Flip-1stJune

DAILY UPDATES -01.06.2021

EXIM NOTIFICATION

Notification no. 06/2015-2020- DT. 31.05.2021

Directorate of Revenue Intelligence has been allowed time Upto 31.12.2021 to complete the
process of export of allocated quantities of Red Sanders Wood.

GST NOTIFICATION

EXTENSION OF THE DUE DATE OF FILING APPLICATION FOR REVOCATION OF
CANCELLATION OF REGISTRATION:

The timeline for filing of the ‘Application for Revocation of Cancellation’ for those applicants,
for whom the due date of filing such application was falling between 15th April to 29 th June 2021, has
been extended up to 30th June 2021.

GST CASE LAWS

1. ATTACHMENT PROCEEDINGS CANNOT BE AT THE COST OF RIGHT OF
PROVISION UNDER ARTICLE 19(1) (G) OF THE CONSTITUTION OF INDIA:

Article 19(1) (g) of Constitution of India -

"FREEDOM TO PRACTISE ANY PROFESSION, OR TO CARRY ON ANY OCCUPATION,
TRADE OR BUSINESS"

❖ The case of the petitioner company is that the respondents by the impugned attachment
orders have completely strangled the business of the petitioner. It is submitted that
petitioner was employing about 15,000 employees who were deployed in various
industrial units in and around Chennai and Karnataka.

❖ The allegation against the petitioner company is that the petitioner company had
fraudulently availed input tax credit on fictitious invoices to discharge the GST
liability. It is estimated that approximately, the fraud committed by the petitioner is for
the sum of ₹ 21 Crores and investigation is still under progress.

❖ Appearing on behalf of the petitioner, Mr.B.Kumar, learned Senior Counsel submits
that apart from ₹ 5.68 Crores which have been appropriated so far against the projected
demand of ₹ 21 Crores, the petitioner has agreed to pay another sum of ₹ 1 Crore,
within a period of one weeks' time.

❖ The learned senior counsel for the petitioner submits that Section 67 cannot be against
the future receivables so as to strangulate the entire business module of the petitioner.

❖ Defending the order and the steps taken by the respondents, learned Senior Panel
Counsel, submits that the petitioner has indulged in large scale fraud and therefore, the
department was compelled to initiate proceedings under Section 67 of the CGST Act,
2017.

❖ He submits that under Section 83 of the CGST Act, 2017, the respondents are entitled
to order provisional attachment of any assets to protect the interest of the revenue.

❖ He further submits that the Directors of the petitioner company had breached the bail
order dated 19.02.2021.

CONCLUSION:

❖ No doubt, wide powers have been vested with the Officers under Section 67 of the
CGST Act, 2017. The said proceedings also entails a provisional attachment of assets
during the pendency of the proceedings under Sections 62, 63, 64, 67, 73 and 74 of the
said Act. However, such protection cannot be made against future receivables.

❖ The respondents can issue notice under Section 73 of the CGST Act, 2017 and
thereafter, determine the amount due and recover the amounts.

❖ It is made clear that the attachment proceedings cannot be at the cost of right of
provision under Article 19(1) (g) of the Constitution of India.

❖ It is made clear that the petitioner shall deposit a sum of ₹ 1 Crore within a period of
one week from the date of receipt of a copy of this order, as was undertaken by the
learned Senior Counsel for the petitioner.

❖ It is also open to the respondents to take steps for cancelling the bail order in case, the
Managing Director and the Director of the petitioner company have violated any of the
conditions of the bail order dated 19.02.2021.

2. UOI VS ADITYA AUTO ENGINEERING PVT LTD:

Respondent assessee had admittedly failed to file its returns prescribed under the GST
law in Form GSTR 3-B and discharge its liability for the period from September 2018 till date. The
assessment orders were, therefore, passed from time to time under Section 62 of the CGST Act
quantifying the tax liability of respondent No. 1 and directing it to file its returns and discharge the
arrears. Respondent No. 1 did not file its returns and discharge its tax liability.

CONTENTION:

Respondent No. 1 preferred a writ petition i.e., W. P. No. 52967/2019 challenging the
assessment order passed under Section 62 of the CGST Act and the same is pending .Respondent No.
1 has also filed another writ petition i.e., present writ petition challenging the assessment order passed
for the period w.e.f., September 2019 to October 2020 . Respondent No. 1 has also failed to file its
returns for a continuous period of 6 months, hence, after following due process of law, the registration
under the GST law was cancelled by an order dated 19.10.2020 and the same is also a subject matter of
the present writ petition/writ appeal.

CONCLUSION:

❖ GST laws do not permit for filing of manual returns. There is no facility under the law
to accept manual returns and by allowing respondent No. 1 to file returns manually will
certainly unsettle the entire scheme of GST and, therefore, on this ground alone, the
interim order passed by the Single Judge deserves to be set aside.

❖ Registration of respondent No. 1 is not in existence. The registration was cancelled for
non-filing of its returns for a continuous period of more than two years and by granting
an interim order, respondent No. 1 has been permitted to continue its business as a
registered dealer even though the law prescribes that a person, who does not file returns
for a continuous period of 6 months, is liable to be deregistered.

❖ The Single Judge is requested to decide the matter on merits, as expeditiously as
possible.
-KARNATAKA HIGH COURT.

3. MONICA DARYANANI VS UOI:

Petitioner has challenged the validity and vires of the Notification 30/2021-Customs , dated 1st
May, 2021, which imposes Integrated Goods and Services Tax ('IGST) at 12% on import of Oxygen
Concentrators for personal use due to COVID-19 till 30th June, 2021, even when such goods are
imported as Gift i.e. free of cost.

CONTENTION:

Petitioner submits that the right to supply of oxygen during emergency is part of Right to Life
guaranteed under Article-21 of the Constitution of India; that the notification is arbitrary as only the
State government and authorised entities can import Oxygen Concentrator without payment of GST
vide notification 28/2021-Customs ; that Oxygen Concentrators are expensive instruments and levy of
@ 12% IGST on Concentrators imported free of cost has unfairly prejudiced the Petitioner during the
time of medical emergency and ongoing crisis of shortage of Oxygen supply across the Country.
Petitioner seeks to amend the Writ Petition and rely upon the said notifications; that they are also
desirous of impugning the ad hoc exemption order notification 4/2021-Customs , dated May 03, 2021.

CONCLUSION:

Petitioner is allowed to amend the Writ Petition. Amendments are to be carried out within a
period of one week. Respondents to file affidavit-in-reply within a period of two weeks.

-BOMBAY HIGH COURT.

4. INTEGRATED PROJECT LOGISTICS PVT LTD VS UOI:

The Petitioner had an eligible CENVAT credit as per the service tax return for the relevant
period .The Petitioner sought to carry forward the same into the GST regime by filing the TRAN-1
Form in terms of Section 140(8) of the CGST Act, 2017 . However, on account of technical glitches,
the same were not successful. As a result, the Petitioner submitted the TRAN-1 Form manually
.Thereafter, the TRAN-1 Form was processed but the input tax credit was not reflected for which the
Petitioner approached the Respondents vide letter.

CONTENTION:

Petitioner claimed that its case fell in the category which is covered by Rule 117(1A) of
the CGST Rules, 2017 , as the Petitioner could not submit the TRAN-1 Form, due to technical glitches.
Petitioner also submitted that it is entitled to distribute the input tax credit to other locations in terms of
Section 140(8) of the Act.

CONCLUSION:

❖ Since the case of the Petitioner squarely falls under the category of 'technical
difficulties on the common portal' as is evidenced by the screen-shot the Petitioner
would be eligible to take the benefit of Rule 117(1A) of the Rules.

❖ The Petitioner therein was also unable to file its TRAN-1 Form electronically and
ultimately resorted to sending a manual copy of its TRAN-1 Form and the Court
directed the Respondents to either open the GST portal or to accept the TRAN-1 Form
filed manually by the Petitioner .

❖ Hence the Respondents are directed to process the TRAN-1 Form filed by the
Petitioner manually in accordance with law.

-DELHI HIGH COURT.

5. FALCON TECHNOLOGIES PVT LTD VS UOI:
The assessee-company is engaged in trading activity. It domestically procures radio equipment

& sells the same to AIR, Doordarshan & Prasar Bharti and other private broadcasters. The assessee
filed the Form TRAN-1 for the relevant period, well before the due date prescribed u/r 117 of the CGST
Rules. However, the CENVAT credit was not transitioned into the GST regime.

CONTENTION:

Despite providing copies of proof of having filed the TRAN-1 Form, the GST authorities have
not taken any action. Emails written by the assessee to the help desk of the GST authorities and to the
Nodal Officer have also not yielded any favourable outcome. No counter affidavit is filed by the GST
Authorities & the reason for denial of credit to the assessee cannot be understood.

CONCLUSION:

Hence the GST authorities are directed to immediately process the TRAN-1 Form filed by the
assessee and reflect the credit in the electronic credit ledger under the GST regime. In case the assessee
is required to file Form TRAN 1 all over again, the portal be opened to enable the assessee to do so.

-DELHI HIGH COURT.

6. DEVELOPER GROUP INDIA PVT LTD VS UOI:
The present petition was filed by the assessee, seeking that directions be issued to the Revenue

Department to permit the assessee to carry forward transitional ITC by filing Form GST TRAN -1
online or manually.

CONCLUSION:

The relief sought for by the assessee is already granted to it in terms of the judgment in Brand
Equity Treaties Limited. v. Union of India wherein a batch of petitions including that of the assessee,
had been allowed. In these circumstances, no further orders are to be passed in the present case.

-DELHI HIGH COURT.

INDIRECT TAX CASE LAWS

1. DRI VS PUSPHA L TOLANI:

Question that arises in this petition is as to, what is the limitation period for filing a suit for
malicious prosecution, against the customs authorities/officials, under the Customs Act, 1962.

CONCLUSION:

Section 198 of the Sea Customs Act, 1878, Section 155(2) of the Customs Act, 1962, leads the
Court to the following conclusions:

❖ The limitation provided under Section 155(2) does not apply to suits.
❖ The limitation provided under Section 155(2) applies to other proceedings.
❖ For the purpose of institution of other proceedings, one month's previous notice in writing, from

the date when the cause of action arises, is required.
❖ None of these other proceedings can be filed after the expiration of three months from the

accrual of the cause.
❖ Therefore, insofar as a suit for malicious prosecution, i.e., a civil suit, is concerned, the period

of limitation of three months, as also the requirement of a notice, under Section 155(2) of the
Customs Act, 1962, would not be applicable.
❖ The suit is well within limitation, as the period of limitation under Section 3 and Section 12 of
the Limitation Act, 1962, r/w Entry 74 of the Schedule of the Limitation Act, would have ended
only on 12th April 2008, which is one day after the date when the suit for malicious prosecution
was presented by the Plaintiff/Respondent. The suit is thus within limitation.

-DELHI HIGH COURT.