| | | |
| Rule 142(1)(a) is
no manner in
conflict with any
provisions of the
Act in view of
powers conferred
under Section 164 | Mahavir Enterprise
v. Assistant
Commissioner of
State Tax [2020] 117
taxmann.com 471
(Gujarat) (22-06-
2020) | It was contended that Rule 142(1)(a) travels beyond the provisions of the Act when it provides for procedure to issue Notice for Section 122. Thus, Rule
142(1)(a) deserves to be declared as ultra vires being in excessive delegation of the powers.
The Court observed that Section 164 provides for the power to make rules and confers power on the Central Government to frame the rules to make rules
generally to carry out all or any of the purposes of the Act. Thus Rule 142(1)(a) is valid and is no manner conflict with any of the provisions of the Act in
view of the powers conferred under Section 164. The challenge to the validity of Rule 142(1)(a) was denied.
Cases Referred- Registrar, Co-operative Societies v. K. Kunjabmu, AIR 1980 SC 350 and State of Nagaland v. Ratan Singh, AIR 1967 SC 212, St. Johns
Teachers Training Institute v. Regional Director, National Council for Teacher Education AIR 2003 SC 1533, Ajay Canu v. UOI, AIR 1988 SC 2027. |
| No Penalty in the
matter of
Classification
Disputes | Atlantic Care
Chemicals (P.) Ltd.
v. Superintendent
Central Tax &
Central Excise
[2023] 155
taxmann.com 3
(Kerala) (07-09-2023) | During assessment period from April 2020 to June 2021, petitioner manufactured hand sanitizers and classified under the Tariff heading 30049088 and
declared tax liability @ 12% applicable to medicament. However, later on 5-7-2022 action was initiated under section 74(1) by issuing a SCN that
classification was under Hand Sanitizers (alcohol based) under HSN 3808 exigible to GST @ 18%. In pursuant to the SCN, order was passed and petitioner
paid assessed amount along with interest. petitioner was not disputing the said liability, he was only aggrieved by the initiation of the penalty proceedings.
The court referred to the judgement in Chakkiath Brothers v. Assistant Commissioner [2014 (3) KLT 222], wherein it was held that for a mere dispute in
classification, no penalty proceedings can be initiated and Court observed that since in the present case also there was a dispute of classification and the
authority had not considered the said judgment. Thus, the matter was remanded back for a fresh order in accordance with law, after taking into consideration
the Judgment in the case Chakkiath Brothers v. Assistant Commissioner (supra). |
| 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) | n 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 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. |
| 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) (03-07-
2023) | 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 (Tran-1 Credit) dated 20-2-2023.
Therefore, order seeking to impose interest and penalty on the petitioner was held to be unsustainable and thus quashed |
| To Levy Penalty
U/Sec 122(2)(a),
procedure U/Sec
73 is 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 |
