Newsletter – Vol. 1, Issue 8 – 12.09.2021

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Writ Petition under Article 226 can only be entertained in exceptional circumstances: Hon’ble Supreme Court
In The Assistant Commissioner of the State Tax and Ors. v. M/s Commercial Steel Limited, Civil Appeal No. 5121 of 2021 (Arising out of SLP (C) No 13639 of 2021 @ D No.11555 of 2020), Hon’ble SC set aside the impugned order passed by the Hon’ble HC as none of the exceptions was present to entertain Writ Petition under Article 226. As per the order, the exceptions are (i) a breach of fundamental rights; (ii) a violation of the principles of natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to the vires of the statute or delegated legislation.

Para 3.2 of the Circular, disallowing refund of accumulated ITC where input and output are same, is wrong: Hon’ble Gauhati High Court 
In BMG Informatics Pvt. Ltd. v. The Union of India and 3 Ors., WP(C)/3878/2021, the Assistant Commissioner disallowed the refund on account of inverted duty structure by referring to the provisions of paragraph 3.2 of the Clarificatory Circular No.135/05/2020-GST dated 31.03.2020. Para 3.2. clarifies that the refund of the accumulated input tax credit on account of the reduction in GST rate under section 54(3)(ii) of the CGST Act 2017 would not be applicable in cases where the input and output supplies are the same. Hon’ble HC held that it is clear that section 54(3)(ii) provides that a refund of the unutilized input tax credit would be available in the event the rate of tax on the input supplies is higher than the rate of tax on output supplies. Para 3.2 of the Circular providing that even though different tax rates may be attracted at different points of time, but the refund of the accumulated unutilized tax credit will not be available under section 54(3)(ii) of the CGST Act of 2017 in cases where the input and output supplies are same, would have to be ignored. Matter remanded for fresh adjudication in light of the above order.

No provisional attachment after passing an order: Hon’ble Gujarat High Court
In Mahavir Enterprise v. State of Gujarat, R/SCA No. 9586 of 2020, Hon’ble HC held that after passing an order in form GST DRC-07 the authority cannot pass an order of provisional attachment of property under Section 83 of the Act.

The demand of tax and penalty before adjudication is without the authority of law: Hon’ble Tripura High Court
In GWC Asphalt v. The State of Tripura and Ors., W.P. (C) No. 620 of 2021, the petitioner mis-declared the vehicle category as ODC (open dimension cargo) thereby got more days for the validity of the E-way Bill. The petitioner contended it to be a bonafide error and submitted that anyway if the vehicle was not stopped then it would have reached the destination in the normal validity period of the E-way Bill. After the detention, the authority raised the demand of tax and penalty. Hon’ble HC held that the authority may inquire further into the lapse in generating the E-way Bill by the petitioner, however, the demand that the petitioner must pay the taxes with penalties even before the issue is adjudicated, is without the authority of law. Hon’ble HC directed the concerned authority to pass the appropriate order and the vehicle shall be released on 50% deposit. 

Issue the notice and pass fresh order: Hon’ble Andhra Pradesh High Court
In Sri. CH Subba Rayudu v. The Government of Andhra Pradesh, The Assistant Commissioner (ST) and Ors., Writ Petition No. 3115 of 2021, the impugned order was passed for the reasons that the petitioner failed to produce the details. The petitioner contended that they have applied for necessary information before the department but the information was not received before the impugned order was passed. Hon’ble HC set aside the impugned order and directed the authority to issue a notice and pass an appropriate order. 

Transition Credit allowed subject to the outcome of Brand Equity before Hon’ble Supreme Court: Hon’ble Delhi High Court
In Micromax Informatics Ltd. v. Union of India & Ors., W.P. (C) 8026/2021, CBIC brought the retrospective amendment to Section 140 to nullify Brand Equity (judgment allowing Tran Credit). Hon’ble HC has held the amendment does not affect the right of the petitioner to claim transitional credit – relied upon SKH Sheets Metal Component. Allowed the Filing of transitional credit subject to the outcome of Brand Equity before Hon’ble SC.

The vehicle having no goods detained u/s. 129, Hon’ble HC asked to reply before authority: Hon’ble Kerala High Court
In M/s Thomason Rubber (India) Pvt. Ltd. v. The Assistant State Tax Officer, W.P. (C) No. 16144 of 2021, the petitioner challenged the detention proceeding initiated u/s. 129 on the grounds that the vehicle had no consignment in it for the purpose of the proceeding. Hon’ble HC disposed of the case, asking the petitioner to appear before the adjudicating authority and directed the authority to pass the order while adverting the reply filed by the petitioner.

Issue the C-Form which will be subject to final adjudication: Hon’ble Chhattisgarh High Court
In M/s Sarda Energy and Minerals Ltd. Versus State of Chhattisgarh & Ors., WPT No. 42 of 2021, the levy of GST on high-speed diesel and issuance of C-Form has been the subject matter of the writ petition. Hon’ble HC directed that the State shall issue C-Form to the petitioner which would be subject to the final adjudication of the entitlement of the petitioner’s C-Form. Matter Pending Adjudication. 

10% pre-deposit is satisfied if the entire disputed demand is deposited: Hon’ble Chhattisgarh High Court 
In M/s NSPR PLR Joint Venture v. Commissioner of Chhattisgarh State Tax (GST), WPT No. 130 of 2021, the entire disputed amount deducted by the department – petitioner filed an appeal – department passed an order on the ground that since the petitioner has failed to deposit the amount of 10% as required under Section 107 (6)(b) appeal cannot be heard on merits – HC held – if the amount of entire liability tax part having been deducted then it would amount to satisfaction of deposit of tax of 10% to the account of the respondent. 

Filing of TRAN-1 allowed to carry forward the transitional credits: Hon’ble Delhi High Court
In Kreative Solutions v. Union of India and Ors., W.P.(C) 3459/2019, the petitioner had attached the screenshot of the excel file with the error while filing TRAN – 1. Hon’ble HC relied upon Super India Paper Products v. Union of India Through Ministry of Finance, Secretary & Ors., W.P. (C) 1150/2020 allowed the Writ Petition and the petitioner has to submit TRAN-1 manually or electronically on or before 30th September 2021.

Bus body building on the chassis on job work is a supply of services: Authority for Advance Ruling, Tamil Nadu 
In Re Anamallais Engineering (P) Ltd., Order No. 27/ARA/2021 dtd. 30.07.2021, AAR Tamil Nadu ruled that the activity of bus body building undertaken on the chassis supplied by the customers to the applicant (job worker) amounts to supply of service as per Schedule II clause 3 of CGST Act 2017. The applicable rate will be CGST @ 9% and SGST @ 9% as per entry no. 26 of NN. 11/2017-CT (Rate) dt. 28.06.2017 (as amended) and Sl. No. 26 of NN. II(2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72 dated 29.06.2017 (as amended) respectively.  

ITC reversal when taxes are not paid by the supplier: Authority for Advance Ruling, West Bengal
In Re: M/s Eastern Coalfield Ltd., Order Number 07/WBAAR/2021-22 dtd. 09.08.2021, AAR, WB ruled that the applicant is not entitled for input tax credit claimed by him on the invoices raised by M/s Gayatri Projects Ltd. pertaining to the period Jan-2020, Feb-2020 and March-2020 for which the supplier has furnished FORM GSTR-1 and FORM GSTR-3B in the month of November’20 and the applicant is, therefore, required to reverse the said input tax credit. 

Clarification regarding extension of time limit to apply for revocation of cancellation of registration in view of NN. 34/2021-CT dated 29.08.2021
Important points are as follows: 

  1. Due date falls between March 1, 2020 and August 31, 2021 – shall be extended to September 30, 2021. 
  2. The benefits are restricted to the cases falling under 29(2)(b) or (c) 
  3. Registered person may file a fresh application again when (i) appeal has not preferred and (ii) appeal rejected by the appellate authority 
  4. Officer shall process the application for revocation considering the extended timelines 
  5. The benefit of further extension of 30 + 30 days in accordance with the proviso to Section 30(1) may be availed by the registered person after September 30, 2021, as the case may be. 


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