Goods and Services Tax (GST), introduced from July 1, 2017 is more than ten months old now but has resulted in operational and implementation disruptions affecting all stakeholders. GST law, as drafted and legislated, is not free from the interpretational hassles. GST Council his however, making regular changes to fix the anomalies and hardships faced by taxpayers.
Taxpayers have already started challenging various provisions of GST laws and rules framed thereunder with more than 180 writs being filed in different courts. High courts and Supreme court have taken a liberal stand so far in view of the fact that law is new and is yet evolving. However, CBIC may move to Supreme court where the verdict is against the Government. This has also been indicated in Circular No. 39 dated 03.04.2018 wherein it is has been hinted in relation to resolution of struck TRAN-1 and filing of GSTR-3B that Government has not accepted blanket opportunity to file TRAN-1 but only in cases where technical glitches crept in. It has advised the departmental officers that courts may be suitably informed and if needed review or appeal may be filed. Further, we have now rulings from Authority for Advance Ruling and Anti-profiteering Authority also.
Here are few more judicial pronouncements for information and guidance of various stakeholders. It is expected that the litigation is bound to go up as time passes by unless the Government comes out with proactive approach and solutions.
In UP Distillers Association v. Union of India (2018) 5 TMI 274 (Allahabad); where the petitioner was an Association of Distillers in Uttar Pradesh State filing writ petition seeking to restrain respondents fan levying administrative charges on sale and supply of molasses under U.P. Sheera Niyantran Adhiniyam, 1964 as it claimed it to amount as double taxation, i.e., levy of administrative charges as well as GST on same activity. Molasses is an important raw material for chemical industries and industrial alcohol. Administrative charges were claimed to be in the nature of tax. Since both charges / tax shall tantamount to double taxation, petitioners filed this writ who were willing to pay GST. Further, in view of fact that a similar matter is pending before Apex Court in relation to trade tax vis-à-vis administrative charges, court granted interim stay from collection of administrative charges till final decision in the matter subject to the petitioners paying GST.
It was also directed that separate accounts be maintained for sale / supply / purchase of molasses till final disposal.
In Tara Chand Saluja v. Union of India 2018 (5) TMI 275 - DELHI HIGH COURT ; where the assessee could not file TRAN-1 / TRAN-2 forms in due time due to technical errors in the GSTN system. On a question for claiming input tax credit when it could not be availed due to technical obstacles, it was pointed out by respondent that GST Council has in principle devised a procedure ensuring that input tax credits can be claimed in cases where technical glitches in system are confronted by assessees. Also, those who could not file in time due to technical errors will be duly accommodated. It was submitted by respondent that one time facility or filing so as to result in a deemed credit as though the assessee had filed the form before the expiry of the stipulated time, will be available only to those individuals or concerns which had approached the GST Council or the concerned Commissionerate / portal / officials etc. through e-mail or other means of communication before the stipulated time. It is also stated that if necessary it is open to the assessees to show if anyone of them was left out and for such purpose the concerned Nodal Officers are likely to be nominated.
Circular No. 39 /13/2018-GST dated 03.04.2018 have since been issued by Central Board of Indirect Taxes and Customs.
In L.G. Electronic India Pvt. Ltd. v. State of UP 2018 (3) TMI 1318 - ALLAHABAD HIGH COURT , where the competent authority had caused inspection of goods in movement and seized goods alongwith the vehicle for want of e-way bill. The court directed that the seized goods of the assessee as well as vehicle be released by the authorities forthwith on the assessee’s furnishing security other than cash and bank guarantee of the proposed tax and penalty and indemnity bond of the value of the seized goods. The revenue was allowed to file counter affidavit within a month after which petitioner could file the rejoinder. In Level 10 Retail Venture v. State Tax Officer 2018 (4) TMI 346 (Kerala); where the state tax officer had detained the textile goods under transport as well as the vehicle on the plea that the goods were not accompanied by the valid documents as contemplated under the CGST Act and SGST Act and Rules. He also insisted the assessee to pay the amount demanded in the detention notice as a condition for release of the goods and vehicle.
Court directed the tax officer to release the goods and vehicle to the assessee on his furnishing bank guarantee for amount equivalent to the demand in notice of detention. It was further provided that the respondent shall adjudicate the matter and pass order within two months from the date of communication of judgment.
In Modern Traders v. State of UP 2018 (4) TMI 1076 (Allahabad); where the petitioner was engaged in inter-state movement of goods (iron and steel) with registered buyers under valid invoice and charging of applicable IGST. Since compulsory requirement of e-way bill for inter-State transactions deferred till 01.04.2018, there was requirement for issuing this document to accompany goods, transaction being prior to this date. Notification was issued under UPGST Act on requirement of e-way bill for intra-sate movement of goods not applicable to inter-state transactions. Petitioner submitted that as admittedly the seized goods were in transit for outside the state the transaction would be covered by the Integrated Goods and Services Tax Act, 2017 (IGST) read with Central GST and that the provisions of the UPGST or its Rulesor the notifications issued therein would not apply.
Rule 138 of the Rules framed under the Central GST provides that till such time e-way bill system is developed and approved by the Council, the Government by notification may specify the documents which are to be carried with the consignment of goods. In exercise of the said power a notification has been issued which provides for the carrying of e-way bill with the goods in transit but the same is applicable has been enforced w.e.f. 01.02.2018. Court observed that the soled ground of seizure of goods is non-production of e-way bill whereas there is no dispute with regard to issuance of invoice and charge of tax by the petitioner.
It was held that there was no error on the part of petitioner and therefore, order of seizure passed under section 129(1) of the CGST Act, 2017 as well as notice under section 129(3) were not sustainable and set aside. Goods and vehicle were order to be released forthwith.