Challenge to SCN issued under Section 73 of the Finance Act, 1994 - leviability of the Service Tax - scope of the word 'Service' - HELD THAT:- Exactly the points that has been raised by the learned counsel appearing for the Petitioner who have challenged against the Show Cause Notice since has been answered by the said decision of the Coordinate Bench of this Court THE PRINCIPAL COMMISSIONER, OFFICE OF THE PRINCIPAL COMMISSIONER OF CGST AND CENTRAL EXCISE, CHENNAI VERSUS M/S. WUNDERBAR FILMS PRIVATE LIMITED, REP. BY MR. S. VINOD KUMAR, DIRECTOR, CHENNAI [2024 (3) TMI 17 - MADRAS HIGH COURT], by respectfully following the same, this Writ Petition is dismissed also on same terms i.e., open to the Writ Petitioner to reply to the Impugned Show Cause Notice wherein it is for the Writ Petitioner to take whatever grounds/objections against the Show Cause Notice and accordingly the issue can be adjudicated and decided by the Adjudicating Authority/Assessing Authority/Revenue at an earliest point of time preferably within a period of four (4) weeks from the date of filing of the reply/objections by the Writ Petitioner.
Challenge to order passed under Section 73 of the WBGST/CGST Act, 2017 - tax period from April 2018 to March 2019 - HELD THAT:- Taking note of the response filed by the petitioners on 3rd December, 2023 in respect of the scrutiny period July, 2017 to March, 2018, it is difficult to accept the contention of the petitioners that the petitioners’ consultant remained unreachable or was ill for reasons whereof, the petitioners were unaware with regard to the impugned show-cause notice dated 5th December, 2023. The petitioner no.1 is not a small business entity but a private limited company, having corporate entity. Thus, the petitioners cannot feign ignorance of the pre show-cause as well as the show-cause notice by contending that its consultant was unwell or remained unreachable.
The petitioners having not responded to the pre-show-cause notice as well as the show-cause notice, there being no proper explanation for having not responded to the same and further taking note of the efficacious alternative remedy available to the petitioner in the form of an appeal under section 107 of the said Act, the petitioners are not entitled to invoke the extraordinary writ jurisdiction to this Court for adjudication of its case on merits on the basis of its stand taken for the first time before this Court.
This writ petition thus, cannot succeed and is accordingly dismissed.
Maintainability of petiiton - availability of alternative remedy - Penalty u/s 129(1)(a) of the Central Goods & Services Tax Act, 2017 - seeking release of detained goods - HELD THAT:- This Court, in view of the aforesaid submission, is disposing of the instant writ petition, on the ground of availability of alternative remedy of appeal, granting liberty to the writ petitioner to prefer appeal, raising all points, before the appellate forum, if not already preferred.
Challenge to demand-cum- show cause notice - non-payment of GST under Reverse Charge Mechanism - lack of jurisdiction - applicability of Section 15(2) of the CGST Act, 2017 - HELD THAT:- The challenge is to the demand-cum-show cause notice issued by the competent authority. The appropriate course of action for the petitioners is to submit a reply and contest the matter before the said authority. The demand- cum show cause notice dated 24.04.2024 having been issued by the competent authority cannot be challenged on the plea of lack of jurisdiction.
As regards, the applicability of Section 15(2) of the CGST Act, 2017, all issues raised by the petitioners herein are left open to be adjudicated before the competent authority.
The High Court of Karnataka dismissed the petition as the petitioner wished to withdraw it due to the government's policy change waiving penalty and interest on GST. All contentions are kept open.
Seeking grant of bail - creating fake companies / firms and appointing Directors / Partners / Proprietors for fraudulently availing fake Input Tax Credit and further passing on the inadmissible Input Tax Credit - HELD THAT:- It appears that petitioner is in judicial custody since 09.04.2024, investigation has been completed and charge sheet has been submitted. Trial has yet to commence which shall consume considerable time. The relevant evidence of the case pertains to electronic evidence, which cannot be tampered by petitioner and other witnesses are official witnesses.
Considering the nature of allegation against petitioner coupled with materials available on record and period of custody of the petitioner, the above-named petitioner is released on bail. Accordingly, the petitioner named above, is directed to be released on bail on furnishing bail bond of Rs. 1,00,000/- with two sureties of the like amount each to the satisfaction of learned Additional Chief Judicial Magistrate, Special Court, Economic Offences, Jamshedpur in connection with Complaint Case No. 1281 of 2024, subject to fulfilment of conditions imposed - bail application allowed.
Rejection of appeal on the ground of being filed after expiry of limitation period as envisaged under Section 107 of the Central Goods and Services Tax Act, 2017 - Registration of the Petitioner has been cancelled for failure to furnish the returns for a continuous period of six months - HELD THAT:- The instant case is squarely covered by the judgment ABDUL SATAR VERSUS THE PRINCIPAL COMMISSIONER, CENTRAL GOODS AND SERVICE TAX & CX, THE JOINT COMMISSIONER (APPEALS) , CGST & CX (APPEALS) , THE SUPERINTENDENT, CGST & CX, RANGE-1, RAMGARH DIVISION [2024 (3) TMI 780 - JHARKHAND HIGH COURT] where it was held that 'The provisions under sections 30, 45, 46, 47 etc. are intended at providing opportunity to the defaulter Firm so as the Firm continues its business. Therefore, a liberal approach is required to be taken in the matters like the present proceeding notwithstanding the period prescribed under section 30 of the GST Act having been lapsed', hence, the same may be disposed of in terms of the said judgment.
Prayer to consider and dispose of rectification application - time limitation prescribed under section 161 in Odisha Goods and Services Tax Act, 2017, followed or not - HELD THAT:- Rectification application dated 20th August, 2023 of petitioner is to be dealt with and disposed of by 17th September, 2024. It is made clear, the department on issuing notice for participation of petitioner in the proceeding, will expect it to comply. Omission on part of petitioner should not impead the department to deal with the application. Mr. Sahoo prays for stay of the demand. Since rectification thereof is pending, it is only after disposal of the application that the demand will either be reiterated or made afresh.
Seeking release of amount charged towards GST for release of the bills for the work done - It is contended that the petitioner is not liable to pay the GST as per the contract - HELD THAT:- It appears that the dispute is alleged with regard to the payment of GST and as such Rs. 2,10,714/- GST amount has been released on the bills of the petitioner for the work prepared by him.
As such if the petitioner contends that he is not liable to pay the amount and the same is disputed by the learned counsel for the respondent, this Court is not inclined to entertain such application but liberty is granted to the petitioner to approach the alternative forum namely Arbitral in the terms and conditions of the agreement itself.
Levy of interest and penalty - wrongly availed and utilized Input Tax Credit (ITC) - Whether the petitioner can be called upon to make payment of interest upon the petitioner not complying with the notice issued in Form DRC- 01A as regards payment of interest, prior to issuance of the show cause under Section 73 of the said Act?
HELD THAT:- Admittedly, in this case on the issuance of a notice in Form DRC -01A the petitioner had debited its credit ledger by indicating that by reasons of error committed during filling of GSTR – 09 the petitioner had wrongly availed the ITC. It is the petitioner’s case that the ITC, though wrongfully availed, was not utilized by him. According to the petitioner unless, the ITC is wrongfully availed and utilized, in terms of Section 50(3) of the said Act interest is not leviable - the said section had been amended by Finance Act of 2022 with retrospective effect from 1st July 2017.
The petitioners had enough credit in its electronic credit ledger, a sum in excess of Rs.5,00,000/- which incidentally was the approximate ITC amount availed, for the relevant period. It is also noticed that in somewhat situation a Coordinate Bench of this Court in the case of M/S. LARSEN & TOUBRO LIMITED VERSUS STATE OF WEST BENGAL & ORS [2022 (12) TMI 1496 - CALCUTTA HIGH COURT] had concluded that unless a registered tax payer avails and utilized ITC, interest cannot be levied.
In this case it is noticed that the petitioner had debited its electronic credit ledger to reverse the ITC availed. A perusal of Section 49(4) of the said Act would clarify that the amount available in the electronic credit ledger, may be used for making payment towards output tax under the Act. Thus, from the tenor of Sections 50(1) proviso, read with Section 49, read with Rule 86 and 87 of the said Rules, it would be apparent that payment of interest and penalty can only be made by debiting the electronic cash ledger and not from the electronic credit ledger. The payment made on 20th March 2021 in form GST DRC-03 is by debit of the electronic credit ledger - unless the ITC is both availed and utilized, interest cannot be levied on the registered tax payer.
The order passed by the proper officer dated 8th April 2023 which has since, merged with the order passed by the appellate authority dated 13th May 2022 cannot be sustained, the same is accordingly set aside. Consequentially, the demand raised by the respondents on account of interest and penalty is also not sustainable and the same is accordingly quashed - Petition disposed off.
Challenge to N/N. 9/2023– C.T. dated 31.03.2023 and N/N. 56/2023-C.T. dated 28.12.2023 issued under the provisions of Section 168A of the CGST Act extending the limitation - issuance of demand notice to the petitioner imposing taxes, penalty and interest - HELD THAT:- This writ petition be listed along with the bunch of connected writ petitions including WP(C)/3291/2024 - And till the next date fixed, let there be no coercive action be taken against the writ petitioner in terms of the impugned order passed by the respondent authority.
Let the names of all respondent counsels be reflected in the Cause List by the Registry.
Levy of GST on amount of Royalty - whether the Royalty is in the nature of ‘tax’ or ‘profit a prendre’ and thus, cannot be deemed to be a ‘consideration’ or not - HELD THAT:- Having heard the learned counsel for the parties and having gone through the records, it is undisputed fact that against the order impugned, the appeal lies and, as such, instead of availing the alternative remedy available under the statute, the petitioner has approached this Court by filing this writ application, which cannot be sustained. Without expressing any opinion on the merits of this writ application, this writ application stands disposed of, by permitting the petitioner to pursue the remedy before the appropriate authority in accordance with law.
Quasing of SCN and summary of SCN - availment of Input Tax Credit against purchase made from non-existent tax payer - HELD THAT:- Having heard the learned counsel for the parties and without expressing any opinion on the merits of the case, since the order is an appealable one, this Court is not inclined to entertain this writ application and grant liberty to the petitioner to pursue the remedy in accordance with law before the appropriate Forum.
Levy of GST on amount of Royalty and District Mineral Fund Contribution paid by the petitioner to the State of Jharkhand - HELD THAT:- It is undisputed fact that against the order impugned, the appeal lies and, as such, instead of availing the alternative remedy available under the statute, the petitioner has approached this Court by filing this writ application, which cannot be sustained.
Without expressing any opinion on the merits of this case, this writ application stands disposed of, by permitting the petitioner to pursue the remedy before the appropriate authority in accordance with law.
Cancellation of registration of petitioner u/s 29(2)(a) of the UP GST Act - whether registration has been obtained by willful misstatement and suppression of fact? - HELD THAT:- Once on the basis of some material is to be used against the dealer, then it should be put to notice before using the same. But in the case in hand, the petitioner was never put to notice for material use adversely against it, which is in violation of the principle of natural justice and the authorities have not adhered to the same. Further, for cancellation of registration, section 29(2) (a) to (e) is provided, but on perusal of the said section, neither there is any violation of the said section, nor any finding has been recorded by any of the authorities for cancelling the registration of the petitioner as contemplated in section 29(2) of the UP GST Act.
The registration of the petitioner could only be cancelled in accordance with the provisions as contemplated in section 29(2) of the UPGST Act and not otherwise. Therefore, the impugned order dated 07.08.2019 passed by the Additional Commissioner, Grade - 2 (Appeal), V, Commercial Tax, Ghaziabad as well as the order dated 30.06.2018 passed by the respondent no. 3 under section 29(2)(a) of the UP GST Act are hereby quashed.
Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due - HELD THAT:- The delay in petitioner’s invoking the proviso to Rule 23 of the Central Goods and Services Tax Rules (CGST Rules) is condoned and it is directed that subject to the petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the petitioner’s application for revocation will be considered in accordance with law.
Challenge to assessment order - failure to notice the notices that preceded the impugned order - initiation of recovery proceedings - HELD THAT:- The interest of the petitioner and the revenue can be balanced, subject to the petitioner depositing 10% of the disputed tax from its Electronic Cash Register within a period of 30 days from the date of receipt of a copy of this order.
The petitioner shall file a composite reply with the respondent with in a period of 30 days from the date of receipt of a copy of this order together with the said deposit.
Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - HELD THAT:- On perusal of the impugned order, it appears that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. The petitioner asserts that such non-participation was on account of not being aware of proceedings. In these facts and circumstances, the interest of justice warrants reconsideration by putting the petitioner on terms.
The impugned order dated 16.03.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within three weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice - Petition disposed off.
Challenge to order in original - petitioner's replies were not duly taken into consideration - inadvertent error was committed by reflecting net ITC - violation of principles of natural justice - HELD THAT:- On examining the petitioner's GSTR 3B returns for the month of October and November 2017-18, it appears prima facie that an inadvertent error was committed and that such error was rectified, albeit irregularly. As against the confirmed tax proposal of Rs. 6,15,502/-, a sum of Rs. 4,47,300/- was recovered from the petitioner's bank account. The facts and circumstances clearly warrant reconsideration.
The impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of a copy of this order - petition disposed off.
Seeking setting aside of order - attachment of bank account in terms of Section 83 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The authorities have no objection if the petitioner’s account is de-freezed in terms of sub-section (2) of Section 83. The bank is not required to get instructions from the authorities because Section 83(2) is very clear.
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