Part-103-One Pager Snapshot to the Latest Cases on Section 70, Section 107, Section 129, Section 122 read with Section 73, Section 62 read with Section 122 and Section 127

-Presence of Advocate during statement at visible but not at audible distance
-Manual Filing of Appeal in case of order served manually acceptable and Payment of Pre-Deposit through challan on manual filing of appeal acceptable
-Non-mentioning of Vehicle Number in case of no intent to evade, is a procedural error
-For Levying Penalty U/Sec 122(2)(a), procedure U/Sec 73 to be followed
-Having reference to provision of Section 127, penalty can be levied U/Sec 122 for cases wherein order passed U/Sec 62.

103.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Section

Case Subject

case

Held

1

Section
70

Presence of
Advocate during
statement at
visible but not at
audible distance

Mayur Chavda v.
State of Maharashtra
[2023] 154
taxmann.com 641
(Bombay) (10-04-23)

Petitioner contended that the Court, has time and again permitted presence of an Advocate at a visible, but not at an audible distance and has
also permitted the petitioner therein to videograph the recording of his statement.
The Court allowed petition and permitted the petitioner's Advocate to remain present at the time of recording of the petitioner's statement at a
visible, but not at an audible distance. They also permitted videography of the said petitioner's statement, at the cost of the petitioner. A copy of
the said videography was to be handed over to the petitioner after show cause notice is issued to the petitioner

2

Section
107

Manual Filing of
Appeal in case
of order served
manually
acceptable
Payment of PreDeposit through
challan on
manual filing of
appeal
acceptable

Kotla Kanakeswara
Rao v. Additional
Commissioner
[2023] 154
taxmann.com 640
(Andhra Pradesh)
(22-09-23

The appeal was rejected by the Appellate Authority as the original Assessment Order dated 2-1-2022 was duly served on the same date, but the
appeal was filed in manual form on 28-2-2022 and later e-appeal was filed on 1-9-2022 with a delay of six months and the pre-requisite deposit
of 10% of the disputed tax has not been paid. Petitioner contended that the Assessment Order dated 2-1-2022 was not uploaded on the
website and therefore, he was constrained to file appeal in manual form on 28-2-2022. In the interregnum period the Order was uploaded on the
official website and thus appeal in electronic form was filed on 1-9-2022.
The Court observed that the factum of non-uploading of the Assessment Order dated 2-1-2022 on official website was not disputed and thus,
reason given by petitioner for filing the appeal in manual form can be accepted. The explanation also was plausible as subsequently the copy of
the Assessment Order was uploaded and thereby the petitioner filed e-appeal. The Court also relied upon the decision of Division Bench in
W.P.No.3308/2021 wherein it was observed that manual form of filing appeal is permissible in terms of Rule 108(1). Thus, explanation offered
by the petitioner were held to be plausible and tenable. Further, on a perusal of copy of challan filed along with material papers reflect that
petitioner made a pre-deposit of 10% of the demanded tax on 25-2-2022 i.e., at the time of manual filing of the appeal. Therefore, it was held
that the said requirement was also complied. Thus, appellate authority ought to have admitted the appeal filed in electronic form.

3

Section
129

Non-mentioning
of Vehicle
Number in case
of no intent to
evade, is a
procedural error

Novateur Electrical
and Digital Systems
(P.) Ltd. v. Additional
Commissioner of
State Tax [2023] 154
taxmann.com 637
(Punjab & Haryana)
(11-09-23)

In the instant case, vehicle number was not mentioned in Part-B of the Eway Bill however, All other documents were shown by the driver.
Revenue contended that E-Way Bill was generated without completely filling Part B and thus there was violation of the provisions of law.
The Court referred to Circular dated 14-9-2018 wherein Para (f) refers to error in one or two digits/characters of the vehicle no. while generating
E-Way Bill. The Court observed that case of petitioner falls under clause (f) as he did not mention vehicle no in part B and thus proceedings
under section 129 should not have been initiated. Further, at the time of search of vehicle, Part B was not filled up but the time driver filled up
Part B in the presence of the Officer and hence there was no malafide intention on the part of petitioner. Thus, it was held that proceedings under
section 129 should not have been initiated, as per circular dated 14-9-2018). It was held that the object of circular dated 14-9-2018 was that in
case of circumstances as detailed in the circular, which were procedural in nature and there no intention of misleading the transfer of goods, the
proceedings should not be initiated under Section 129.

4

Section
62 and
Section
122

For Levying
Penalty U/Sec
122(2)(a),
procedure U/Sec
73 has to be
followed

Nandi PVC (P.) Ltd.
v. Union of India
[2022] 145
taxmann.com 4
(Andhra Pradesh)
(14-09-2022

An Assessment Order was passed under Section 62 in Form GSTR ASMT - 13, dated 05.02.2019, demanding the Petitioner to pay tax with
interest and penalty. The penalty was levied under Section 122(2)(a) of the CGST Act, 2017. It was contended that, to impose penalty under
Section 122 of CGST Act, procedure under Sections 73 or 74 is required to be followed, for which a SCN has to be issued.
The Court observed that in order to impose penalty in terms of Section 122(2)(a) of the Act, the demand for recovery should be made following
the procedure under Section 73, in which case, the proper Officer shall issue a notice under Section 73 within three months prior to the time
specified in Section 73(10). It appeared from the record that such a notice was not issued prior to passing of impugned order. Thus, order
imposing penalty was set-aside and matter was remanded back to the authority concerned

5

Section
62,
Section
122 and
Section
127

Having
reference to
provision of
Section 127,
penalty can be
levied U/Sec 122
for cases
wherein order
passed U/Sec
62

Spy Agro Industries
Ltd. v. Union of India
[2022] 139
taxmann.com 69
(Andhra Pradesh)
(05-05-2022)

An order U/Sec 62 was passed and thereafter, the very same authority enlarged the order with certain additional liabilities by styling the order
as Corrigendum-cum-Addendum and inserting para No.4.8 and consequently, directed the petitioner to pay penalty U/Sec 122(2)(a) Thereafter,
the very same authority issued another communication titling it as rectification order under section 161 of CGST Act in order to ratify the
Corrigendum-cum-Addendum. The petitioner contended that entire procedure followed by authorities in imposing penalty without hearing the
petitioner was illegal and incorrect. Department stated that there is no bar for imposing penalty under sections 62 and 122.
The Court observed that as per Section 161 where any rectification adversely affects any person, principles of natural justice shall be followed.
Section 127 of the Act which in view of the Court had some importance deals with power to impose penalty in certain cases. In the instan case,
penalties were imposed creating additional liability, which was not reflected in the earlier notice and No opportunity of hearing was given to the
petitioner. Further, section 62 does not anywhere speak about imposing penalty. It only speaks about liability for payment of interest or for
payment of late fee. Therefore, as per section 127, if penalty is to be imposed in cases, which are not covered under section 62 or section 63 or
section 64 or section 73 or section 74 or section 129 or section 130, the authority can impose penalty after giving reasonable opportunity of
hearing such person. Thus, the orders under challenge were set aside with permission to proceed further by issuing a fresh notice

Part-102-One Pager Snapshot to the Cases on use of Scope of Definition Clause in a Statute and Meaning of a word

-Use of Definition Clause
-Definitions in statutes when beginning with, “unless there is anything repugnant in subject”
-Meaning of the Word not defined in the Statue
-Perils of Importing definition from other statute
-Perils of Dictionary Meaning
-Definition of word from other statue no to be imported if not pari materia

102.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Subject

Case

Held

1

Use of Definition
Claus

Nahalchand
Laloochand P.Ltd
vs Panchali CoOp.Hng.Sty.Ltd on
31 August, 2010
(SC)

“Justice G.P. Singh in the `Principles of Statutory Interpretation' (12th edition, 2010) says that the object of a definition of a term is to avoid the
necessity of frequent repetitions in describing all the subject matter to which that word or expression so defined is intended to apply. In other
words, the definition clause is inserted for the purpose of defining particular subject-matter dealt with and it helps in revealing the legislative meaning.
However, the definitive clause may itself require interpretation because of ambiguity or lack of clarity in its language. In the `Construction of Statutes' by
Earl T. Crawford (1989 reprint) at page 362, the following statement is made: ".......the interpretation clause will control in the absence of anything else in
the act opposing the interpretation fixed by the clause. Nor should the interpretation clause be given any wider meaning than is absolutely necessary. In
other words, it should be subjected to a strict construction."

2

Definitions in
statutes when
begining with,
“unless there is
anything
repugnant in
subject”

Nahalchand
Laloochand P.Ltd
vs Panchali CoOp.Hng.Sty.Ltd on
31 August, 2010
(SC)

But s. 2 begins with the words " in this Act, unless there is anything repugnant in the subject or context " and then come the various definition
clauses of which (9) is one. It is well settled that all statutory definitions or abbreviations must be read subject to the qualification variously
expressed in the definition clauses which created them and it may be that even where the definition is exhaustive inasmuch as the word defined
is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon
the subject or the context. That is why all definitions in statutes generally begin with the qualifying words similar to the words used in the present case,
namely, unless there is anything repugnant in the subject or context.

3

Meaning of the
Word not defined
in the Statue

Maheshwari Fish
Seed Farm vs T.
Nadu Electricity
Board And Anr on
16 April, 2004 (SC)

It is settled rule of interpretation that the words not defined in a statute are to be understood in their natural, ordinary or popular sense. According
to Justice Frankfurter, "After all, legislation, when not expressed in technical terms, is addressed to common run of men, and is, therefore, to be understood
according to sense of the thing, as the ordinary man has a right to rely on ordinary words addressed." (Wilma E. Addison v. Holly Hill Fruit Products, 322
US 607, at p.618). In determining, therefore, whether a particular import is included within the ordinary meaning of a given word, one may have regard to
the answer which everyone conversant with the word and the subject-matter of statute and to whom the legislation is addressed, will give if the problem
were put to him. (Principles of Statutory Interpretation by Justice G.P. Singh, Ninth Edition, 2004, p.95

4

Perils of
Importing
definition from
statute

Maheshwari Fish
Seed Farm vs T.
Nadu Electricity
Board And Anr on
16 April, 2004 (SC)

Suffice it to observe that the common parlance meaning of the term 'agriculture', in the context in which it has been used and is arising for
determination before us, cannot be determined by reference to definition given in other statutes. This we say for more reasons than one. Firstly,
none of the statutes reffered to by Shri Iyer, the learned senior counsel, can be called statutes in pari materia. Secondly, it is common knowledge that the
definition coined by the Legislature for the purpose of a particular enactment is often an extended or artificial meaning so assigned as to fulfill the object of
that enactment. Such definitions given in other enactments cannot be freely used for finding out meaning to be assigned to a term of common parlance
used in an altogether different setting. And lastly, as Justice G.P. Singh points out in "Principles of Statutory Interpretation" (Ninth Edition, 2004,
at page 163) "......it is hazardous to interpret a statute in accordance with a definition in another statute and more so when such statute is not
dealing with any cognate subject or the statutes are not in pari materia." The same view has been taken in the decision of this court in CIT, W.B.
v. Benoy Kumar (supra) which we have extensively referred to earlier in this judgment

5

Perils of
Dictionary
Meaning

CGT vs. Getti
Chettiar [1971] 82
ITR 599(SC)

A reading of this section clearly goes to show that the words "disposition", "conveyance", "assignment", "settlement", "delivery" and "payment" are used
as some of the modes of transfer of property. The dictionary gives various meanings for those words but those meanings do not help us. We have
to understand the meaning of those words in the context in which they are used. Words in a section of a statute are not to be interpreted by
having those words in one hand and the dictionary in the other. In spelling out the meaning of the words in a section, one must take into
consideration the setting in which those terms are used and the purpose that they are intended to serve

6

Definition of word
from other statue
no to be imported
if not pari materia

Sri Jagatram Ahuja
vs The
Commissioner Of
Gift Tax on 17
October, 2000 (SC)

We may state here itself that the words and expressions defined in one statute as judicially interpreted do not afford a guide to construction of
the same words or expressions in another statute unless both the statutes are para-materia legislations or it is specifically so provided in one
statute to give the same meaning to the words as defined in other statute. The aim and object of the two legislations, namely, the Gift-tax Act and the
Estate Duty Act are not similar

Part-101-One Pager Snapshot to the Latest Cases on Section 73, Rule 86A, Section 129 and SCN issued on same subject by two authorities

SCN issued on same subject matter issued by two authorities to be decided by one of the authorities
-An earlier order passed under Rule 86A(2) lifting blocking of ITC Ledger, will not preclude assessing officer in passing an order under Section 73/74 to hold that ITC was wrongly availed.
-Conduct of the assessee to be considered in case of expired Eway Bill and having found that the conduct was not with the intention to evade tax, relief to be granted to the assessee

101.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Section

Case Subject

Case

Held

1

Section
73

SCN on same
subject matter
issued by two
authorities to be
decided by one
of the authorities

LGW Industries Ltd. v.
Assistant
Commissioner, Salt
Lake Charge [2023]
154 taxmann.com 611
(Calcutta) (15-03-
2023

SCN was issued by Assistant Commissioner, Salt Lake Charge on dated 29th Dec 2022 and on the very same issue, Assistant Commissioner,
State Tax, Bureau of Investigation, South Bengal (HQ) had issued notice dated 7th Nov, 2022.
The Court was of the view that if the subject issue is one and the same or if the subject is inter-related, it is always better that one authority
adjudicates the matter. By directing the assessee to face multiple authorities may result in conflicting decisions. Therefore, not only in the
interest of the assessee but in the interest of the revenue also, one authority should take the decision. Admittedly, Bureau of Investigation,
South Bengal was centralised agency and if that agency has already taken up the matter for consideration and the concerned Assistant
Commissioner has issued notice dated 7th Nov, 2022, it was held to be appropriate that issues be considered by the said authority including
the issue, which was raised by the respondent in the SCN dated 29th Dec 2022

2

Section
73/74 and
Rule 86A

An earlier order
passed under
Rule 86A(2)
lifting the
blocking of ITC
Ledger, will not
preclude the
assessing officer
in passing an
order under
Section 73/74 to
hold that ITC was
wrongly availed

D. Ranganathan &
Co. v. Assistant
Commissioner (RAL)
(FAC) [2023] 154
taxmann.com 606
(Madras) (11-04-
2023

For the period 2017-18, petitioner's ITC had been blocked under Rule 86A on the basis that ITC had been availed allegedly, fraudulently.
The petitioner was called upon to file objections and was also heard. Pursuant thereto, an order was passed on 16-7-2021, considering the
request of the petitioner for unblocking of credit under Rule 86A in its favour. Thereafter, notices came to be issued to the petitioner on the
basis of information received by the assessing officer (hereinafter referred as “R 3”) to the effect that suppliers were non-existed or were not
conducting business from the place in which registration had been obtained. The petitioner responded to the SCN by relying on proceedings
dated 16-7-2021. The submissions made before R1 were reiterated before R3, the assessing officer, and, infact response dated 15-11-2022
relies, lock, stock and barrel, on proceedings dated 16-7-2021 only. After considering the explanation and hearing the petitioner in detail, R3
proceeded to pass the impugned order on 5-1-2023.
The Court observed that while passing an order lifting the blocking of credit, the assessing authority was undoubtedly required to examine
whether such block has been validly made. It was thus incumbent upon the officer concerned to examine every aspect of the matter prior to
arriving at a proper decision. However, at the same time, it was also incumbent upon the dealer to establish receipt of the goods or services.
R3, in the impugned order of assessment had proceeded on the basis that the petitioner did not establish movement of goods. In fact, he
referred to various particulars called for by him, such as weighment slips, vehicle receipts for goods transportation, freight for inward and
outward related documents, fuel expenses, stating that such documents were not produced. He thus concluded, that petitioner did not
discharge burden placed upon him to establish movement of goods and, based on such failure as well as the departmental enquiries,
concluded that the transactions were fictitious as the suppliers did not exist. As regards the bank statements, there was an explanation put
forth in the order to the effect that cash has been credited and debited the same day and hence the transactions constituted classic circular
transactions. The High Court, thus concluded that true, R3 ought to have made reference to order of R1 dated 16-7-2021 and undoubtedly,
this was a flaw in the assessment order but not a fatal flaw. The power of an assessing officer under section 73/74 is wide and proceedings
for assessment may be initiated in any circumstance where it appears to the proper officer that the claim of ITC by an assessee is incorrect.
The mere fact that an order has been passed under Rule 86A(2) will not stand in the way of the assessing officer making an assessment or
curtailing his powers in any way, in such an exercise.

3

Section
129

Conduct of the
assessee to be
considered in
case of expired
Eway Bill and
having found
that the conduct
was not with the
intention to
evade tax, relief
to be granted to
the assessee

Usha Martin Ltd. v.
Deputy Commissioner
of State Tax [2023]
154 taxmann.com 610
(Calcutta) (16-06-
2023)

The goods in question were meant for export and the appellants had generated an e-Way Bill which was valid till 12th September, 2019. The
appellants' case was that the goods while being loaded into the vessel had got damaged and as a result, the goods had to be taken back to
the appellants factory at Ranchi for repairs. For such purpose the e-Way Bill was generated based on a challan on 7th September, 2019 which
was valid till 12th September, 2019. In terms of Rule 138(10), an option is given to extend period of e-Way Bill and such extension should be
done before eight hours. Admittedly, eight hour period expired about 8.10 a.m. on 13-9-2019 and at about 8.20 a.m., goods were detained.
The Court observed that on perusal of e-Way Bill, it was seen that no tax was payable since the goods which were owned by the appellants
were taken back to their factory at Ranchi for repairs. The identical issue was considered in various matters earlier by the Court and in all
those matters, conduct of the assessee was considered and having found that the conduct was not with the intention to evade tax, relief was
granted to those assessee’s. The Court thus concluded that case on hand would also fall under the said category since there was no
allegation of any evasion of tax rather it was not disputed that goods were being transported under a cover of challan to the factory of
appellants for carrying out repairs and thus, it was not a fit case where tax and penalty should have been levied on the appellants.
Cases Referred- Progressive Metals Pvt. Ltd. v. The Deputy Commissioner, State Tax, Bureau of Investigation, South Bengal, Durgapur
Zone & Ors. in MAT 562 of 2023 dated 28-4-2023; KDG Projects Pvt. Ltd. v. Assistant Commissioner of State Tax, Bureau of Investigation
(North Bengal) reported in 2022(66) G.S.T.L. 262 (Cal.); Medha Servo Drives Private Limited & Anr. v. The Assistant Commissioner of, State
Tax, Bureau of Investigation (South Bengal), Durgapur Zone & Ors. in MAT 1751 of 2022 dated 17-11-2022

Part-100-One Pager Snapshot to the Latest Cases on entitlement of ITC as per the provisions of Section 16-Part-III

-Before directing the recipient to reverse ITC, the authority ought to take action against the supplier and unless and until authority was able to bring out exceptional case as clarified in the press release issued by CBIC, straight away, authority was not justified in directing the recipient to reverse the ITC
-ITC not allowed as tax cannot be paid on invoices issued post cancellation of registration of supplier
-Time limit prescribed for claiming ITC u/s 16(4) is not violative of articles 14, 19(1)(g) and 300-A of the Constitution of India.

100.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Case Subject

Case

Held

1

Before directing
the recipient to
reverse ITC, the
authority ought to
take action
against the
supplier and
unless and until
authority was able
to bring out
exceptional case
as clarified in the
press release
issued by CBIC,
straight away,
authority was not
justified in
directing the
appellant to
reverse the ITC

Suncraft Energy
(P.) Ltd. v.
Assistant
Commissioner,
State Tax [2023]
153
taxmann.com 81
(Calcutta

The allegation against the appellant was that the supplier has not shown the Bill in GSTR 1 and hence the appellant is not eligible to avail ITC as per section
16(2). SCN did not allege that appellant was not in possession of tax invoice and that the appellant has not received the goods or services or both.
The court referred to decision of Appex Court in the matter of Union of India (UOI) v. Bharti Airtel Ltd. [2022] 4 SCC 328 wherein effect and purport of Form
GSTR-2A was explained that it is only a facilitator for taking a confirm decision while doing such self-assessment. Non-performance or non-operability of Form
GSTR-2A will be of no avail because dispensation stipulated at the relevant time obliged registered persons to submit return on the basis of such selfassessment in Form GSTR-3B manually on electronic platform. The Court relied upon Arise India Ltd. v. Commissioner of Trade and Taxes, Delhi.
The Court referring to press release dated 18-10-2018 observed that the authority had not conducted any enquiry on supplier more particularly when
clarification has been issued where furnishing of outward details in Form GSTR 1 by a corresponding supplier and the facility to view the same in Form GSTR
2A by the recipient is in the nature of tax payer facilitation and does not impact the ability of the tax payers to avail ITC on self-assessment basis in consonance
with the provisions of section 16 of the Act. Furthermore, Press release dated 4
th May 2018 was also referred wherein it was clarified that there shall not be
any automatic reversal of ITC from buyer on non-payment of tax by seller and in case of default in payment of tax by seller, recovery shall be made from seller
however, reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer,
closure of business by supplier or supplier not having adequate assets etc.
Thus, it was held that the action of the proper officer was branded as arbitrarily as it carried without resorting to any action against the supplier and ignoring
the tax invoices produced by the appellant as well as the bank statement to substantiate that they have paid the price for the goods and services rendered as
well as the tax payable there on. Therefore, before directing the appellant to reverse ITC, the authority ought to have taken action against the supplier and
unless and until authority was able to bring out exceptional case where there was collusion between appellant and supplier or where supplier was missing or
supplier had closed down its business or the supplier did not have any assets and such other contingencies, straight away the authority was not justified in
directing the appellant to reverse the ITC. Therefore, demand raised on the appellant was held not to be sustainable. The order was set aside with a direction
to first proceed against supplier and only under exceptional circumstance as clarified in press release by CBIC, proceedings be initiated against appellant.

2

ITC not allowed
as tax cannot be
paid on invoices
issued post
cancellation of
registration of
supplier

Jai Balaji Paper
Cones v.
Assistant
Commissioner
Sales Tax [2023]
152taxmann.com
690 (Madras)

The case of the petitioner is that the petitioner has paid an amount of Rs.4,14,000/- to the supplier by including the GST payable of Rs.4,14,000/- on three
invoices. It was submitted that since the petitioner has paid the tax due to the supplier on invoice dated 23.11.2018, thus they cannot be asked to pay IGST.
The court by referring to Section 16(2) (c) of CGST Act, 2017 stated that a registered person is not entitled to credit of input tax in respect of any supply of
goods or services of both, if tax is not paid to the Government. The registration of the supplier was cancelled on 31.10.2018 before three invoices dated
23.11.2018 were raised. Thus, it was clear that supplier could not have paid the tax to the ex-chequer. Therefore, it was held that there cannot be a mandamus
to the authority contrary to the provisions of the respective GST Act of 2017 and the Rules made thereunder and the petition as dismissed. It was further stated
that the petitioner was however entitled to recover the amount from the suppliers in the manner known to law.

3

Time limit
prescribed for
claiming ITC u/s
16(4) is not
violative of
articles 14,
19(1)(g) and 300-
A of the
Constitution of
India.

[2023] 152
taxmann.com
640 (Andhra
Pradesh)
Thirumalakonda
Plywoods v.
Assistant
Commissioner -
State Tax

The Court observed that Section 16(2) does not appear to be a provision which allows input tax credit, rather ITC enabling provision is section 16(1). On the
other hand, section 16(2) restricts the credit which was otherwise allowed to only such cases where conditions prescribed in it were satisfied. Therefore, section
16(2) in terms only override the provision which enabled the ITC i.e., section 16(1). This is evident from the manner in which Section 16(2) is couched. The non
obstante clause in section 16(2) is followed by a negative sentence "no registered person shall be entitled to the credit of any input tax in respect of any supply
of goods or services or both to him unless". This negative sentence pellucidly tells that unless the conditions mentioned in section 16(2) are satisfied, no credit
will be eligible. This stipulation manifests that section 16(2) is not an enabling provision but a restricting provision. What it restricts is the eligibility which was
otherwise given U/s 16(1). Hence unless such clear inconsistency is established, overriding effect cannot be given over other provisions. In the present case
both Section 16(2) and (4) are two different restricting provisions, the former providing eligibility conditions and the later imposing time limit. Further, influence
of a non obstante clause has to be considered on the basis of the context also in which it is used. Therefore, section 16(4) being a non-contradictory provision
and capable of clear interpretation, will not be overridden by non obstante provision u/s 16(2). Thus, in substance it was held that section 16(1) is an enabling
clause for ITC; 16(2) subjects such entitlement to certain conditions; section 16(3) and (4) further restrict the entitlement given u/s 16(1). That being the scheme
of the provision, it is out of context to contend that one of the restricting provisions overrides other two restrictions. Another way of looking it was that if really
legislature had no intention to impose time limit, there was no necessity to insert Section16(4) and to further intend to override it through section 16(2).
The Court further observed that mere filing of the return with a delay fee will not act as a springboard for claiming ITC and referred to the argument by learned
Advocate General wherein it was stated that collection of late fee is only for the purpose of admitting the returns for verification of taxable turnover of the
petitioner but not for consideration of ITC. Such a statutory limitation cannot be stifled by collecting late fee.
The Court observed that ITC being a concession, the legislature is within its competency to impose certain conditions, including time prescription for availing
such right. Thus, time limit prescribed for claiming ITC u/s 16(4) is not violative of articles 14, 19(1)(g) and 300-A of the Constitution of India


Part-99-One Pager Snapshot to the Latest Cases on entitlement of ITC as per the provisions of Section 16-Part-II

-Merely on the ground that in Form GSTR-2A the tax is not reflected, should not be a sufficient ground to deny the claim of ITC.

-Section 16(4) is constitutionally valid and is not violative of Articles 19(1)(g) and Article 300-A of the Constitution of India and is not inconsistent with or in derogation of any of the fundamental right guaranteed under the Constitution of India.

-Claim of Input Tax Credit raised by the petitioner cannot be sustained when the supplying/selling dealer has not paid up the amounts to the Government; despite collection of tax from the purchasing dealer.

99.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Case Subject

Case

Held

1

Merely on the ground
that in Form GSTR-2A
the tax is not reflected,
should not be a
sufficient ground to
deny the claim of ITC.

Diya Agencies v.
State Tax Officer
[2023] 154
taxmann.com 421
(Kerala)

The Court had observed that if supplier has not remitted the amount paid by the petitioner to him, the petitioner cannot be held responsible. Whether
the petitioner has paid the tax amount and the transactions between the petitioner and seller dealer are genuine are the matter on facts and evidence.
The petitioner must discharge the burden of proof regarding the remittance of tax to the seller dealer by giving evidence as mentioned in the Judgment
of the Supreme Court in 2023 (3) TMI 533 SC (The State of Karnataka v. M/s. Ecom Gill Coffee Trading Private Limited). If on examination of the
evidence submitted by petitioner, assessing officer is satisfied that claim is bonafide and genuine, petitioner should be given input tax credit. Merely
on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the assessee the claim of input tax credit

2

Section 16(4) is
constitutionally valid
and is not violative of
Articles 19(1)(g) and
Article 300-A of the
Constitution of India
and is not inconsistent
with or in derogation of
any of the fundamental
right guaranteed under
the Constitution of
India.

Gobinda
Construction v.
Union of India [2023]
154 taxmann.com
311 (Patna)

-The Court observed that ITC is not unconditional and a registered person becomes entitled to ITC only if the requisite conditions are fulfilled and
the restrictions contemplated Section 16(2) do not apply. One of the conditions to make a registered person entitled to take ITC is prescribed Section
16(4). The right of a registered person to take ITC under Section 16(1) becomes a vested right only if the conditions to take it are fulfilled, free of
restrictions prescribed under Section 16(2).
-The Court was of the view that provision under Section 16(4) is one of the conditions which make a registered person entitled to take ITC and by no
means it can be said to be violative of Article 300-A.
-It was argued that there is absence of any rationale behind fixation of a cut-off-date for filing of return. The Court did not find any merit in the
submissions so advanced, and outrightly rejected the submission.
-It was further observed that Fiscal legislation having uniform application to all registered persons and cannot be said to be violative of Article 19(1)(g)
of the Constitution and the question of such statutory provision being violative of Article 302 of the Constitution and in teeth of Article 13 of the
Constitution of India does not arise at all. The Court further stated that the submission that the requirement of Section 16(4) being directory and not
mandatory is not at all tenable in view of the clear language used in Section 16 of the Act. The concession of ITC under Section 16(1) is dependent
upon the fulfillment of requisite conditions laid down under various provisions including sub-section (4) thereof.
-Thus, Court held that Section 16(4) is constitutionally valid and is not violative of Articles 19(1)(g) and Article 300-A of the Constitution of India. The
said provision is not inconsistent with or in derogation of any of the fundamental right guaranteed under the Constitution of India

3

Claim of Input Tax
Credit raised by the
petitioner cannot be
sustained when the
supplying/selling dealer
has not paid up the
amounts to the
Government; despite
collection of tax from
the purchasing dealer.

Aastha Enterprises
v. State of Bihar
[2023] 153
taxmann.com 491
(Patna

-The Court by observing the decision of Apex Court in the matter of The State of Karnataka v. M/s. Ecom Gill Coffee Trading Private Limited stated
that the said decision can be distinguished especially looking at section 70 of the KVAT Act and also petitioner having to produce not only the invoices
but also the account details and the documents evidencing transportation of goods. However, this did not absolve the assessee from the rigor provided
under Section 16(2)(c). This provision in effect casts a burden of proof on the purchasing dealer who claims ITC, which is a right created under statute;
sustained only under the specific terms of the statute.
-The benefit to claim ITC is one conferred by the statute and if the conditions prescribed in the statute are not complied; no benefit flows to the
claimant.
-The contention of double taxation was negated by the Court since the claim was denied only when the supplier who collected tax from the purchaser
failed to pay it to the Government.
-Further contention raised was regarding measures provided to recover the collected tax, which selling dealer failed to pay to the Government. The
mere fact that there is a mode of recovery provided under the statute would not absolve the liability of the tax payer to satisfy the entire liability to the
Government. The purchasing dealer being the person who claims ITC could only claim the benefit if the supplier who collected the tax from the
purchaser has paid it to the Government and not otherwise.
-The Government definitely could use its machinery to recover the amounts from the selling dealer and if such amounts are recovered at a later
point of time, the purchasing dealer who paid the tax to its supplier could possibly seek for refund. However, as long as tax paid by the purchaser to
the supplier, is not paid up to the Government by the supplier; the purchaser cannot raise a claim of ITC under the statute.
-When supplier fails to comply with the statutory requirement, the purchasing dealer cannot, without credit in his account claim ITC and the remedy
available to the purchasing dealer is only to proceed for recovery against the seller. Even if such recovery from the supplier is affected by the purchasing
dealer; the State would be able to recover the tax amount collected and not paid to the exchequer, from the selling dealer since the rigor of provisions
for recovery on failure to pay up, after collecting tax, enables the Government so to do.
-Therefore, there should be credit available in the credit ledger of the purchaser to claim Input Tax and otherwise the claim would be frustrated. On
the above reasoning, it was held that the claim of ITC raised cannot be sustained when selling dealer has not paid up the amounts to the Government;
despite collection of tax from the purchasing dealer

Part-98-One Pager Snapshot to the Latest Cases on entitlement of ITC as per the provisions of Section 16 of CGST Act, 2017-Part-I

-Seller to be examined in case wherein supply of goods challenged
-Recovery to be first affected from the seller
-ITC to be given for transactions entered by the recipient before cancellation of registration of the supplier
-In absence of documents, mere reflection of credit in GST Records electronically is not sufficient.
-Section 16 to be followed strictly, substantive liability on supplier & protective liability on recipient. Mechanism to brought in place to address the same.
-SCN can be treated as a communication under Section 42(3) intimating mismatch between the ITC claimed by recipient and tax paid by the supplier
-Supporting document can be furnished in reply to the SCN that tax has been paid

98.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Case Subject

Case

Held

1

Seller to be examined
in case wherein supply
of goods challenged
Recovery to be first
affected from the seller

D.Y. Beathel
Enterprises v. State
Tax Officer (Data
Cell), Tirunelveli
[2021] 127
taxmann.com 80
(Madras)

The Court observed that if the tax had not reached the kitty of the Government, then the liability may have to be eventually borne by one party, either
the seller or the buyer. In the case on hand, Court observed that it did not appear that any recovery action has been taken against the seller. Also,
assessment of the seller was completed by excluding the subject transactions alone The Court was unable to appreciate the approach of the authorities
as when it has come out that the seller has collected tax from the purchasing dealers, the omission on the part of the seller to remit the tax in question
must have been viewed very seriously and strict action ought to have been initiated against him. Also further, apart in enquiry in question, seller ought
to have been examined and confronted, because respondent had taken a stand that the petitioners have not even received the goods and had availed
input tax credits on the strength of generated invoices. Thus, impugned orders were quashed and remitted back on account of non-examination of
seller and non-initiation of recovery action against the seller the first place.

2

ITC to be given for
transactions entered by
the recipient before
cancellation of
registration of the
supplier

LGW Industries Ltd.
v. Union of India
[2022] 134
taxmann.com 42
(Calcutta)

The writ petition was disposed of by remanding the matters to be considered afresh on the issue of their entitlement of benefit of input tax credit in
question. The authorities were directed to consider the documents which petitioners wanted to rely in support of their claim of genuineness of the
transactions in question and to consider as to whether payments on purchases in question along with GST were actually paid or not to the suppliers
(RTP) and also to consider as to whether the transactions and purchases were made before or after the cancellation of registration of the suppliers
and also consider as to compliance of statutory obligation by the petitioners in verification of identity of the suppliers (RTP). It was further directed
that if it is found upon consideing the relevant documents that all the purchases and transactions in question were genuine and supported by valid
documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration the
judgments of the Supreme Court and various High Courts which have been referred in this order and in that event the petitioners shall be given the
benefit of input tax credit.
Similar ratio also followed in Sanchita Kundu v. Assistant Commissioner of State Tax [2022] 142 taxmann.com 576 (Calcutta) and Gargo
Traders v. Joint Commissioner, Commercial Taxes (State Tax) [2023] 151 taxmann.com 270 (Calcutta).

3

In absence of
documents, mere
reflection of credit in
GST Records
electronically is not
sufficient.

Tvl. Ashok Trading
Co. v. State Tax
Officer, Inspection
Cell-III, Trichy [2022]
141 taxmann.com
227 (Madras)

The Court observed that the petitioner had no documents to substantiate a valid availing of input tax credit and mere reflection of the amounts in the
Goods and Service Tax records electronically is not sufficient. If credit is to be allowed and adjusted on such transactions, it would lead to unintended
benefits being conferred

4

Section 16 to be
followed strictly,
substantive liability on
supplier & protective
liability on recipient.
Mechanism to brought
in place to address the
same

Pinstar Automotive
India (P.) Ltd. v.
Additional
Commissioner
[2023] 149
taxmann.com 13
(Madras

The Court observed that the provisions of section 16 are to be observed strictly, such that, there is no jeopardy to the interests of the revenue. The
provisions of the statute has, assimilating wisdom of experience from the erstwhile tax regimes, gone one step further to ensure that the interests of
the revenue are protected by providing for a mandate that the tax liability is defrayed/met either at the hands of the supplier or the purchaser, the
petitioner in this case. Thus, no fault can be attributed to the revenue in this regard. An additional factor is that where the tax liability has been met by
way of reversal of ITC and similarly recovery is effected from the supplier as well, this would amount to a double benefit to the revenue. Thus, while
the Department may reverse credit in the hands of the purchaser, this has to be a protective move, to be reversed and credit restored if the liability is
made good by the supplier. Thus, the substantive liability falls on the supplier and the protective liability upon the purchaser. A mechanism must be
put in place to address this situation.

5

SCN can be treated as
a communication under
Section 42(3) intimating
mismatch between the
ITC claimed by
recipient and tax paid
by the supplier
Supporting document
can be furnished in
reply to the SCN that
tax has been paid

Mahendra Feeds
and Foods (Trading
Division) v. Deputy
Commissioner of
GST and Central
Excise [2022] 143
taxmann.com 248
(Madras)

It was contended by the revenue that ITC claimed by petitioner was a wrong claim because, there was a complete mismatch between the supplier
and the petitioner, as the supplier, in support of its outward tax has not paid the tax or not shown the same in their accounts, as if that they paid the
tax. It was contended on behalf of petitioner that under section 42(3) of GST Act there was an obligation on the part of Revenue to communicate to
both the supplier and recipient about mismatch of ITC. Once such a communication is issued under the rule in consonance with section 42(3), there
must be a procedure to be followed. However, since no such communication was issued and SCN was issued, which has also been responded by
the petitioner saying that the supplying dealer has paid the tax, it is a procedural violation.
The Court observed that the rectification would be possible at the hands of the petitioner who was the dealer who received the goods by way of input
supply, at least at the time of receipt of SCN issued in this regard by the Revenue. After receipt of the SCN, if at all the petitioner wanted to rectify the
mismatch, supporting documents to substantiate that output tax had been paid by the supplying dealer should have been procured and filed along
with the reply, which they failed to do. Therefore, technical reason that under section 42(3) it should have been communicated at the earliest point of
time and therefore SCN cannot be treated as communication intimating mismatch between the supplier and petitioner, cannot be countenanced

Part-97-One Pager Snapshot to the Latest Cases on Section 29, 50, 67, 75, 107, 122 and 140

-Opportunity of being heard be provided before an adverse order
-No Interest and Penalty for Transitional credit which could not have been availed due to technical glitches on portal maintained by the Government
-Appeal could not be dismissed as certified copy of order not produced
-No roving or fishing inquiries be conducted under the garb of authorisation U/Sec 67
-Opinion for cancellation of registration cannot be formed by DGGI

97.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Section

Case Subject

Case

Held

1

Section
75

Opportunity
of being
heard be
provided
before an
adverse
order

Tvl. Sree Amman
Metal Works v. State
Tax Officer
(Adjudication)-2
[2023] 154
taxmann.com 496
(Madras)

Petitioner challenged the impugned orders, apart from questioning them on merits, because of the objections filed by the petitioner were not taken
note of by the respondent and non-speaking orders was passed.
The Court observed that reading of the impugned orders did not imply the reasoning of the authority concerned. That apart, though adverse orders
were being passed against the petitioner, no opportunity of personal hearing was afforded to him, which was contemplated under section 75(4) of
the Central Goods and Services Act, 2017. Therefore, on this limited ground, without addressing the merits of the case, the Court allowed Writ
Petitions and set aside the impugned orders and remitted the matter back to the respondent

2

Section
140

No Interest
and Penalty
for
Transitional
credit which
could not
have been
availed due
to technical
glitches on
portal
maintained
by the
Government

Nithya Packaging (P.)
Ltd. v. Assistant
Commissioner of GST
and Central Excise
[2023] 154
taxmann.com 494
(Madras)

Petitioner faced difficulty in transitioning ITC on capital goods and communicated with Department and officials named on Web Portal. However,
he was unable to transfer the transitional credit. Thereafter, petitioner decided to avail such Credit. The credit was confirmed by Sanction Order
(Tran-1 Credit) dated 20-2-2023. Meanwhile, proceedings were initiated to recover the amounts from the petitioner, which culminated in the
impugned order. By the impugned order dated 28-3-2023, officer had imposed penalty and interest on the petitioner under section 50 and Section
73(9) read with Section 122(2)(a). The impugned order was passed as petitioner filed a revised return in terms of the decision of Bombay High Court
in Chep India Private Limited v. Union of India and others dated 27-6-2022 and decision of the Hon'ble Supreme Court in Union of India and
another v. FILCO Trade Centre Private Limited dated 22-7-2022, claiming ITC, which was earlier sanctioned by the Sanction Order (Tran-1 Credit)
dated 20-2-2023. The only point that arose for consideration was whether petitioner could be mulcted with interest and penalty even though the
credit which was taken was sanctioned and merely because the petitioner had also filed returns to transition the same credit.
The Court observed that petitioner was entitled to Rs. 11,06,396/- on the eve of implementation of GST with effect from 1-7-2017 and by Sanction
Order (Tran-1 Credit) dated 20-2-2023, proper officer had confirmed that petitioner was entitled to the aforesaid transitional credit. Therefore, merely
because petitioner had filed subsequent return and had given up the same would not mean that petitioner could be subjected to pay interest and
penalty. The difficulty arose only on account of technical glitches in the web portal maintained by the Central Government at the time of
implementation of GST. The petitioner cannot be penalized as the credit itself was allowed after the implementation of GST by Sanction Order (Tran1 Credit) dated 20-2-2023. Therefore, order seeking to impose interest and penalty on the petitioner was held to be unsustainable and thus quasshed

3

Section
107

Appeal could
not be
dismissed as
certified
copy of order
not produced

KPMG India (P.) Ltd.
v. Joint Commissioner
of State Tax (Appeals)
[2023] 154
taxmann.com 492
(Punjab & Haryana)

Petitioner contended that they had filed appeal along with digitally uploaded order on the common portal and hence, appeal could not be dismissed
on the ground that certified copy was not attached with the appeal.
The Court observed that since uploaded copy was already part of the appeal, it would amount to substantial compliance of Rule 108 and Joint
Commissioner would not dismiss the appeal by impugned order on the ground that appellant had not submitted certified copy of order impugned
therein. Since fact was further clarified by notification dated 25-1-2023 whereby it has been clarified if an order against which appeal has been filed
is uploaded on common portal, then final acknowledgement shall be considered as date of filing of the appeal. The writ petition was thus allowed

4

Section 67

No roving or
fishing
inquiries be
conducted
under the
garb of
authorisation
U/Sec 67

Bhagat Ram Om
Prakash Agro (P.) Ltd.
v. Commissioner of
Central Tax, GST
[2023] 154
taxmann.com 491
(Delhi)

Petitioner contended that the search authorisation was illegal as the same was issued without proper officer having any reason to believe that
conditions as specified under Section 67(1) of CGST Act, 2017. Petitioner stated that search was conducted in view of directions issued by the
Special Judge (P.C. Act) to Income Tax Department, GST Department, and Enforcement Directorate to check source of Rs. 50,00,000/- received
by petitioners. Petitioner no.2 purchased a property from one Mr. Rajesh Kumar Anand for a sum of Rs. 50,00,000/-. Mr. Rajesh Kumar Anand had
deposited the said consideration in a fixed deposit receipt which was offered as a collateral for securing the bail of Sh. Kapil Wadhawan and others.
The Court issued notice to the revenue but at the same time observed that they had serious reservations whether any such roving and fishing
inquiry under the CGST Act, 2017 could have been directed to be conducted by the Special Judge. Further, the proper officer can authorise the
search only if the conditions specified in Section 67 of the Act are fulfilled.

5

Section
29

Opinion for
cancellation
of
registration
cannot be
formed by
DGGI

Muhammad Salmanul
Faris k v.
Superintendent,
CGST & Central
Excise [2023] 154
taxmann.com 414
(Kerala)

Deputy Director, DGGI, Kochi Zonal Unit has requested the Range Officer, Ottapalam to cancel GST registration of the petitioner and petitioner
was given a personal hearing by the proper officer on 27-3-2023. However, petitioner did not appear on the said date and new date was fixed on
19-4-2023. The petitioner did not appear for the said hearing on 19-4-2023 and therefore, impugned order for cancellation of the GST registration
of petitioner was passed. The petitioner contended that when DGGI Cochin Unit has already taken a decision and directed for cancellation of the
GST registration of the petitioner, the competent authority could not have taken a decision contrary to the said direction issued by the higher authority.
The Court observed that considering the aforesaid submissions, there was no denial of fact that the DGGI, Kochi Zonal Unit has already taken the
decision for cancelling the GST registration of the petitioner and the proper officer was only required to form the formalities and could not have taken
an independent decision. Therefore, the impugned order was set aside and remanded back for decision on merits. However, the said order was not
revived further for a period of one month

Part-96-One Pager Snapshot to the Latest Cases on Section 67,73,107 and 129 of CGST Act, 2017

-Issue of prohibitory order under Section 67(2) not a stop gap arrangement to decide whether to seize goods or not
-Notice issued after six months from date of prohibition not invalid but goods to be returned in view of Section 67(7)
-Order passed without recording contentions and without discussion on the issues raised by Petitioner quashed
-SCN Issued without containing any reason for the allegations made
-Circular No. 76 Dated 31st Dec’ 18 to be considered while deciding levy of penalty U/Sec 129(1)(a)/(b)
-Failure to consider submissions of the petitioner by the proper officer and the appellate authority

96.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Section

Case Subject

Case

Held

1

Section
67

Issue of prohibitory
order under
Section 67(2) not a
stop gap
arrangement to
decide whether to
seize goods or not
Notice issued after
six months from
date of prohibition
not invalid but
goods to be
returned in view of
Section 67(7)

Best Crop
Science (P.)
Ltd. v.
Superintendent,
CGST [2023]
154
taxmann.com
476 (Delhi)

The Court considered Section 110 of Customs Act which it held to pari-materia to Section 67 of CGST Act, 2017. It further observed that action for
seizure of the goods is required to be predicated on a reason to believe that the goods are liable for confiscation. This condition was required to be
satisfied, before passing any order under the proviso to Section 67(2) of the CGST. The first proviso to Section 67(2) permits to pass an order
prohibiting tax payer from parting with the goods in cases where goods were liable for seizure, but is not practicable to do so. Order of prohibition is
not a stop gap arrangement for the department to take an informed decision whether to seize goods or not seize goods.
Further regarding provision of Section 67(7) wherein concerned authorities are required to return the seized goods if a notice is not issued within
a period of six months; high court stated that the contention that the although goods are required to be returned but order of prohibition can continue
indefinitely was held to be militating against the scheme of Section 67 of the CGST Act.
However, for the contention that the impugned show cause notice was liable to be set aside because it was not issued within the period of six
months from the date of the order of prohibition was held to be unmerited. The consequence of Sub-section (2) of Section 67 of the CGST Act merely
provides that if no notice is issued within the stipulated period, the goods seized were liable to be returned. It did not postulate that the notice, issued
after six months, was invalid. Thus, petitioner's challenge to the impugned show cause notice on the ground that it was issued after six months of the
order of prohibition was rejected.

2

Section
73

Order passed
without recording
contentions and
without discussion
on the issues
raised by Petitioner
quashed

Savvy Fabrics
v. Union of India
[2023] 154
taxmann.com
451 (Bombay)

Petitioner contended that the impugned order was illegal, inasmuch as, although a detailed reply to the show cause notice was submitted by the
Petitioner as also a personal hearing was granted to the Petitioner, the impugned order did not record any reasons/findings regarding such contentions
as urged by the Petitioner. It was further stated that there was no invocation of Section 122 in SCN regarding penalty.
The Court observed that in the impugned order, in the paragraph titled "findings", none of the contentions as urged by the Petitioner were recorded
as also there was no discussion whatsoever on the issues as raised by the Petitioner. This more particularly, when the impugned order raises a
demand against the Petitioner on interest payable under section 50(3) as also a penalty being imposed under section 122 of the CGST/SGST Act,
2017 read with Section 73(9). Thus, impugned order was quashed with liberty to issue fresh SCN

3

Section
29

SCN Issued
without containing
any reason for the
allegations made

Rahul Kumar
Jain v. Union of
India [2023] 154
taxmann.com
450 (Delhi)

SCN merely alleged that petitioner's GST registration was proposed to be cancelled on account of fraud, wilful misstatement or suppression of facts;
however, it did not provide any specific reason and it did not provide any clue as to the facts which were allegedly suppressed. Petitioner responded
by denying the allegations and also asked why and on what grounds, department alleged that they have taken registration by means of fraud, wilful
misstatements or suppression of facts so that they can submit defence and detailed reply in this regard.
The Court observed that it was evident that petitioner had no clue as to why its GST registration was sought to be cancelled and petitioner's request
for providing further specific grounds was not acceded to and no further information was provided to the petitioner. Thus, impugned order was quashed
being devoid of any reason as it only reiterated that it was order for cancellation of registration in reference to the SCN

4

Section
129

Circular No. 76
Dated 31st Dec’ 18
to be considered
while deciding levy
of penalty U/Sec
129(1)(a)/(b)

Western Carrier
India Ltd. v.
State of U.P.
[2023] 154
taxmann.com
449 (Allahabad)

Petitioner was aggrieved by the order whereby liability was fixed upon it to pay penalty in terms of Section 129(1)(b). It was stated that the goods
transported were accompanied by E-Way bill and invoice etc. and authorities erred in imposing penalty upon petitioner inasmuch as by virtue of
Circular No.76/50/2018 dated 31st December 2018, petitioner was liable to be treated as owner of the goods and consequently provision of section
129(1)(a) alone could have been invoked.
The Court stated that goods in transit were carrying necessary documents in the form of E-Way bill and invoice etc, therefore, department ought to
have considered the petitioner's prayer for release of goods and vehicle upon compliance of the provisions contained U/s 129 (1) (a). Thus, direction
was issued to act in terms of the Circular and release goods upon compliance of conditions stipulated U/s 129(1)(a).

5

Section 107

Failure to consider
submissions of
petitioner by proper
officer and
appellate authority

KS
Commodities
(P.) Ltd. v.
Assistant
Commissioner
[2023] 154
taxmann.com
447 (Delhi)

The petitioner filed a refund application. SCN was issued to the assessee and which was duly responded. The Adjudicating Authority considered
the reply but rejected the petitioner's application for refund, inter alia, on the ground that the petitioner was unable to co-relate the input supplies
respect of which ITC refund claim was made and the export of the commodities. The petitioner appealed against the said order, however, same was
rejected by impugned order. The petitioner contended that although required proofs were submitted but neither Order-in-Original nor the impugned
order passed by Appellate Authority discussed the material produced by the petitioner.
The Court observed that none of the said orders indicated any reason as to why authorities did not consider the said material to be relevant for
establishing that input supplies in respect of which refund was claimed, were directly corelated to export of sugar. In view of the above, impugned
order was set aside and appeal restored with Appellate Authority to examine the material relied upon and to state the reasons if he was of the view
that evidences on record cannot be corelated to the export of sugar as claimed by the petitioner

Part-95-Snapshot to the Judgment “S. Sundaram Pillai, Etc vs V.R. Pattabiraman 1985 SCR (2) 643 (SC)” for Interplay of Explanation, Proviso & meaning of term “wilful default”

Usually, Judgements of Apex Court discusses in detail about one principle in Law but sometimes, one comes across Judgement, wherein not one or two but multiple principles are explained and it’s a treat to read such Judgements. Sharing today one such judgement S. Sundaram Pillai, Etc vs V.R. Pattabiraman 1985 SCR (2) 643 (SC) which is although for Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 but explains in the most beautiful way

a) Implications of Proviso and Explanation,
b) Interplay where Provision contains both Proviso and Explanation to Proviso,
c) Meaning of Wilful, and
d) Instances which can be considered as wilful and not wilful.

It would be a treat to read the Judgement for the Sheer Principles laid down for Interpretation (even one might not be concerned with Tamil Nadu Buildings (Lease and Rent Control) Act, 1960) and my Snapshot is an attempt to summarise the Judgement..

95.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Held

1

Question of Law-The appeals involved point of law relating to the interpretation of the term 'wilful default' appearing in the proviso to section 10 (2) of the Tamil Nadu Buil dings (Lease and Rent Control)
Act, 1960 as the 'Act') coupled with the Explanation which seeks to explain the intent or the proviso

2

Provision Involved-(2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing
cause against the application, is satisfied-
(i) that the tenant has not paid or tendered the rent due by him in respect of the building, within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in
the absence of any such agreement, by the last day of the month next following that for which the rent is payable, or..
Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant's default to pay or tender rent was not willful, he may, notwithstanding anything contained in section 11, give
the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application
shall be rejected.
[Explanation. - For the purpose of this sub-section, default to pay or tender rent shall be construed as willful, if the default by the tenant in the payment or tender of rent continuous after the issue of
two months' notice by the landlord claiming the rent

3

Meaning of Wilful Defauler explained -Thus, a consensus of the meaning of the words 'wilful default' appears to indicate that default in order to be wilful must be intentional, deliberate, calculated and
conscious, with full knowledge of legal consequences flowing therefrom. Taking for instance a case where a tenant commits default after default despite oral demands or reminders and fails to pay the
rent without any just or lawful cause, it cannot be said that he is not guilty of wilful default because such a course of conduct manifestly amounts to wilful default as contemplated either by the Act or by
other Acts referred to above.
Reference to the decision in Khivraj Chordia v. G. Maniklal Bhattad AIR 1966 Madras 67 to highlight difference between a simple default and wilful default-The decisions of this court have
reportedly pointed out that there is a clear difference in law between default and wilful default and that non-payment of rent within the time specified by the Act, though would amount to default, cannot
by itself be treated as wilful default, and that if the rent was paid after the expiry of the time in the following month within a short time thereafter, the default cannot be said to be wilful to warrant the
punishment of eviction. Keeping in mind the main object of the enactment, namely prevention of unreasonable eviction of tenants, the principle that emerges from the several decisions is that for
default to be regarded as wilful default, the conduct of the tenant should be such as to lead to the inference that his omission was a conscious violation of his obligation to pay the rent or reckless
indifference. If the default was due to accident or inadvertence or erroneous of false sense of security based upon the conduct of the landlord himself, the default cannot be said to be wilful default. It is
not possible to lay down any hard and fast rule applicable to all cases. But the basic and essential distinction between mere default and wilful default should be borne in mind and the totality and
cumulative effect of all the circumstances should be taken into account and not any particular feature of the case in isolation. In certain cases the prior conduct of the tenant consisting of chronic defaults
taken along with a totally false and reckless plea of discharge or any other wholly untenable plea may amount to wilful default. But at the same time, certain pleas raised by the tenant, but negatived by
the court on assessment of the evidence adduced by the landlord and the tenant, may constituted proof of bona fides on the part of the tenant, as to rule out any theory of wilful default.

4

How to Interpret Proviso Explained-The well established rule of interpretation of a proviso is that a proviso may have three separate functions. Normally, a proviso is meant to be an exception to
something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment In other words, a proviso cannot be torn apart from
the main enactment nor can it be used to nullify or set at naught the real object of the main enactment. In short, generally speaking, a proviso is intended to limit the enacted provision so as to except
something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes an integral part of
it so as to amount to a substantive provision itself

5

How to Interpret Explanation Explained-The object of an Explanation to a statutory provision is-(a) to explain the meaning and intendment of the Act itself,
(b) where there is any obscurity or vagueness in the main enactment, to clarify the same so a- to make it consistent with the dominant object which it seems to subserve,
(c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful,
(d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the
mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and
(e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in interpretation of the same

6

Reading provision of 10(2)(i)-To begin with, s. 10 (2) (i) of the Act lays down that where the Controller is satisfied that the tenant has not paid or tendered the rent within 15 days after the expiry of the
time fixed in the Agreement of tenancy or in the absence of any such Agreement, by the last date of the month next following that for which the rent is payable, he (tenant) undoubtedly commits a default.
Two factors mentioned in s.10 (2) (i) seem to give a clear notice to a tenant as to the mode of payment as also the last date by which he is legally supposed to pay the rent.

7

Combined interpretation of Explanation and Proviso-We express our view in the matter in the following terms: (1) Where no notice is given by the landlord in terms of the Explanation, the Controller,
having regard to the four conditions spelt out by us has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful. If he feels that any of the
conditions mentioned by us is lacking or that the default was due to some unforeseen circumstances, he may give the tenant a chance of locus paenitentiae by giving a reasonable time, which the statute
puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected.
(2) If the landlord chooses to give two months' notice to the tenant to clear up the dues and the tenant does not pay the dues within the stipulated time of the notice then the Controller would have no
discretion to decide the question of wilful default because such a conduct of the tenant would itself be presumed to be wilful default unless he shows that he was prevented by sufficient cause or
circumstances beyond his control in honouring the notice sent by the landlord

Part-94-Snapshot to “How and why Land and Building was included in Schedule III in GST”

5th GST Council Meeting-Agenda 2A of the Meeting
5th GST Council Meeting-Why it was advocated to bring land and building under the GST Net as part of Agenda
7th GST Council Meeting- Tax on Sale of Land and Building deferred for a year
11th GST Council Meeting-Reason behind inclusion of Land and Building in Schedule III

94.-Daily-Round-up-to-the-Latest-CasesDownload

S.No

Case

Held

1

5
th GST Council
Meeting-Agenda 2A

Para 2.2 of the Agenda stated as follows: Under the GST regime, it is proposed to subject supply of goods or services to GST. Goods have been defined under the
Constitution to include “all materials, commodities and articles”. Likewise, services have been defined under the Constitution “as anything other than goods”. Goods and
services tax have been defined in the Constitution to mean “any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human
consumption”. Supply has been defined in the model GST law in the broadest possible sense and includes sale

2

5
th GST Council
Meeting-Why it was
advocated to bring land
and building under the
GST Net

Para 2.4. of the Agenda stated as follows-Thus, supply of immovable property (land and buildings) has been kept outside the purview of GST. It is felt, that this would
distort the GST particularly when there is no constitutional or legal impediment to levy GST on supply of land and building to GST due to the following reasons:
(i) Stamp duty, which is levied under Article 268, is with reference to documents and is collected by the Centre on documents listed in Entry 91 of the Union List
while by the States on documents listed in Entry 63 of the State List. Therefore, the argument that because legal conveyance of title of land and buildings
attracts stamp duty, they cannot be subjected to GST is facile because stamp duty is levied on documents while GST would be levied on the supply of land
and buildings, whether as goods or services (“aspect theory” upheld by the Supreme Court in a host of judgements). Renting/leasing of land and buildings
are subjected to service tax presently. Documents pertaining to such renting/leasing are subjected to stamp duty.
(ii) Entry 49 of the State List reads thus: - “Taxes on lands and buildings”
It is felt that this entry is not an impediment to levy of GST on supply of lands and buildings because of the “aspect theory” upheld by the Supreme Court: while the stock
of lands and buildings is subjected to tax by the States on the aspect of possessing land and buildings, the supply aspect can be subjected to GST.
(iii) ..
(iv) ..
(v) Further, though service tax and VAT are charged generally @ 4.5% and 1% of the value of the flat (which includes the value of the undivided share of land) respectively,
there are embedded taxes in the flat. The total tax incidence in respect of flats in nonmetros is more than that in metros. In fact, where the value of land is less, the
incidence of service tax and VAT is more (embedded taxes). GST on supply of land and building will equalize the tax incidence in respect of houses in metros
and non-metros.
(vi) Without levying GST on supply of land and building, it would be very difficult to complete the input tax credit chain (ITC) and allow ITC in respect of construction services
and construction material used in creation of immovable property which is further used for carrying out taxable activities. This is highly distortionary. While at the behest
of business and industry, the ITC chain would get liberalized, the tax administration would forever be saddled with non-completion of ITC chain thereby
resulting in disincentives to obtain taxable invoices for availing input tax credit. Non inclusion of land and building in GST results in cascading of taxes.
(vii) …
(viii) Land and building are not on the same footing as alcoholic liquor for human consumption as the latter is constitutionally outside the definition of goods and
services tax (para 2.2 above).

3

7
th GST Council
Meeting- Tax on Sale
of Land and Building
deferred for a year

GST Council in its 7th Meeting Concluded as follows-In view of the Discussion above for Agenda item 2A, the Council decided not to introduce GST on land and building
at this stage and agreed that this issue could be revisited after a year or so the implementation of GST.

4

11
th GST Council
Meeting-Reason
behind inclusion of
Land and Building in
Schedule III

Para 6.11-The Deputy Chief Minister of Delhi referred to his letter dated 4 March, 2017 addressed to the Hon'ble Chairperson and copies sent to all the Hon'ble Members
pointing out that designating the sale of land and sale of buildings (subject to certain exceptions), neither as supply of goods nor a supply of services (in Schedule
III of the draft CGST Law) would lead to a break in the input tax credit chain and it would be a very big missed opportunity to curb the flow of black money..
Para 6.12-The Secretary observed that as per the decision in the 7th Meeting of the Council, this issue was to be reconsidered after one year of implementation of GST
and if there was an agreement at that time to bring sale of land and building under GST, it would require amendment to Schedule Ill. He therefore suggested that
presently sale of land and building could be exempted through a notification instead of incorporating it in the law. CCT, Karnataka stated that if a decision was
taken to bring sale of land and building in GST, then several amendments would be required in the law such as Section 16 dealing with eligibility and conditions
for taking input tax credit. He therefore suggested that the entry regarding sale of land and building should not be removed from Schedule III. The Hon'ble
Chairperson stated that this issue could be taken up for decision after one year of implementation of GST. The Hon'ble Minister from Uttar Pradesh suggested to retain the
decision taken in the 7th Meeting of the Council. The Hon'ble Minister from Andhra Pradesh stated that they would further study the proposal made by the Hon'ble Deputy
Chief Minister of Delhi. The Council decided to retain the decision taken in the in Meeting of the Council (held on 22-23 December, 2016).