Indirect Tax Cases Monthly Round Up: May 2024
Mariya Paliwala
1 Jun 2024 9:20 AM GMT
Supreme CourtSupreme Court Seeks Data Of GST Arrests, Says Citizens' Harassment Won't Be Allowed Due To Any Ambiguity In Arrest ProvisionsCase Title: Radhika Agarwal v. Union of India and Ors., W.P.(Crl.) No. 336/2018 (and connected matters)While hearing a batch of petitions challenging penal provisions of GST Act, Customs Act, etc. as non-compatible with the CrPC and the Constitution,...
Supreme Court
Case Title: Radhika Agarwal v. Union of India and Ors., W.P.(Crl.) No. 336/2018 (and connected matters)
While hearing a batch of petitions challenging penal provisions of GST Act, Customs Act, etc. as non-compatible with the CrPC and the Constitution, the Supreme Court on Thursday (May 2) expressed concerns about the ambiguity in Section 69 of the GST Act (dealing with power with arrest) and conveyed that it would interpret the law to "strengthen" liberty, if need be, but not allow citizens to be harassed.
Case Details: Commissioner Of Central Excise Belapur Vs Jindal Drugs Ltd.
Citation : 2024 LiveLaw (SC) 374
The Supreme Court has held that labelling or re-labelling of containers amounts to 'manufacture' under the Central Excise Act for availing cenvat credit.
Delhi High Court
Life Of Provisional Attachment Order Is Only One Year: Delhi High Court
Case Title: M/S Krish Overseas Versus Commissioner Central Tax-Delhi West & Ors.
The Delhi High Court has held that the life of an order of provisional attachment is only one year.
Delhi High Court Quashes MOOWR Instructions Denying Benefit To Solar Power Generation Units
Case Title: Acme Heergarh Powertech Private Limited Versus CBIC
The Delhi High Court has held that the statutory scheme underlying the Manufacture and Other Operations in Warehouse Regulations, 2019 (MOOWR) cannot be construed as seeking to exclude solar power generation in terms of permissions granted under Section 65 of the Customs Act, 1962.
Case Title: VI Exports India Private Limited Versus Union Of India
The Delhi High Court while dismissing the rice exporter's appeal, upheld the decision of the single bench holding that the exporter cannot be permitted to export 11,000 MT of banned non- basmati white rice, due to the non-fulfilment of the conditions entitling it to an exemption from the ban on export imposed by Notification bearing no. 20/2023 dated 20th July, 2023 issued by the Department of Commerce, Government of India.
Condition Of Pre-Deposit Duly Complied, Delhi High Court Restores Appeal On Board Of CESTAT
Case Title: Ankit Madan Versus Registrar, Customs, Excise And Service Tax Appellate Tribunal & Ors.
The Delhi High Court has held that the appeal itself may be restored on the Board of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), bearing in mind the undisputed position that the condition of pre-deposit has been duly complied with.
Show Cause Notice Not Adjudicated For Nearly 14 Years; Delhi High Court Issues Notice To Dept.
Case Title: M/S Durga Trading Company And Ors Versus The Additional Director General (Adjudication) And Anr.
A division bench of the Delhi High Court, comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, has issued the notice to the department in a petition assailing the jurisdiction to adjudicate the Show Cause Notice, which has not been adjudicated for nearly 14 years.
Unexplained Expenditure Addition Merely Based On CBIC Instruction Not Sustainable: Delhi High Court
Case Title: Bausch And Lomb India Private Limited Versus Assessment Unit, National Faceless Assessment Centre, Delhi
The Delhi High Court has deleted the addition for unexplained expenditure, which was based on the instruction issued by the Central Board of Indirect Taxes and Customs (CBIC).
Monetary Limit Of Rs. 1 Crore For Appeals To High Court; Delhi High Court Dismisses Dept's Appeal
Case Title: The Principal Commissioner Of Customs, ACC Imports New Delhi Versus M/S. Salasar Synthetics
The Delhi High Court has dismissed the challenging redemption fine of Rs. 40 lakhs, citing instructions issued by the Central Board of Indirect Taxes and Customs (CBIC), which set the monetary limit of Rs. 1 crore for appeals to the high court.
Unexplained Expenditure Addition Merely Based On CBIC Instruction Not Sustainable: Delhi High Court
Case Title: Bausch And Lomb India Private Limited Versus Assessment Unit, National Faceless Assessment Centre, Delhi
The Delhi High Court has deleted the addition for unexplained expenditure, which was based on the instruction issued by the Central Board of Indirect Taxes and Customs (CBIC).
Additions U/s 69C Based Merely On CBIC Information Can't Be Sustained: Delhi High Court
Case Title: Bausch And Lomb India Private Limited Vs Assessment Unit
The Delhi High Court sets aside the assessment order and remits the matter to AO on the ground that the additions of Rs.70.10 Cr. made under Section 69C as unexplained expenditure based merely on information received from Central Board of Indirect Taxes & Customs (CBIC) is unsustainable.
Bombay High Court
Case Title: Purushottam Prabhakar Chavan Versus Deputy Commissioner of Sales Tax (GST)
The Bombay High Court has held that lender bank registration with the Central Registry of Securitisation and Security Interest of India (CERSAI) has first priority over Deputy Commissioner of Sales Tax (GST) (DCST) against proceeds of enforcement under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
Case Title: KEC International Ltd. Versus UOI
The Bombay High Court has quashed the reassessment notices issued merely on the basis of information received from the Directorate General of GST.
Madras High Court
Case Title: M/s.V.R.Muthu & Bros. Versus State Tax Officer
Citation: 2024 LiveLaw (Mad) 225
The Madras High Court has held that merely because the assessment is deemed to have been completed in both cases, it does not mean that the officers are precluded from exercising the power under Section 25 or Section 27 of the TNVAT Act, 2006.
Calcutta High Court
Case Title: Lokenath Construction Private Limited Versus Tax/Revenue Government Of West Bengal And Others
The Calcutta High Court has held that the adjudicating authority, without resorting to any action against the supplier, who is the selling dealer, ignored the tax invoices produced by the appellant as well as the certificates issued by the Chartered Accountants, which are erroneous and wholly without jurisdiction.
Case Title: Commissioner Of Customs (Preventive) Versus Shri Rajendra Kumar Damani @ Raju Damani
The Calcutta High Court has held that it is the duty cast upon the court to examine the correctness of the validity of the retraction, the point of time at which the retraction was made, whether the retraction was consistent, and whether it was merely a ruse.
Case Title: Glenmark Pharmaceuticals Limited Versus Union of India
The Sikkim High Court has held that when a procedure is prescribed, the petitioner, while seeking the grant of budgetary support, is required to follow that procedure and not work out a different procedure for the authorities to follow.
Case Title: M/S. Anurag Steel Enterprise Versus Commissioner Of Cgst & Central Excise, Howrah Cgst & Cx Commissionerate
The Calcutta High Court has held that the alleged retraction on the grounds of the appeal filed before the Commissioner after a period of three years and nine months was rightly rejected by the Commissioner of Appeals.
Jharkhand High Court
Case Title: Sri Gopikrishna Infrastructure Pvt. Ltd. & Ors. Versus The State of Jharkhand
LL Citation: 2024 LiveLaw (Jha) 72
The Jharkhand High Court has held that the action of Jharkhand Bijli Vitran Nigam (JBVNL) offends Article 14 of the Constitution of India by refusing to reimburse contractor GST impact on indirect transactions.
Orissa High Court
Reassessment Order Can't Merely Be Based On Tax Evasion Report Or An Audit Report: Orissa High Court
Case Title: M/s.Hindustan Tyre House Versus Dy. Commissioner of Sales Tax
The Orissa High Court has held that reassessment orders cannot merely be based on a tax evasion report or an audit report.
Punjab And Haryana High Court
Punjab And Haryana High Court Stays CBIC-Circular Concerning Taxability Of Corporate Guarantees
Case Title: M/S Acme Cleantech Solutions Pvt Ltd V/S Union Of India And Others
The Punjab and Haryana High Court has stayed the circular issued by the Central Board of Indirect Taxes and Customs (CBIC) concerning the taxability of corporate guarantees.
Allahabad High Court
Case Title: Mr. Pranay Dhabhai v. State Of U.P. And 2 Others
Citation: 2024 LiveLaw (AB) 299
Relying on its earlier decision in A.S. Solanki Vs. State of U.P. and others, the Allahabad High Court has reiterated that tax dues cannot be collected from the director of a company under liquidation unless it has been provided in any statute.
Case Title: Mentha And Allied Products Ltd vs. State Of U.P. And 3 Others
Citation: 2024 LiveLaw (AB) 300
The Allahabad High Court has held that computation of correct input tax credit can only be done till the passing of the regular assessment order by the Assessing Authority and not at a later stage. The Court held that reverse input tax credit is neither a 'rate of tax' nor a 'turnover' which can be subjected to reassessment under Section 29 of the Uttar Pradesh Value Added Tax Act, 2008.
Case Title: M/S K Y Tobacco Works Pvt. Ltd. v. State Of U.P. And 4 Others
Relying on its earlier decision in M/s Anandeshwar Traders v. State of U.P. and Others, the Allahabad High Court has held that the burden to prove double movement of goods based on same documents lies on the department.
Case Title: M/S Rajshi Processors Raebareli Thru. Its Partner Ashok Kumar Lakhotia v. State Of U.P. Thru. Prin. Secy. Deptt. Of State Tax,Lko. And 2 Others
The Allahabad High Court has held that the authorities are not estopped from taking action against wrongful claim of input tax credit merely because the firms with which transactions were alleged to have been done were registered at the time of the alleged transactions.
Case Title: The Commissioner, Commercial Tax U.P. v. M/S R.P. Milk Made Products (P) Ltd.
Case citation: 2024 LiveLaw (AB) 328
The Allahabad High Court has held that plant and machinery sold after the closure of business are capital goods under Section 2(f) of the Uttar Pradesh Value Added Tax Act, 2008 and are excluded from levy of tax under the amended definition of 'business' under Section 2(e) of the Act.
Case Title: M/S S Kumar Construction v. Commissioner Of Central Excise (Appeals), Central Goods And Services Tax (Appeals) And Another
The Allahabad High Court has held that the limitations prescribed under special statutes, such as Finance Act, 1994 will prevail over the limitations mentioned in the Limitation Act, 1963.
Case Title: Ns Agro And Engineering Products v. State of U.P. and Another
While dealing with the non-compliance of mandatory provision for opportunity of hearing under Section 75(4) of the Central Goods and Services Tax Act, 2017, the Allahabad High Court directed the Commissioner, Commercial Tax, Uttar Pradesh to take remedial action, including disciplinary proceedings against erring adjudicating authorities for violating principles of natural justice without justifiable reasons.
Option Once Exercised For A Financial Year May Not Be Withdrawn Midway: Allahabad High Court
Case Title: M/S.Raman Ispat Pvt. Ltd. Versus Cce Meerut
The Allahabad High Court has held that an option, once exercised for a financial year, may not be withdrawn midway.
Case Title: Commissioner Commercial Tax, U.P. At Lucknow V. M/S Pan Parag India Limited
The Allahabad High Court has held that the franchise agreement granted a non-exclusive licence rather than a transfer of the right to use goods and the transaction does not attract Value Added Tax under the Uttar Pradesh Value Added Tax Act (UPVAT Act).
Failure To Cite Judgment Does Not Render Original Judgement Flawed: Allahabad High Court
Case Title: M/S Tata Steel Ltd. versus Commissioner Trade Tax U.P. Lucknow
The Allahabad High Court has held that mere failure to cite a judgement does not, in and of itself, render the original judgement flawed.
Case Title: M/S Ace Manufacturing Systems Limited v. State Of U P And 3 Others
The Allahabad High Court has held that Over Dimensional Cargo cannot be penalized by the authorities for reaching its destination in less time than estimated by travelling at a higher speed when there is no intention to evade tax.
Rajasthan High Court
Rajasthan High Court Dismisses Petition Challenging GST Demand On Exhibition Services
Case Title: M/s. Savio Jewellery Versus Commissioner, Central Goods And Service Tax
The Jaipur Bench of the Rajasthan High Court has dismissed the petition challenging the GST demand on exhibition services.
Crane Services To Transport Department Does Not Constitute Sale: Rajasthan High Court
Case Title: Assistant Commercial Taxes Officer Versus M/s Agarwal Carriers And Lifters
The Rajasthan High Court, Jaipur Bench has held that crane services to the transport department does not constitute sale.
Gujarat High Court
Case Title: NEPRA Resources Management Pvt. Ltd. & Anr. Vs State of Gujarat & Anr.
LL Citation: 2024 LiveLaw (Guj) 69
The Gujarat High Court has ruled that the Notified Area Authority, Vapi, does not qualify as a local authority or governmental authority. As a result, the Solid Waste Management and recycling services provided to it are not eligible for exemption under Notification No. 12/2017-State Tax (Rate) dated 30th June 2017.
Case Title: Vimal Agro Products Pvt. Ltd. & Anr. Vs Union of India & Ors
LL Citation: 2024 LiveLaw (Guj) 70
The Gujarat High Court has upheld the imposition of a 12 percent tax on Mango Pulp since the inception of GST. The court clarified that Circular No. 179/11/2022-GST dated August 3, 2022, and Notification No. 06/2022 dated July 13, 2022, simply reinforce that mango pulp falls under the 12 percent GST bracket, specifically after the inclusion of "Mangoes (other than mangoes, sliced, dried)" following guava.
Gujarat High Court Grants Bail To Metal Industries Proprietor In Rs. 6.67 Crore GST Evasion Case
Case Title: Dipen Champaklal Shah Vs State of Gujarat
LL Citation: 2024 LiveLaw (Guj) 71
The Gujarat High Court has granted bail in a case of GST evasion amounting to Rs. 6.67 Crores to the proprietor of Metal Industries, a business engaged in manufacturing and trading brass products, metal scrap, etc. in Jamnagar after 79 days of cost.
Meghalaya High Court
Right Of Appeal Relating To Value Of Service Maintainable Before Supreme Court: Meghalaya High Court
Case Title: The Commissioner of Central Goods & Services Tax and Central Excise Versus M/s Walchandnagar Industries Limited
The Meghalaya High Court has held that the right of appeal relating to the value of service is maintainable before the Supreme Court.
AAR
Applicant's Name: Landmark Cars East Private Limited
The West Bengal Authority of Advance Ruling (AAR) has ruled that 18% GST is payable on the amount received by the applicant from Mercedes-Benz India towards reimbursement of “Loss on Sale of Demo Car.”
Opting To Pay Tax At Lower Rate By Not Availing ITC Forfeits Right To Avail Input Tax Credit: AAR
Applicant's Name: Noori Travels
The Telangana Authority of Advance Ruling (AAR) has held that the applicant by opting to pay tax at a lower rate by not availing input tax credit on the goods and services used in his supplies has forfeited his right to avail input tax credit.
Supply Of Disposable Paper Cup Attracts 18% GST: AAR
Applicant's Name: Sekandar Sardar
The West Bengal Authority of Advance Ruling (AAR) has held that the supply of disposable paper cups attracts 18% GST.
Applicant's Name: M/s. Center for International Admission and Visas (CIAV)
The Telangana Bench of the Authority of Advance Ruling (AAR) has held that marketing, recruiting, or referring consultants to foreign universities on a principal-to-principal basis is not 'intermediary service'.