Newsletter – Vol. 2, Issue 14 – 03.04.2022

Download .pdf version, to share it with your colleagues – link here.

Refund of unutilized ITC may be claimed where credit has accumulated on account of the rate of tax on inputs being higher than the rate of tax on output supplies irrespective of cases where the input and output supplies remain the same: Hon’ble Calcutta High Court
In M/s Shivaco Associates and Anr. v. Joint Commissioner of State Tax, Directorate of Commercial Tax and Anr., WPA No. 54 of 2022, the issue pertains to the claim of refund on account of inverted duty structure where input and output remain the same. Hon’ble HC held that C/SGST Act does not mention about non-granting of the benefit of accumulated input tax credit where the input and output supplies are the same. Circular No. 135/2020-GST dated 31.03.2020 is trying to restrict the refund to a particular set of supplies. The circular is trying to create a class inside the class, which is impermissible. According to the Act, refund is permissible in respect of all classes where the input tax is higher than the output tax. By way of the circular, the Board is curtailing the said benefit and making refund permissible only if the input and output supplies are different. The same amounts to overreaching the provisions as laid down in the Act. Refund allowed. 

Six percent (6%) interest if a refund is not given within the statutory time frame: Hon’ble Gujarat High Court
In Parekh Plastichem Distributors LLP v. UOI, R/SCA No. 11423 of 2020, Hon’ble HC held that the plain reading of Section 56 of the C/SGST Act would indicate that if any tax, which is ordered to be refunded u/s. 54(5) to any applicant, is not refunded within sixty days (60 days) from the date of receipt of the application u/s. 54(1), interest at the rate not exceeding 6% [six percent] shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application u/s. 54(5).

On an inadvertent mistake committed by the Chartered Accountant, the dealer under the Act should not be made to pay a very heavy price like cancellation of the registration itself: Hon’ble Gujarat High Court
In M/s Dilipkumar Chandulal and Ors. v. State of Gujarat and Ors., R/SCA No. 4340 of 2022, inadvertent error on part of the CA – instead of inserting the registration number of the HUF, CA inserted the registration of the proprietorship- thus, the registration of the proprietary firm under the GST got cancelled. The Hon’ble HC held that Respondent No. 2 (‘department’) should immediately look into the matter and see to it that the order cancelling the registration is recalled and the original registration under the CGST is restored. For a mistake said to have been committed by the Chartered Accountant, the dealer under the Act should not be made to pay a very heavy price like cancellation of the registration itself.

Appellate Authority went behind the back of the assessee and considered the ground which was not even part of the SCN; violation of PNJ: Hon’ble Gujarat High Court
In Khodiar Export Import v. State of Gujarat and Ors., R/SCA No. 5220 of 2022, as per the order of cancellation of registration the amount payable was zero (0) and thereafter at the appellate stage, the appeal was dismissed on the new ground of spot visit reliance. Hon’ble HC held that SCN was issued on the specific ground that the firm had not filed returns continuously for a period of six months. The order passed by the Respondent No. 3 cancelling the registration is also presumed to be on the very same ground though, the order cancelling the registration is a non-speaking order. However, we fail to understand how could the appellate authority behind the back of the firm could have taken into consideration the report of the spot visit undertaken by Respondent No. 3 for the purpose of dismissing the appeal. If the appellate authority would have put the firm to notice, probably, the firm could have appropriately replied to the same. It appears that behind the back of the firm, the ground which is not at all in the show cause notice has been considered and ultimately, the appeal came to be dismissed. We are of the view that the entire procedure undertaken not only by Respondent No. 3 but even by the appellate authority is in absolute violation of the principles of natural justice. On the aforesaid short ground, we believe that the firm should succeed before us. Impugned orders set aside; registration restored.

The documents or records relied upon by the respondent concerned were never provided to the petitioner to enable the petitioner to contradict the said report; violation of PNJ: Hon’ble Calcutta High Court
In Pavati Trading Pvt. Ltd. and Anr. v. The Dy. Commissioner of State Tax, Shibpur, Howrah, SGST and Ors., WPA 81 of 2021, Hon’ble HC disposed of the writ petition by setting aside the impugned order with the direction upon the Deputy Commissioner to consider afresh and dispose of the petitioner’s application for revocation of cancellation of its registration 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 within four weeks from the date of communication of this order and also to provide the documents to the petitioner to be relied on by the respondent, for the purpose of the final adjudication of the said application.   

Notice issued by a state officer instead of the central officer will amount to the error of jurisdiction and not an inherent lack of jurisdiction: Hon’ble Allahabad High Court
In Ajay Verma v. UOI and Ors., WTax No. 1169 of 2021, the issue pertains to the territorial jurisdiction of the proper officer and the validity of the impugned SCN and Assessment Order thereof; as the registration was assigned to Central GST Officer but the SCN was issued and adjudicated by the State GST Officer. Hon’ble HC held that the proper officer under the UP/CGST Act has inherent jurisdiction over the assessee falling within his territorial jurisdiction but that jurisdiction has to be exercised as per cases assigned by the designated committee. The present case is not of inherent lack of jurisdiction rather it is a case of error of jurisdiction on account of non-allotment of case of the petitioner assessee to the Respondent No. 4/State Officer. In the instant case, the assessee has submitted to the error of the jurisdiction. WTax dismissed.

Non-availability of Form GST ITC-02A on the GSTN portal for transfer of credit under R. 41A; transfer allowed: Hon’ble Rajasthan High Court
In Pacific Industry Ltd. v. UOI and Ors., D.B. Civil Writ Petition No. 12190/2019, Hon’ble HC held that the department was not in a position to dispute the fact that Form GST ITC-02A was not available on the GSTN Portal within the stipulated period of 30 days from the date of registration of the petitioner’s new business vertical and hence, the petitioner was genuinely and bonafidely prevented from uploading the same. It was also not disputed that the petitioner manually submitted the form to the Deputy Commissioner, CTO Ward, A-Circle Udaipur within the prescribed period of 30 days. As a consequence of the admitted factual position, we are of the firm opinion that the impugned action whereby, the respondents have failed to acknowledge and transfer the input tax credit to the tune of ₹ 2,58,03,590/- accruing to the petitioner pursuant to the registration of its new business unit in accordance with Rule 41A of the GST Rules, is grossly illegal, arbitrary and unjust. Allowed to avail in next GSTR-3B. 

Department to withdraw the negative block liability in the ECL: Hon’ble Gujarat High Court
In Milap Scrap Traders v. State/Commercial Tax Officer and Ors., R/SCA No. 12986 of 2021, the issue is no more res integra in view of the recent pronouncement of this Court in the case of Samay Alloys India Pvt. Ltd. v. State of Gujarat [Special Civil Application No.18059 of 2021 decided on 3rd February 2022]. No negative liability in the ECL. 

The services (conduct of the examination) provided to the schools/education organizations in relation to the ASSET examination is exempted: Hon’ble Gujarat High Court
In M/s Educational Initiatives Pvt. Ltd. v. UOI and Ors., R/SCA No. 16476 of 2021, Hon’ble HC has affirmed the ruling of Gujarat Authority for Advance Ruling i.e., Question: Whether the educational assessment examination (ASSET) with its variants provided by the applicant to school/educational organization is exempted from payment of GST under Sr. No. 66(b)(iv) of the NN. 12/2017 – CT (Rate) dated 28.06.2017 and entry No. 69(b)(iv) of NN. 09/2017-Integrated Tax (Rate) dated 28.06.2017 as well as equivalent SGST Notification. Answer: Yes, the exemption is available in view of the above discussion in respect of ASSET services provided to the educational institution.”

The author may be reached at*

Facebook Twitter Linkedin
Scroll Up
Copy link
Powered by Social Snap