GIST OF RECENT PRONOUNCEMENTS ON GST (PART-XX)

[Dr. Sanjiv Agarwal]

Goods and Services Tax (GST), introduced from July 1, 2017 is about twenty 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 is however, making regular changes to fix the anomalies and hardships faced by taxpayers.  32 meetings of GST Council have been held till 14^th February, 2019.

Taxpayers have already challenged various provisions of GST laws and rules framed thereunder with over 300 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. In recent past, CBIC had issued directions to be officers to defend the writs. Further, we have now rulings from Authority for Advance Ruling (AAR) and National Anti-profiteering Authority (NAA) also. Even the orders from Appellate Authority for Advance Ruling have also started pouring in and we have over two dozen Appellate Orders from AAAR. Further, there are about 40 Orders of NAA out of which two Anti-profiteering cases have gone to Delhi High Court.

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 Union of India v. Kundan Care Products Ltd. 2018 (6) TMI 1477 - SUPREME COURT , this special leave petition (civil) arises out of judgment of High Court in Kundan Care Products Ltd. v. Union of India  2017 (8) TMI 1142 - DELHI HIGH COURT

The assessee filed writ petition challenging rule 44A of CGST Rules as being ultra vires to section 140 of CGST Act and High Court granted interim relief to assessee to effect that no coercive steps shall be taken by revenue to recover credit already availed by assessee till next date of hearing. The SLP filed against judgment and order of High Court was dismissed, after allowing for condonation of delay.

• In J K Tyre & Industries Ltd v. GST Council 2018 (5) TMI 457 - MADHYA PRADESH, HIGH COURT ,  the assessee filed the instant petition seeking direction to respondent to reopen portal immediately enabling assessee to revise its FORM TRAN – 1 and to avail transitional credit, in view of fact that during pendency of petition, Department pointed out that CBDT had issued Circular No. 39/13/2018 - GST dated 3-4-2018 whereby a special cell had been created to resolve assessee's grievances. The Court directed the assessee to avail remedy as was provided vide Circular No.39/13/2018- GST dated 03.04.2018.

• In Vinayaga Roofings v. Assistant State Tax Officer, Kerala 2018 (5) TMI 368 - KERLA HIGH COURT , the petitioner’s goods and vehicle were seized as the consignment was not accompanied by E-way bills. Where vehicle of assessee had been detained for reason that consignment was not supported by E-way bill, Competent Authority was directed to release vehicle on assessee furnishing bank guarantee and also executing a bond under Rule 140(1) of CGST Rules, 2017.

• In Sainik Mining & Allied Services Ltd v. Union of India 2018 (7) TMI 966 - CHHATTISGARH HIGH COURT , where the assessee failed to upload FORM TRAN-1 on GSTN Portal, due to technical glitches, the assessee was directed to approach Nodal Officer within four days by filing representation along with all necessary documents for redressal of its grievance and Department was also directed Authority to consider and dispose of representation following procedure laid down in Para 8 of C.B.I. & C. Circular No. 39/13/2018-GST, dated 3-4-2018.

• In Metal Handicrafts v. State of U.P. 2018 (4) TMI 1545 - ALLAHABAD HIGH COURT , the assessee was registered dealer under the U.P. VAT Act and after the enforcement of the Goods and Services Tax regime with effect from 1-7-2017 made an application for migration to the Goods and Services Tax under the signature of one of its directors and in support of documentation,  the PAN card was appended.

The revenue authorities completed the migration process, but during migration recorded incorrect particulars in the registration form of the assessee. To get this rectified, assessee filed the petition. On writ, the assessee contended that despite repeated requests, reminders and also personal meeting with the officials, the error was not being rectified. It also pointed out that the revenue authorities had informed that system of migration had been closed by Goods and Services Tax Network and there was no possibility of generating correct particulars and entering them into the GST portal.

The Court observed that one sees no reason why the authorities were not opening the portal to enable the assessee to correct the particulars which were wrongly reported in the registration. The respondent assured the Court that necessary steps should be taken to redress the grievance of the assessee. In view of the aforesaid, the revenue authorities, were directed by the court to carry out necessary correction in the form of the assessee in respect of legal name, constitution of the business, the registration details, user ID and password to match with the PAN of the assessee and, if necessary, to open the portal for carrying out the correction.

• In True Count Systems Pvt. Ltd. v. Union of India 2018 (7) TMI 1330 - ALLAHABAD HIGH COURT , Petitioner has alleged that despite making several efforts on the last date for filing of the application, the electronic system of the respondent did not respond as a result of which the petitioner was likely to suffer loss of the credit that it is entitled to by passage of time.

In view of the above, the respondents were directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They were also to ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained for use of the credit likely to be considered for the petitioner.

• In B.R. Industries v. Union of India 2018 (8) TMI 211 - ALLAHABAD HIGH COURT where the assessee was unable to file GST TRAN-1 and avail the due credit because of failure of electronic system. Therefore, court directed to reopen GSTN Portal within two weeks and in the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They were to also ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained for use of the credit likely to be considered for the petitioner.

 

(Some more cases to follow)

Discussions to this article

[Ganeshan Kalyani]

Nice compilation of the rulings. It is a referencer for us. Pats to your efforts.

[Dr. Sanjiv Agarwal]

Thanks, Sir