Newsletter – Vol. 1, Issue 11 – 03.10.2021

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The requirements of the issue of FORM GST DRC-01 and FORM GST DRC-01A have been statutorily ingrained in the Rules: Hon’ble Madras High Court
In M/s Shri Tyres v. State Tax Officer, Chennai, W.P. No. 19756 of 2021 And W.M.P. No. 21034 of 2021, Hon’ble HC held that a careful perusal of Section 73 of the CGST Act in conjunction with Rule 142 makes it clear that non-adherence to Rule 142 had caused prejudice to the writ petitioner qua impugned order and therefore it is a rule which necessarily needs to be adhered to, if prejudice is to be eliminated in the case on hand. In other words, it is not a mere procedural requirement but, on the facts, and circumstances of this case, it becomes clear that it is tantamount to trampling the rights of the writ petitioner.

If main person proceeding concluded then proceeding against other persons are deemed to be concluded, Explanation to Section 74 challenged: Hon’ble Delhi High Court 
In Shiv Kumar Jindal v. Union of India and Ors., W.P. (C) 10842/2021, Writ Petition has been filed seeking issuance of an appropriate writ to declare the Explanation I-(ii) to Section 74 of the CGST Act, 2017 and Delhi GST Act, 2017, as violative of the Constitution of India as well as contrary to the scheme of GST Laws. 

Article 226 cannot be invoked for private law remedy (contractual matter): Hon’ble Andhra Pradesh High Court
In M/s ARA Hospital Pvt. Ltd. v. The State of Andhra Pradesh and Ors., Writ Petition No. 17415 of 2021, the petitioner’s bid was rejected during the technical bid stage because the petitioner has no GST Registration as required by the tender. The petitioner contended that as their business i.e. Health Care Services are exempted from GST hence, they have not registered under GST. Hon’ble HC delved deep into the maintainability of the writ petition and observed that Art. 226 can be invoked only in the case of public law remedy and not for private law remedy in contractual matters. On such observation the court looked into the arbitrariness of the tender process and held that the Petitioner would have to supply drugs and goods which are not exempt from the levy of GST and the petitioner would require to be registered, under the GST Act. In the absence of such a registration certificate, the action of the 2nd Respondent in rejecting the technical bid of the Petitioner cannot be termed to be arbitrary. Writ Petition Dismissed

The reason is required for blocking of Credit u/r. 86A : Hon’ble Madras High Court
In M/s HEC India LLP v. Commissioner of CGST and Central Excise and Ors., Writ Appeal No. 2341 of 2021, Hon’ble HC held that in the absence of any reason, which has been recorded, the invocation of power under Rule 86A should be held to be unauthorised, illegal and without jurisdiction. In the instant case, no reason was intimated in writing hence, writ appeal is allowed.

Set aside the impugned order which was passed on non-appearance of Local Counsel: Hon’ble Madhya Pradesh High Court
In M/s Pyarelal Galar v. The State of M.P. and Ors., Writ Petition No. 16691 of 2021, the appeal preferred by the petitioner under section 107 of the GST Act, 2017 has been dismissed without hearing the appellant as no one (local counsel) had appeared on behalf of the appellant on the date of hearing. Hon’ble HC allowed the writ petition and directed the appellate authority shall afford an opportunity of hearing to the petitioner and pass a fresh order.

Mismatch of PAN details allowed to be changed from the effective date: Hon’ble Allahabad High Court 
In M/s Jhas Industries v. State of U.P and Ors., Writ Petition No. 1482 of 2018, the sole proprietor business was taken over by the petitioner (son) just before the GST regime. However, the PAN was of the fathers in the GSTIN. The error was brought to the notice of the department before the GST regime started. Because of that, the petitioner cannot avail of the transition of ITC. Hon’ble allowed the writ petition and held that the provisional GSTIN of the petitioner that became effective on 01.07.2017 shall be corrected to record the PAN number of the petitioner’s PAN. 

Issues to Watch: No Tax is Payable on Royalty to Government
In M/s Raj Quary Works v. State of Gujarat, R/SCA No. 13662 of 2021, the petitioner has challenged the taxability on royalty paid to the Government. The prayer for such challenges are as follows: (C) In the alternative this Hon’ble Court may be pleased to declare that no tax is payable by the petitioner on mining royalty under reverse charge mechanism pursuant to Notification No. 13/2017 – Central Tax (Rate) dated 28th June, 2017 since the transaction is like renting of immovable property; (D) In the alternative this Hon’ble Court may be pleased to declare that royalty is in the nature of tax and not pursuant to supply of goods or services and therefore no tax is payable on royalty under the GST Acts. Notice Issued. 

Appeal to be decided on merits when the appeal was dismissed on limitation without affording any opportunity of hearing: Hon’ble Madhya Pradesh High Court
In M/s Uttam Caters v. The State of Madhya Pradesh and Ors., Writ Petition No. 18533 of 2021, the Hon’ble High has held that upon perusal of the appellate order, it is evident that the appeal was dismissed on the very first date on the ground of limitation without affording any opportunity of hearing to the petitioner to explain the delay in filing the appeal. In the facts and circumstances of the case, we deem it proper to direct the Appellate Authority to decide the appeal of the petitioner on merits within a period of two months from the date of communication of the order without being influenced by the impugned order passed by the Appellate Authority.

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