deliberate act by the appellant to suppress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest on late payment of GST as payable under Section 50 of CGST Act, 2017. (vii) The Taxable value of taxable supplies made during the period July-2017 to Mar- 2018 is ₹ 2,38,60,384/- as per their Invoices issued and ₹ 2,39,77,711/- as per GSTR- 3B filed for the aforesaid period. The appellant had assured to furnish the reasons of such difference in the value of clearance, but the appellant has failed to furnish any reason till date. Since the appellant has not furnished any reason for difference thereof, the department has no option other than to consider higher taxable value i.e. the value of supply shown in the GSTR- 3B filed by them, for computation of GST payable the period 2017-18 (July-17 to Mar- 18). (viii) The appellant appeared liable to pay IGST ₹ 45,75,623/- + CGST ₹ 22,72,388/- + SGST ₹ 22,72,388/- for the period Dec-2017 to March- 2019; against which the appellant has deposited IGST ₹ 36,83,299-, CGST ₹ 11,23,195/- and SGST ₹ 11,23,195/- only till date. The amount of IGST ₹ 36,83,299/-, CGST ₹ 11,23,195/- and SGST ₹ 11,23,195/(Cash + ITC), so deposited/debited by the appellant appeared liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared to be recoverable from them in terms of Section 50 of the CGST Act, 2017 and since the appellant appeared to have contravened the provisions of the Act Rules referred above with intention to evade service tax, they also appeared to be liable to penalty under Section 122 of the Act. 3. Accordingly, M/s Sinex Vision, Plot No.113,Adinath Nagar, G-1, Krishna Villa, Sirsi Road, Jaipur, were called upon to show cause as to why: (i) The GST amounting to ₹ 91,20,399/- (IGST ₹ 45,75,623/- + CGST ₹ 22,72,388/- + SGST ₹ 22,72,388/-) should not be demanded and recovered from them under proviso to Section 74 read with Section 76 of Goods and Service Tax Act, 2017 and Rajasthan Goods Service Tax Act, 2017 and Section 20 of IGST Act,2017 and the amount of IGST ₹ 36,83,299/-, CGST ₹ 11,23,195/- and SGST ₹ 11,23,195/- so deposited by the appellant should not be appropriated against the total demand of ₹ 91,20,399/- (IGST ₹ 45,75,623/- + CGST ₹ 22,72,388/- + SGST ₹ 22,72,388/-) for the period under demand. (ii) (a) Interest at the applicable rates should not be recovered from them under Section 50 Goods and Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 122 (2) (b) of the Goods and Service Tax Act, 2017 and corresponding Rajasthan Goods Service Tax Act, 2017 and Section 20 of lGST Act, 2017 upon them. However, in terms of Section 74(11) of CGST Act, 2017, if the tax. amount of ₹ 91,20,399/- and interest thereon is paid within a period of thirty days of the date of receipt of this order, the penalty payable shall be fifty percent (50%) of the amount of tax, subject to the condition that the amount of such reduced penalty is also paid within the said period of thirty days: 5. Being aggrieved with the impugned order dated 30.06.2020, the appellant has filed appeal on the following grounds which are summarized as under: At the outset, the appellant deny all the allegations contained in the impugned order as incorrect, unsustainable, illegal and arbitrary on the following grounds, which are independent and without prejudice to one another:- 1. That the impugned order has been passed without considering the submissions made by the appellant and thus deserves to be set-aside on this ground alone. 2. Demand for the period Aug-18 to Mar-19 has been calculated without considering the ITC' That the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 the total trade receivables are ₹ 1.20 crore approx. On account of such huge trade receivables outstanding in respect of invoices raised during the impugned period the appellant could not make the payment of tax for the period post July-18 and file returns as it is a small service provider with limited means of finances and is mainly dependent on its realization from customers to meet the working capital requirement. The liquidity position of the appellant has worsened with passage of time as it is waiting for realizing the amount from its customers and is committed to deposit the same as soon as payment is received from them. The net liability which is required to be paid after adjustment of ITC available for the said period would be ₹ 16,71,210/- as against the demand of ₹ 31,90,710/- incorrectly stated in the show cause notice as well as impugned order. 4. That the Ld. Adjudicating authority had wrongly relied upon the decision of Megha Engineering and Infrastructure Ltd. wherein it was held that until return is filed no credit would be available in electronic credit ledger and thus there would not be any entitlement of credit. The appellant submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited is not sustainable for imposition of penalty on the appellant. That without causing prejudice the submissions that no penalty is imposable on the appellant in this case it is submitted that the amount of penalty has been wrongly calculated as ₹ 91,20,399/- as the appellant had already deposited the due tax for the period Dec-17 to July-18 amounting to ₹ 59,29,689/- (IGST of ₹ 36,83,299/CGST of ₹ 11,23,195/- and SGST of ₹ 11,23,195/-) which has been ordered to be appropriated to the government account. Such amount deserves to be excluded from the amount of penalty alongwith the amount of ITC for the period Aug-18 to Mar-19. That the appellant is committed to deposit GST as soon as it receives payment from its customers. The appellant is making all the efforts day in and out for realising payment from its customers by making regular correspondence and visits to their offices. The appellant is facing severe liquidity crunch and if not given some more time to discharge its liabilities then it would put an end to its business operations. The appellant has cited following case laws in their defence: The appellant submit that the Hon 'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed. (2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed. (3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed. (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed. (5) The amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der this Act and does not include interest, fee and penalty; and (ii) other dues means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder Section 50 of CGST Act, 2017 stipulates that interest shall be payable on delayed payment of tax, which reads as - (1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council. (2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid. Section 59 of CGST Act, 2017 stipulates that- Every registered person shall self-assess the taxes payable under this Act And furnish a return for each tax period as specified under section 39. SECTION 122. Penalty for certain offences. - (1) Where a taxable person who - (i). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified by the Commissioner. Now I am taking the issue for discussion 8 At the outset, the appellant pleaded that the demand for the period August-2018 to March-2019 has been confirmed without considering the input tax credit available with him during the said period of demand. The appellant submitted that the total ITC for the said period are available amounting to ₹ 15,19,500/- (IGST is ₹ 2,43,632/-, CGST is ₹ 6,37,934/- and SGST is ₹ 6,37,934/-). Further, he submitted that after setting off the input credit from the output tax liability the net demand of GST payable is ₹ 16,71,210/- as against the demand of ₹ 31,90,710/- . In the support of his contention the appellant has submitted the copy of voucher register in which details of Suppliers, GSTN No. Invoices No. Date of Invoices, Taxable value and amount of GST (IGST, CGST, SGST +Cess ) etc., have been mentioned (as Annexure- D of submissions). To examine the veracity of appellant in this context, it would be appropriate to look into the statutory provisions available in the GST Law. The relevant legal provisions of GST law wherein eligibility and conditions for taking input tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown the receipt of services in his books of accounts. In the instant case, I observed that the appellant has issued the invoices for his whole outward supply and in the invoices he has charged the GST also. Therefore, it is very much obvious that liability of tax is arised upon the appellant at the time of issue of invoices and accordingly he should have to discharge his tax liability by filing the returns within the stipulated time but he did not do so. Hence he has violated the provisions of GST Act and rules made thereunder. In view of the above legal provisions I am not agree with the assessee contention that he did not deposit his tax liability due to non payment received from his customers. Further, appellant submitted that the contention of department that he has collected the tax for period Dec-2017 to March-2019 from its customers but not deposited the same and thus evaded the tax is incorrect and untenable. He also contended that he has filed the returns for the period Dec-2017 to July-2018 and discharged his tax liability for the said period moreover, he also filed GSTR-1 for subsequent period August-2018 to March-2019 but could not filed GSTR 3B due to liquidit ..... 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