Newsletter – Vol. 1, Issue 6 – 29.08.2021

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No reversal of Input Tax Credit on invisible manufacturing loss occasioned during the process of manufacture of Ghee under Tamil Nadu VAT Act: Hon’ble Madras High Court
In M/s R.K. Ganpathy Chettiar v. The Assistant Commissioner (ST), Kangeyam Assessment Circle, Kangeyam, W.P. Nos. 14166, 14176, 14171, 14173 & 14175 of 2021 and WMP. Nos. 15052, 15054, 15055, 15046 & 15051 of 2021, the Hon’ble HC relied upon A.R.S. Steels and Alloy International Pvt. Ltd. v. The State Tax Officer, Chennai (W.P.Nos.2885 of 2020 and batch) and held that no reversal of Input Tax Credit is required on invisible manufacturing loss occasioned during the process of manufacture of Ghee under Tamil Nadu VAT Act. 

Not a beneficiary of alleged fraudulent inward ITC, Bail Granted: Hon’ble Allahabad High Court
In Kushal Gupta v. Union of India and Ors., Criminal Misc. Bail Application No. – 15774 of 2021, Hon’ble HC has granted bail to the employee of the company wherein the company is alleged of availing fraudulent inward ITC. The applicant contested that he cannot be said to be the beneficiary of alleged fraudulent inward ITC, which was availed by the company for which the only proprietor of the company can be said to be the main beneficiary, who has not been made accused in the present case. 

Division Bench set aside single bench order which quashed provisional attachment order: Hon’ble Madras High Court
In The Principal Additional Director General DGGI v. Sri Marg Human Resources Pvt. Ltd., W.A. No. 1488 of 2021, the department challenged the order passed by the single judge setting aside the provisional attachment while observing (i) attachment cannot be made on future receivable, (ii) petitioner already discharge 27.05% thus, attachment has no meaning and (iii) violating article 19(1)(g). Hon’ble Division Bench held that the challenge of the provisional order is premature as the statutory lifting of attachment was not pursued by the respondent-company thus, set aside the order and direction by the Hon’ble Single Bench.

Vehicle released only on undertaking: Hon’ble Tripura High Court
In NE Equipment Solutions Pvt. Ltd. v. The State of Tripura and Ors., W.P.(C) No. 577/2021, Hon’ble HC observed that tax authorities must make a clear distinction between deliberate tax evasion and technical or minor defects which manifest no intention to evade tax. When the IGST liability has been fully discharged, no intention can be attributed on part of the petitioner to evade tax. Thus, the Hon’ble HC released the vehicle along with goods upon the petitioner filing an undertaking, subject to appeal and further right to challenge the order of assessment (court must have meant detention order), if any tax or penalty liability is crystallized, the petitioner would discharge the same.

Provisional Attachment cease to exist after one year: Hon’ble Bombay High Court
In Implement Impex Private Limited v. State of Maharashtra, Writ Petition No. 3710 of 2021, Hon’ble HC held that by operation of Section 83(2) of the CGST Act the provisional attachment order ceases to exist after the expiry of a period of one year from the date of the attachment order was made.

Transitional Credit Allowed: Hon’ble Telangana High Court
In M/s BMW India Financial Services Pvt. Ltd. v. The Union of India and Ors., Writ Petition No. 9166 of 2020, Hon’ble HC allowed the transitional VAT when the declaration in Form GST TRAN-1 was filed on 27.12.2017 through GST Portal and not considered by the department because “as no technical issues were noticed in their log.”

Challenging appealable order in the guise of constitutional validity not entertained: Hon’ble Calcutta High Court
In Aniruddha Banerjee v. Senior Joint Commissioner, State-Tax, Large Taxpayers Unit & Ors., WPA 10217 of 2021, the petitioner challenged the order of the Adjudicating Authority as well as the constitutional validity of section 16(2)(c) and section 16(4) of the West Bengal GST Act, 2017. Hon’ble HC didn’t entertain the challenge of the impugned order since it was appealable. Now the Hon’ble Court will only hear the challenge w.r.t. constitutional validity. 

Liaison Office not leviable to GST on services received from Head Office and hence, not liable to register: Authority for Advance Ruling, Maharashtra
In Re: M/s The World Economic Forum, India Liaison Office, AAR, Maharashtra ruled that the applicant is not undertaking any ‘business’ as defined under Section 2(17) of the CGST Act and therefore the activities/services received by the applicant from its HO cannot be said to be in the course or furtherance of its business and hence cannot be considered as a supply under Section 7 of the CGST Act, 2017. As a corollary to the import of service in this case, not being considered as a supply liable to GST, the applicant would not be required to obtain registration in India under Section 24 of the Central Goods and Service Tax Act, 2017 with respect to activities carried out by the Applicant’s Head office located outside India and rendered to the Applicant.

Supplying non-AC buses to transport staff is leviable to GST: Authority for Advance Ruling, Maharashtra
In Re: M/s Shailesh Ramsunder Pande Pooja Vaishnavi School Bus Service, Order No.- GST-ARA-66/2019-20/B-49 dated 20.08.2021, the applicant has an agreement with RIPL for supplying non-AC buses to transport staff of RIPL and the buses are owned by the applicant. It was ruled that the recipient of services is RIPL and the subject activity will amount to ‘renting of motor vehicle’ and shall qualify as a taxable activity under the provisions of the GST Laws under S. No. 10 of NN. 11/2017-CT (Rate) dated 28.06.2017. It was also ruled that the arrangement will not fall under ‘non air-conditioned contract carriage


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