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GST - Case Laws
Showing 561 to 580 of 13902 Records
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2024 (10) TMI 879
Challenge to order passed by the appellate authority on 31st May 2023 passed under Section 107 of the WBGST / CGST Act, 2017 - HELD THAT:- The petitioner, though has a statutory remedy in the form of an appeal, since the appellate tribunal is yet to be constituted, the present writ petition has been filed.
The present writ petition should be heard. Taking note of the provisions of Section 112(8) of the said Act and the prima facie case made out by the petitioner, the petitioner should be directed to make payment of 10 per cent of the balance amount of the remaining amount of tax in dispute, in addition to the amount already deposited by the petitioner under Section 107(6) of the said Act with the respondents within two weeks from date.
Let affidavit in opposition to the present writ petition be filed within a period of 6 weeks from date. Reply, thereto, if any be filed within 4 weeks thereafter.
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2024 (10) TMI 878
Classification of supply - undertaking of deposit works under both modes - value of supply under the First mode and under the Second mode - When deposit work is executed Second method, whether DISCOM is eligible to avail ITC of GST on Material, labour, installation and other overhead? - HELD THAT:- The entire material and installation work is arranged by the applicant on behalf/ instance of consumers/ intending agencies and work is done in the supervision of the Applicant. The work done by applicant falls under “Works Contract” as per section 2 (119) of the CGST Act, 2017.
It is pertinent to note that the ownership of the property is vested with the PVVNL, after construction of lines the property will be kept by the applicant as custodian of these lines and it is credited in the applicant’s books of account. However the construction of lines is being done on behalf of the customers of applicant, the applicant is not doing it on his own account, thus the ITC on the material. labour, installation and other overhead does not falls under block credit under section 17 (5) of the CGST Act, 2017. Hence, applicant is eligible for Input Tax Credit as per Section 16 of the CGST Act, 2017.
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2024 (10) TMI 877
Classification of goods - rate of tax - dried softy ice cream mix (low fat) in vanilla flavour - N/N. 1/2017-Central Tax (Rate) dated 28.6.2017 - HELD THAT:- The product in question i.e. “Vanilla Mix” - dried softy ice cream mix (low fat) in vanilla flavour comprise of several ingredients and each ingredient play a role in the product. Since this product is intended to use for making of soft serves, each Ingredient has a specific role to make the soft serve smooth and creamy in texture. Further. it is also conclusive that not only the contents of the product in question but the processing done in the soft serve machine also play a vital role in giving the smooth and creamy texture characteristic of soft serves.
The submissions made by the applicant are not enable and the product in question does not fall under the Heading 0404.
Perusal of the Chapter Note 5 reveals that food preparations subjected to further processing for human consumption are covered under Heading 2106. It is also apparent that powders for ice-creams and similar preparations are also covered under Heading 2106. Further. preparations consisting of milk powder, sugar and any other added ingredients are also included under Heading 2106. Powder for table cream, jellies, ice-cream and similar preparations, whether or not sweetened are also included in Heading 2106. It is also evident that the product in question cannot be termed as a dairy produce.
The product i.e. “Vanilla Mix” - dried softy ice cream mix (low fat) in vanilla flavour is classifiable under Heading 2106 90 99 of the First Schedule to Tariff Act attracting tax at the rate of 9% of CGST and 9% of SGST.
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2024 (10) TMI 876
Exemption under GST - Composite supply - scope of Local Authority - Whether the activity of providing, laying, jointing, testing and commissioning of sewer system and all ancillary works is exempt under entry 3B of the NN 13/2017-CT (Rate) dated 28.06.2017? - HELD THAT:- In the instant case the applicant is engaged in providing ‘works contract services’. The applicant also admits the fact that they are engaged in supply of goods along with services for an immovable property. Thus, the services provided by the applicant are found to be works contract services, where goods along with services are supplied.
KOTA NAGAR NIGAM is covered under the definition of Local Authority. In the instant case, the applicant is providing services to KOTA NAGAR NIGAM which is a local authority.
Vide Notification No. 16/2021-Central Tax (Rate) dtd 18.11.2021 w.e.f. 01.01.2022, “a Government Authority or a Government Entity” words are omitted from SR No. 3 and 3A of the Notification No. 12/2017-CTR dtd 28.06.2017. From the para 5.52, it is clear that the Sr No. 3B was inserted to provide the exemptions on supply of certain services supplied to Government Authority, which was previously curtailed by the above referred Notification dtd 18.112021 w.e.f. 01,01.2022. Thus, entry Sr No. 3B is not a new entry, rather it is extension of existing entries of Sr No. 3 and 3A.
The Sr No. 3 and 3A of the Notification No.12/2017-CTR dtd 28.06.2017 are applicable only in the case of pure services or composite supply having value of supply of goods not more than 25 percent. Since, Sr No 3B is also extension of Sr No 3 and 3A and all these entries are inter-related and it won’t be appropriate to read all these entries in isolation or individually. Therefore, Sr No. 3B will also be applicable in case of pure services or composite supply, where value of the goods is not more than 25 percent.
The applicant provides services to Nagar Nigam, Kota, which is a ‘local authority’ and all the three entries Sr No 3, 3A and 3B of the Notification No. 12/2017-CTR dtd 28.06.2017 are consistent and should not be read individually, the rate of tax on services provided by the applicant should be decided in terms of Sr No. 3 and 3A, since the said entries cover services provided to ‘local authority’, there is no need to go to Sr No. 3B.
The applicant is providing its services to NAGAR NIGAM, KOTA (local authority) of laying, jointing, testing and commissioning of Sewerage System and all ancillary works along with Design, construction, supply, installation, testing and commissioning (Civil, Mechanical, electrical, instrumentation & other necessary works) of Sewage Pumping Stations, Upgradation of effluent of existing Sewage Treatment Plant with provision for treated waste water reuse including I year defect liability with 10 years O&M for towns under package AMRUT-2.O/RAJ/SEWERAGF-21 for Kota North, Rajasthan. So, exemption entry No. 3B is not applicable to the applicant.
The activity of providing, laying, jointing, testing and commissioning of sewer system and all ancillary works by the applicant to Nagar Nigam Kota, being a local authority is not exempted under entry 3B of the NN 13/2017-CT (Rate) dated 28.06.2017.
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2024 (10) TMI 790
Seeking refund of amount paid - legal contention raised on behalf of the petitioner is that the respondents do not have power to recover amounts during the pendency of investigation that has commenced even prior to issuance of show cause notice at the stage of Sections 67 and 70 and hence have sought for refund of amount paid - HELD THAT:- In terms of the Scheme of the CGST Act, it must be noticed that the assessee has an opportunity even before the service of notice under Section 74 (1) on the basis of “his own ascertainment of such tax or the tax as ascertained by the proper officer”, make payment and inform the proper officer in writing regarding such payment as envisaged under Section 74 (5).
It must be noted that the payments made by the petitioner of Rs. 1.00 crore on 31.07.2021 and further amount of Rs. 1.50 crores on 03.08.2021 and even if ‘DRC-03 declaration’ is taken note of, it cannot be stated that in the present case, there is self-ascertainment. For the purpose of self-ascertainment, it is clear that it amounts to a voluntary determination by the assessee himself as regards the liability of tax. In light of the stand taken in the Affidavit dated 10.08.2021 and the averments made in the writ petition filed on 16.09.2021, this element of voluntariness is absent and accordingly, the sine qua non of self-ascertainment is not fulfilled. Though the declaration in Form DRC-03 contains a declaration that the filing is voluntary, the facts as noticed above are sufficient to construe that such declaration was in fact not voluntary.
In light of adjudication still to conclude and notice under Section 74 (1) of the CGST Act is already issued, the question of going back to the stage of 74 (5) does not arise, as in terms of Section 74 (5), the self-ascertainment process is to be completed prior to the issuance of notice under Section 74 (1), subject to issuance of notice under Section 74 (7) as regards shortfall.
The petition is allowed in part and while declaring that the recovery of tax made from the petitioner which though Revenue contends is deposit made by way of self-ascertainment under Section 74 (5) of the CGST Act, is declared to be illegal and directed to be refunded within a period of four weeks from the date of receipt of certified copy of the order, with interest as is applicable.
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2024 (10) TMI 789
Blocking of Electronic Credit Ledger - pre-decisional hearing was not provided to the petitioner nor does the impugned order contain any reason to believe as to why it was necessary to block the Electronic credit ledger - violation of principles of natural justice - HELD THAT:- In K-9-ENTERPRISES, KWALITY METALS, K-9-INDUSTRIES VERSUS THE STATE OF KARNATAKA, THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, BELAGAVI. [2024 (10) TMI 491 - KARNATAKA HIGH COURT] it was held that 'in the absence of valid nor sufficient material which constituted ‘reasons to believe’ which was available with respondents, the mandatory requirements/pre-requisites/ingredients/parameters contained in Rule 86A had not been fulfilled/satisfied by the respondents-revenue who were clearly not entitled to place reliance upon borrowed satisfaction of another officer and pass the impugned orders illegally and arbitrarily blocking the ECL of the appellant by invoking Rule 86A which is not only contrary to law but also the material on record and consequently, the impugned orders deserve to be quashed.'
Thus, in the instant case, since no pre-decisional hearing was provided/granted by the respondents before passing the impugned order, coupled with the fact that the impugned order invoking Section 86A of the CGST Rules by blocking of the Electronic credit ledger of the petitioner does not contain independent or cogent reasons to believe except by placing reliance upon the reports of Enforcement authority which is impermissible in law, since the same is on borrowed satisfaction as held by the Hon’ble Division Bench of this Court, the impugned order deserves to be quashed.
The impugned orders are set aside - petition allowed.
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2024 (10) TMI 788
Grant of bail - passing on fraudulent input tax credit - creation of fake invoices - non-compliance with Section 41A of Cr.P.C and Section 70 of GST Act - HELD THAT:- It reveals that during the course of the search proceedings '' the reason to believe'' was formed based on the material evidence. Therefore, the commissioner authorized the CGST authorities to arrest the accused/respondent which reduced into wittings by the commissioner in the case investigation file. Accordingly, arrest was made by the authorities/petitioner by following due process of law. During the arrest copy of the memorandum of arrest was given to the accused. Further, while remanding the accused/respondent copy of the arrest memo was submitted before the Court, the grounds for arrest also explained to the accused/respondent and also mentioned about the tax evaded by the accused/respondent in the remand report. In the report, it is clearly mentioned as the accused is the master mind in creating non existing fictious firms and caused tax loss to the Government to the tune of Rs. 175.88 crores and also submitted the voluntary statement made by the respondent along with remand report. Based on the aforesaid material and evidence the Additional Director authorized the officers to arrest the respondent.
As per Section 70 of CGST Act, the summon was issued to the respondent/accused calling upon him to appear for enquiry and also to return the statement on 24.06.2023 and the same was received by his wife/Meerakumari on 23.06.2023 but he was not appeared. Again another summon was issued to the respondent/accused for appearance but he was not appeared. Therefore, the search was made in his premise in the presence of his wife on 21.03.2023 along with other individual witnesses.
As per Section 70 of CGST Act, the summons issued to the respondent to appear before the appropriate officer but he was not appeared. So also Section 41A of Cr.P.C indicated that issue a notice directing the person against whom reasonable complaint has been made. Therefore summons issued to the accused /respondent in relation to cognizable offence is equivalent to the duty cast upon the police officer under Section 41A of Cr.P.C. In the present case, authorization of arrest was issued under Section 69 of CGST Act with reasons and they complied with the other procedures before arrest under Section 69(ii) of the CGST Act and in fact grounds of arrest informed to the accused/respondent which is also a equivalent procedural safeguards mentioned in Cr.P.C. Moreover, the amount of tax evaded also recorded in the memo of arrest which enclosed with arrest memo and that copy also provided to the accused at the time of the arrest all these procedural formalities not been denied by the respondent, so there is no procedural default on the side of the investigating agency. Therefore, the reason assigned by the Court for granting bail that the investigating agency had committed default in following the procedures as contemplated under Section 41 A is erroneous.
Further, the respondent attempted to flee from the country after he came to know about his accomplice's arrest. Therefore, if the bail is granted to him, he may flee to foreign countries or may tamper the evidence. The prime facie investigation shows that accused/respondent caused loss to the Government exchequer to the tune of Rs. 173.88 crores. Hence this court is inclined to cancel the bail.
Petition allowed.
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2024 (10) TMI 787
Validity of ITC - Compliance with conditions under Section 16 of the U.P. GST Act - double taxation - burden to prove - it was held by High Court that 'in the absence of these documents, the actual physical movement of goods and genuineness of transportation as well as transaction cannot be established and in such circumstances, further no proof of filing of GSTR 2 A has been brought on record, the proceeding has rightly been initiated against the petitioner.' - HELD THAT:- This Special Leave Petition is disposed off by reserving liberty to the petitioner herein to file a review petition before the High Court bringing to the notice of the High Court, the documents which were filed and on record before the High Court and also by bringing on record additional documents. Till such time, the review petition is not disposed of by the High Court, the impugned judgment shall not be cited as a precedent.
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2024 (10) TMI 782
Violation of principles of natural justice - alleged vagueness in the SCN - SCN was vague and bereft of the relevant particulars - HELD THAT:- In the present case, considering the relief pressed, the argument was about violating the principles of natural justice because of the alleged vagueness of the impugned show cause notice. However, there was no vagueness in the impugned show cause notice. The impugned show cause notice was quite detailed and gave the Petitioners a complete idea of the case they were required to meet. The Petitioners’ reply is pretty thorough, and no serious grievance was made about any alleged vagueness in the impugned show cause notice.
In Special Director and Another Vs. Mohd. Ghulam Ghouse and another [2004 (1) TMI 378 - SUPREME COURT] the Hon’ble Supreme Court has held that unless the High Court is satisfied that the show-cause notice was totally non-est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine. The writ petitioner should invariably be directed to respond to the show cause notice and take all the grounds that may now be highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which the recipient of the notice can even urge, and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the Court.
In Union of India and others Vs. Coastal Container Transporters Association and others [2019 (2) TMI 1497 - SUPREME COURT] the Hon’ble Supreme Court held that where the case was neither of lack of jurisdiction nor any violation of principles of natural justice, the High Court ought not to have entertained the writ petition at the stage of notice, more so, when against the final orders, appeal lies to the Supreme Court. Further, the Court held that when there is a serious dispute concerning the classification of service, the respondents ought to have responded to the show cause notices by placing material in support of their stand. Accordingly, the appeals against the quashing of the show cause notices were allowed.
In Mahanagar Telephone Nigam Ltd. Vs. Chairman Central Board, Direct Taxes and another [2004 (5) TMI 7 - SUPREME COURT], the Hon’ble Supreme Court held that it was settled law that the litigation against show cause notices should not be encouraged. The Court approved the decision of the High Powered Committee, which was eminently fair and aimed at preventing frivolous litigation. The Court held that the appellant’s right was not affected. It was clarified that the appellant could move a court of law against an appealable order. By not maintaining discipline and abiding by the decision, the appellant had wasted the public money and time of the courts.
Petition dismissed.
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2024 (10) TMI 781
Maintainability of petiiton - appealable order or not - petitioner was not given any opportunity to go through the statement, file his revised reply and advance effective arguments - violation of principles of natural justice - HELD THAT:- The Hon’ble Supreme Court in its judgment dated 10.04.2024 in the case of PHR Invent Educational Society Vs. UCO Bank and Others [2024 (4) TMI 466 - SUPREME COURT (LB)] disapproved the order of Telangana High Court in [2022 (2) TMI 1476 - TELANGANA HIGH COURT], wherein a Division Bench of this Court entertained a Writ Petition despite availability of alternative remedy. The Hon’ble Supreme Court opined that merely because a petition is maintainable, it is not necessary to entertain a petition. It is the discretion of the Court to entertain a petition and not a compulsion.
Thus, it is clear that “maintainability” and “entertainability” are two different facets. Merely, because petition is “maintainable”, it creates no compulsion on the Writ Court to “entertain” it. If the petitioner has not raised any objection of limitation/jurisdiction before the Authority, he may raise all possible objections in his appeal memo before the Appellate Authority. The petitioner is unable to show if he is relegated to avail the remedy of appeal, it will cause any palpable injustice to him.
Thus, in view of judgment of Supreme Court in R.S. Pandey [2005 (9) TMI 634 - SUPREME COURT] and also in its recent judgment in PHR Invent Educational Society [2024 (4) TMI 466 - SUPREME COURT (LB)], it is not required to “entertain” this petition. The petitioner has an efficacious statutory remedy of appeal. The petitioner may avail the said remedy. The time consumed before this Court shall not be counted by the learned Appellate Authority for the purpose of counting limitation in preferring appeal. It is made clear that the respondents shall entertain the appeal, if the same is filed physically by the petitioner.
This Writ Petition is disposed of.
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2024 (10) TMI 780
Rejection of refund of Goods and Services Tax (GST) filed u/s 54 of the Central Goods and Services Tax Act, 2017 - It is stated by the petitioner that the impugned refund rejection order was decided without considering the submissions of the petitioner and without granting it any opportunity of personal hearing - violation of principles of natural justice - HELD THAT:- The present petition is amongst a batch of petitions that were heard together [being W.P.(C) No.1298/2023, W.P.(C) No.1299/2023 and W.P.(C) No.1300/2023] and W.P.(C) No.1298/2023 was heard as the lead matter. The questions raised in the present petition are covered by the decision rendered today in [2024 (5) TMI 177 - DELHI HIGH COURT].
Matter remanded to the appropriate authority for consideration afresh - petition disposed off by way of remand.
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2024 (10) TMI 779
Classification of goods - applicable rate of GST - Compensation Cess - Tobacco pre-mixed with lime - HELD THAT:- Under N/N. 01/2017-Central Tax (Rate) no definition of manufactured or unmanufactured tobacco has been provided and accordingly we have to mainly rely upon the decision of Hon'ble Court and the Tribunals decisions in the matter. There is no doubt that chewing tobacco may be both manufactured and unmanufactured. The difference between the manufactured and unmanufactured tobacco is dependent on the process being undertaken to prepare the product. In the present case the process being undertaken by the Appellant involves mixing of Lime paste in raw cut tobacco, evaporation of the water content from the said tobacco mixed with lime paste, addition of aroma, menthol and moisturizer.
Reliance placed upon the decision of the Apex Court in the State of Madras Vs Bell mark Tobacco Company [1966 (10) TMI 106 - SUPREME COURT] wherein it was held by the Hon'ble Court that cumulative effect of various processes to which Tobacco was subjected, before it was sold, amount to the manufacturing process.
In the instant case that mixing lime and other ingredients with the tobacco leaves would result into emergence of a new product with distinct name and character. Thus, it is evident that the raw material undergoes a set of processes and emerges as a distinct product which makes it marketable/consumable for the chewing needs. Therefore, the product to be supplied by the applicant is “manufactured tobacco product for chewing'. Once, it is decided that the product is 'manufactured chewing tobacco', the classification of the product merit under CTH 2403 99 10 which specifies 'chewing tobacco' under the head “2403-0ther manufactured tobacco and manufactured tobacco substitutes.
Thus, the product to be supplied by the applicant is manufactured tobacco classifiable under 24039910.
Since it has been concluded that the product to be supplied by the applicant is classifiable under HSN 24039910 (Chewing Tobacco without Lime Tube), the applicable rate of GST Compensation Cess in term of Serial No.26 of [Notification No. 1/2017-Compensation cess (R) dated 28.06.20171 is 160% - the product (i.e. tobacco pre-mixed with lime) to be supplied by applicant is classifiable under HSN24039910 (Chewing Tobacco without Lime Tube). The rate of GST is 28% and IGST-28%) and that of Compensation Cess is 160%.
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2024 (10) TMI 771
Levy of GST - value of loan for which guarantee is given needs to be divided equally amongst the relevant years of guarantee - reverse charge mechanism - 1% of total value of loan in first year - 1% of only remaining outstanding value of loan at beginning of each subsequent year - continuing guarantee.
Whether GST under reverse charge mechanism on issuance of corporate guarantee is payable one-time or on periodical basis, considering that the guarantee has been issued only once and is valid for specified period of time without requirement of any periodical renewal in terms of Rule 28 (2) of the CGST Rules? - HELD THAT:- In the instant case, the Corporate Guarantee is received by the Applicant i.e. subsidiary company from Foreign Group Companies in respect of loan taken from banks and financial institution for which Foreign Company does not charge any consideration from the Applicant leading to the conclusion that it is import of service received by the Applicant.
Since in the instant case, as no consideration has been charged by the Associated Enterprises from the Applicant and where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply i.e. Indian subsidiary and the GST liability is to paid by the Applicant at one time basis at the time of supply.
If the GST under RCM is to be paid on periodical basis, then in order to determine the value of supply, whether the value of loan is to be divided equally amongst the relevant years of guarantee and GST is to be paid considering 1% of such divided deemed value each year or 1% of only remaining outstanding value of loan at the beginning of each subsequent year in term of Rule 28 (2) of the CGST Rules 2017? - HELD THAT:- If the guarantor executes the contract of guarantee without consideration, in the GST regime prior to 26.10.2023, for the benefit of a related party, GST would be payable on the basis of the valuation mechanisms as per Rule 28 (1) of RGST/CGST rules 2017 at the time of execution of the contract - GST under reverse charge mechanism is payable on 1% of deemed total value of loan after guarantees executed after 26-10-2023 as per rule 28 (2) of RGST/CGST rules 2017 on one time basis at the time of execution of the contract, if the guarantor executes the contract of guarantee without consideration, for the benefit of a related party in the GST regime post 26.10.2023.
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2024 (10) TMI 770
Levy of GST on the Mining Lease payments (applicability of GST on the Royalty payment of Mining Lease to Government of Rajasthan under Reverse Charge Mechanism) - payment of upfront Payments as per the Tender Documents which are paid in installments much before issuing LOI and after issuing LOI but before entering in to the Lease Agreement - State of Telangana or to apply for registration in the State of Rajasthan and pay GST - applicable rate of GST - eligibility of Input Tax Credit.
Whether the applicant is liable any GST on the Mining Lease payments (applicability of GST on the Royalty payment of Mining Lease to Government of Rajasthan under Reverse Charge Mechanism)? - HELD THAT:- Section 9 (3) of CGST Act, 2017 provides that the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both - the Applicant is liable to pay GST on Mining Lease Payments including Royalty, to be paid to the Govt. of Rajasthan under RCM.
If the applicant is liable to pay GST on the above, what will be the applicable rate of GST? - HELD THAT:- The Applicant is liable to pay GST @ 18% (SGST 9% & CGST 9%).
If GST is applicable, whether the applicant is liable to pay GST on the payment of Upfront Payments as per the Tender Documents which are paid in installments much before issuing LOI and after issuing LOI but before entering in to the Lease Agreement? - HELD THAT:- The Applicant is of the opinion that payment of royalty amount to the Government will be coming in to effect only after entering in to the Mining Lease Agreement with the Government of Rajasthan. The lessor and lesee relationship will be coming into effect only after entering the lease agreement. The payments made as per the conditions in the Tender Documents prior to issue of Letter of Intent in the capacity of Preferred Bidder and payment made after issue of LOI but before entering into the Mining Lease agreement as Successful Bidder cannot be considered as Advance payments for supply of services and GST is not liable to be paid at the time of making payment by considering the same as Advance payments for supply of services.
The advance deposit money is received only as security. Generally, it is not used by the supplier in the course of supply Of goods or services. It is forfeited in case of violations of terms and conditions as mentioned in tender document. As per point 13.1 of Tender Document, the upfront payment paid by the Successful Bidder shall be adjusted in full at the earliest against the amount to be paid under sub-rule (3) of rule 8 of Auction Rules on commencement of production of mineral which shows that advance payment made by the Applicant shall be adjusted towards future payments to be made by them. Hence Section 2 (31) of CGST Act, 2017 is not applicable in the instant case.
The Applicant is liable to pay GST on the upfront payments made to the State Govt. under Reverse Charge Mechanism (RCM) in term of Serial No.5 of Notification No. 13/20317-CetraI Rate Dated 28.06.2017.
lf GST is applicable, whether the applicant can pay GST from the State of Telangana or to apply for registration in the State of Rajasthan and pay GST. (v) Whether the GST paid is eligible to be claimed as Input Tax Credit or not? - HELD THAT:- The tax payable under the provisions of sub-section (3) and (4) of Section 9 is included in input tax and the credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger and so the applicant is eligible to avail ITC of GST paid by them under RCM subjected to fulfilment of conditions laid down under section 16 of CGST Act, 2017.
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2024 (10) TMI 717
Power of CBIC to issue circular and delegate the functions of 'Proper officer' to issue Audit Report - it was held by High Court that 'no case is made out to strike down the impugned circulars or the impugned show cause notices inter alia on the ground that such show cause notices were issued by the officers who were not the “proper officers” as defined under Section 2(91) of the CGST Act' - HELD THAT:- Issue notice, returnable in four weeks.
List the Special Leave Petition on 14 August 2024.
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2024 (10) TMI 716
Violation of principles of natural justice and fair play - impugned order made without giving the petitioner an opportunity of hearing - HELD THAT:- In this case, the show cause notice dated 10 April 2023 required the petitioner to file a response within 30 days. The notice clearly indicates the date, timing, and venue of the personal hearing. On 21 June 2023, the Petitioner sought time to file a reply. The defence that the show cause notice was not uploaded on the petitioner’s designated portal is not convincing. There was undoubtedly some delay in responding to the show cause notice on the petitioner's part.
Though the reason for the show cause notice not being uploaded on the petitioner’s portal is not very convincing, given the fact that the impugned order was made or digitally signed only on 25 June 2023, the petitioner deserves to be granted an opportunity of hearing subject to the petitioner paying costs. This opportunity would address the argument about natural justice without prejudicing the revenue’s interests disproportionately.
The reply dated 21 June 2023 does not appear to be on merits, but the reply refers to the show cause notice not being uploaded to the petitioner’s designated portal. Accordingly, subject to the payment of costs of Rs. 50,000/-, the petitioner is granted two weeks to file a reply to the show cause notice dated 10 April 2023.
After such a reply is filed, the 4th respondent should dispose of the show cause notice dated 10 April 2023 after considering the reply and hearing the petitioner. The show cause notice must be disposed of as expeditiously as possible and, in any event, within eight weeks of receiving the reply if the same is filed.
Petition disposed off.
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2024 (10) TMI 715
Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - petitioner was unaware of proceedings culminating in the impugned order - mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal relates to a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. It is also evident that such tax proposal was confirmed because the tax payer did not file objections to the show cause notice. In view of the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms.
The impugned order dated 23.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period - Petition disposed off.
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2024 (10) TMI 714
Levy of GST on the charges paid to the Railways on behalf of Operator and those charges were recovered from the Operator - scope of supply - pure agent service or not - If charges paid to the Railways on behalf of Operator were not come under the scope of the pure agent or liable to be tax then what will be the tax Rate?
Scope of supply - Whether GST is required to be paid on the charges paid to Railways on behalf of operator and those charges recovered from operator? - HELD THAT:- As per Agreement entered between Applicant and Indian Railways, the later has supplied various services to the Applicant wherein some of them are taxable and Indian Railways has not entered any Agreement with the operator at all, As the Applicant being recipient of service from the Indian Railways hence required to pay the GST on the charges paid to the Indian Railways and Applicant has sub-late this task to the operator for smooth operation Of Palace On Wheels (POW), operator is supposed to pay the charges to the Applicant and not Indian Railways along with GST as per terms and conditions Of Agreement dated 28.06.2023 entered between them (Rajasthan Tourism Development Corporation Ltd. and the operator).
Why not the said charges were come under the scope of the pure agent? - HELD THAT:- A pure agent is a registered taxable person who liaises between other suppliers on behalf of his client. Under this concept, While providing services to the client, he also undertakes to receive other ancillary services from other service providers, and incurs expenditure on behalf Of his client - Since the Applicant has not procured any additional service, there is no question of holding to the title of service and therefore they cannot use any service for their own interest.
Since none of the condition of Pure Agent enumerated in a rule 33 of CGST Rule,2017is met, the Applicant cannot act as Pure Agent. As they are not Pure Agent, they are required to pay GST on the taxable supply received from Indian Railways.
lf charges paid to the Railways on behalf of Operator were not come under the scope of the pure agent or liable to be tax then what will be the tax Rate? - HELD THAT:- Yes, the charges are paid to the Indian Railways by the Applicant and not operator and therefore are leviable to GST as per the rate given below:
1. Registration Fee @ 18%
2. Haulage Charges @ 5%
3. Right to Use (RU) @ 18%
4. Stabling Charges @ 18%
5. Station User Fee @ 5%
6. Cancellation Charges @ 5%
7. Security Deposit - Though no GST is leviable on this amount but if it is adjusted against any aforesaid charge, then GST will be charged according to that charges.
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2024 (10) TMI 671
Challenge to impugned summary order - order passed without there being any notice issued in Form DRC-01 as provided under the GST Rules - principles of natural justice - HELD THAT:- Admittedly in facts of the case respondent authorities did not serve any show cause notice upon the petitioner and straightaway issued the impugned order in Form GST DRC-07 which does not contain any reasons.
Thus, without going into the merits of the matter, the impugned summary order in Form GST DRC-07 dated 11.1.2019 issued by the respondent is hereby quashed and set aside and the matter is remanded back to the respondents for de novo adjudication after giving an opportunity of hearing to the petitioner as fresh order is required to be passed in accordance with law. Such exercise shall be completed within 12 weeks from the date of receipt of a copy of this order.
Petition disposed off by way of remand.
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2024 (10) TMI 670
Reversal of Input Tax Credit (ITC) - necessary GST IT 02 form was not filed by its transferor electronically but only manually - breach of provisions of Section 18 (3) of the CGST Act read with Rule 41 of the CGST Rules - Jurisdiction and validity of the show cause notice regarding the non-electronic filing of Form GST ITC-02 - HELD THAT:- Section 18 (3) of the CGST Act provides that where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.
The impugned show cause notice, after referring to Section 18 (3) of the CGST Act and Rule 41 (1) of the CGST Rules, alleges that the Petitioner has contravened the said two provisions since it has availed and utilised credit of Rs. 18,30,58,995/- (including Rs. 74,06,395/- as IGST, Rs. 15,74,90,681/- as CGST and Rs. 1,81,61,919/- as SGST) for payment of tax liability - The allegation in the impugned show cause notice might have had some substance if it had been the Respondents' case that its common portal was fully functional and TDN or the Petitioners could file Form GST ITC-02 electronically on the common portal. However, it was conceded that the GST portal was nascent during the relevant time, and GST ITC-02 was not available for filing electronically. Thus, neither the Petitioner nor TDN could be faulted for not filing Form GST ITC-02 electronically on the department’s common portal. The record establishes, and in any event, it was not disputed, that TDN or the Petitioner couldn't file Form GST ITC-02 on the department’s common portal during the relevant period because of the functionality issues relating to such a common portal.
The Division Bench of the Rajasthan High Court in Pacific Industries Ltd Vs. Union of India [2022 (3) TMI 1304 - RAJASTHAN HIGH COURT] noted that though the learned counsel representing the Respondents – GST Department, vehemently and fervently opposed the Petitioner’s contention, he was not in a position to dispute the fact that Form GST ITC-02A was not available on the GSTN Portal within the stipulated period of 30 days from the date of registration of the Petitioner’s new business vertical and hence, the Petitioner was genuinely and bona fide prevented from uploading the same. No dispute was raised about the Petitioner manually submitting the form to the Deputy Commissioner within 30 days.
In Savita Oil Technologies Ltd and Savita Polymers Ltd. Vs. The Union of India and Ors. [2023 (7) TMI 877 - BOMBAY HIGH COURT] the Coordinate Bench of this Court of which one of us (Jitendra Jain, J) was a member, the Petitioner was prevented from filing an Appeal against intimations issued in Form DRC-05 because the electronic portal had not made a provision for filing an appeal against an intimation issued in Form DRC-05. The Coordinate Bench noted that an appeal statutorily lay against such intimations issued in Form DRC-05. Therefore, merely because the electronic portal does not make a provision for filing of an appeal against an intimation issued in Form DRC-05, the Petitioners cannot be faulted, and for such technical reason, it cannot be countenanced that a statutory right of appeal available to the Petitioners is rendered otiose.
Accordingly, this Court directed that until an appropriate provision is made for acceptance of such appeal electronically, filing of such appeal should be permitted manually. Again, even this decision is an authority for the proposition that the technicalities, mainly when not the party but the department creates them, should not be put forth by the department to defeat the statutory rights and entitlement of the parties.
Based on the facts on record and the decided cases referred to above in the case of this very Petitioner, the contention that the impugned show cause notice ought not to have been issued to the Petitioner, is accepted. The Respondents were duty-bound to take cognisance of the decisions of the Allahabad, Gujarat, and Delhi High Courts in dealing with almost identical issues concerning this Petitioner.
Tthe impugned show cause notice dated 17 August 2023 is set aside - the Respondents is directed to consider, according to law, the manually filed forms by the TDN as expeditiously as possible.
Petition allowed.
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