Goods and Services Tax (GST), introduced from July 1, 2017 is over nine 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 were no legislative changes in the Union Budget -2018.
Taxpayers have already started challenging various provisions of GST laws and rules framed there under with more than 100 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 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.
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 Evergreen Seamless Tubes Pvt. Ltd. & Ors. v. Union of India & Ors, WP No. 12378 of 2017(Bombay), HC dismissed writ petition challenging constitutional validity of Section 140(3)(iv) of CGST Act which deals with transition and therefore, refused to strike down one year time limit for transitional credit availment. It was held that the said one year limit has clear nexus with objective sought to be achieved by GST legislation and therefore, cannot be struck down as for smooth transition from old indirect tax regime to GST regime, some arrangements were required to be made and conditions with respect thereto be imposed.
Further, Court referred to SC ruling in Jayam & Co., where it was held that when concession in form of Input Tax Credit is given by a Statute, Legislature has power to make provision stating the form and manner, in which such concession shall be allowed and there was no right, inherent or otherwise, vested with dealers to claim ITC benefit.
2. In Age Industries Pvt. Ltd v. Assistant State Tax Officer, SGST Department, Kochi (2018) 10 GSTL 16 (Kerala);[2018] 89 taxmann.com 276 (Kerala) where the assessee had sent goods to three parties for quality appraisal on job work basis against a series of delivery challans, it was held that detention of goods for reasons that they were not accompanied by document provided under rule 138(2) of Kerala GST Rules (e way bill) and were intended to be supplied to an unregistered firm was not sustainable. Therefore, it was decided that the Department was not able to support detention on reasons not mentioned in notice.
3. In Manu International v. State of U.P (2018) 9 GSTL 4 (Allahabad), where the assessee applied for migration from VAT to GST and GSTN erred in issuing registration certificate, it was held that authorities shall not initiate any penal action against assessee for non-filing of GST for month of July and August, 2017 and also for not depositing tax but the returns shall required to be filed within two weeks of issuance of correct ID/password and tax accordingly was allowed to be paid within another two weeks.
4. In Sandipkumar Kirankumar Sharma v. State Election Commission [2018] 91 taxmann.com 189 (Gujarat); (2018) 9 GSTL 363 (Gujarat), it was held that Goods and Services Tax Council is an independent body constituted under article 279A of Constitution, which is required to meet periodically, to make its recommendations to Union and States, on taxes, cesses and surcharges etc. and it cannot be said that recommendations made by Goods and Services Tax Council are in violation of Election Code of Conduct.
5. In R. Agro Industries v. State of U.P. – [2018] 91 taxmann.com 210 (Allahabad), the assessee was transporting the consignment of goods from one State to another State and the department seized the consignment at Ghaziabad under section 129(1) of the Uttar Pradesh GST Act, 2017 but the assessee contended that the transaction in question was covered under the IGST Act, 2017 and the provisions of the UP GST Act, 2017 would not be applicable. Such consignment was not liable to be seized under the UP GST Act, 2017 and thus the assessee filed the writ petition in the High Court. It was held that in the matter of seizure under the provisions of the IGST Act, 2017, the provisions of Central GST Act, 2017, such as Section 129, would apply mutatis mutandis. The impugned order of seizure could not be held to be bad, in law, only for the reason that the wrong provision of Act had been mentioned. Hence, the impugned order was to be treated to have been passed under the IGST Act, 2017, read with Section 129 of the Central GST Act, 2017 rather than passed under the UP GST Act, 2017.
6. In KTL (P) Ltd. v. Union of India (2018) 10 GSTL 132 (Allahabad), where assessee unable to file GST Tran-1 till last date of filing due to failure of electronic system and thus unable to avail due credit. Department directed to reopen GSTN Portal within two weeks and ensure that petitioner is able to pay taxes online and avail credit.
7. In Continental India Pvt. Ltd. v. Union of India (2018) 10 GSTL 423 (Allahabad); [2018] 91 taxmann.com 284 (Allahabad), where assessee unable to file GST Tran-1 till last date (27.12.2017) of filing due to failure of electronic system and thus unable to avail due credit, further assessee also submitted the manual application for claiming transitional credit on 10.01.2018. Department directed to reopen GSTN Portal within two weeks and ensure that petitioner is able to pay taxes online and avail credit.
8. In M/s. Arihant Superstructure Limited v. The Union of India through the Commissioner (GST) , The Commissioner, Central Goods and Service Tax, (2018) 3 TMI 1268 (Rajasthan), where the assessee filed GST Tran-1 by electronic mode but returns filed by the electronic mode are not generated on the website of the Department and thus, were not accepted. By placing reliance in the case of Padmavati Enterprise, Abicor and Binzel Technoweld Pvt. Ltd. v The Union of India & Another [(2018) 3 TMI 539 Bombay High Court] it was directed to accept the returns on provisional basis.
(Some more cases to follow)
Also Read-
6 Recent Court Pronouncements On GST – Part I
8 Recent Court Pronouncements On GST – Part II
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