Dr. Sanjiv Agarwal, FCA, FCS

Sanjiv Agarwal Photo

Goods and Services Tax (GST), introduced from July 1, 2017 is more than one year 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 already started challenging various provisions of GST laws and rules framed there under with more than 200 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. CBIC has already instructed field formations on defending the writs. Further, we have now rulings from Authority for Advance Ruling and National Anti-profiteering Authority.

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 Global Agency v. General Manger, South Western Railway GM Office (2018) 66 GST 569 (Karnataka); (2018) 91 taxamann.com 217 (Karnataka); 2018 (3) TMI 389(Karnataka), where the assessee filed a writ petition against the Director General Goods and Service Tax and other not to take any action against it under the GST law enforced from 01.07.2017. It was observed that unless a cause of action arises to the assessee by an impugned action notice or order by the respondents, the academic questions raised by the assessee cannot be determined under Article 226 of the Constitution of India. The court held that since no cause of action had arisen to assessee yet by impugned action notice or order by respondents, petition was liable to be dismissed as premature.

2. In Hindalco Industries Ltd. v. Union of India (2018) 66 GSTL 636 (Bombay); [2018] 66 GST 636 (Bombay); (2018) 92 taxmann.com 69 (Bombay); 2018 (3) TMI 1124, where assessee filed writ petition against recovery of service tax demand raised upon it, petition was disposed of stating that on account of subsequent development and particularly CGST Act and the issue in petition was purely academic and rendered infructuous.

The court also recalled its earlier order imposing costs of Rs. 25,000 on the respondents which had been duly complied with and was directed to be returned. Such cost was to impress upon the Authorities that the proceedings before the Court should not be delayed. By delay, the larger public interest suffers and that was not present to the mind of the authorities and it is only to remind them of the duties and obligations to the public, that costs were imposed. The petition was disposed off accordingly.

3. In Priyanka Enterprises v. Joint Commissioner of Customs (2018) 66 GST 614 (Madras);(2018) 92 taxmann.com 53 (Madras); 2018 (4) TMI 858 (Madras),where the Adjudicating Authority had confiscated imported goods of the assessee, i.e., GSL ARTEMIA BRINE SHRIMP EGGS imported from Great Sale Lake, Artemia, USA and the assessee filed a writ petition seeking release of the said imported goods.

The request was made in view of the fact that the imported goods have a shelf life of only six months and already two months have lapsed and further delay would render the product useless apart from causing other complications and the office of the Commissioner of Customs (Appeals), Chennai was vacant at that given point in time and the Commissioner of Central Excise was holding charge and there may be loss of time before the appeal is taken up for hearing.

The court directed the Adjudicating Authority to provisionally release the confiscated goods on remittance of differential duty by assessee by calculating IGST @ 5 percent. The assessee was directed to pay the differential duty in respect of the Bill of Entry dated 04.07.2017 as well as the duty quantified on the live consignment covered in Bill of Entry dated 03.10.2017 by calculating the Integrated Goods and Services Tax at the rate of 5 percent. On remittance of the differential duties, the Adjudicating Authority shall provisionally release the cargo within a period of seven days from the date of remittance for both Bills of Entry.

4. In Pauls Travel & Tours Ltd. v. Union of India (2018) 11 GSTL 255 (Delhi); 2017 (12) TMI 640 (Delhi), where the petitioner was in business of booking tours and hotel packages for customers and charged IGST from them for booking in hotels located outside Delhi but were unable to avail input tax credit on SGST charged by hotels as it was not registered in the state where hotel was situated. Further, different provisions were applicable in case of online booking through web travel portals where input tax credit was allowed. The Court observed that the matter requires in depth examination by the respondents for there are several examples which show anomalies that arise. Different provisions are applicable in case of online bookings through web travel portals and they are able to avail the credit.

Court directed that the respondents will examine the assertions and so called anomalies. Court will be informed on the treatment accorded on sale of manufactured goods and other services which are provided by an assessee across the country. The respondents would examine and consider whether the matter should be placed before the GST Council.

(Some more cases to follow)

S. No. Particulars
1. 6 Recent Court Pronouncements On GST – Part I
2. 8 Recent Court Pronouncements On GST – Part II
3. 10 Recent Court Pronouncements on GST -Part III
4. 8 Recent Pronouncements on GST (Part- IV)
5. 6 Recent Pronouncements On GST (Part-V)
6. Recent Pronouncements on GST (Part-VI)
7. 8 Recent Pronouncement on GST (Part-VII)
8. Recent Pronouncements on GST (Part-VIII)
9. Recent Pronouncements On GST (Part-IX)
10. 4 Recent Judicial Pronouncements on GST (Part-X)

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June 2021