Goods and Services Tax (GST), introduced from July 1, 2017 is over 150 days old and has resulted in operational and implementation issues affecting all stakeholders. GST law, as drafted and legislated, is not free from the interpretational hassles. Taxpayers have started challenging various provisions of GST laws and rules framed there under. High courts have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBEC may move to Supreme Court where the verdict is against the Government.
Here are few more judicial pronouncements for information and guidance of various stakeholders. It is expected that the litigation is bound to go up as time passes by.
- In Dr. Kanagasabapathy Sundaram Pillai Founder, MY “Integrating Society India Net” NGGO Versus Union Govt. of India, Through, The Chairman, Central Board of Excise and Customs “CBEC” - 2017 (9) TMI 389 - BOMBAY HIGH COURT it was held that petition shall not be entertained with the observation that since the Government machinery was geared up, the petitioner could not urge or seek directions to postpone the decision of implementation from 01.07.2017.
- In Kumar Traders And Company v. State of Assam (2017) 9 TMI 749; where it was suspected that the areca nuts stored in the godown, were of Burmese origin and were smuggled through Mizoram border and was stored in the Guwahati godown, for onward transportation to other parts of the country, it was held that the stored areca nuts were neither stolen nor were kept in suspicious circumstances. At best, tax is payable for dealing in areca nuts but that would be in the domain of the Finance & Taxation Department under Assam Goods & Service Tax Act, 2017.
In the interim, to facilitate the petitioners to carry on their legitimate business and taking note of the fact that rate of tax is @2.5% for areca nuts, under the Assam Goods & Service Tax Act, 2017 and they are to pay further 2.5% tax to the Central Government coffer, subject to the petitioners' furnishing Bank guarantee for ₹ 30 lakh towards the estimated tax, to the Commissioner of State Tax, the seized goods should be released to the custody of the petitioners .
However, the transportation and business of areca nuts will be subject to realization of due tax by the authorities and the Bank guarantee, ordered to be deposited, is only on estimation and is not on quantification of the payable tax. The Finance & Taxation Department is at liberty to estimate the precise payable tax and make the assessment.
- In Kundan Care Products Ltd v. Union of India 2017 (8) TMI 1142 - DELHI HIGH COURT ; where an interim relief on recovery of transitional CVD credit on imported gold bars was to be granted to assessee, it was held that where assessee having made out a prima facie case for grant of interim relief in their favour, no coercive steps can be taken by revenue to recover credit already availed by them till next date of hearing.
- In A& M Design & Print production 2017 (10) TMI 253 - DELHI HIGH COURT where the assessee was trying to offset its IGST liability partially from CGST credit and partially from SGST credit but disallowed by GSTN portal with a message to first offset CGST credit completely before cross utilization. As there is no provision in GST law against such utilisation, Department was directed to file reply by next hearing date.
- In M/s. M.J.S. Enterprises, M/s H.B. Enterprises, M/s Royal Automobiles, M/s M.G. Automobiles, M/s S.A. Automobiles, M/s T.S. Enterprises, M/s Indus Steel Traders, M/s M.M. Enterprises, M/s A.M.K. Enterprises, M/s A.J. Enterprises, M/s Farhan Steel v. The Controller of Stores & Purchase, The Managing Director Karnataka State Road Transport Corporation, The State of Karnataka, The Commissioner of Commercial Taxes 2017 (9) TMI 1301 - KARNATAKA HIGH COURT , Karnataka State Road Transport Corporation (KSRTC) the assessee, an intending purchaser of the scrap buses, filed a writ petition praying to issue a direction in the nature of a writ of certiorari quashing the E-Tender Notice and to declare that the rate of tax applicable on the sale of scrap buses is 18 per cent falling under either Heading No. 7204 of Third Schedule of the Central Goods and Services Tax Act, 2017 (GST Act) or Entry No. 453 of the Third Schedule of Karnataka Goods and Services Tax Act, 2017 [KGST Act].
In the said notice inviting tenders from the intending purchasers of the scrap buses, the rate of Goods and Service Tax (GST), as recently introduced in India with effect from 1-7-2017 applicable in the said notice, was given as 'As applicable/28%. It stated that the rate of GST applicable on the scrap buses could not attract 28 per cent rate of GST and, therefore, the Court by interfering may direct the KSRTC to collect the GST only at the rate of 18 per cent.
It was held that it would be premature for the Court to decide such academic questions at this stage, when the very foundation of such a dispute itself is not even available for the Court to decide. It is for the assessee to compete in the bid process at the given rates of GST applicable as notified by the KSRTC and it does not furnish cause of action to the assessee to invoke the extraordinary jurisdiction of the Court at this stage to either modify the rate of tax in the E-Tender Notice or to decide the academic question about the correct rate of GST applicable on such scrap buses, which are being put to auction by the KSRTC and the provisions for advance ruling in this regard have been enacted in the said enactments. The assessee can either approach such authorities for advance ruling about the rate of GST in the matter. Otherwise the determination of rate of tax or correct tax liability is done at the time of regular assessment proceedings. It is for the petitioners to approach and represent the concerned Government for the constitution and manning of these Advance Ruling Authorities, as prescribed under Section 96 of the GST Act.
- In M/s Ascics Trading Company v. The Assistant State Tax Officer, The State Of Kerala 2017 (10) TMI 831 - KERALA HIGH COURT, where the goods were detained for non-compliance with the requirements of carrying prescribed documents under IGST Act, 2017, it was observed that although the power to prescribe the documents that are to accompany the transportation of goods in the course of inter-state trade is conferred on the Central Government, the Central Government had, till date, not notified the documents that have to be carried by a transporter of the goods in the course of interstate movement. Under the said circumstances and finding that neither the State Legislature nor the State Government would have the power to make laws/rules to govern interstate movements of goods in the course of trade, and for the purposes of levy of tax, detention for the sole reason that the transportation was not accompanied by the prescribed documents under the IGST Act/CGST Act/CGST Rules, cannot be legally sustained.
(Some more cases to follow)
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