BACKGROUNDA batch of 27 Writ Petitions was filed by various small traders and businesspersons whose GST registrations were cancelled under Section 29(2)(c) of the CGST/TNGST Acts for non-filing of returns for a continuous period of six months. Show Cause Notices in prescribed form were issued to all petitioners and cancellation orders were passed after personal hearing opportunities. The cancellation orders ranged from the year 2018 to 2019. Some petitioners directly challenged the cancellation orders, while others challenged orders of Appellate Commissioners rejecting their appeals as time-barred, and a few challenged rejection of revocation applications. The Government had provided multiple amnesty opportunities through Order No.01/2020-Central Tax dated 25.06.2020 (for cancellations up to 12.06.2020) and Notification No.34/2021-Central Tax dated 29.08.2021 (extending deadline to 30.09.2021), but none of the petitioners availed these in time. The Appellate Commissioners correctly rejected all belated appeals as beyond the condonable period under Section 107 of the respective GST Acts. FACTSAll the petitioners had failed to file their GST returns for a continuous period of six months, resulting in cancellation of their registrations. After cancellation, they neither filed applications for revocation under Section 30 of the Act within 30 days, nor did they avail the extended amnesty opportunities granted by the Government on the recommendations of the GST Council to revive their registrations. When some of them filed appeals before Appellate Commissioners under Section 107 of the CGST/TNGST Acts, those appeals were rejected as beyond the condonable period of limitation — the delays ranging from 11 months to over 2 years. The Appellate Commissioners, being statutory authorities, had no jurisdiction to condone delay beyond the maximum period prescribed under Section 107. Several petitioners also pointed to the Supreme Court's COVID-19 limitation extension orders, CBIC Circular No.157/13/2021-GST dated 20.07.2021, Circular No.158/14/2021-GST dated 06.09.2021, and Notification No.34/2021-Central Tax dated 29.08.2021. One petitioner specifically raised an issue about the GST portal architecture not permitting filing of revocation applications despite dues being paid. The Court noted that while the Appellate Authorities rightly rejected the petitions under the statute, there was an overwhelming case for restoring the registrations in exercise of the extraordinary writ jurisdiction under Article 226. COURT OBSERVATIONS (Verbatim)"The law on the limitation has been well settled by the Hon'ble Supreme Court. In this connection, a reference is invited to the decision of the Hon'ble Supreme Court in M/s.Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and Others, (2008) 3 SCC 70, wherein, it has been held that statutory appeal filed beyond the statutory period for condonation of delay under Section 35 of the Central Excise Act, 1944 cannot be condoned. This position of law applies to the facts of these cases.""As original or as appellate authority exercising power under the respective enactments, quasi judicial officers were bound by the provisions of the Act and the limitation under it, they have acted in accordance with law. They cannot look beyond the limitations prescribed under provisions of the Act. Therefore, no fault can be attributed to their action.""the provisions of the Goods and Services Tax Act, 2017 cannot be interpreted in such a manner, so as to debar an assessee, either from obtaining registration or reviving the lapsed/cancelled registration as such an interpretation would be not only contrary to the Article 19(1)(g) of the Constitution of India but also in violation of Article 14 and Article 21 of the Constitution of India.""In my view, no useful purpose will be served by keeping these petitioners out of the bounds of GST regime under the respective GST enactments other than to allow further leakage of the revenue and to isolate these petitioners from the main stream contrary to the objects of the respective GST enactments.""The purpose of GST registration is only to ensure just tax gets collected on supplies of goods or service or both and is paid to the exchequer. Keeping these petitioners outside the bounds of the GST regime is a self defeating move as no tax will get paid on the supplies of these petitioners.""The provisions of the GST enactments cannot be interpreted so as to deny the right to carry on Trade and Commerce to a citizen and subjects. The constitutional guarantee is unconditional and unequivocal and must be enforced regardless of the defect in the scheme of the GST enactments. The right to carry on trade or profession also cannot be curtailed. Only reasonable restriction can be imposed. To deny such rights would militate against their rights under Article 14, read with Article 19(1)(g) and Article 21 of the Constitution of India.""This is a fit case for exercising the power under Article 226 of the Constitution of India in favour of the petitioners by quashing the impugned orders and to grant consequential relief to the petitioners. By doing so, the Court is effectuating the object under the GST enactment of levying and collecting just tax from every assessee who either supplies goods or service. Legitimate Trade and Commerce by every supplier should be allowed to be carried on subject to payment of tax and statutory compliance.""These petitioners deserve a chance and therefore should be allowed to revive their registration so that they can proceed to regularize the defaults."     FINAL VERDICTAll 27 Writ Petitions were allowed subject to conditions. The petitioners were directed to file all pending returns and pay the defaulted tax, interest, fine and fee within 45 days from receipt of the order, without adjusting from ITC. On compliance, the GST registrations shall stand revived forthwith. The respondents were directed to instruct GSTN to make necessary changes in the portal architecture within 30 days to enable filings. ITC, if any, to be utilized only after scrutiny and approval by competent authorities.👍 IN FAVOUR OF ASSESSEE CASES REFERRED BY THE COURT#Case NameCitation1M/s. Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur & Others(2008) 3 SCC 70 (Supreme Court)2P.R. Mani Electronics vs. Union of India and Others2020 SCC OnLine Mad 8053 (Madras HC, Division Bench)3Tvl. Sunpenta Mining Service Pvt. Ltd. vs. Asst. Commissioner (ST), SalemW.P.Nos.20083 & 20086 of 2021 dated 22.09.2021 (Madras HC)4Suresh Trading Corporation vs. Asst. Commissioner (Circle) of SGST, Coimbatore IIW.P.No.21109 of 2021 dated 01.10.2021 (Madras HC)5Mafatlal Industries Ltd. vs. Union of India(1997) 5 SCC 536 (Supreme Court)6In Re: Cognizance for Extension of Limitation2021 SCC OnLine SC 947 (Supreme Court) — M.A. No.665/2021 in SMW(C) No.3/2020  

BACKGROUNDRadha Krishan Industries, a lead manufacturer registered under GST since July 2017, had purchased goods from GM Powertech, Kala-Amb. Investigation revealed GM Powertech had fraudulently claimed ITC from fake firms. GM Powertech's partners were arrested in December 2018 and a demand of Rs. 39.48 crores was confirmed against GM Powertech under Section 74(9). On 21 October 2020, the Commissioner delegated his powers under Section 83 to the Joint Commissioner. On 28 October 2020, the Joint Commissioner provisionally attached the appellant's receivables — Rs. 4 crores from Fujikawa Power and Rs. 2.91 crores from Deepak International — on the ground that appellant had fraudulently claimed ITC of Rs. 5.03 crores based on supplies from GM Powertech. Crucially, the Show Cause Notice against the appellant under Section 74(1) was issued only on 27 November 2020 — i.e., after the provisional attachment. The appellant filed objections on 4 November 2020 which were rejected on 6 November 2020 without granting any personal hearing. The appellant challenged the provisional attachment before the HP High Court under Article 226, which dismissed the writ petition holding that an efficacious alternative remedy by way of appeal under Section 107 of the HPGST Act was available. The appellant approached the Supreme Court.COURT OBSERVATIONS (Verbatim)On nature of power of provisional attachment:"The power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account... Each of these ingredients must be strictly applied before a provisional attachment on the property of an assessee can be levied.""The Commissioner must be alive to the fact that such provisions are not intended to authorize Commissioners to make preemptive strikes on the property of the assessee, merely because property is available for being attached."On necessity vs. expediency:"By utilizing the expression 'it is necessary so to do' the legislature has evinced an intent that an attachment is authorized not merely because it is expedient to do so... but because it is necessary to do so in order to protect interest of the government revenue. Necessity postulates that the interest of the revenue can be protected only by a provisional attachment without which the interest of the revenue would stand defeated."On tangible material:"The formation of the opinion must be based on tangible material which indicates a live link to the necessity to order a provisional attachment to protect the interest of the government revenue."On pendency of proceedings:"We are unable to accept the contention of the respondent that merely because proceedings were pending/concluded against another taxable entity, that is GM Powertech, the powers of Section 83 could also be attracted against the appellant. This interpretation would be an expansion of a draconian power such as that contained in Section 83, which must necessarily be interpreted restrictively."On the impugned order:"The order of the Joint Commissioner contains absolutely no basis for the formation of the opinion that a provisional attachment was necessary to safeguard the interest of the revenue. No tangible material has been disclosed. The record clearly reveals a breach of the mandatory pre-conditions for the valid exercise of powers under Section 83 of the HPGST Act."On Rule 159(5) — hearing:"It is not open to the Commissioner, as has been stated in the present case, to hold the view that the only safeguard under sub-Rule 5 is to submit an objection without an opportunity of a personal hearing. Such a construction would be plainly contrary to sub-Rule 5 which contemplates both the submission of an objection to the attachment and an opportunity of being heard... Both the right to submit an objection and to be afforded an opportunity of being heard are valuable safeguards.""The Commissioner who hears the objections must pass a reasoned order either accepting or rejecting the objections."On maintainability of writ:"The Joint Commissioner while ordering a provisional attachment under Section 83 was acting as a delegate of the Commissioner... the order passed by the Joint Commissioner as a delegate of the Commissioner was not subject to an appeal under Section 107(1) and the only remedy that was available was in the form of the invocation of the writ jurisdiction under Article 226 of the Constitution. The High Court was, therefore, clearly in error in declining to entertain the writ proceedings."FINAL VERDICTAppeal allowed. Orders of provisional attachment dated 28 October 2020 set aside. High Court judgment dated 1 January 2021 quashed. Writ petition under Article 226 held maintainable and provisional attachment held illegal for non-fulfillment of conditions under Section 83 and breach of Rule 159(5).  

Facts :The assessee, a registered dealer dealing in garments, claimed input tax credit on purchases supported by invoices. The audit authority disallowed ITC under Section 39(1) alleging that transactions with certain dealers were not genuine and that the burden under Section 70 was not discharged. The First Appellate Authority upheld the disallowance, but the Karnataka Appellate Tribunal allowed the assessee’s appeal. The State filed a revision petition before the High Court challenging the Tribunal’s order. Court Decision:The High Court upheld the Tribunal’s order and dismissed the revision petition. It held that the assessee had discharged the burden under Section 70 by producing invoices and proof of payment through banking channels, establishing genuineness of transactions. The Court further held that once transactions are proved genuine, input tax credit cannot be denied merely because the selling dealer failed to remit tax. It was also held that the statute does not permit action against the purchasing dealer for default of the selling dealer. Cases Referred by Court:•    Microqual Techno Pvt. Ltd. v. Additional Commissioner of Commercial Taxes •    Packwell Industries v. State of Karnataka  

Facts :The petitioner’s goods were detained during transit through a detention order (Form GST MOV-06) on the ground that the invoice value was lower than the MRP and HSN code was wrongly mentioned. The petitioner challenged the detention contending that these grounds do not justify detention under Sections 129 or 130 of the GST Act. It was also contended that there was no discrepancy in tax rate or supporting documents accompanying the goods. The issue arose from detention at a parcel godown during movement of goods.Court Decision:The Court held that undervaluation with reference to MRP is not a valid ground for detention of goods under the GST Act. There is no statutory provision prohibiting sale of goods below MRP, and such comparison cannot justify detention. The Court further held that incorrect HSN classification, without impact on tax rate, does not warrant detention. The detention order was quashed and authorities were directed to release the goods forthwith. Directions were also issued to the Commissioner to ensure such unwarranted detentions are not repeated.

BackgroundCIDCO (City Industrial and Development Corporation of Maharashtra Ltd.), incorporated on 17th March 1970, is designated as the New Town Development Authority under Section 113(3A) of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). In furtherance of its planning mandate, CIDCO allots residential-cum-commercial and hotel plots on 60-year leases through a tender process. Successful bidders pay a one-time lease premium (lump sum) plus annual lease rent. In April 2017, upon issuance of allotment letters, CIDCO demanded GST @ 18% on the total one-time lease premium via Demand Draft. Petitioners — an association of builders and a partnership firm — challenged this levy before the Bombay High Court after the GST Commissionerate failed to respond to their grievance correspondence. Court Observations (Verbatim)"A perusal of sections 7, 8, 9, 10 and 11 falling in this Chapter leaves us in no manner of doubt that the expression 'supply' includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.""Once this law, in terms of the substantive provisions and the Schedule, treats the activity as supply of goods or supply of services, particularly in relation to land and building and includes a lease, then, the consideration therefor as a premium/one-time premium is a measure on which the tax is levied, assessed and recovered. We cannot then probe into the legislation any further.""It is entirely for the legislature, therefore, to exercise the powers conferred by sub-section (2) of section 7 of the GST Act and issue the requisite notification. Absent that notification, merely going by the status of the CIDCO, we cannot hold that the lease premium would not attract or invite the liability to pay tax in terms of the GST Act.""With respect, it cannot be said that the activities performed by sovereign or public authorities under the provisions of law, which are in the nature of statutory obligations are excluded from the purview of the present enactment.""Pertinently, the dividing line between governmental and non-governmental, sovereign and regal functions and otherwise is not very thin and post globalisation, liberalisation and privatisation."Final VerdictThe demand for GST on the one-time lease premium is held to be in accordance with law. The writ petition is dismissed and Rule is discharged. No order as to costs.