Dr. Sanjiv Agarwal

Goods and Services Tax (GST), introduced from July 1, 2017 is almost six 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 started challenging various provisions of GST laws and rules framed there under. 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.

Also Read-

6 Recent Court Pronouncements On GST – Part I

8 Recent Court Pronouncements On GST – Part II

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 Coimbatore Corporation Contractors Welfare Association v. State of Tamil Nadu and others (2017) 10 TMI 783 ( Madras),where the assessee was engaged in works contract and it pleaded for the agreements which were executed prior to 01.07.2017 that GST cannot be imposed and only 2% VAT is applicable, Court directed to the Commissioner of Commercial taxes to consider the representation given by the assessee and pass orders within a period of four weeks from the date of receipt of a copy of the High Court. The writ petition was allowed by way of remand. 

2. In Jindal Dye chem Industries (P) Ltd. v. Union of India & Others (2017) 10 TMI 693 (Delhi),where the assessee imported gold bars, it was held that in view of the CBEC press release dated 6th October 2017, which prima facie makes no distinction as regards the Advance Authorizations (AA) issued prior to or after 1st July 2017, the assessee shall not be required to pay IGST in respect of the imported gold bars by it, in terms of the AAs issued to it. Such interim relief was granted subject to the assessee furnishing to the Respondent authorities a letter of undertaking that the clearance of the imported goods in terms of the AA will be subject to the final result of the present petition.

3. In M/s Metro Institutes of Medical Sciences Pvt Ltd v State of UP & 5 others (2017) 10 TMI 784 (Allahabad)where the assessee was unable to complete the process of migration under GST, as the password for new provisional ID was not issued, the court directed the Department to immediately issue a password to assessee for completing migration process on the GST Portal, to upload its returns and deposit the due tax.

4. In Nila Infrastructure Limited & 1 v. Surat Municipal Corporation & 1 (2017) 87 taxmann.com 147; 11 TMI 809 (Gujarat), it was held that mere downloading of tender document cannot be said to be entry at initial stage to consider such person who has downloaded as bidder/tenderer. As per the tender conditions, the party submitting its bid was required to deposit/pay within the stipulated time the bid document fee/bid processing fee which included GST at 18 per cent. The petitioner having participated in the tender process was found ineligible on the ground of non-compliance of essential condition of non deposit of entire bid tender document fee as it did not deposit the amount of GST. Thus, it would not be open for the petitioners to challenge the condition and/to contend that such a condition was not warranted.

5. In Sameer Mat Industries & Kaleel Mat Industries v State of Kerala (2017) 87 taxmann.com 337(2017) 12TMI 202 (Kerala), where goods were detained and issue was of release od 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 Ramdev Trading Company & Another v. State of U.P. & 3 others (2017) 12 TMI 341 (Allahabad), where the goods of assessee were detained by detaining authority and also a penalty imposed on the ground that goods were mis described, it was observed that at the stage of seizure the detaining authority had not applied his mind, nor formed any opinion as to intention to evade tax and the only allegation made in the seizure order was to the effect that the Transit Declaration Form (TDF) was absent and that the goods have been mis- described. Also, there was no allegation whatsoever as to the intention of the petitioner to evade tax. In such circumstances, it was held that in absence of any allegation or evasion of tax being made against the petitioner at the stage of detention and seizure and even at the stage of issuance of notice of penalty, it was difficult to sustain the penalty.

7. In M/s M.K. Enterprises through its Prop. Mukesh Kumar v. State of U.P. & 3 Others (2017) 12 TMI 342 (Allahabad),where the assessee was not given any opportunity to show cause or give reply to the allegation on which goods had been seized on account of absence of Transit Declaration Form (TDF), it was held that as the petitioner had no notice or opportunity to explain his conduct with respect to the discrepancy in the Tax Invoice alleged in the seizure order, the said order passed u/s 129(1) and 129(3) of the UPGST Act shall be set aside.

8. In Iqra Roadways (India) Thru’ Its Prop. & 3 Others v. State of U.P. & 3 Others, (2017) 11 TMI 1032 (Allahabad), the petitioners were carrying on the business of transporters and were registered under UPGST Act, 2017 and their goods were detained and seized including vehicle u/s 129(i) of UPGST Act, 2017 despite the fact that goods were accompanied by the invoice and bilty and the value of invoices(except two) were below Rs. 50000. However, from revenue side at the time of detention, the detaining authority had clearly mentioned in the detention memo that the necessary physical verification is required as the E-Way Bill, which was produced, was not relevant as the date and time mentioned had already expired. On physical verification, the authority has found certain irregularities with regard to quality of the goods as well as quantity. The goods which were not accompanied with proper documents were seized for which a notice under Section 129(3) of the U.P. G.S.T. Act had been issued on 26.9.2017 indicating therein the value of the goods and the demanded tax which has been calculated by the seizing authority at different rates as per the individual items/goods which is mentioned being Rs. 1,11,564/-. On the other hand, Circular No. 1117 dated 16.8.2017, in which it was provided that the G.S.T. being the new law, therefore, it may take some time for proper implementation of the scheme of E-Way Bill on all India basis. Rule 138 of U.P. G.S.T. Rules provides for the old E-Way Bill scheme, which was in effect earlier, may be continued.

Since the factual disputes were involved and penalty proceedings already initiated, it was held that it would be proper in the interest of justice that the 11/30/2017  seized goods be released in favour of the petitioners on the payment of an amount of Rs. 1,11,564/- (as indicated in the show cause notice dated 26.9.2017), it was directed that the goods and vehicle be released forthwith on payment of the amount of tax as has been indicated in the show cause notice dated 26.9.2017 being Rs. 1,11,564/-. Court also ordered that for penalty levied, they may approach appellate authorities who were directed to decide the same within two months.

(Some more cases to follow)

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