Newsletter – Vol. 1, Issue 10 – 26.09.2021

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Limitation extended due to covid-19 is ending on 02.10.2021: SMW(C) No. 3 of 2020 – Hon’ble Supreme
In Re: Cognizance for Extension of Limitation, Misc. Application No. 665 of 2021, Hon’ble SC disposed of the misc. application by giving buffer period of 90 days or the actual remaining period as on 15.03.2020, whichever is greater.

Conclusion without supporting reason, provisional attachment set aside: Hon’ble Bombay High Court
In M/s Monopoly Innovations Pvt. Ltd v. Union of India & Ors., Writ Petition No. 5473 of 2021, Hon’ble HC set aside the order of provisional attachment which was devoid of reasoning. Hon’ble HC held that attachment of a property being in the nature of exercise of a drastic power, the Commissioner was required to be more circumspect in recording his conclusions by reference to the applicable law rather than recording his ipse dixit and the Commissioner has recorded conclusions without supporting reasons.

Bunch matter of Writ Petition relating TRAN-1/TRAN-2 allowed: Hon’ble Allahabad High Court
In M/s Ratek Pheon Friction Technologies v. Principal Commissioner and 2 Ors., WTAX No. 477 of 2021 [along with other WPs], The Hon’ble HC allowed the bunch of WPs filed for submitting and revising TRAN-1/TRAN-2. Hon’ble HC held that in absence of any enabling law, that burden cast on the “registered persons”/taxpayers – to lead evidence of difficulty faced, is wholly arbitrary and unreasonable and therefore unenforceable. The injury caused being attributable to the State authorities, even if unintentional, the “registered persons”/taxpayers cannot be burdened today, to bring home evidence to establish the extent of the injury caused that too with respect to transition provision newly introduced, especially when the injury sprung from a generic event/cause. Thus, we have no hesitation in observing that a reasonable opportunity ought to have been granted to all “registered persons”/taxpayers to submit/revise/re-revise electronically their Form GST TRAN-1/TRAN-2.

Transitional Credit allowed without having evidences of error in GST system log: Hon’ble Orissa High Court
In M/s Sunny Motors v. CBIC and Ors., WP(C) No. 9348 of 2020, the petitioner was unable to upload the GST TRAN-1 form on account of some unavoidable and unforeseen circumstances – petitioner was not allowed the facility of transition since ‘as per GST system log, there are no evidence of error or submission/filing of TRAN-1′ (denied because it was not in accordance with 117(1A)). Hon’ble HC directed the department to accept the GST TRAN-1.

Writ Petition failed to establish that Section 129 is unconstitutional: Hon’ble Uttarakhand High Court
In M/s A.P. Refinery Pvt. Ltd. v. State of Uttarakhand and Ors., Writ Petition (M/s) No. 1014 of 2021, the petitioner challenged the constitutional validity of section 129 (detention proceeding) along with detention and confiscation proceeding. The Hon’ble HC discussed at length the constitutionality and held that “in the facts and circumstances of the instant matter, the learned counsel for the petitioner could not able to show that the provisions of the enactments-in-question are unreasonable or the object of these enactments is to destroy a fundamental right/ constitutional right.” The impugned confiscation order was set aside as it violated the PNJ.

Goods along with the conveyance be released to the apparent owner: Hon’ble Karnataka High Court
In M/s Sri. Shel Singh Purohit, Proprietor of M/s Bhavani Trading v. Commercial Taxes Officer (Vigilance) -21, Bengaluru, Writ Petition No. 14645 of 2021 (T-RES) Hon’ble HC held that during confiscation proceeding subject goods along with conveyance can be released to the apparent owner thereof on his depositing the amount that may become payable by him in terms of confiscation notice, subject to the outcome of the said proceedings.

Clarification on doubts related to scope of ‘Intermediary’: Circular No. 159/15/2021-GST dated 20.09.2021
Primary requirement of intermediary – (i) minimum of three-party (ii) two distinct supply (iii) Intermediary service provider to have the character of an agent, broker or any other similar person (iv) Does not include a person who supplies such goods or services or both or securities on his own account (v) Sub-contracting for a service is not an intermediary service. The specific provision of place of supply of ‘intermediary services’ under section 13 of the IGST Act shall be invoked only when either the location of supplier of intermediary services or location of the recipient of intermediary services is outside India. Further, the clarification gave 4 examples of an intermediary supply.

Clarification in respect of certain GST related issues: Circular No. 160/16/2021-GST dated 20.09.2021
– The date of issuance of the debit note shall determine the relevant financial year for the purpose of section 16(4) of the CGST Act.
– No physical copy of e-invoice during the movement
– Restriction under 54(3) will apply only to those goods which are actually subjected to export duty.

Clarification relating to the export of services-condition (v) of section 2(6) of the IGST Act 2017 – GST – Circular No. 161/17/2021-GST dated 20.09.2021
It is clarified that a company incorporated in India and a body corporate incorporated by or under the laws of a country outside India, which is also referred to as foreign company under the Companies Act, are separate persons under CGST Act, and thus are separate legal entities. Accordingly, these two separate persons would not be considered as “merely establishments of a distinct person in accordance with Explanation 1 in section 8”.

Issuance of SCNs in a time-bound manner – Instructions No. 02/2021-22 [GST- Investigation]
The last date of final annual return for FY 17-18, FY 18-19 and FY 19-20 was stated in the instruction and accordingly, the SCNs should be issued. So for instance, for FY 17-18 Normal Period will be 4 & 6 November 2022 and the Extended Period will be 4 & 6 August 2024.

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