29. [2019 108 taxmann.com 330 (Chen.-CESTAT)] M/s Global Analytics India (P) Ltd. vs. CGST &
C.Ex., Chen.) Date of order: 22nd July, 2019
When the exporter of services files a refund claim for service tax and
KKC paid on input services under Rule 5 of CENVAT Credit Rules, but instead of
reserving the said credit by debiting CENVAT Credit ledger, carries forward the
credit in TRAN01, the subsequent reversal of the said credit in GST regime can
be taken as a sufficient compliance of debit to CENVAT credit account for the
purpose of grant of refund
FACTS
The assessee, an exporter of services under Rule 6A of the Service Tax
Rules, made applications for refund of Service Tax and Krishi Kalyan Cess paid
on input services under Rule 5 of CENVAT Credit Rules and also under Notification
No. 27/2012-C.E.(N.T.) dated 18th June, 2012. However, the
Adjudicating Authority, after considering the explanation of the appellant,
rejected the refund claims inter alia on the grounds that the assessee
had not fulfilled the primary condition of debiting equal amount of CENVAT
Credit under Rule 5 ibid at the time of filing refund claim and that
since the appellant had carried forward in TRAN-1 under GST, refund need not be
granted as per section 142(3) of the CGST Act, 2017.
HELD
The Hon’ble Tribunal observed that it is an undisputed fact that the
appellant did not reverse an equal amount as required by the condition in
paragraph 2(h) of Notification No. 27/2012 (Supra). But the fact
remains that there was no provision in the ACES system to debit the value of
refund and the entire credit carried forward in TRAN-1 was reversed by the
appellant voluntarily in its GSTR3B filed for the month of April, 2018.
In view thereof, it was held that the assessee made sufficient
compliance with the condition in paragraph 2(h) since post-GST it would become
an impossible task for an assessee when the filing of ST-3 returns itself was
done away with. The Tribunal also relied upon the Board Circular No.
58/32/2018-GST for granting relief to the assessee.
30. 2019 112 taxmann.com 370 (Guj.)] Synergy Fertichem (P) Ltd. vs. State of Gujarat Date of order: 23rd December, 2019
High Court explained the principles for the purpose of invocation of
powers granted to the authorities under sections 129 and 130 of the CGST Act
FACTS
The petitioner imported a consignment of ceramic pigment ink and cleared
the same from the customs by filing a bill of entry and payment of applicable
customs duty and IGST. Considering the perishable nature of the goods (such ink
is required to be preserved at a certain temperature), the C&F agent
initiated transport of the ceramic ink to the warehouse of the petitioners in
Vadodara without even waiting for the e-way bill in respect of the goods. This
was resorted to considering the fact that the proof of payment of GST on the
transaction itself was accompanying the goods in the form of a bill of entry
for home consumption. The transporter duly prepared the transport receipt in
respect of the vehicle for transport of goods from the airport to the warehouse
of the petitioners.
But the truck with the goods was stopped for verification by the
Department and detained on the ground of absence of e-way bill in respect of
the goods. The petitioner subsequently generated the e-way bill and also
explained its case to the officer. The authorities, however, refused to release
the goods on the ground of the absence of an e-way bill. The authorities, in
addition to tax, also insisted on 100% penalty u/s 129 of the GST Act and also
a fine in lieu of confiscation equal to the value of the goods u/s 130
of the GST Act. Hence the petition.
HELD
The High Court held that sections 129 and 130 of the Act are mutually
exclusive and independent of each other. Referring to the plethora of decisions
on the interpretation and construction of the non-obstante clause, the
Court held that two provisions in the same Act, each containing a non-obstante
clause, requires a harmonious interpretation of the two seemingly conflicting
provisions in the same Act after giving proper consideration of giving effect
to the object and purpose of the two provisions and the language employed in
each. Section 129 deals with detention, seizure and release of goods and
conveyances in transit, whereas section 130 talks about the confiscation of
goods or conveyances and levy of tax, penalty and fine thereon. The Court held
that section 130 of the Act can be invoked even in cases where the amount of
tax and penalty is paid in terms of the provisions of section 129 of the Act.
This would be provided the case falls in any of the five eventualities
prescribed in section 130(1) of the Act.
The question whether the movement of the consignment without valid e-way
bills constitutes a substantive error or a mere technical breach is to be
considered by the AO keeping in mind the provisions of sections 122, 125 and
126 of the Act, as well as all relevant Instructions and Circulars issued by
the Board.
The High Court specifically observed that this litigation is nothing but
an outburst on the part of the dealers that practically in all cases of
detention and seizure of goods and conveyance, the authorities would
straightway invoke section 130 of the Act and would thereby issue notice
calling upon the owner of the goods or the owner of the conveyance to show
cause as to why the goods or the conveyance, as the case may be, should not be
confiscated. The High Court held that without any justifiable grounds or
reasons to believe, the authorities may not be justified in issuing a notice of
confiscation u/s 130 of the Act. For the purpose of issuing the said notice at
the threshold, i.e., at the stage of Section 129 of the Act itself, the case
has to be of such a nature that on the face of the entire transaction, the
authority concerned is convinced that the contravention was with the definite
intent to evade payment of tax.
Further, the Court held that section 130 of the Act is an independent
provision for confiscation in cases where it is found that the intention was to
evade payment of tax. Confiscation of goods or vehicle is almost penal in
character. In other words, it is an aggravated form of action and the object of
such aggravated form of action is to deter the dealers from evading tax and
that all cases of contravention of the provisions of the Act or the Rules, by
itself, may not attract the consequences of such goods or the conveyance being
confiscated u/s 130 of the Act. The High Court, therefore, clarified that for
the purpose of invoking section 130 at the very threshold, the authorities need
to make out a very strong case. Merely on suspicion, the authorities may not be
justified in invoking section 130 of the Act straightway.
The High Court held that if the authorities are of the view that the
case is one of invoking section 130 at the very threshold, then they need to
record their reasons for such belief in writing and such reasons should,
thereafter, be looked into by the superior authority so that the superior authority
can take an appropriate decision whether the case is one of straightway
invoking section 130 of the Act. In short, the notice for the purpose of
confiscation must be based on the materials and the action must be held in good
faith and should not be a mere pretence. The Court also held that sections 129
and 130 have non-obstante clauses, whereby they can be operated upon in
spite of sections 73 and 74 of the Act.
Further, the Court clarified that where the driver of the vehicle is in
a position to produce all the relevant documents to the satisfaction of the
authority concerned as regards payment of tax, etc. and the authenticity of the
delivery challan is also not doubted, but unfortunately he is not able
to produce the e-way bill – in such a situation it would be too much for the
authorities to straightway jump to the conclusion that the case is one of
confiscation, i.e. the case is of intent to evade payment of tax. The court
also clarified that where the documents are found to be in order, detention and
seizure of goods on the ground that tax paid was less cannot be justified. In
such an eventuality, the correct procedure which the inspecting authority is
expected to follow is to alert the Assessing Authority to initiate the
assessment proceedings.
Thus, in a case of a bona fide dispute with regard to the
classification between the transporter of the goods and the Squad Officer, the
Squad Officer may intercept the goods and detain them for the purpose of
preparing the relevant papers for effective transmission to the jurisdictional
AO. It is not open to the Squad Officer to detain the goods beyond a reasonable
period. The process can, at best, take a few hours. The process of detention of
the goods cannot be resorted to when the dispute is bona fide,
especially concerning the exigibility of tax and, more particularly, the rate
of tax.
31. [2019 108 taxmann.com 570 (Karn.)] Suma Oil Agencies vs. Commissioner of
Commercial Taxes Date of order: 18th July, 2019
When, as a
result of confusion over jurisdiction, the assessee received two notices of
re-assessment for the same period and assessee appears and replies before one
assessing officer intimating to the other of the said fact, the ex parte
assessment order passed by the said other officer is liable to be set aside
FACTS
The petitioner
was issued with a re-assessment notice relating to tax period 2012-13 by the
DCCT (Audit)-5.2 to which the petitioner replied suitably; he produced the
books of accounts before the said authority. Subsequently, re-assessment notice
was issued by the DCCT (Audit)-5.5 to re-assess the assessee. The petitioner
brought to the notice of the said authority the earlier notice issued by the
DCCT (Audit)-5.2 relating to the very same tax period. Despite this, the DCCT
(Audit)-5.5 passed an ex parte re-assessment order. Hence this writ
petition.
HELD
The High Court
observed that ex facie the assignment note issued to the DCCT
(Audit)-5.2 relating to the tax period 2010-11 and 2011-12 has been considered
to be the assignment note issued even to the tax period 2012-13, by the said
authority, resulting in issuance of re-assessment notice to re-assess the
assessee under the provisions of the Act for the tax period 2012-13. On the
reply filed by the petitioner to the notice issued by the DCCT (Audit 5.5), an
endorsement dated 14th December, 2016 has been issued by the said
authority – DCCT (Audit)-5.5 bringing these aspects to the notice of the
petitioner, more particularly, the assessment under the tax period 2012-13
being assigned to the DCCT (Audit)-5.5.
However, the
High Court held that since the jurisdiction of the officers to proceed with the
re-assessment relating to the tax period 2012-13 was not clear among the authorities
concerned, the ex parte re-assessment order now impugned certainly
deserves to be set aside for the reason that the assessee had appeared before
DCCT (Audit)-5.2, pursuant to the re-assessment notice issued by the said
authority relating to the tax period in question, and if that be the position,
the DCCT (Audit)-5.2 ought to have transferred the proceedings initiated by him
to the competent authority assigned with the jurisdiction.
That having not been done, the petitioner cannot be made to suffer.
