9911796707
TMI Blog2023 (12) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... on'), with retrospective effect from 1.7.2017 i.e the date from when the original registration was granted to the petitioner no.1 bearing registration no. 09AVKPS1666H2Z1 (hereinafter referred to as the 'old registration'). 3. Challenge has also been raised to the order passed by Authority for Advance Ruling dated 17.12.2019, passed at the instance of petitioner no.2 (M/s Vivo Mobile India Private Limited), to the extent the said authority has refused to grant benefit of Input Tax Credit (ITC) that may have arisen against the original Tax Invoices issued against old registration, during July 2017 and August 2017 as are supported by the revised Tax Invoices (for the same transactions) issued by petitioner no.1, under its new registration. 4. The facts are undisputed. Prior to enforcement of the Act, petitioner no.1 (M/s Harbir Singh Contractor) was registered under the Finance Act, 1994 (hereinafter referred to as the 'Service Tax law') for supply of "Manpower Supply Services". Upon enforcement of the Act, by virtue of operation of law namely Section 139 of the Act, the petitioner no.1 provisionally auto-migrated under the Act. At the same time, by virtue of Section 22 read with S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation.--For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.] (2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day. Section 25. Procedure for registration.- (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business. 3[Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, (28 of 2005) in a Special Economic Zone or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther that in case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration. 6(6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification: Provided that if an Aadhaar number is not assigned to an individual, such individual shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. 7[(6C) On and from the date of notification, every person, other than an individual, shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of registration shall be issued in such form and with effect from such date as may be prescribed. (12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period." 5. Also, the Act introduced the concept of Input Service Distributor (hereinafter referred to as the 'ISD'). Section 2(61) of the Act reads as below: "2(61) "Input Service Distributor" means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office; (emphasis supplied) 6. Then, ISD may obtain a separate registration for that particular activity, by virtue of Section 24(viii) of the Act read with the proviso to Rule 8 of Central Goods and Services Tax Rules, 2017 (hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an application in Part B of FORM GST REG-01, duly signed or verified through electronic verification code, along with the documents specified in the said Form at the common portal, either directly or through a Facilitation Centre notified by the Commissioner. 11 [(4A) Every application made under rule (4) shall be followed by - (a) biometric-based Aadhar authentication and taking photograph, unless exempted under sub-section (6D) of section 25, if he has opted for authentication of Aadhar number; or (b) taking biometric information, photograph and verification of such other KYC documents, as notified, unless the applicant is exempted under sub-section (6D) of section 25, if he has opted not to get Aadhar authentication done, of the applicant where the applicant is an individual or of such individual in relation to the applicant as notified under sub- section (6C) of section 25 where the applicant is not an individual, along with the verification of the original copy of the documents uploaded with the application in FORM GST REG-01 at one of the Facilitation Centres notified by the Commissioner for the purpose of this sub-rule and the application shall be deemed to be compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " and the words "Documents attached", find mention below that description. Thus, that is inconclusive of any other details having been filled up by the petitioner, to obtain registration. 9. Yet, the disclosure made by petitioner no.1 at that stage is clearly established from the document annexed as Annexure SCA-8 to the Supplementary Counter Affidavit, described as Registration Certificate on Form GST REG-06. That document pertaining to the original registration granted to the petitioner first discloses the tax-payer status to be Input Service Distributor (ISD). Yet it goes on to narrate and thus record the description of goods and services being dealt with by petitioner no.1. That part of the Registration Certificate reads as below: "Goods Services HSN Description HSN Description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on the relevant material available with this office. Please note that in addition to tax so assessed, you will also be liable to pay interest and penalty as per provisions of the Act. 3. Please note that no further communication will be issued for assessing the liability. 4. The notice shall be deemed to have been withdrawn in case the return/s referred above, is filed by you before issue of the assessment order. DESIGNATION: SUPERINTENDENT C:GAUTAM BUDDHA NAGAR > D: DIVISION I GAUTAM BUDDHA NAGAR > R: RANGE - 5 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS" 12. In the context of the Act, the monthly return on the Form GSTR-3B is mandated to be filed in terms of Rule 61 of the Rules. For ready reference, provisions of Rule 61 of the Rules reads as below: "61. Form and manner of furnishing of return.- (1) Every registered person, other than a person referred to in section 14 of the Integrated Cools and Services Tax Act, 2017 or an Input Service Distributor or a non-resident taxable person or a person paying tax under section section 51 or, as the case may be, under section 52 shall furnish a return specified under sub-section (1) of section 39 in FORM GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jarat, Maharashtra, Kamataka, Goa, Kerala, Tamil Nadu. Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry. Andaman and Nicobar Islands or Lakshadweep, the return in FORM GSTR- 3B of the said rules for the months of October, 2020 to March, 2021 shall be furnished electronically through the common portal, on or before the twentysecond day of the month succeeding such month: Provided further that for taxpayers having an aggregate turnover of up to five crore rupees in the previous financial year, whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi, the return in FORM GSTR-3B of the said rules for the months of October, 2020 to March, 2021 shall be furnished electronically through the common portal, on or before the twenty fourth day of the month succeeding such month." 13. Thus, Form GSTR-3B is the form for monthly return, required to be filed by every registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. (3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act. 39. Furnishing of returns.- "(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form, manner and within such time as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed: Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall furnish return for every quarter or part there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing return under the proviso to sub-section (1) shall pay to the Government, the tax due taking into account inward and outward supplies of goods or services or both, input tax credit availed, tax payable and such other particulars during a month, in such form and manner, and within such time, as may be prescribed. (8) Every registered person who is required to furnish a return under sub-section (1) or sub-section (2) shall furnish a return for every tax period whether or not any supplies of goods or services or both have been made during such tax period. (9) Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub- section (2) or sub-section (3) or sub-section (4) or subsection (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act: Provided that no such rectifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, whichever is later, in such form and manner as may be prescribed." 14. Clearly, the undischarged legal obligation under Section 46 of the Act, for which a compliance notice, could be issued, is one that may exist on a registered person other than a ISD. Necessarily, that liability may arise only with respect to filing of returns for the main/business activity, and no other. 15. Then, it is also a fact, upon such notice being issued, petitioner no.1 initially sought rectification in his original registration. However, since the software enabled and dependent procedural law did not permit such a correction to be made, he sought a fresh registration specifically and only with respect to "Manpower Supply Services". Here, it may also be noted, it is not the case of the revenue that the assessee had more than one vertical business as may have allowed him to obtain multiple registrations (with respect to main/business activity), at the relevant time. 16. In fact, originally, under the proviso to Section 25 of the Act, multiple registrations were permissible only in the event of more than one vertical business existing against a single PAN registration. Later, with effect from 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately registered main/business activity giving rise to issuance of Tax Invoices and therefore the ITC. 20. However, contrary to the law, such fact occurrence took place in the present case. The original registration was granted primarily with respect to ISD, yet the petitioner no.1 not only mentioned the same on its Tax Invoices but also charged and deposited tax against that registration. At both levels i.e. at the stage of grant of registration and at the level of charge and deposit of tax, an error occurred at the instance of petitioner no.1, insofar as it may have wrongly mentioned its ISD registration number on its Tax Invoices and charged tax from petitioner no.2. Yet, such mistakes were compounded and owned by the revenue authorities who allowed the tax amount Rs. 1,44,97,066/-. to be deposited against that ISD registration, contrary to the mandate of the statutory law. 21. As discussed above, not only the original registration Form filled by petitioner no.1 disclosed the main taxable business activity but the revenue authorities also noted that main activity as "Manpower Supply Services" in the registration records maintained by them, at that time. 22. Then, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliminate avoidable human errors and to improve administrative efficiency. Under the present Act, by virtue of section 146, a digital common portal has been created by the GSTN to provide amongst others facilitation of registration; payment of tax; furnishing of returns; computation and settlement of integrated tax; issuance of electronic way bill etc. Then under the Rules framed under the Act, enabling provisions exist regarding intimation of composition levy (Rule 3), validity of composition levy (Rule 6), application for registration (Rule 8), Verification of registration and approval (Rule 9), issuance of registration certificate (Rule 10), furnishing of bank account details (Rule 10A), Adhar identification for registered persons (Rule 10B), grant of registration to a person supplying online information and database access or retrieval services from a place outside India to non-taxable online recipient (Rule 14), extension of period of operation by casual taxable person and non resident taxable person (Rule 15), Assignment of unique identification number to certain special entity (Rule 17), amendment of registration (Rule 19), application for cancellation of registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the authority for advance ruling (Rule 104), form and manner of appeal to the appellate authority for advance ruling (Rule 106), manual filing and processing (Rule 107A), appeal to the appellate tribunal (Rule 110), tax or duty credit carried forward under any existing law or on goods held in stock on the appointed day (Rule 117), revision of declaration in form GST Tran-1 (Rule 120A), information to be furnished prior to the commencement of movement of goods and generation of e-way bills (Rule 138), Document and devices to be carried by a person in-charge of a conveyance (Rule 138A) and facility for uploading information regarding detention of vehicle (Rule 138D). 25. At the same time, machines and machine processes are what humans make them to be. As discussed above, it remained from the GSTN while designing the portal to ensure that a ISD registration may arise only for distribution of ITC against a pre-existing and separate business registration i.e. the registration for "Manpower Supply Services" only. This much is plain that no ISD registration could ever arise unless there pre-existed other registration/s for main/business activity/activities of supply and sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the ground that the appellant has neither deposited the tax to the Government exchequer during the period July 17 to August 17 nor filed the returns for the period. Being aggrieved the appellant filed the present appeal on the following grounds: (i) The appellant has honestly paid tax liability for the period within the prescribed due dates but he (appellant) was unable to file the returns because the registration was granted under ISD category. Under the ISD category a taxpayer is not required to pay any tax through electronic cash ledger, and tax payer cannot pay any tax on GST portal as tax payment is not permitted for an ISD taxpayer." 27. Upon hearing the parties, the appeal authority made the following pertinent observation: " 5. I have carefully gone through the facts and records of the case as well as submission made personal hearing. I find that the appellant was a regular tax payer with Service Tax department. On applying for registration under GST Act, he was granted the registration under category. He deposited the due tax on 22.08.17 and 25.09.17. When appellant tried to file the Returns, he was unable to file the same and then it came to his notice that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2Z1 appears to be legal and proper and to be allowed." 28. It is also a fact, the entire amount of tax deposited against the ISD/original registration lying in the Electronic Cash Ledger Rs. 1,44,97,066/- was directed to be refunded to the petitioner no.1. As a fact, it was refunded on 1.5.2019. Petitioner no.1 deposited the same on 6.5.2019 against his new registration. However, the revenue would contend that the said amount was adjusted against the tax demand for the month of April 2019. 29. Therefore, what we are left to deal with is not so much as to the legalities but equities. Normally, tax and equity do not go together. At the same time, it is not a charging provision that we are dealing with as may completely shut out the door for equity considerations to arise. The dispute has arisen only with respect to procedural laws. 30. In Sangram Singh v. Election Tribunal, AIR 1955 SC 425, while dealing with the provisions of the Criminal Procedure Code, 1973 in the conduct of trials, the Supreme Court observed as below:- "16. Now a code of procedure must be regarded as such. It is procedure, something designed to facilitate justice and further its ends: not a penal enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensed for by an order of costs. However negligent or careless may have been the first omission, and however, late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side." From the early days, processual law has been recognized as handmade and not mistress in the administration of justice. In The State of Punjab and Another v. Shamlal Murari and Another, (1976) 1 SCC 719, it was observed as under: "...... We must always remember that processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. It has been wisely observed that procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. Where the non-compliance, tho' procedural, will thwart fair hearing or prejudice doing of justice to parties, the rule is mandatory. But, grammar apart, if the breach can be corrected without injury to a just disposal of the case, we should not enthrone a regulatory requirement into a dominant desideratum. After all, courts are to do justice, not to wreck this end product on technicalities. Viewed in this perspective, even what is regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not the case of the revenue that the said petitioner either had more than one business or place of business or that he had mis-utilized the original registration for any unmerited gain of ITC etc. 34. At the same time, as noted above, the revenue authorities not only permitted the petitioner to deposit tax against that ISD registration, they treated the petitioner to be a person registered for "Manpower Supply Services" inasmuch they also issued the notice dated 18.11.2019 seeking to cancel the original registration granted to petitioner no.1 for reason of his not filing the monthly returns for that activity, on Form GSTR-3B. These crucial mistakes were occasioned by and are attributable to the GSTN Portal alone that allowed for: ISD/original registration to arise to the petitioner No.1, in absence of any prior/existing registration for taxable/business activity; tax deposit to arise against ISD registration granted to petitioner No.1; issuance of show cause notice under section 46 of the Act for alleged non-filing of monthly returns on GSTR-3B by a ISD (that was wholly impossible in law). 35. To that extent, we find the genesis of the errors to be inherently and inseparabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time though under inadequate registration and in view of the further fact that the petitioner no.1 was refunded the amount on 1.5.2019 that he again deposited against his new registration on 6.5.2019, we find the petitioner no.1 is not to blame to that extent. However, that may not be enough to allow consequential benefit of ITC to arise to petitioner No.2 under the new registration granted to petitioner No. 1 with effect from 1.7.2017. 39. The substantive relief of benefit of ITC arising to the petitioner no.2 on the sales performed by the petitioner no.1 from 1.7.2017 till 31.8.2017 would hinge on the further conduct of petitioner no.1 regarding deposit of tax on the due date while filing the return relevant to the revised Tax Invoices that came to be issued by the petitioner on 23.10.2017 i.e. upon the fresh registration being granted. If the due tax on the revised Tax Invoices had been deposited along with the return for the month of October 2017, the respondent including the GSTN shall make appropriate arrangement to allow for availment of the Input Tax Credit to petitioner no.2 against such revised Tax Invoices. If however there were delays or non-compliance to that extent, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By the Finance (No.2) Act, 2019, sec. 95 [w.e.f.1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] 8 Ins. By the Finance (No.2) Act, 2019, sec. 95 [w.e.f.1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] 9 First proviso omitted G.S.R.63(E), dated 29th January, 2019 (w.e.f. 1-2-2019). First proviso, before omission, stood as under: "Provided that a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer shall make a separate application for registration as a business vertical distinct from his other units located outside the Special Economic Zone". 10 Subs. by G.S.R. 63(E), dated 29th January, 2019 for "provided further" (w.e.f. 1-2-2019). 11 Subs. by G.S.R. 786(E), dated 22nd December 2020, for sub-rule (4A). Earlier sub-rule (4A) was substituted by G.S.R. 517(E), dated 20th August, 2020 (w.e.f. 1-4-2020) and inserted by G.S.R. 199(E), dated 23rd March, 2020 (w.e.f. 23-3-2020). Sub-rule (4A) before substitution by G.S.R. 786(E), dated 22nd December, 2020, stood as under: "(4A) Where an applicant, other than a person notified under sub-section (6D) of section 25, opts for authentication of Aadhaar number, he shall, while submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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