Dr. Sanjiv Agarwal

Goods and Services Tax (GST), introduced from July 1, 2017 is over seven 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. There are no legislative changes in the Union Budget -2018. However, based on GST Council recommendations, there may be some changes in the GST laws which may be introduced in second leg of Budget session in March, 2018.

Taxpayers have already started challenging various provisions of GST laws and rules framed there under with more than 75 writs being filed in different courts. 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.

1. In Salasar Synthetics v. Union of India (2017) 6 GSTL 396 (Delhi), where the assessee was contending that Rule 44A of CGST Rules, 2017 providing for reversal of 5/6th of already accrued Cenvat credit in respect of additional duty of Customs paid at time of import of gold dore bar was unreasonable whereas Section 140 of Central Goods and Services Tax Act, 2017, allowed such credit to be carried forward in full as transitional measure, read with rule making power under Section 164 ibid, it was held that rule 44A ibid imposing restrictions only in respect of gold dore bar is grossly discriminatory and unreasonable, Hence, interim relief was granted and it was directed that no coercive steps should be taken till next date of hearing to recover Cenvat credit already availed by assessee.

2. In Nirmal Constructions v. State of Madhya Pradesh (2017) 7 GSTL 3 (Madhya Pradesh), where the State Government decided to cancel tender proceedings invited with effect from 1-7-2017 to 5-8-2017 in which assessee has participated, it was held that nothing was illegal or arbitrary in decision of State Government to cancel tender proceedings in view of change in tax environment on introduction of GST. It was further held that since tenderer is eligible for Input Tax Credit on GST paid on goods/services and there is nothing wrong in decision to exclude amount of GST in tender value for future tenders.

3. In Kanwar Enterprises (P) Ltd. v. Assistant Commissioner (CT), Chennai (2017) 6 GSTL 457 (Madras), where the excess tax paid was duly acknowledged in assessment orders and Form P notices issued stating that assessee was entitled for refund of specified amounts but no orders were passed by Assessing Officer despite direction from High Court and several representations by assessee, it was held that assessee shall be entitled for cash refund considering that there was likelihood of dealer being harassed in event of initiating action for contempt., Assessing Officer was directed to effect refund in full, constrained to initiate suo motu proceedings for contempt

4. In Coimbatore Road Contractors Welfare Association v. State of Tamil Nadu (2017) 12 TMI 515; (2017) 7 GSTL 4 (Madras), where the agreements for works contract were executed prior to 01.07.2017 and assessee was of view that GST could not be imposed and VAT @ 2% alone shall be applicable, it was held that since the assessee’s representations are pending, it would be appropriate for the department to respond to the same by giving them a reply. Further, the appropriate person, who would be in a position to give reply, is the Commissioner of Commercial Taxes who shall give a reply because all other authorities were the Department of Highways and National Highways etc., who would not be in a position to specifically address the issue pointed out by the assessee.

5. In Sameer Mat Industries & Kaleel Mat Industries v State of Kerala (2017) 87 taxmann.com337 (2017) 12 TMI 202 (Kerala), where goods were detained and issue was of release old detained goods and jurisdiction of detaining authority, it was held that issue of mis-classification and under-valuation of goods has to be gone into by respective Assessing Officers and not by detaining officer. The specific power invoked under CGST/SGST is applicable only to intra state movement of goods. It was ordered that goods be released as further retention of goods were not permitted, but however, on execution of simple bond without sureties by the petitioners.

6. In Devashish Polymers (P.) Ltd. v. Union of India [2017] 88 taxmann.com 85;(2018) 1 TMI 276 (Delhi), where the assessee being a non-commercial research institution claimed that it had a vested right in its favour for continuation of exemption from payment of both, customs and excise duty until validity of registration granted to its R&D centre till 31-3 – 2019, and since, the exemption from payment of excise duty stood rescinded, it was held that matter required elucidation and Government was to respond on basis of said rescission.

(Some more cases to follow)

Also Read-

6 Recent Court Pronouncements On GST – Part I

8 Recent Court Pronouncements On GST – Part II

10 Recent Court Pronouncements on GST -Part III

8 Recent Pronouncements on GST (Part- IV)

Read Other Articles from Dr. Sanjiv Agarwal

Author Bio

Qualification: CA in Practice
Company: Agarwal Sanjiv & Company
Location: Jaipur, Rajasthan, IN
Member Since: 03 Oct 2019 | Total Posts: 307

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