GIST OF RECENT PRONOUNCEMENTS ON GST (PART-XII)

[Dr. Sanjiv Agarwal]

Goods and Services Tax (GST), introduced from July 1, 2017 is more than ten months old now but has resulted in operational and implementation disruptions affecting all stakeholders.  GST law, as drafted and legislated, is not free from the interpretational hassles. GST Council his however, making regular changes to fix the anomalies and hardships faced by taxpayers.

Taxpayers have already started challenging various provisions of GST laws and rules framed thereunder with more than 180 writs being filed in different courts. High courts and Supreme court have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBIC may move to Supreme court where the verdict is against the Government. This has also been indicated in Circular No. 39 dated 03.04.2018 wherein it is has been hinted in relation to resolution of struck TRAN-1 and filing of GSTR-3B that Government has not accepted blanket opportunity to file TRAN-1 but only in cases where technical glitches crept in. It has advised the departmental officers that courts may be suitably informed and if needed review or appeal may be filed.  Further, we have now rulings from Authority for Advance Ruling and Anti-profiteering Authority also.

Here are few more judicial pronouncements for information and guidance of various stakeholders. It is expected that the litigation by way of writs is bound to go up as time passes by unless the Government comes out with proactive approach and solutions.

• In Federation of Hotel & Restaurant Association of India v. Union of India 2018 (1) TMI 1221 - SUPREME COURT OF INDIA, where the appellant approached Delhi High Court impugning action of Controller of Weights and Measures against hotels and restaurants of assessee for charging a price higher than printed Maximum Retail Price (MRP) for supply of packaged water bottles during services provided to their customers while in hotels and restaurants.

Appellant pleaded that transaction consisting predominantly of a service, and not of a sale of drinking water and consisted of a composite charge which included incidental charges for food, drinks etc.

The Single Judge finally held that charging prices for mineral water in excess of MRP printed on the packaging, during the service of customers in hotels and restaurants does not violate any of the provisions of the Standards of Weights and Measures Act, 1976 as this does not constitute a sale or transfer of these commodities by the hotelier or restaurateur to its customers.

Appellant association filed Writ Petition seeking a declaration that provisions of Standards of Weights and Measures Act, 1976, Standards of Weights and Measures (Enforcement) Act, 1985 and Standards of Weights and Measures (Packaged Commodities) Rules, 1977 were not applicable to services rendered in premises of hotels/restaurants as sale of food and drinks in hotels consisted of a composite contract and it was not possible to divide service element from sale element . It was observed that Legal Metrology Act 2009 was enacted to do away with 1976 and 1985 Acts so as to combine said provisions into one enactment to make law simple, ensure accountability, and bring in transparency. However, even though 2009 Act had replaced 1976 Act, definition of 'sale' contained in 2009 Act remained same which would go to show that composite indivisible agreements for supply of services and food and drinks would not come within purview of either enactment.

On appeal to the Supreme Court, it was held that neither Standards of Weights and Measures Act, 1976 read with Standards of Weights and Measures (Enforcement) Act, 1985 or Legal Metrology Act, 2009, would apply so as to interdict sale of mineral water in hotels and restaurants at prices which are above MRP.

• In KNR Walayar Tollways Pvt. Ltd. v. Commercial Tax Officer (Works Contracts), Palakkad (2018) 4 TMI 1010 (Kerala), where the petitioner was an assessee under Kerala VAT Act and desired to file revised returns for the period 2014-15 and 2015-16 and permission for revision was pending with authorities, the court directed the authorities to decide application within one month from date of receipt of this order in terms of Circular No. 14/2017 issued under SGST Act, 2017 on right of assessees to submit revised return.

• In M. Bagulayan  v. Superintendent of Central GST & Central Excise (2018) 2 TMI 194 (Madras);  where the petitioner had been levied with tax. The demand so raised was accepted by petitioner and same was duly paid. However, petitioner was still liable to pay interest thereon. Since petitioner submitted that he had paid 25 per cent of interest liability, he was permitted to remit balance payment in five equal monthly installments by the Court.

• In Etten Craft Holding Pvt. Ltd. v. State of Kerala  2018 (5) TMI 1280 (Kerala), where the petitioner filed the writ for directing the respondent to notify Authority for Advance Ruling in terms of section 96 of the Act. It was claimed that although the statutory provisions contemplate an Authority for Advance Rulings within the State, the respondents had not constituted the Authority, and hence, the petitioner is not able to approach an authority for advance rulings. The portal of the taxing authority did not provide for a method of filing applications before the authority for advance ruling.

The respondent submitted that till such time as electronic filing system was put in place on portal, assessee would be permitted to file application manually before authority apprehensions of assessee allayed.

Based on such submissions, court observed that the apprehensions of the petitioner in the writ petition now stand allayed. The writ petition was therefore closed.

• In Dhanaswaroopdas v. Assistant State Tax Officer 2018 (4) TMI 344 (Kerala);  the Authority had detained the goods of the assessee under transport on the ground that the consignment of goods was not accompanied by the \necessary declaration in Form KER II.

The assessee filed a writ seeking release of goods. It was contested that the competent authority had not enabled the generation of KER II declaration in the website and as such, it was impossible for the transporter to download the KER II declaration electronically and it was under those circumstances that the detention was necessitated.

It was directed to the adjudicating authority to complete the adjudication process in connection with the detention within a period of one week. While adjudicating the matter, the Adjudicating Authority shall take note of the contention of the assessee that it was on account of the non-availability of Form KER II in the website that the transporter was disabled from producing the same at the time of transportation of the goods.

The challenge to the vires of the rules was kept open. Court followed its own judgment in CTO v. Madhu M.B. 2017 (9) TMI 1044 - KERALA HIGH COURT ;

 

(Some more cases to follow)

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