#cgst Archives - Prime Legal

4 Jun

The amount accumulated in the Fund is to be utilized in terms of Section 58 for welfare of consumer : Delhi High Courtss.

Prime Legal

Blog #cgst, #Delhi HC, #Funds

CASE TITTLE: SVERA AGRO LIMITED V COMMISSIONER OF CENTRAL TAX AND GST, GST DELHI

CASE NO: W.P.(C) 11926/2023 & CM. APPLS. 46666/2023, 711/2024

ORDER ON: 29.02.2024

QUORUM: JUSTICE SANJEEV SACHDEVA, JUSTICE RAVINDER DUDEJA

FACTS OF THE CASE:

The facts leading to the present petition in question is that, the Petitioner seeks a direction to the respondent to sanction the Refund claim of the petitioner for the period August 2020 to March, 2021. Petitioner further seeks withdrawal of the deficiency memos Issued by the respondent in response to the refund claim of the Petitioner for the period May, 2019 to July, 2019.

LEGAL PROVISIONS:

Section 54 of the Central Goods and Services Tax Act, 2017 talks about Refund of tax

Section 57 the Central Goods and Services Tax Act, 2017 provides for constitution of a Consumer Welfare Fund

CONTENTIONS OF PETITIONER:

The petitioner through their counsel submits that the refund Application was being rejected by issuing deficiency memos requiring The petitioner to furnish a certificate issued by the Chartered Accountant in terms of Rule 89 (2)(l) (m) of the Central Goods and Services Tax Rules, 2017.

CONTENTIONS OF THE RESPONDENT:

The Learned counsel for respondent submits that the Circular No.125/44/2019 dated 18.11.2019 requires the assessee seeking refund Of unutilized Input Tax Credit to furnish a self-declaration under Rule 89(2)(l) if the amount claimed is less than Rs.2 lakh, otherwise furnish A certificate as required under Rule 89(2)(m).

COURTS ANALYSIS AND JUDGEMENT:

The court on considering the facts and contentions of the counsel opined that Section 57 provides for constitution of a Consumer Welfare Fund. The amount accumulated in the Fund is to be utilized in terms of Section 58 for welfare of consumer. Section 54 sub-section (8) stipulates that notwithstanding Anything contained in sub-section (5), the refundable amount instead Of being credited to the Fund is to be paid to the applicant if such Amount is relatable inter-alia to refund of unutilized Input Tax Credit Under sub-section (3).the court further contented that the deficiency memos issued To the petitioner, requiring the petitioner to furnish a certificate of the Chartered Accountant are not sustainable.hence the court accordingly set Aside. We are informed that pending these proceedings the court further contended that Since part of the amount was denied on account of deficiency Memos, which we have not found to be sustainable in view of the Proviso to Rule 89 (2) (l)(m), the court further holds that petitioner is entitled to Interest on the delayed refund in terms of Section 56 of the Central Goods and Service Tax Act, 2017 at the rate notified by the Government within a period of four weeks from today. the court further noticed that the submission of learned counsel For the petitioner that the online portal of the respondent Was not accepting the refund applications and this Court had permitted The petitioner to file the refund applications for period August, 2019, October, 2019 and December, 2019, physically. As per the petitioner, in view of pendency of the present Petition, further claims could not be lodged. Accordingly, on petitioner Filing such refund applications, the Department shall not reject the Same solely on the ground of limitation.the court accordingly disposed of the petition in above terms.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement reviewed by:Sowmya.R

click here to view judgement

30 Apr

The High Court of Delhi Disposed Petition with Opportunity for Detailed Reply, Personal Hearing : Directs Re-Adjudication of Show Cause Notice

Prime Legal

Blog, Delhi High Court #cgst, #highcourtofdelhi, #tax

Case Title – Sun & Sand Industries Africa Pvt. Ltd. Vs. Sales Tax Officer Class-II/ AVATO Department of Trade and Taxes

Case Number – W.P.(C) 5670/2024 & CM APPL. 23433/2024

Order Number – 24^th April, 2024

Quorum – Justice Sanjeev Sachdeva and Justice Ravinder Dudeja

FACTS OF THE CASE

In the case of Sun & Sand Industries Africa Pvt. Ltd. Vs. Sales Tax Officer Class-II/ AVATO Department of Trade and Taxes, an order dated 19^th December,2023 was challenged by the Appellants, which was duly disposed of a Show Cause Notice dated 23^rd September,2023. The Show Cause Notice presented a demand of Rupees 15,19,68,460 against the Appellant under Section 73 of the Central Goods and Service TaxAct, 2017. The notice stated reasons inclusive of excess claim of Input Tax Credit (ITC), scrutiny of the ITC availed, and under-declaration of ineligible ITC. The Appellant provided the response to the notice on the dated 23^rd of the October, 2023, seeking the additional time for a detailed reply and a personal hearing. The Appellant provided with a response to the reminder on the dated 18^th of December, 2023, seeking further time to furnish a reply and appear for a personal hearing. Furthermore, the Appellant of the said case, replied to the reminder on the dated 18^th December,2023, seeking further time to furnish a reply and appear for a personal hearing. However, the impugned order dated 19^th of the December, 2023 did not consider the request of the Appellant for the extension of time and was said to be enigmatic.

CONTENTIONS OF THE APPELLANT

The appellant, through their counsel, in the said case contented that even after seeking for additional time for a detailed reply and a personal hearing, the impugned order did not consider the request made by them
The appellant, through their counsel, in the said case relied on the Section 75(5) of the Central Goods and Service Tax Act, 2017, which allows them for adjournment for personal hearings up to three time in the case of proper and sufficient cause shown concerning the same.
The appellant, through their counsel, in the said case contented that they weren’t provided with the opportunity of a personal hearing, which is violative of the principles of natural justice.

CONTENTIONS OF THE RESPONDENT

The respondent, through their counsel, in the said case contented that even after two opportunities provided to the Appellants, they failed to file a detailed reply or appear in person.
The appellant, through their counsel, in the said case contented that no detailed reply was furnished by the Appellants, and the impugned order was justified based on their non-compliance.

LEGAL PROVISIONS

Section 73 of the Central Goods and Services Tax Act, 2017 prescribes the determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason of fraud or any wilful-misstatement or suppression of facts
Section 75(5) of the Central Goods and Services Tax Act, 2017 prescribes that the proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing, provided that, no such adjournment shall be granted for more than three times to a person during the proceedings.

ISSUES

The main issue of the case revolved around whether the impugned order denying the request of the Appellant for the extension of the time and a personal hearing was justified?
Whether it was violative of the principles of natural justice in the proceedings?

COURT ANALYSIS AND JUDGMENT

The court in the case of Sun & Sand Industries Africa Pvt. Ltd. Vs. Sales Tax Officer Class-II/ AVATO Department of Trade and Taxes, observed that it is not mandatory for the proper officer to grant them adjournments, even though, Section 75(5) of the Central Goods and Services Tax Act, 2017 allows for up to three adjournments of personal hearings. The court observed that the discretion to adjourn hearings depends on the circumstances of each case and that whether the cause shown is sufficient. The court, in this case, observed the impugned order to be abstruse and agreed with the request of the Appellant for one more opportunity to file a detailed reply. The court set aside the impugned order and the show cause notice is remitted to the proper officer for re-adjudication. The Appellant, in this case, is directed to institute a reply within 30 days, and the proper officer is instructed to re-adjudicate the show cause notice, providing an opportunity for a personal hearing and issuance of a fresh speaking order within the stipulated period of time under Section 75(3) of the Central Goods and Services Tax Act, 2017. The court cited clearly that it has not commented on the merits of the case, and that all rights and contentions of the parties to the case are reserved.

Judgement Reviewed by – Sruti Sikha Maharana

Click Here to View Judgment

22 Aug

Delhi High Court Clarifies Scope of Seizure under Section 67 of CGST Act

Prime Legal

Blog #cgst, #delhi, #delhicourt, #delhihighcourt, #property, #seize

Title: Deepak Khandelwal Proprietor v. Commissioner of CGST and Anr.

Decided on: 17th August, 2023

+ W.P.(C) 6739/2021

CORAM: HON’BLE MR JUSTICE VIBHU BAKHRU & HON’BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

Introduction

The Delhi High Court, in a recent case, delved into the interpretation of Section 67 of the CGST Act, 2017, pertaining to the seizure of documents, books, and items during search operations. The court highlighted the legislative intent behind the provision and clarified the extent to which seizure can be carried out.

Facts

The petitioner, engaged in trading non-ferrous metals, faced a search operation at his residence under Section 67(2) of the CGST Act, resulting in the seizure of items, currency, and subsequent arrest. The petitioner sought the release of the seized assets, including two silver bars and mobile phones.

Analysis

The court analyzed the provisions of Section 67 of the CGST Act to discern its legislative intent. It noted that the power to seize items, books, or documents under Section 67(2) is solely for the purpose of examination, inquiry, or proceedings under the Act. The court emphasized that the intent is to uncover tax evasion and ensure taxable supplies are taxed. It clarified that the provision does not empower the seizure of currency or valuable assets solely based on unaccounted wealth.

Held

The court ruled that under Section 67(3) of the Act, items seized under Section 67(2) and not relied upon for issuing notices under the Act or its rules must be returned within thirty days of notice issuance. The court emphasized that the seizure provisions are not meant for recovering unaccounted wealth or tax evasion. Therefore, it directed the respondents to release the seized currency and valuable assets from the petitioner’s possession.

Conclusion

The Delhi High Court’s interpretation of Section 67 clarifies the boundaries of seizure powers under the CGST Act, emphasizing that the provision is not intended for seizing unaccounted wealth or assets. The court’s analysis reaffirms the legislative purpose and ensures that the scope of seizure remains aligned with its original intent.

Written by- Ankit Kaushik

Clicke here to view judgement