Newsletter – Vol. 2, Issue 2 – 09.01.2022

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The right to CENVAT Credit cannot be frustrated by pressing on the procedural requirement of filing TRAN-1 before 27.12.2017: Hon’ble CESTAT, Chennai 
In M/s Bharat Heavy Electricals Ltd. v. Commissioner of GST & Central Excise, Excise Appeal No. 40546 of 2021, Order dtd. 15.12.2021, facts: From 23rd to 28th June, input services (involving reverse charge mechanism) were received for which payments to vendors were effected during the period 5th July to 4th October 2017. Since credit on the inputs / input services could not be availed before 30.6.2017, the same was not reflected in the ER-1 returns filed by them. It could not be carried forward through TRAN-1 to the new GST regime. As per the provisions under CENVAT Credit Rules, 2004, as amended in 2015, the Appellant was eligible to avail credit of the duty / tax paid on inputs and input services within a period of one year. Thereafter, the Appellant filed an application for refund of the credit vide their letter dated 27.3.2018. Held: In the present case, at the cost of repetition, the appellant would be eligible to avail credit but for the introduction of GST law. The said right cannot be frustrated by pressing on the procedural requirement of filing TRAN-1 before 27.12.2017. The accounting practice adopted by the appellant allows to avail credit only after making payments to the vendors which have made it impossible to carry forward the credit as set out in the GST law. When the credit is eligible, the same cannot be denied by stating procedural requirements.

‘Undervaluation’ and ‘change in route’ cannot be a ground for seizure/detention of goods in transit by the inspecting authority: Hon’ble Gujarat High Court
In Karnataka Traders v. State of Gujarat, R/SCA No. 19549 of 2021, Hon’ble HC held that We clarify that we have quashed the entire confiscation proceedings keeping in mind two things: first, mere change of route without anything more would not necessarily be sufficient to draw an inference that the intention was to evade tax. Sometimes, change of route may assume importance provided there is cogent material with the department to indicate that an attempt was sought to be made to dispose of the goods indirectly at a particular place. If such is the case, then probably, the authority may be justified in initiating appropriate proceedings, but mere change of route of the vehicle by itself is not sufficient. In the same manner, mere undervaluation of the goods also by itself is not sufficient to detain the goods and vehicle far from being liable to confiscation.

After depositing the pending amount, the registration which is withdrawn shall stand restored: Hon’ble Bombay High Court
In M/s Maha Arvind Roadways Pvt. Ltd. v. Commissioner of Central Tax and Ors., Writ Petition No. 5138 of 2021, Hon’ble HC held that it is made clear that upon the deposit of the said amount of INR 90,09,874/-, the registration of the petitioner under CGST Act read with MGST Act, which is withdrawn shall stand restored without prejudice to the rights and contentions of the revenue. The revenue would be at liberty to decide the application for restoration of the registration of the petitioner upon deposit of the said amount of INR 90,09,874/- and shall pass an order within three months from the date of such deposit of the amount. The order that would be passed, shall be communicated to the petitioner within one week from the date of passing of such order. If the said order is adverse against the petitioner, the same shall not be implemented for the period of one week from the date of communication of such adverse order.

The representation of revised TRAN-1 should be decided by the department: Hon’ble Madras High Court
In M/s Cummins India Limited v. The Assistant Commissioner and Ors., W.P. No. 23394 of 2021, Hon’ble HC held that the petitioner’s representation to the jurisdictional respondent namely, the first respondent herein has remained unaddressed so far, this Writ Petition is disposed of by directing the first respondent to respond to the representation dated 25.06.2020 within a period of 30 days from the date of receipt of a copy of this order.

The representation w.r.t. reimbursement of differential tax amount out of change in tax regime (from VAT to GST) be decided by the government: Hon’ble Orissa High Court
In M/s Bhanjadeo Constructions v. State of Odisha and Ors., W.P. (C) No.38490 of 2021, the Petitioner has challenged the action of the Opposite Parties in not reimbursing the differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 1st July, 2017. Hon’ble HC held that In that view of the matter, the Petitioner shall make a comprehensive representation before the appropriate authority within four weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10th December, 2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably within a period of three months from the date of receipt of the certified copy of this order.

First file the appropriate reply to the notices, writ disposed of: Hon’ble Madras High Court
In M/s Azeem Transport Company v. The Assistant Commissioner (Circle), GST, Tiruppur Central-II, W.P. No. 6274 of 2021 And W.M.P. No. 6885 of 2021, it is the case of the petitioner that the petitioner’s partnership firm consisted of four partners out of which two of the partners have exited and pursuant to which the petitioner firm was reconstituted by a deed of Reconstitution dated 19.04.2019. Pursuant to the deed of Reconstitution, the petitioner made an application for making changes in the registration by filing an application on 18.03.2020. The revenue case is that the petitioner has failed to respond to the order dated 27.03.2020 wherein the order also directed the petitioner to file a reply by 09.04.2020. Hon’ble HC held that the petitioner has not replied to the respective notices dated 27.03.2020 and 20.07.2020 and therefore there is no merits in the present writ petition in as much as these communications in Form GST Reg 03 dated 27.03.2020 and 20.07.2020 are merely a proposal setting out the reasons why the request of the petitioner cannot be accepted. It is for the petitioner to respond to the same. Under these circumstances, this writ petition is disposed of by directing the petitioner to file an appropriate reply.

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