I.
High Court
19. 2018 [19] G.S.T.L. 29
(Guj.) Teesta Distributors vs. Union of India dated 10th October,
2018
Levy of GST on lotteries is constitutionally
valid.
Facts
Petitioner assessee is engaged in selling of
paper lotteries of several states within the state of West Bengal. Assessee
challenged the constitutional validity of levy of GST on sale of lottery
tickets contesting that lotteries are not goods as per the definition provided
in the Constitution of India and thus should be exempt under Schedule III of
the CGST Act, 2017
Held
The Hon’ble High Court referring to various
judgments of the Hon’ble Supreme Court wherein it was held that lottery is an
actionable claim and therefore goods held that as lottery ticket evidences the
transfer of right and thus falls within the definition of actionable claim.
Under the GST law, Schedule III deals with activities or transactions which are
treated neither as a supply of goods nor as a supply of services and takes out
actionable claims but other than lottery, therefore levy of GST on the same was
held valid.
20. 2018 [19] G.S.T.L. 46
(M.P.) Advantage India Logistics Pvt. Ltd. vs. Union of India
dated 23rd August, 2018
State GST Officers are duly empowered to
inspect, search and seize under IGST Act, 2017.
Facts
Petitioner assessee challenged jurisdiction
of M.P. State Government or officials
authorised under the MPGST Act, 2017 to exercise the powers under IGST Act, 2017
particularly u/s. 4 of the IGST Act, 2017. Further, it was also contested that
no such notification was issued empowering the State officers to practice provisions of IGST. Thus, the Respondent department had no power to
search and seize goods under IGST Act, 2017 and so the seizure order issued
u/s. 129 (1) of MPGST Act, 2017 was liable to be quashed.
Held
The Hon’ble Court after analysing section 4
of the IGST Act, 2017 held that officers appointed under the MPGST Act are
authorised to be proper officers for the purpose of IGST and therefore the writ
petition was dismissed.
21. 2018 [19] G.S.T.L. 578
(Del.) Napin Impex Pvt. Ltd. vs. Commissioner of DGST, Delhi
dated 28th September, 2018
On account of non-production of books of
accounts and other documents, complete sealing of premise by Revenue
authorities is illegal.
Facts
Revenue officers visited the premises of the
petitioner and directed to produce books of accounts and other documents. Upon
non-availability of same, the petitioner sought 3 days-time to produce the
same. Ostensibly the Revenue ordered temporary sealing of the premises and next
day the premises were completely sealed as per section 67 of the CGST Act
(power of inspection, search and seizure). Grieved petitioner preferred writ
before the Hon’ble High Court. Respondent contested that till date they have
neither co-operated nor produced books of accounts or any other material.
Consequently premises were rightly sealed in light of the said section. Upon
co-operation from petitioner same can be de-sealed.
Held
The Hon’ble Court held that on plain reading
of the statute, especially section 67(4), which merely authorises the concerned
officials to search the premises and if resistance is offered, break-open the
lock or any other almirah, electrical device, box, etc. containing books and
documents. The complete sealing of the premises however in the opinion of the
Court is per se illegal. Hence, allowing the writ petition a direction was
given to remove the seal forthwith within next 12 hours of the order and
handover the premises to the petitioner.
22. 2018 [19] G.S.T.L. 582
(Cal.) Sanjay Kumar Bhuwalka vs. Union of India dated 9th July, 2018
Evasion of GST led to arrest, bail was granted
to accused assessee.
Facts
The Assessees were arrested due to
involvement in business of generating and selling of fake tax invoices to
various entities without supplying the underlying goods or services and
facilitating irregular availment and utilization of input tax credit by such
entities to whom such fake invoices were issued and the amount involved was
substantial amounting to several crore. Summons were issued to them u/s. 70
read with 174 (2) of the CGST Act wherein it was admitted in their statement
that they were looking after and controlling the business activities of the
companies. Upon reasonable belief the petitioners were arrested by the Revenue
officials. Petitioners then applied for the bail, challenging the legality of
arrest contesting that reasonable belief was not properly dealt by the
arresting officer.
Held
The Hon’ble Court held that while granting
bail, the Court has to keep in mind the nature of the accusations, the nature
of evidence in support thereof the severity of the punishment which conviction
will entail the character of the accused, reasonable apprehension of the
witnesses being tampered with, the large interest of the public/ state and
other similar considerations are required to be taken into consideration. Bearing
in mind the evidence collected so far by the Investigating Agency and in
consideration of the compounding nature of the offence, the Court released the
petitioners on bail on furnishing bond of the sum of Rs.50,00,000/- each on
condition to deposit Rs.39 crore.
23. 2018 [19] G.S.T.L. 590
(All.) Maa Vindhyavasini Tobacco Pvt. Ltd. vs. State of U.P
dated 5th April, 2018
Seizure of goods and vehicle for the reason
of writing vehicle number by hand held not sustainable.
Facts
Petitioner’s goods were seized on the ground
that goods started journey one week after the date of the invoice and details
with regard to the vehicle were not mentioned in the E-way Bill though they
were mentioned subsequently after downloading the E-way Bill in hand writing.
Doubting the transaction because of hand written details of the vehicle number,
the authorities seized the goods as well as the vehicle.
Held
The Hon’ble Court while deciding the issue
found no irregularity in the transaction in question for the reason that till
downloading of E-way Bill the transport company and the vehicle were not
engaged. They were engaged subsequently,
so the details were mentioned later by hand. Neither details of transport
company nor the vehicle were necessary while downloading E-way Bill. Thus the Court was of the view
that the petitioner, a registered dealer had issued invoices clearly indicated
the charge of IGST and Central Cess so there seemed no irregularity in the
transaction in question it was ordered to release the goods and the vehicle.
24. [2019-TIOL-07-AAR-GST]
GGL Hotel & Resort Company Ltd dated 8th January, 2019
Input tax credit is not eligible on lease
rental paid for the leasehold land used for furtherance of business.
Facts
Applicant sought a ruling as to whether Input
Tax Credit was available for the lease rent paid during pre-operative period
for the leasehold land on which the resort was being constructed to be used for
furtherance of business when the same was capitalised and treated as capital
expenditure.
Held
The Authority ruled that the cost of
constructing the immovable asset included the lease rental paid for right to
use the land on which the asset was being built. Thus being an integral part of
the cost of the immovable property, the lease rental paid for the service of
right to use the land is a supply for construction of the said property.
Construction of the hotel etc. is impossible unless the applicant enjoys
uninterrupted right to use the land. Construction of the immovable property is
therefore, critically dependent on the supply of the leasing service. The
leasing service for right to use the land is therefore a supply for
construction of the immovable property. The disallowance of input tax credit
u/s. 17(5)(d) of the GST Act, is not limited to the civil structure being
constructed but it extends to the immovable property in general which includes
the supplies received for retaining the right to use and develop the land.
Input tax credit is therefore not admissible.
25. 2018 (19) G.S.T.L 65
(N.A.P.A.) Sukhbir Rohilla vs. Pyramid Infratech Pvt. Ltd.
dated 18th September, 2018
Imposition of penalty on Builder for not
passing GST ITC benefit to customers/ home buyers.
Facts
Complaint of profiteering was filed by home
buyers against the respondent in respect of its affordable housing projects,
complaining that the respondent had not passed on the benefit of ITC to the
buyers of the flats in contravention of the provision of section 171 (1) of the
CGST Act, 2017.
Held
The authority of National Anti-profiteering
after investigating the complaint held that though rationalisation of tax not
resulted in reduction in tax rate, benefit of ITC ought to have been extended
to all goods and services utilised by any builder which was not available in
pre-GST era. Section 171 of the CGST Act, 2017 not only deals with passing on
benefit of reduction in rate of tax but also deals with passing on the benefit
of ITC. Thus, it is evident that respondent had contravened the said provision
and therefore ordered to reduce the price to be realised from the buyers of the
flats commensurate with the benefit of ITC received by him and held liable for
penalty also.
26.
[2019-TIOL-02-NAA-GST] Shri Surya Prakash Loonker, Director General
Anti-Profiteering, CBIC vs. Excel Rasayan Pvt. Ltd.
dated 16th January, 2019
Increase in the base price, post reduction in
the GST rate is a clear case of
profiteering.
Facts
Allegation was that the respondent did not
pass on the benefit of reduction in the GST rate applicable to detergents from
28% to 18% w.e.f 15.11.2017 but increased the base prices so that there was no
reduction in the prices to the recipients. The Respondent submitted that he was
availing SSI exemption under Central Excise and charging VAT @12.5% on the base
price that on introduction of GST, 28% tax was levied and since this disturbed
his pricing pattern, he had reduced the base price and absorbed the burden and
when the GST rate was reduced from 28% to 18% w.e.f. 15.11.2017, though the
base price was increased, it was much less than the base price in the pre-GST
era.
Held
The National Anti-profiteering Authority
noted that the decision not to increase MRPs when tax rates were increased on
account of implementation of GST was a business call taken by the assessee and
therefore he could not claim any concession on this ground. Benefits arising
due to the GST rate reduction could not be denied to the consumers just because
in the earlier scenario MRPs was not changed to extend some extra benefit to
the consumers. The Respondent admittedly did not pass on the benefit of tax
reduction since the base prices of the products were increased to maintain the
same selling prices which were existing before the reduction of rate of tax.
Profiteering was thus proved. The authority thus directed to reduce the sale
prices of the product immediately commensurate with the reduction in rate of
tax and the profiteered amount was ordered to be deposited in the Consumer
Welfare Fund along with interest. Further notice was issued asking the
Respondent to explain that why penalty should not be imposed under Rule 133 of
the CGST Rules 2017 for the offense committed u/s. 122 of the Act.
27. 2018 (19) G.S.T.L 84
(N.A.P.A.) Ankur Jain and Ors. vs. Kunj Lub Marketing Pvt. Ltd
dated 8th October, 2018
Imposition of penalty on the supplier on
denial of passing the benefit of ITC to his customers.
Facts
The applicant filed complaint against Kunj
Lub Marketing Pvt. Ltd alleging that it had not passed the benefit of reduction
in the rate of tax by way of reduced prices and had instead increased the base
price of the product by Rs.0.24 per pack. On further scrutiny it was found that
the total amount of profiteering was determined at Rs.90,778/. Thus, on
allegation of contravention of section 171 (1) of the CGST Act, 2017
investigation was initiated.
Held
The authority of National Anti-Profiteering
after investigating the complaint held that according to the facts of the case
it was seen that the respondent was supposed to not only pass on the benefit of
ITC to his customers but was also supposed to pass the benefit of reduced base
prices on the reduction of the rate of tax charged on the product supplied.
However instead it had resorted to profiteering and charged higher prices for
the product sold. Respondent’s contention that it had reduced the MRP of one of
the products, such liberty to arbitrarily reduce the price of one product and
not of others was not available. Thus, it was held that the respondent violated
the provisions of Anti-Profiteering and held liable to penalty and interest on
the amount of profiteering.
