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GST - Case Laws
Showing 41 to 60 of 13886 Records
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2024 (11) TMI 1209
Condonation of delay in filing appeals against orders under CGST/SGST Acts - Whether the court can exercise jurisdiction under Art. 226 to permit the filing of appeals beyond the statutory time limit? - HELD THAT:- The petitioner has not made out any ground for grant of relief in this writ petition. Admittedly, the petitioner filed appeals against Ext.P.1 series of orders only in the month of February 2024 i.e., four years after the date on which the orders against which the appeal was sought to be filed had been issued. This Court cannot, normally, in the exercise of jurisdiction under Art. 226 of the Constitution of India extend the time limit for filing an appeal under Section 107 of the CGST/SGST Acts.
This is clear from the law laid down in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [2007 (12) TMI 11 - SUPREME COURT]. The issue was considered in the context of Section 35 of the Foreign Exchange Management Act, 1999 in KETAN V. PAREKH VERSUS SPECIAL DIRECTOR, DIRECTORATE OF ENFORCEMENT AND ANOTHER. [2011 (11) TMI 62 - SUPREME COURT] - The judgment in Ketan V. Parekh is also authority for the proposition that though Section 5 of the Limitation Act, 1963 may not apply, the benefit of Section 14 of that Act can be extended in appropriate cases. It is only when the Court finds certain extraordinary circumstances that prevented the petitioner from filing an appeal within time, the Court will exercise such jurisdiction (in rare cases) and direct that the petitioner should be permitted to contest an appeal filed beyond the statutory time limit, on merits - there are no extraordinary circumstances in this case to grant similar relief to the petitioner.
Though Article 226 of the Constitution of India does not fix any period of limitation for the filing of a writ petition, it is settled law that a writ petition can be dismissed on the ground of inordinate delay in filing the writ petition. As already observed the orders issued by the adjudicating authority were issued in the month of February 2020. This Writ Petition has been filed only in the year 2024. That is another reason to decline relief. The petitioner has failed to approach this Court within a reasonable time.
The contention of the petitioner that he was sick and advised bed rest due to fatty liver disease has to be taken with a pinch of suspicion - the writ petition fails, and it is accordingly dismissed.
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2024 (11) TMI 1208
Seeking to quash the Impugned Ex-Parte Order passed under Section 73(9) of the CGST/ UPGST Act, 2017 as well as the Impugned Summary of the Order - extension of period of limitation for determination of tax under Section 73(10) of the CGST/ UPGST Act, 2017 without having any exigency provided under Explanation to Section 168A of CGST/UPGST Act, 2017 - HELD THAT:- Petitioner placed reliance upon the judgements of the Supreme Court in Ghanshyam Mishra and Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021 (4) TMI 613 - SUPREME COURT]; Pr. CIT v. Monnet Ispat & Energy Ltd. [2018 (8) TMI 1775 - SC ORDER]; judgement of Bombay High Court in Murli Industries Limited v. Astt. CIT [2021 (12) TMI 1182 - BOMBAY HIGH COURT]; and the order of Delhi High Court in ARENA SUPERSTRUCTURES PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER OF INCOME TAX & ANR. [2024 (7) TMI 1558 - DELHI HIGH COURT] to buttress his argument that once the resolution plan has been sanctioned by the National Company Law Tribunal, other dues that are not part of said plan would extinguish. Furthermore, new liability cannot be created by the tax authorities for prior periods on a company, that is the 'successful resolution applicant'.
In light of the above judgements and the ratio laid down by the Supreme Court in Ghanshyam Mishra and Sons (P.) Ltd., the order impugned dated April 30, 2024 is stayed during the pendency of this writ petition.
List this matter on January 16, 2024.
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2024 (11) TMI 1207
Challenge to remarks/order annexed to the Respondents’ reply - confusion regarding cancellation of GST registration order - violation of principles of natural justice - HELD THAT:- There is no evidence of any proper order of cancellation or in any event, communication of this order to the Petitioner. Since the portal refers to remarks, it is possible that the Petitioner was confused about whether this would constitute an order or in any event, a speaking order.
The show cause notice dated 8 June 2023 required the Petitioner to file a reply and attend the personal hearing on 15 June 2023. The Petitioner did neither. It was only in November that the Petitioner filed a reply in physical format, adding that it could not have been uploaded to the Respondent’s portal earlier - The impugned remarks take no cognisance of the Petitioner’s reply filed in the physical format. Since the impugned remarks were uploaded only on 10 January 2024, cognisance should have been taken of the Petitioner’s reply. Accordingly, there is a failure of natural justice.
The costs must be paid to the Tata Memorial Hospital within four weeks from today, and proof of payment/receipt must be produced before the second Respondent within four weeks. Upon receipt of such proof, the second Respondent must fix a date for personal hearing of the Petitioner/its representative and dispose of the show cause notice dated 8 June 2023 by passing a reasoned order and communicating it to the Petitioner. The notice regards personal hearing should be served on the Petitioner by e-mail and not by simply indicating it on the portal - If the costs are not paid within four weeks from today, then this Petition will be deemed to have been dismissed with Rs. 10,000/- again payable to Tata Memorial Hospital.
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2024 (11) TMI 1206
Validity of exemption notification dated 02.03.2023 - imposition of condition for the purpose of getting exemption that the vehicle in question must have been purchased in the State of Uttar Pradesh - Section-3 of the U.P. Motor Vehicle Taxation Act, 1997 - HELD THAT:- Perusal of the provisions of section 3, would reveal that the State Government, subject to such conditions and for such period, as may be specified, may exempt either wholly or partly any motor vehicle or class of motor vehicles from the payment of any tax under the Act. The Section, does not restrict the power of the State to indicate the conditions for grant of exemption. The notification dated 02.03.2023, inter alia, provides for 100% exemption of tax qua the vehicles purchased and registered in Uttar Pradesh.
The very fact that the aforesaid Section does not restrict the powers of the State in imposing condition, the plea raised seeking to question the condition imposed regarding purchase of vehicle cannot be countenanced. The submissions made that as the tax imposed is on plying of the vehicle, no condition on the basis of place of the purchase of the vehicle can be imposed, apparently also has no basis.
There is substance in the submissions of learned counsel for the respondents that on purchase of vehicle within the State, the State gets revenue through its share of G.S.T. and in case the vehicle is purchased from outside the State, even that part of the revenue is lost and therefore, instead of making it open-ended exemption, the State is well within its power to impose the condition of purchase of vehicle within the State, which condition cannot be said to be unreasonable.
Thus, no case for interference is made out in the petition, the same is, therefore, dismissed.
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2024 (11) TMI 1170
Levy of penalty u/s 129(1)(b) of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act - HELD THAT:- From a perusal of the documents annexed with the writ petition, it appears that the authorities have not challenged the invoice and/or e-way bill produced by the petitioner nor have they questioned the fact of purchase of the areca nuts from a third party which was then being supplied by the petitioner to the consignee. The petitioner also relies on the Circular No.76/50/2018-GST, dated December 31, 2018 that states that if the invoice or any other specified document is accompanying the consignment of goods, then either the consignor or the consignee should be deemed to be the owner.
Reliance placed on the Division Bench judgment of this Court in the case of H/S HALDER ENTERPRISES VERSUS STATE OF U.P. AND OTHERS [2023 (12) TMI 514 - ALLAHABAD HIGH COURT] wherein it has been held that the Department is bound by the aforesaid circular dated December 31, 2018 and if the invoice mentions the name of the consignor, the consignor shall be deemed to be the owner.
The order dated November 6, 2024 is illegal and unjustified, and accordingly, the same is quashed and set-aside with a direction upon the authorities to pass an order under Section 129(1)(a) and thereafter release the goods and vehicle upon payment of the penalty in accordance with law.
The writ petition is disposed of.
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2024 (11) TMI 1169
Denial of the input tax claim - Interpretation of Section 16(5) of the CGST Act regarding input tax credit - Circular issued by the Government of India bearing No. 237/31/2024-GST dated 15th October, 2024 - HELD THAT:- By virtue of the above provision and the directions issued by the Central Government, the petitioner would be entitled to file a rectification application for consideration of the claim of input tax credit made in the return filed; if it has been so made in the returns filed as indicated from the demand-cum-show cause notice.
The petitioner would be entitled to file such rectification application within the time stipulated in the circular, which shall be considered in terms of the newly incorporated provisions under Section 16(5) of the CGST Act and the Circular of the Central Government.
The writ petition stands disposed of.
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2024 (11) TMI 1168
Seeking reimbursement of extra GST paid at 6% from 01.01.2022 to 30.09.2022 - grievance of the petitioner is that despite the aforesaid enhancement from 01.01.2022, the respondents are paying the running bills with 12% GST and the petitioner is paying 18% GST - HELD THAT:- Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No.2 which is a Government Entity.
The respondent No.2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement.
Petition disposed off.
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2024 (11) TMI 1167
Challenge to order of demand has been raised against the present petitioner - petitioner was denied opportunity of hearing - violation of principles of natural justice - HELD THAT:- The view taken by the coordinate bench in BHARAT MINT AND ALLIED CHEMICALS VERSUS COMMISSIONER COMMERCIAL TAX AND 2 OTHERS [2022 (3) TMI 492 - ALLAHABAD HIGH COURT] agreed upon. Once it has been laid down by way of a principle of law that a person/assessee is not required to request for "opportunity of personal hearing" and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence.
Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created.
Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required.
The impugned order dated December 21, 2023 is set aside. The matter is remitted to the respondent no.2/Commercial/State Tax Officer, Sector-16, Lakhanpur, kanpur-II, Kanpur Nagar to issue a fresh notice to the petitioner within a period of two weeks from today - petition allowed by way of remand.
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2024 (11) TMI 1166
Wrongful availment of CENVAT Credit - Seeking refund the excess utilization of ITC along with penalty - petitioner submits that the impugned order is only a copy-paste of the reply given by the petitioner to the show cause notice and the explanation provided therein has not been considered in a reasonable manner - violation of principles of natural justice - principles of audi alteram partem - HELD THAT:- The Apex Court in Mrs. Maneka Gandhi v. Union of India and another [1978 (1) TMI 161 - SUPREME COURT] laid down the ratio in relation to the principles of audi alteram partem in the doctrine of natural justice holding that 'The court must make every effort to salvage this cardinal rule to the maximum extent permissible in a given case. It must not be forgotten that “natural justice is pragmatically flexible and is amenable to capsulation under the compulsive pressure of circumstances”. The audi alteram partem rule is not cast in a rigid mould and judicial decisions establish that it may suffer situational modifications. The core of it must, however, remain, namely, that the person affected must have a reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.'
Coming to the present writ petition in hand, three factors may be highlighted by this Court. Firstly, the impugned order merely copies the reply provided by the petitioner which leads to a conclusion that there was non application of mind by the respondent authority - Secondly, in the reply to the show cause notice, certain documents and reports were sought for by the assessee, which had been relied upon by the authorities. However, without providing the same to the assessee, the authorities proceeded to impose the tax liability and penalty - Thirdly, the explanation provided by the petitioner with regard to the use of the raw materials in the process of the manufacture by the petitioner supported with opinions of the experts were simply brushed aside by the respondent authority, who did not even examine whether the said raw materials had been used in manufacture of the final products which were fabrics - Without having done so and without granting an opportunity of fair hearing to the petitioner, the liability that has been imposed upon the petitioner appears to be patently illegal and without any authority in law.
Thus, non production of certain documents to the petitioner that were relied upon by the authorities, coupled with the manner in which no proper opportunity of hearing was granted to the petitioner leads us to the conclusion that severe prejudice has been caused to the petitioner. Ergo, the impugned order cannot be sustained and is liable to be quashed and set aside.
The impugned order dated September 12, 2024 is quashed and set aside with a direction upon the respondent authorities to examine the fabrics, provide a copy of the report to the petitioner, grant an opportunity of hearing to the petitioner and thereafter pass a reasoned order in the same - Petition allowed.
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2024 (11) TMI 1109
Challenge to SCN - Section17(5)(d) of the CGST Act, 2017 and Section 17(5)(d) of the TNGST Act, 2017 - HELD THAT:- The validity of the said provisions of both CGST and TNGST Act is concerned, it is brought to our notice by the learned counsel appearing for both sides that, by the recent decision of the Hon'ble Supreme Court in the matter of Chief Commissioner of Central Goods and Service Tax and Others Vs. M/s.Safari Retreats Private Limited and Others [2024 (10) TMI 286 - SUPREME COURT], the Hon'ble Supreme Court has upheld the validity of the said provisions.
In view of the said decision where the law has been declared, the challenge that has been made against the said provisions in W.P.No.23572 of 2022 has to be rejected, hence, W.P.No.23572 of 2022 is dismissed.
Petition dismissed.
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2024 (11) TMI 1074
Violation of principles of natural justice - petitioner was completely denied opportunity of oral hearing before the Assessing Authority - challenge to order whereby demand has been raised against the present petitioner - HELD THAT:- Once it has been laid down by way of a principle of law that a person/assessee is not required to request for "opportunity of personal hearing" and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence.
Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created - Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required.
The impugned order dated July 27, 2024 is set aside. The matter is remitted to the respondent no.2/Deputy Commissioner, State Tax, Sector-1, Basti, Gorakhpur to issue a fresh notice to the petitioner within a period of two weeks from today - Petition allowed.
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2024 (11) TMI 1073
Seizure and detention of goods - goods in question was under valued - instead of aluminum cable, PVC Aluminum mixed cable (Feeder Cable) was found - HELD THAT:- On perusal of the records, it shows that the goods in question were accompanying with all the relevant documents i.e. e-way bill, GR, tax invoice etc. and in the e-way bill, the HSN Code 8544 were specifically been mentioned and quantity 3520 was mentioned. There was no difference in HSN Code and quantity as well as the tax leviable on the goods in question. However only on the ground that on physical verification PVC Aluminum Mixed Cable (Feeder Cable) was found, the goods were detained.
Further before the appellate authority, new ground in respect of under valuation of the goods, was taken. The Commissioner, Commercial Tax, UP by way of Circular dated May 9, 2018 has specifically stated that no goods shall be detained on the ground of under valuation.
In the present case, the respondent authority has failed to bring on record any material that the goods mentioned in the tax invoice accompanying with the goods, has different HSN Code and different rate of tax or mentioned in the detention memo dated 1.10.2019. Once this fact is not disputed that HSN Code and rate of tax is similar, no adverse inference can be drawn. The petitioner would not gain in not mentioning correct description of items or state would loose its legitimate tax.
The impugned order dated 26.11.2020 cannot be sustained in the eyes of law and same is hereby quashed - Petition allowed.
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2024 (11) TMI 1072
Quashing of impugned order under Section 129 of the GST Act - E-Way Bill was not properly filled - intent to evade tax or not - HELD THAT:- Upon inspection of the goods no discrepancy of physically able goods with the goods disclosed in the E-Way Bill. The assessee on show cause resisted the proceedings - According to the assessee there was no intent to evade the tax. The goods in the vehicle were fully reconciled with details stated in the E-Way bill. Non filling of the part of E-Way Bill would not trigger the proceedings under Section 129 of the GST Act.
The facts which are admitted and disclosed from the records are these. There was no discrepancy in the goods which were physically found at the time of inspection and details of goods recorded in the E-Way Bill available with the driver of the vehicle. The authorities below have not found any intent to evade tax.
This Court has set its face against initiation of proceedings under Section 129 of GST Act in the wake of mere technical breaches. When substantial compliance of the provisions is disclosed and when the physcial inspection of goods tallies with the goods declared in the E Way Bill and no intent of tax evasion is made out, proceedings under Section 129 of GST Act become vitiated.
The impugned order dated 24.06.2024 passed by the respondent no. 1, Additional Commissioner, Grade-2 (Appeal), State Tax, Judicial Division, Etawah is unsustainable and is quashed - Petition allowed.
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2024 (11) TMI 1038
Dismissal of appeal of the petitioner - dismissal mainly, on the ground that against the assessment order, the petitioner preferred online appeal without filing certified copy of assessment order in physical form, whereas, downloaded copy of assessment order was filed along with the appeal memo - HELD THAT:- The view taken by all the High Courts agreed upon, wherein it was held that amendment in Rule 108 with effect from 26.12.2022 is procedural in nature and being procedural, will have retrospective effect - reliance can be placed in Indian Potash Ltd. v. Deputy Commissioner [2024 (8) TMI 66 - MADRAS HIGH COURT] and Oaknorth (India) Pvt. Ltd. v. Union of India [2023 (9) TMI 781 - PUNJAB AND HARYANA HIGH COURT].
The view of the High Courts agreed upon that rejection of appeal on hyper technical ground cannot be countenanced, more so, when appeal was admittedly filed within time along with the downloaded copy from the portal.
Thus, the impugned appellate order dated 19.07.2024 is set aside. The appeal is restored in the file of learned appellate authority. The appellate authority shall decide the appeal, in accordance with law, on merits - petition disposed off.
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2024 (11) TMI 1037
Eligibility for GST exemption on hostel accommodation services - whether the hostel accommodation being provided by the Applicant to students and working women qualify to be a residential dwelling for use as residence as described in the above entry and thus eligible for exemption or not? - HELD THAT:- The term 'residential dwelling' has not been defined either under CGST Act or under Notification No. 12/2017. However, under the erstwhile service tax law, in paragraph 4.13.1 of the Taxation of Services: An Education Guide dated 20.06.2012', issued by the CBIC, the expression residential dwelling' has been interpreted in terms of the normal trade parlance as per which it is any residential accommodation, but does not include hotel, motel, inn, guest house, campsite, lodge, house boat, or like places meant for temporary stay.
It is clear that the purpose and objective of the notification is nothing but to avoid taxing residential properties taken on rent by family or individuals and the benefit of exemption is not extended to the premises which do not qualify as residential dwelling for use as residence. Further, unless the twin conditions of 'renting of residential dwelling' for 'use as residence,' being inter-twined and inseparable, are not met, the exemption is not available. As per settled position in taxation laws, especially when exemptions or concessions or benefits are to be availed, the interpretation is to be literally and strictly construed and not in liberal terms. In effect, the place rented out is neither a residential dwelling nor being rented out for use as residence.
It is clear that hostel accommodation is not equivalent to residential accommodation and hence the services supplied by the Applicant would not be eligible for exemption under Entry 12 of Exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017 and under the identical Notification under the TNGST Act, 2017, and also under Entry 13 of Exemption Notification No.09/2017-IT(Rate) dated 28.06.2017, as amended.
Requirement for GST registration based on turnover - HELD THAT:- It is clear that the Applicant's service of providing hostel accommodation is not eligible for exemption under Entry 12 of Exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017 as amended, the Applicant is very much be required to take registration under the GST Enactments, as the arrangement between the Applicant and the hostel occupants is liable to be classified as transaction in the course of furtherance of business and hence, as per Section 7(1)(a) of CGST Act, 2017 read with Entry No. 2(b) of the Second Schedule to the CGST Act, the said transaction constitutes "supply" - the Applicant is required to get themselves registered in the state of Tamil Nadu, if their aggregate turnover in a financial year exceeds twenty lakh rupees.
Taxability and applicable GST rate for hostel accommodation services - HELD THAT:- It is observed that hotels are meant for a temporary stay (2-5 days) and have lot of facilities and staff, but hostels are used for a longer period and have basic facilities with minimal staff required by the inmates to stay at a reasonable rate. Therefore, hostel services cannot be equated to a hotel accommodation and hotel GST rates cannot be applied to a hostel. Therefore, the supply of hostel accommodation services (Tariff heading 9963) is taxable @ 9% CGST + 9% SGST under Sl. No. 7(vi) of the above Notification (Sl.No. 7 (ix) as per original notification).
Tax treatment of in-house food supply as part of hostel services - HELD THAT:- The natural bundle has the characteristic of where one service is the main service and the other services are ancillary services which help in better enjoyment of the main service. Further, there is a single price for the combined services. The principal activity of the Applicant is supply of accommodation Services. While providing such services, the charges are being realised in a consolidated manner for the value of food and other like services rendered. The Applicant has stated that they do not charge separately for the other services provided by them. Thus, the services provided by the Applicant are composite in nature - As per Section 8 of the CGST Act, 2017, for a Composite supply, the tax rate on the principal supply will be treated as the tax rate on the given composite supply. Since the Applicant provides a number of services in a composite manner, the hostel accommodation services provided by the Applicant, being the principal supply, which is taxable @18%, will be tax rate for the composite supply provided by them.
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2024 (11) TMI 979
Levy of penalty for availing excess Input Tax credit - delay in filing the appeal by the petitioner - HELD THAT:- This Court allows the writ petition on the grounds that the delay in filing the appeal by the petitioner was due to an unavoidable personal circumstances, including the critical illness of her husband, which required extensive medical attention. The petitioner provided supporting medical documentation, but the Appellate Authority refused to condone the delay. This rigid approach fails to account for genuine extenuating circumstances, reflecting a lack of judicial empathy and an unreasonable interpretation of statutory time limits.
Given the petitioner's situation, this decision by the Appellate Authority to dismiss the appeal based solely on timing considerations was unduly harsh and legally unsound. Moreover, the petitioner’s right to further appeal has been obstructed by the non-formation of the GST Appellate Tribunal, effectively denying her a statutory right to a higher appeal.
In light of the procedural irregularities, the arbitrary nature of the actions and the statutory misapplication, this court finds the petitioner’s case to be meritorious. Accordingly, the writ petition is allowed, and the impugned orders dated May 24, 2024 is quashed. The petitioner’s rights under the WBGST Act, 2017, are restored, with all benefits that accompany this decision, without any adverse consequences arising from the annulled orders.
Application disposed off.
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2024 (11) TMI 978
Scope of Supply - GST on supply “agreed to be made” - Constitutional validity of Sections 7, 12, 13, and 16 of the CGST Act and corresponding MGST Act - Entitlement to Input Tax Credit (ITC) on receipt vouchers - the case of the petitioner is that the petitioner was precluded from availing of the Input Tax Credit (ITC) of the GST paid to L&T (its constituent) for the reason that Section 16 (2) (b) of the CGST and MGST Act provided that no ITC could be taken unless the service had been received - Refund of GST and ITC - HELD THAT:- It is not in dispute that for execution of the project work, purchase orders dated 23 March 2018 back-to-back with the Contract Agreement, were issued by the petitioner to its member, i.e. L & T. Reciprocally the constituent of the petitioner would raise bills on the petitioner for the portion of the work executed by it each month. In turn, the petitioner would raise a single consolidated invoice on the employer (MMRDA). On availing of these advances, the petitioner issued “advance receipt vouchers” to the MMRDA for both the first and second installment of the mobilization advance received by it. Such ‘advance receipt vouchers’ as issued/ executed by the petitioner in favour of the MMRDA, indicated several details inter alia the total amount of advance claimed before tax and the GST amounts payable on such advance and the total invoice value.
In State of M. P. Vs. Rakesh Kohli & Anr. [2012 (5) TMI 262 - SUPREME COURT], the Court was considering the challenge whether the High Court was justified in declaring Clause (d) of Article 45 of Schedule 1-A of the Indian Stamp Act, 1899 which was brought in by the Indian Stamp (Madhya Pradesh Amendment) Act, 2002 as unconstitutional being violative of Article 14 of the Constitution of India. In such context, the Supreme Court, not agreeing with the view taken by the High Court, held that the well defined limitation in the constitutional validity of the statute enacted by the Parliament or the State Legislature has not been kept in mind by the High Court.
On a plain reading of Section 7, the expression “supply” includes “all forms of supply of goods or services or both”, such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration (as defined under Section 2 (31)) by a person in the course or furtherance of business. It is well settled that every word as contained in the provision as used by the legislature, is required to be given its due meaning, so as to gather the object and intention behind the provision as intended by the legislature. In the context of Section 7 (1) (a), it is apparent that it inter alia includes “all forms of supply of goods or services or both”, of the nature as specified therein which are “made” or “agreed to be made” for a “consideration” by a person in the course or furtherance of business - Once the test in such form is satisfied in relation to the supply of goods or services, the levy of collection of tax under Chapter III and more particularly, Section 9 (charging section) would stand attracted. As to how the expression “in the course or furtherance of business” is legally understood and interpreted by the Courts can be discussed.
Adverting to the interpretation of the expression “in the course of business” and in the present context, an expression added to it namely of the words “in furtherance of business”, as used in Section 7 (1) (a) would necessarily mean that the supply is connected to or in relation to the activities in question or is the integral part of such activity. By applying such interpretation, it cannot be denied that once an advance was received by the petitioner in the course of or in furtherance of the contract in question, it would necessarily amount to a supply attracting payment of GST - the legislative intention behind Section 7 is quite clear that such composite contract would fall within the definition of supply as envisaged by Section 7 (1) (a).
The petitioner’s case challenging the vires of Section 12 and 13, is to the effect that these provisions are invalid and ultra vires as they apply to ‘supply agreed to be made’, for the reason that Article 246A applies only in respect of the ‘supply of goods or services’ and not in relation to supply “agreed to be made” - It is hence the petitioner’s case that once the actual supply itself is not made, there is no warrant for the levy in question either by virtue of the applicability of Section 7 read with Section 9 and Sections 12 and 13.
The petitioner merely referring to the provisions of Article 246A read with Article 366 (12A) of the Constitution which provide that the Parliament as also the State Legislature would be empowered to make laws in respect of goods and services tax to be imposed by the Union or a State, would be required to be interpreted in a broad sense. Thus, the Parliament as also the State Legislature were within their constitutional authority, to not only enact the provisions which are assailed by the petitioner, but also to prescribe / stipulate the manner and the method under which the scheme of the GST laws ought to work, in regard to the applicability of such provisions, was also the domain of the respective legislatures.
In the present case as contended on behalf of the petitioner, the provisions of Section 31 read with Rule 36 are being applied by the Revenue to deny the input tax credit to the petitioner on the ground that on account of lack of supply, no invoice was available or issued so as to entitle the petitioner to claim the input tax credit - the rigour and the mandate of sub-section (1) and (2) of Section 31 is not applicable to the operation of sub-section (3) which stands on its independent legs, when it recognises the tax paying documents as referred thereunder. In any event sub-section (3) of Section 31 is also required to be read in the context of the companion provisions namely sub-section (4), (5), (6) and (7). These provisions contemplate a variety of situations, even when at a belated stage, an invoice can be issued and which can be a situation of advance payment being received in relation to the transactions between the parties. Thus, Section 31 is required to be holistically read so as to make the provision meaningful and more particularly in the context in hand. For such reason, when the petitioner satisfied the requirements of Section 31 (3) (d) as also accepted by the revenue to be a tax paying document, it would not be correct in law that the petitioner is denied input tax credit, merely because the petitioner has not complied with the part of the provisions, namely sub-section (1) of Section 31 read with Rule 36.
The prayers of the petitioner challenging the constitutional validity and legality of Sections 7, 12, 13 and 16 (2) (b) of the CGST/MGST Act are rejected - It is declared that in the peculiar facts of the case on the basis of Receipt Voucher issued by L&T in favour of the petitioner, the petitioner was entitled to avail the Input Tax Credit under section 16 of the CGST/MGST Act.
Petition disposed off.
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2024 (11) TMI 977
Maintainability of the writ petition - Jurisdiction of SCN - quashing the exercise of the jurisdiction vested in this Court under Article 226 of the Constitution of India - challenge to Ext.P9 notification which relates to the rate of GST for commission received in terms of the provisions contained in Section 21(1)(b) of the Chit Funds Act, 1982.
Maintainability of the writ petition - HELD THAT:- The contention of the Senior Standing Counsel appearing for the respondents that this Court should not interfere with a show cause notice should be accepted in normal circumstances. However, where on admitted facts, the show cause notice is found to be without jurisdiction, it is not that an objection raised to the maintainability of the writ petition is sustainable. It is settled law that where the proceedings are challenged as being without jurisdiction, the availability of an alternate mechanism for resolution of disputes (here through adjudication of the show cause notice) is no ground for the Court to refuse to exercise jurisdiction.
The judgment of a Constitution Bench of the Supreme Court in Calcutta Discount Co. Ltd. v. ITO and Anr, [1960 (11) TMI 8 - SUPREME COURT] is the authority for this proposition. When faced with an argument that the question as to whether re-assessment notices were properly issued under the provisions of Section 34 of the erstwhile Indian Income Tax Act, 1922 should not be investigated in a writ petition under Article 226 of the Constitution of India it was held 'We have therefore come to the conclusion that the Company was entitled to an order directing the Income Tax Officer not to take any action on the basis of the three impugned notices.'
In the facts of the present case, it is clear on the authority of the judgment of the Supreme Court in Oriental Kuries Limited [2019 (11) TMI 1818 - SUPREME COURT] and the provisions of Notification No.12 of 2017 that the issuance of a show cause notice alleging that the transactions, which are the subject matter of Ext.P1 show cause notice, should be subject to a levy of GST is clearly without jurisdiction. There are no disputed questions of fact.
The matter can be decided purely as a matter of law. Therefore, the fact that this writ petition has been filed challenging a show cause notice is no ground to refuse the exercise of jurisdiction under Article 226 of the Constitution of India.
Ext.P1 show cause notice is confined to the interest received from the defaulting subscribers. In such circumstances, for reasons indicated, it must be held that the amount of interest received by the foreman of a chit on defaulting subscriptions cannot be said to be amounts received as consideration for the supply of services.
It is declared that Ext.P1 show cause notice is issued without jurisdiction. It is accordingly quashed - this writ petition is allowed.
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2024 (11) TMI 976
Violation of principles of natural justice - notices were uploaded on the “view additional notices and orders” tab of the GST portal - the petitioner asserts that he was unaware of proceedings - HELD THAT:- On examining the impugned order, it is evident that the order pertains to discrepancy between the petitioner’s GSTR-3B return and the auto populated GSTR-2A and also reconciliation of turnover as per the Income Tax return and GSTR-3B return. It is also clear that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary that the petitioner be provided an opportunity to contest the tax demand on merits.
The impugned order dated 9-8-2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is directed to submit a reply to the show cause notice - petition disposed off.
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2024 (11) TMI 975
"Governmental Authority" or "Local Authority" - Government of Karnataka holds 99.99% of equity in the Corporation - exemption from filing of Annual Return in Form GSTR9 and Form GSTR9C - input tax credit on the inward supply of goods and services, which are capitalized in the books of accounts - input tax credit on the inward supply of services against output taxable supplies of support and auxiliary services and other supply of taxable goods - input tax credit (on inputs, input services and capital goods) proportionately on the taxable output supply of support services and goods (scrap etc.) - eligibility to claim taxes paid under RCM, as input tax credit - levy of Additional Surcharge collected from Open Access Consumer - taxability of "Wheeling and Banking Charges allowed by Commission (KERC) as 5% and 2% of the energy input into the distribution system by Open Access consumer.
HELD THAT:- The clause 8.5.4 of the Tariff Policy, 2016 notified by the Ministry of Power, Government of India provides that: "The additional surcharge for obligation to supply as per section 42(4) of the Act should become applicable only if it is conclusively demonstrated that the obligation of a licensee, in terms of existing power purchase commitments, has been and continues to be stranded, or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. The fixed costs related to network assets would be recovered through wheeling charges."
As per National Electricity Policy, an additional surcharge be levied for meeting the fixed cost of the distribution licensee arising out of his obligation to supply in cases where consumers are allowed open access. As per Karnataka Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulation, 2004, the open access customer shall be liable to pay such additional surcharge as may be determined by the Commission from time to time. It is also noticed that Regulation 3 of KERC (Electricity Supply) Code, 2004 empowered the appellant to charge additional surcharge from their open access consumers. Thus, it is apparent that the appellant is collecting additional surcharge as per the Electricity Act; Tariff Policy; National Electricity Policy of Ministry of Power, Government of India and Karnataka Electricity Regulatory Commission (Terms and conditions for open Access) Regulation, 2004, KERC (Electricity Supply) Code, 2004 of Karnataka Electricity Regulatory Commission, Government of Karnataka from the open access customers, and therefore it forms part of tariff for the supply and distribution of electricity.
It is found that collection of Additional Surcharge from OA consumers on the basis of quantum of energy wheeled from the private generators of OA consumers is only to meet the fixed cost of the appellant arising out of this obligation to supply. Such collection mechanism is backed by an Act and policies of Central Government as well State Government. In the instant case, the Appellant has entered into agreements with their customers, basically for supply of electricity - From the submissions of the appellant, there are no independent arrangement entered into by the appellant for tolerating an act against which the consideration is collected as Additional Surcharge. It is found that such amounts do not constitute payment (or consideration) for tolerating an act, rather these amounts are collected only to cover the fixed costs the appellant has to incur in terms of power purchase agreements they have entered into with power generating companies.
The Additional Surcharge levied under Electricity Act from their customers who opted for sourcing electricity from open access, over and above the consideration charged towards supply and distribution of electricity should form part of taxable value, determined in terms of Section 15 of the CGST Act, 2017 - the supply of electricity as goods and/or distribution of electricity as service are covered under exemption either in terms of entry No. 104 of Notification No.02/2017 CT(R) dated 28.06.2017 applicable to goods and /or entry No.25 of the Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 applicable to services.
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