Newsletter – Vol. 1, Issue 12 – 10.10.2021

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Order of Cancellation quashed as no opportunity of hearing was given: Hon’ble Uttarakhand High Court
In M/s Efficaz Project Ltd. Liability Partnership v. Commissioner, Uttarakhand GST Commissionerate and Anr., Writ Petition (M/S) No. 1968 of 2021, Hon’ble HC held that the impugned order suffers from the violation of statutory provisions of non-providing of any opportunity as contemplated under sub-section (2) of section 29 of the Act, hence, the impugned order is quashed.

GST should be compensated when the contract has old rates under VAT: Hon’ble Karnataka High Court 
In Mas Constructions v. Hubballi Dharwad Smart City Limited, W.P. No. 2804/2021 (T-Res), the contract contained only the sales tax component, but the tender was awarded post-GST regime. The Hon’ble HC held that the respondent is required to make good the GST to the contractor as it was only 5% of the VAT which was provided for in the contract. Majorly court relied on the Finance Department clarification i.e. The Finance Department by its clarification dated 14.12.2020 has also opined that the tax difference ought to be calculated on each of the works and necessary steps to be taken to decide as to whether contract agreement needs to be changed.

Rule 96(10) is challenged as ultra vires to the Act and Constitution: before Hon’ble Gujarat High Court
In M/s Shubham Texo Pack Pvt. Ltd. v. Union of India, R/SCA No. 14738 of 2021, the petitioner has challenged the sub-rule (10) of rule 96 of the CGST Rules, 2017 as ultra vires Section 16 of the IGST Act, ultra vires Sections 54 and 164 of the CGST Act, 2017, and ultra vires Articles 14 and 19(1)(g) of the Constitution of India; The petitioner prayed that it is entitled to pay Integrated Tax on goods exported and also claim refund of such tax paid on the goods exported under Section 16(3)(b) of the IGST Act, 2017.

Circular No. 125/44/2019-GST dtd. 18.11.2019 cannot override the Rules: Hon’ble Allahabad High Court
In Savista Global Solutions Pvt. Ltd. V. Union of India and 5 Ors., WTAX 113 of 2021, Hon’ble HC observed that there is no dispute to the fact that an amount is refundable to the petitioner by the respondent for the month of July, 2019 yet the same is not processed. The department contended that as per Circular No. 125/44/2019-GST dtd.  18.11.2019 online mode of submission is required for the refund, however, the petitioner has manually filed the return. Hon’ble HC held that Rule 97A includes the manual filing of the refund application and no circular can override such rule. Even otherwise the refund application was filed before the existence of such circular. Hon’ble HC held that the Respondent shall refund the entire amount together with interest at the rate of 6% till the date of issuance of the demand draft or online mode within a period of one month.  

State E-way Rules during 01.02.2018 – 31.03.2018 were unenforceable: Hon’ble Allahabad High Court
In M/s Varun Beverages Ltd. v. State of U.P. and 2 Ors., WTAX No. 1670 of 2018, the petitioner relied upon the decision of Division Bench of Hon’ble Allahabad HC in M/s Godrej and Boyce Manufacturing Co. Ltd v. State of U.P. and Ors., 2018 U.P.T.C.[Vol. 100] – 1206, wherein it was observed that during the period 01.02.2018 to 31.03.2018 the requirement of E-way Bill under U.P. GST Act read with Rules framed thereunder was unenforceable thus, it was held that neither seizure of goods was justified nor can the penalty be sustained. Hon’ble HC held that the present issue is squarely covered by Godrej (supra) and quashed the impugned order.

SCN quashed because was not issued in the prescribed manner: Hon’ble Madras High Court
In M/s Suresh Trading Corporation v. The Assistant Commissioner, W.P. No. 21109 of 2021, Hon’ble HC held that the impugned order being order for cancellation of GST Registration dated 30.10.2019 bearing reference No. ZA331019110945P is set aside solely on the ground that SCN which preceded the same has not been issued in the prescribed template i.e., REG- 17 under Rule 22(1) of TN-GST Rules, as it does not mention the date and time of the personal hearing.

Material facts not considered, directed to consider afresh and dispose of bypassing reasoned and speaking order: Hon’ble Calcutta High Court
In M/s International Value Retail Pvt. Ltd. v. Union of India & Ors., WPA 11147 of 2020, the petitioner submitted that due to covid-19 they were not carrying the business from the premises of the principal place of business and such material fact was not considered by the authority in the application for revocation of cancellation. Impugned order set aside and directed to pass fresh order. Hon’ble HC directed the respondents concerned to consider afresh and dispose of the petitioner’s application for revocation of cancellation of its registration of the petitioner under GST Act in accordance with law and by passing a reasoned and speaking order after giving an opportunity of hearing to the petitioner or its authorized representative.

Clarification: Circular No. 164 /20 /2021-GST dated 06.10.2021 (Few)

  • Only seed for sowing will be exempt;
  • Cloud Kitchen/central kitchen will be taxed at 5% without ITC; 
  • Ice cream sold by a parlor or any similar outlet would attract GST at the rate of 18%; 
  • Grant of mining rights will be taxable at 18%

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