Dr. Sanjiv Agarwal, FCA, FCS

 Dr. Sanjiv Agarwal

Goods and Services Tax (GST), introduced from July 1, 2017 is now over 150 days old and has resulted in operational and implementation issues affecting all stakeholders.  GST law, as drafted and legislated, is not free from the interpretational hassles. Taxpayers have started challenging various provisions of GST laws and rules framed there under before various High Courts and about 50 petitions have been filed so far. 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 Read6 Recent Court Pronouncements On GST – Part I

Here are few judicial pronouncements for information and guidance of various stakeholders. It is expected that the litigation is bound to go up as implementation goes under way.

  1. In Modern Pipe Industries v. State of U.P (2017) 84 taxmann.com 254 (Allahabad), where the assessee was registered as sole proprietor instead of partnership firm, it was held and directed to the department that the necessary GST ID/ pass word in the name of partnership firm shall be issued within a period of two weeks and the registration certificate be corrected within a week thereafter.
  2. In WS Retail Services (P.) Ltd. v Union of India (2017) 84 taxmann.com 92 (Punjab & Haryana), where the assessee supplied goods to customer of Punjab, which it brought from its warehouse situated outside State of Punjab to its delivery hub located in Punjab and mentioned its TIN of Punjab in VAT -36 return, it was held that the said supply shall have to be treated as inter-state supply.
  3. In Sachdeva Overseas v. State of U.P (2017) 86 taxmann.com 181/(10) TMI 252 (Allahabad), where the assessee on enforcement of GST regime got itself migrated for purposes of GST as a partnership firm, but Adjudicating Authority had registered it as a sole proprietorship, it was held that Adjudicating Authority shall have to rectify this mistake.
  4. In Rajasthan Tax Consultants Association v. Union of India (2017) 63 GST 552/86 taxmann.com 183/(10) TMI 254 (Rajasthan), where the period for applying under Composition Scheme was extended upto 30.9.2017, it was held that those assessees who could not apply under Composition Scheme upto 16.8.2017, their applications would be accepted and shall have effect from 1.7.2017
  5. In GNG Enterprises v. State of U.P. (2017) 86 taxmann.com 182/(8) TMI 44 (Allahabad), the assessee was permitted to avail benefit of a Scheme issued under UP Entertainments and Betting Tax Act, 1979 even after shift to GST regime with effect from 1.7.2017 as there is no notification repealing the benefit as in the past till 31.3.2020 and to retain percentage of it, subject to final disposal of writ.
  6. In Hind Energy and Coal Benefication (India) Ltd. v. Union of India (2017) 4 GSTL 437/(10) TMI 251 (Delhi), where the assessee has already paid clean energy cess on purchase of coal, it was held that the assessee may be given credit for such payment and will not be required to make any further payment under GST for effecting sales and clearances, subject to the furnishing of proof of such payment by assessee to officers.
  7. In Union of India v Dr Kanaga Sabpathy Sundaram Pillai, Founder, My Integrating Society India Net NGGO (2017) TIOL 01 HC ;(2017) 9 TMI 389 (Mumbai), it was held that petition shall not be entertained with the observation that since the Government machinery was geared up, the petitioner could not urge or seek directions to postpone the decision of implementation from 01.07.2017.
  8. In Kumar Traders And Company v. State of Assam (2017) 9 TMI 749; 4 GSTL 120 (Gauhati),where it was suspected that the areca nuts stored in the godown, were of Burmese origin and were smuggled through Mizoram border and was stored in the Guwahati godown, for onward transportation to other parts of the country, it was held that the stored areca nuts were neither stolen nor were kept in suspicious circumstances. At best, tax is payable for dealing in areca nuts but that would be in the domain of the Finance & Taxation Department under Assam Goods & Service Tax Act, 2017.

In the interim, to facilitate the petitioners to carry on their legitimate business and taking note of the fact that rate of tax is @2.5% for areca nuts, under the Assam Goods & Service Tax Act, 2017 and they are to pay further 2.5% tax to the Central Government coffer, subject to the petitioners’ furnishing Bank guarantee for Rs. 30 lakh towards the estimated tax, to the Commissioner of State Tax, the seized goods should be released to the custody of the petitioners.

However, the transportation and business of areca nuts will be subject to realization of due tax by the authorities and the Bank guarantee, ordered to be deposited, is only on estimation and is not on quantification of the payable tax. The Finance & Taxation Department is at liberty to estimate the precise payable tax and make the assessment.

(More cases to be reported in next part)

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  1. HR Subramanya Iyer says:

    we are manufacturers of transmission parts such as gears, pinions, shafts which falls under HSN 8483. Notification 41/2017 shifted gears and gearings from 28% to 18% by inserting new sl no in 18% schedule. There are interpretation among our customers that goods shifted from 28% to 18% are re classified under HSN 8483 (sl no 369). please clarify.

  2. vswami says:


    In one’s independent perspective, founded on purely common sense considerations, from a practical viewpoint is this: The listing of the disputes and judicial /quasi judicial decisions by the learned author, by itself , does bear on its sleeves the indisputable fact that the GST Code is replete with inept drafting, laxity in firm policy, so on. And that, without having a diligent look through afresh and making suitable /appropriate amends to the enactment in its present form/text , years’ long prolonged /protracted litigation might prove inevitable, a certainty irrevocable in times ahead. In hind sight with wisdom open to be gathered from decades old past experience, and on the flip side, none can prudently oversight two angles, – the enormous amount of litigation likely to ensue and the two fold costs to the Exchequer- by way of litigating in courts , with no let-up or stopping of it, and the cost to be incurred over the manpower – the judiciary, for resolving such disputes. in the ultimate analysis, all such costs would have to be met by/collected from the taxpayers-community. Wonder- is this not an aspect which needs to be given the utmost priority, in taking on the tragic state of affairs as complained of and under discussion, with no end in sight for now or in the foreseeable future ahead !

    Back to the EXPERTS for due thoughts how to redeem, earl-ier /-st , than later or never ?! ,

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September 2021