GST Caselaw

#GSTCase-59-Gist of High Court Decisions- No condonation of delay in filing of appeal beyond the period of thirty days however high court accepted Jurisdiction of the writ Court against the order, Validity of Single E-way Bill for multiple invoices, Attachment of Bank Account of Directors for non-recovery of dues from company, Unsealing of the premises on cooperation by the petitioner, Permission to correct bonafide errors in TRAN-1.

#GSTCase-59-Gist of High Court Decisions- No condonation of delay in filing of appeal beyond the period of thirty days however high court accepted Jurisdiction of the writ Court against the order, Validity of Single E-way Bill for multiple invoices, Attachment of Bank Account of Directors for non-recovery of dues from company, Unsealing of the premises on cooperation by the petitioner, Permission to correct bonafide errors in TRAN-1.

 

Case-1: Stove Kraft (P.) Ltd. v. Assistant State Tax Officer [2019] 103 taxmann.com 27 (Kerala)

Case-2: H.M. Industrial (P.) Ltd. v. Commissioner, CGST and Central Excise [2019] 102 taxmann.com 410 (Gujarat)

Case-3: Pragati Automotion (P.) Ltd. v. Union of India [2019] 102 taxmann.com 468 (Karnataka)

Case-4: Steel Hypermart India (P.) Ltd. v. Additional Commissioner of Commercial Taxes, Bangaluru [2019] 103 taxmann.com 16 (Karnataka)

Case-5: Shanti Eat Udyog Surir Kala, Tehsil Mant District Mathura v. State of U.P [2019] 102 taxmann.com 338 (Allahabad)

 

Case-1: Stove Kraft (P.) Ltd. v. Assistant State Tax Officer [2019] 103 taxmann.com 27 (Kerala)

Issue: Single E-way Bill Generated for Three Invoices

Facts: Petitioner is a dealer. The goods and vehicle have been detained; in the e-way bill generated, petitioner has shown three invoices. Noting that separate e-way bill will have to be generated to each of the invoices, goods have been detained.

Held: It is to be noted that, it is not a case where e-way bill does not mention all the invoices. There may be practical difficulty for the Department in tracking the invoices, when multiple number of invoices mentioned in the e-way bill generated. High Court Directed that goods and vehicle shall be released to the petitioner on executing a simple bond.

 

Case-2: H.M. Industrial (P.) Ltd. v. Commissioner, CGST and Central Excise [2019] 102 taxmann.com 410 (Gujarat)

Issue: Attachment of Bank Accounts of Directors unless nonrecovery is attributed to any gross neglect, misfeasance or breach of duty on their part in relation to the affairs of the company

Facts: Respondent had, inter alia, attached bank accounts of directors of petitioner-company by the impugned orders of provisional attachment of the property under section 83 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “the CGST Act”).

Held: Reliance placed upon section 83 of the Act is thoroughly misconceived inasmuch the same relates to recovery of any tax, interest or penalty due from a private company in respect of supply of goods or services. Moreover, even if such amount cannot be recovered from the private company, the directors of the company do not ipso facto become liable to pay such amount and it is only if the director fails to prove that nonrecovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company, that the same can be invoked. However, in any case, at this stage, section 83 of the Act does not apply to the directors of the private company.

Under the circumstances, the impugned orders of attachment, to the extent the same attach the bank accounts of the directors are concerned, are totally without any authority of law. In these circumstances, the respondents are directed to forthwith release the attachment of the following bank accounts.

 

Case-3: Pragati Automotion (P.) Ltd. v. Union of India [2019] 102 taxmann.com 468 (Karnataka)

Issue:  Permission to correct the bona fide error which had crept in while filing the Form GST TRAN-1 because of which petitioner deprived of transitional credit of an amount of Rs. 9.74 crores in its electronic credit ledger

Facts: It is the contention of the petitioner that after the GST regime has been implemented in India, the petitioner filed GST TRAN-I claiming credit of Rs. 9,74,57,802/- in Column – 5 of Table 5(a) of Form GST TRAN – 1 well within the time prescribed by the statute. Revised Form GST TRAN – 1 was filed by the petitioner on 27.12.2017 after including the details of goods sent to job worker and held in his stock on behalf of the principal manufacturer in terms of Section 141 of CGST Act credit pertaining to job work. However, credit claim was indicated only in Column – 5 of Table 5(a) but not in Column – 6. The electronic credit ledger reflected credit of Rs. 5,89,346/-. The petitioner made several complaints before the Nodal Officer, but the same has not been considered so far.

Held: It is hardly required to be stated that the Nodal Officer appointed under the Central Goods & Services Tax (CGST) and State Goods & Services Tax (SGST) Acts is obligated to consider the complaint of the petitioner and take a decision in the matter. However, the same has not been done, therefore High Court directed the respondent-Nodal Officer to consider complaint/representation made by the petitioner at Annexures-H and K to the writ petition and take a decision in accordance with law in an expedite manner and is ordered accordingly.

 

Case-4: Steel Hypermart India (P.) Ltd. v. Additional Commissioner of Commercial Taxes, Bangaluru [2019] 103 taxmann.com 16 (Karnataka)

Issue: Unsealing of the premises subject to co-operation in inspection/search by the petitioner

Facts: Respondent officers along with team of officers visited registered office of petitioner at Jigani, Anekal Taluk, Bengaluru.

Contention of the Petitioner: Respondent issued authorization of search on 08.01.2019 on a suspicion that the directors would be involved in circular trading with other companies located in Bengaluru and Hosur. Mere suspicion is not suffice for issuing any authorization. The authorization order does not authorize the officer who had pass the order impugned, under Section 67[4] of the Act. It was further contended that Section 67 [4] of the Act does not empower the respondent to seal the business premises since access to the business premises was not denied by the petitioner as reflected in the order impugned.

Contention of the Respondent: Books of accounts of some other companies were maintained in the premises where the inspection was carried on. However, computer system wherein business transaction of company was stored, including tally software stopped functioning all of a sudden along with internet connection abruptly. In the absence of tally information and internet connection, complete verification of the books of accounts of the company was not possible as the same was maintained in the tally software in the server. The directors of the petitioner company did not put any efforts to set out the said disruption. There being denial of access to the computer system, Section 67[4] was invoked to seal the premises in question.

Held: Additional Government Advocate present before the Court, submitted that premises of petitioner company in question shall be unsealed/de-sealed in the presence of the petitioner on any date convenient to the petitioner subject to the petitioner co-operating for inspection/search of the computer system and other records available in the premises. In the circumstances, High Court was of the considered view that the justice would be sub-served in directing the Revenue to unseal the premises in question on 05.02.2019 at 11.00 a.m., which is convenient to the petitioner and the petitioner shall co-operate for inspection/search of the premises in question, including the computer system.

 

Case-5: Shanti Eat Udyog Surir Kala, Tehsil Mant District Mathura v. State of U.P [2019] 102 taxmann.com 338 (Allahabad)

Issue: Condonation of delay beyond thirty days not allowed however high court accepted Jurisdiction of the writ Court against the order

Facts: The first appeal filed by petitioner against order dated 03.12.2018 was beyond the period for which delay may have been condoned, by about nine days.

Observation by the Court: Period of limitation to file a first appeal under Section 107 of the U.P. Goods and Services Tax Rules, 2017 is three months and the period for which the delay may be condoned is thirty days from the expiry of normal period of limitation. Clearly, no application for condonation of delay may have been entertained by the appellate authority beyond a period of thirty days from the date of expiry of normal period of limitation (three months).

In view of the decision of Supreme Court IN case of Singh Enterprises v. CCE [2008] 12 STT 21 (SC) paragraph no. 8 as also the Full Bench decision of this Court in CIT v. Mohd Farooq [2009] 184 Taxman 191/317 ITR 305, the delay condonation application filed beyond the period of thirty days could not be condoned and it was clearly not maintainable by the appellate authority.

 Held:

  • Condonation of Delay not allowed: There is no error in the order of the appellate authority dismissing the appeal as time barred.
  • Jurisdiction of the writ Court against the order accepted: Learned counsel for the petitioner then submitted that if the remedy of appeal is held to be non-existant, still jurisdiction of the writ Court against the original order dated 03.12.2018 may not be ousted. High Court accepted the contention of the petitioner and issued notices to the respondents. Learned Standing Counsel has accepted notices on behalf of the respondents. In the meanwhile, subject to the petitioner depositing 50% of the disputed amount of tax and furnishing security for the balance amount of disputed tax in the shape of other than cash and bank guarantee within a period of one month from today, further recovery proceedings initiated against the petitioner shall remain stayed.
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