“Indirect Taxes –
Recent Decisions” was started in 2009 by Puloma Dalal and Bakul Mody. C B
Thakar, G G Goyal and Janak Vaghani started to contribute to ‘Part B’
consisting VAT decisions a few years later.
Indirect taxes gathered
momentum as a field of practice especially after the advent of Service tax
(1994) and VAT (2005). This column gave the practitioners and others, vital
decisions on both subjects. Post GST regime, and while decisions under Service Tax
and VAT continue to be given, Part C was added recently to include GST rulings
especially advance rulings. Jayesh and Mandar started contributing after a few
years and Ishaan joined from April, 2018.
I.
High Court
28. 2019 [20] G.S.T.L. 3
(Allahabad) Timexo Fasteners India Pvt. Ltd. vs. State of U.P. dated 22nd November, 2018
Seizure
of goods by incorrectly recording the time of interception and allowing E-way
bill to expire after detention is unjustified
Facts
Petitioner’s goods were in
transit from Delhi to Kanpur and were intercepted at Kanpur. Seizure order was
passed on the ground that E-way bill accompanying the goods had expired.
Petition was filed contending that the vehicle entered Kanpur and was
intercepted at much early time before the expiry of the E-way Bill. The fact to
be noted was that the time of interception of the vehicle mentioned in the
instructions of the Assistant Commissioner did not match with the time
mentioned in the documents produced by him. However, the fact that the vehicle
was intercepted and checked much time before the expiry of the E-way Bill
remained unanswered in the instructions.
Further, the Act and the
Rules do not provide any time limit for the Tax Authorities to issue a seizure
memo of the intercepted goods and the vehicle.
Held
It was held that, the goods
seized on the ground that accompanying E-way bill had expired not justified
rather it was deliberately allowed to expire after the detention of the goods
by incorrectly recording the time of interception.
29. 2019 [20] G.S.T.L. 45 (Mad.) Dev
Indus Paints vs. Commissioner (CT), Commercial Taxes
Department, Puducherry dated 9th July, 2018
Demand
notice or attachment of bank account cannot be done where no assessment order
has been passed.
Facts
Show Cause Notice and
consequential attachment of the bank account for recovery of tax was challenged
by way of writ petition by the Petitioner Assessee contending that assessment
orders for the same were not passed for the periods under dispute i.e. for the
years from 2015-16 to 2017-18.
Held
The Hon’ble High Court held
that there cannot be a demand notice nor there can be any attachment of the
Petitioner’s bank account. Allowing the writ petition, the court directed the
Respondents to return the cheques collected from the Petitioner. It was also
directed to the Respondents to issue pre-revision notices to the Petitioner for
all the periods under dispute, grant reasonable opportunity to submit
objections, opportunity of personal hearing and complete the assessments in
accordance with the law.
30. 2019 [20] G.S.T.L. 193 (Ker.) Panel
Source LLP vs. Assistant State Tax Officer, Kasaragod dated 16th
October, 2018
Goods
seized for not uploading Part-B of E-way Bill, released on furnishing bank
guarantee for tax and penalty due and a simple bond without sureties.
Facts
Appellant assessee’s
vehicle was detained for reason of Part-B of E-way Bill not uploaded.
Consequently penalty was imposed. Assessee being aggrieved with the mandatory
condition of payment of penalty or furnishing of security u/s. 129(3) of the
CGST Act preferred writ petition to declare Rule 140 of CGST/ SGST Rules as
violative of Article 301 of Constitution of India. Learned Single Judge of the
Hon’ble High Court dismissed the writ petition, against which assessee
preferred Writ Appeal.
Held
Division bench of the
Hon’ble High Court held that the defect found was that the intercepted vehicle
was carrying an invalid E-way bill. The document was categorised as invalid for
reason of Part-B of the bill having not been uploaded and not accompanying the
goods. Though Part-B of E-way Bill was uploaded by Appellant before the notice
and order but that would not remove the defect pointed out by detaining
officer. Thus, it was directed to release the goods of Appellant on furnishing
a bank guarantee for tax and penalty found due and a simple bond without
sureties for the value of the goods in the form as prescribed under Rule 140(1)
of the CGST Rules.
31. 2019 [20] G.S.T.L. 197 (Ker.) Hotel Harisree vs. Assistant
Commissioner (Assessment), SGST Department, Kolam dated 16th
November, 2018
Directions
to Departmental Authorities to not take coercive steps for recovery until
disposal of stay application by Appellate Authority.
Facts
Petitioner a registered
dealer under KGST Act was served with the assessment order by the state revenue
authorities. Revenue authorities then initiated coercive steps of recovery
before expiry of its right to prefer appeal and before Appellate Authority could
consider the stay petition filed by Assessee. Aggrieved assessee preferred writ
petition.
Held
The Hon’ble High Court on
believing that assessee exercised its statutory remedy of filing appeal on time
and on appearance that stay petition also being filed by assessee held that
procedural fairness demands that authorities must wait, before taking further
steps until the appellate authority decides on stay petition. Thus, disposed
writ petition directing the Respondent Revenue to defer coercive steps until
the Appellate Authority considers the stay petition with hope that the same
will be disposed expeditiously.
32. [2019-TIOL-40-HC-KAR-GST] Global Associates Association of Persons vs.
Union of India dated 24th January,
2019
A right
to challenge a legislation or a Notification/Circular will not arise unless the
litigant is affected by the action initiated by the executive in furtherance of
such legislation / administrative Circular/Notification.
Facts
Petitioner involved in
construction activity is aggrieved by the Notification 11/2017-Central Tax
(Rate) and clarification dated 09.01.2018 issued by the respondent-authorities
pursuant to Entry 5(b) of Schedule II to the CGST Act, 2017 which envisages
levy of tax on construction activities and deeming the value of the land at
one-third of the total amount charged. It was argued that irrespective of any
action initiated or not by the respondent-authorities, they are entitled to
challenge the same and hence the writ petition is maintainable.
Held
The Court noted that
enacting a legislation or issuing Notification/Circular could not confer a
right to challenge unless the litigant is affected by the action initiated by
the executive in furtherance of such legislation/administrative Circular /
Notification more particularly, in taxing statutes. Cause of action is sine
qua non for challenging such legislation/Notification/Circular. Thus a Writ
Court cannot adjudicate upon such matters in vacuum and without a cause of
action it would be merely academic, consuming public time. The writ was thus
held premature and therefore dismissed.
II
Authority of Advance Ruling (AAR)
33. [2019-TIOL-17-AAR-GST] Ex-Servicemen Resettlement Society dated 28th January, 2019
Security services and scavenging services provided to
central government and state government not eligible for exemption under the
GST law.
Facts
Applicant a registered
society provided “Security services” and “Scavenging services” to various
hospitals under the State Government as well as the Central Government – they
sought a ruling as to whether exemption from GST is available in terms of
Notification 12/2017-Central Tax (Rate).
Held
The Authority noted that
the Exemption notification makes it clear that exemption is granted under sr.
no. 3 to ‘pure services’ provided to Central Government/State Government or
Union Territory or local authority or a governmental authority by way of any activity
in relation to a function entrusted to a panchayat under Article 243G or in
relation to any function entrusted to a municipality under Article 243W of the
Constitution. The service is classifiable as ‘pure service’ as they are not
supplying any goods while provisioning the services and the recipient is
government or governmental authority. However, before deciding applicability of
Sl. No. 3 of exemption notification, the functions of a Panchayat or
Municipality under the Constitution needs to be discussed. Reading Article
243G, 243W of the Constitution along with a study of the two functional item
lists placed in the Eleventh Schedule and the Twelfth Schedule of the Indian
Constitution makes it clear that “Security Services” provided to government hospitals
and medical colleges as institutions of Central/State/District/local
authorities are clearly not covered under either of the lists, so also, no
entry includes any of the services the applicant has bundled under the
description of “Scavenging services” i.e cleaning of hospital premises is not
classified under ‘sanitation or similar service’. Therefore, supply of security
services and the bundle of service described as scavenging service is not
entitled for the benefit of exemption. 
