GST INDIA Biz
GST India .biz — Case Law
Latest GST Case Law and Judgements
S.No Name Date of Order Subject Actions
201Infac India Pvt. Ltd. v. Deputy Commissioner of GST & Central Excise 14-09-2023Refund of wrongly adjusted interest on transitional credit under GST regime (Sections 49(5), 50(3), 140, 142(3) – Central Goods and Services Tax Act, 2017; Section 11B – Central Excise Act, 1944) View Download

Facts :Petitioner wrongly transitioned balance from Personal Ledger Account as input tax credit under Section 140 of CGST Act.Refund was sanctioned, but ₹9,25,366 was adjusted towards interest on such utilization.Petitioner contended that sufficient Input Tax Credit was available and there was no loss to revenue.Dispute arose on legality of interest adjustment while granting refund.Court Decision:Petitioner ought to have claimed refund under Section 11B of Central Excise Act read with Section 142(3) of CGST Act.Wrong transition of credit was acknowledged, but tax liability was subsequently squared up using available Input Tax Credit.There was no loss to revenue, as sufficient credit existed.Directions:Deduction of ₹9,25,366 towards interest held unsustainable.Impugned order modified to that extent.Respondent directed to refund ₹9,25,366 to petitioner.Refund to be made within 8 weeks.

Infac India Pvt. Ltd. v. Deputy Commissioner of GST & Central Excise 14-09-2023
Refund of wrongly adjusted interest on transitional credit under GST regime (Sections 49(5), 50(3), 140, 142(3) – Central Goods and Services Tax Act, 2017; Section 11B – Central Excise Act, 1944)

Facts :Petitioner wrongly transitioned balance from Personal Ledger Account as input tax credit under Section 140 of CGST Act.Refund was sanctioned, but ₹9,25,366 was adjusted towards interest on such utilization.Petitioner contended that sufficient Input Tax Credit was available and there was no loss to revenue.Dispute arose on legality of interest adjustment while granting refund.Court Decision:Petitioner ought to have claimed refund under Section 11B of Central Excise Act read with Section 142(3) of CGST Act.Wrong transition of credit was acknowledged, but tax liability was subsequently squared up using available Input Tax Credit.There was no loss to revenue, as sufficient credit existed.Directions:Deduction of ₹9,25,366 towards interest held unsustainable.Impugned order modified to that extent.Respondent directed to refund ₹9,25,366 to petitioner.Refund to be made within 8 weeks.

View Download
202Guru Storage Batteries vs. State of Maharashtra & Ors.11-09-2023Validity of blocking of Electronic Credit Ledger (ECL) by an officer below the rank of Assistant Commissioner under Rule 86A of the CGST Rules, 2017. View Download

Background & Relevant FactsThe petitioner, Guru Storage Batteries, a partnership firm based in Nagpur, challenged the action of Respondent No. 3 — the State Tax Officer, Kamptee — in blocking its Electronic Credit Ledger (ECL). The blocking was carried out by Mr. Ujval Shrirampant Deshmukh, a State Tax Officer, who is admittedly an officer of a rank below that of Assistant Commissioner. The respondents sought to justify this action by relying on a Notification dated 24/01/2020, contending that the Commissioner had delegated the power to block ECL to Respondent No. 3. The petitioner also alleged that illegal recovery notices were being issued consequent to the said blocking. Court Observations (Verbatim)"A perusal of Rule 86A of the Central Goods and Services Tax Rules, 2017, indicates that such a blocking can be done by the Commissioner or an officer authorized by him in this behalf, not below the rank of Assistant Commissioner. Admittedly, the respondent No.3 does not fall within that category and is an Officer of the rank below that of the Assistant Commissioner.""Though the Notification dated 24/1/2020 has been relied upon to contend that the power has now been delegated by the Commissioner to the respondent No.3 (page 104), the same is under the State GST Act, whereas Rule 86-A of the aforesaid Act would contemplate a delegation by way of amendment to the Rule. The Notification dated 24/01/2020, would be of no assistance to the respondents." Final VerdictThe action of Respondent No. 3 in blocking the ECL was held to be without authority and was quashed and set aside. The petition was allowed with no costs, and the Rule was made absolute. Cases ReferredDee Vee Projects Ltd. vs. Government of Maharashtra and Ors. — 2022(2) Bom.C.R. 239 (Bombay High Court)

Guru Storage Batteries vs. State of Maharashtra & Ors. 11-09-2023
Validity of blocking of Electronic Credit Ledger (ECL) by an officer below the rank of Assistant Commissioner under Rule 86A of the CGST Rules, 2017.

Background & Relevant FactsThe petitioner, Guru Storage Batteries, a partnership firm based in Nagpur, challenged the action of Respondent No. 3 — the State Tax Officer, Kamptee — in blocking its Electronic Credit Ledger (ECL). The blocking was carried out by Mr. Ujval Shrirampant Deshmukh, a State Tax Officer, who is admittedly an officer of a rank below that of Assistant Commissioner. The respondents sought to justify this action by relying on a Notification dated 24/01/2020, contending that the Commissioner had delegated the power to block ECL to Respondent No. 3. The petitioner also alleged that illegal recovery notices were being issued consequent to the said blocking. Court Observations (Verbatim)"A perusal of Rule 86A of the Central Goods and Services Tax Rules, 2017, indicates that such a blocking can be done by the Commissioner or an officer authorized by him in this behalf, not below the rank of Assistant Commissioner. Admittedly, the respondent No.3 does not fall within that category and is an Officer of the rank below that of the Assistant Commissioner.""Though the Notification dated 24/1/2020 has been relied upon to contend that the power has now been delegated by the Commissioner to the respondent No.3 (page 104), the same is under the State GST Act, whereas Rule 86-A of the aforesaid Act would contemplate a delegation by way of amendment to the Rule. The Notification dated 24/01/2020, would be of no assistance to the respondents." Final VerdictThe action of Respondent No. 3 in blocking the ECL was held to be without authority and was quashed and set aside. The petition was allowed with no costs, and the Rule was made absolute. Cases ReferredDee Vee Projects Ltd. vs. Government of Maharashtra and Ors. — 2022(2) Bom.C.R. 239 (Bombay High Court)

View Download
203Aastha Enterprises v. State of Bihar & Ors.18-08-2023Eligibility of ITC under Section 16(1) & 16(2)(a)–(d) where the supplier collected but failed to deposit tax with the Government. View Download

BackgroundThe dispute arose from denial of ITC claimed on purchases made against tax invoices. The purchasing dealer contended that the purchases were genuine, payments for the goods and tax were made through bank accounts, invoices were available, and movement of goods was established. However, the selling dealer, after collecting the tax component from the purchaser, did not deposit the corresponding tax with the Government. The petitioner argued that recovery should instead be made from the defaulting selling dealer and that denying ITC would result in double taxation.The State opposed the claim by relying upon Section 16 of the BGST Act, submitting that ITC is subject to the statutory conditions prescribed therein. The Court also noted that the assessment order had not been challenged through the statutory appeal under Section 107 within the prescribed period, but proceeded to examine the substantive ITC issue because it involved interpretation of the statutory provision.Court ObservationThe Court held that the conditions prescribed under Section 16(2)(a), (b) and (c) are cumulative and must be satisfied together. Possession of a tax invoice and proof of receipt/payment of goods are not, by themselves, sufficient for availing ITC. Section 16(2)(c) specifically requires that the tax charged on the supply must have been actually paid to the Government, either in cash or through admissible ITC.The Court relied upon the Supreme Court's decision in State of Karnataka v. Ecom Gill Coffee Trading Private Limited, observing that the claimant of ITC bears the statutory burden of establishing the conditions necessary for the credit. It further held that production of invoices, proof of movement of goods and payment through banking channels does not overcome the requirement under Section 16(2)(c) that the tax must actually reach the Government.The Court rejected the contention that denial of ITC amounted to double taxation. It observed that merely because the purchaser paid the tax component to the supplier, the tax liability to the Government cannot be treated as satisfied unless the supplier actually deposits the tax with the Government. The statutory mechanism available to recover the unpaid tax from the selling dealer does not absolve the purchasing dealer from satisfying the conditions for ITC.Final VerdictThe Court concluded that the purchasing dealer cannot claim ITC unless the tax collected by the supplier has actually been paid to the Government. Even where the purchaser possesses tax invoices, establishes movement and receipt of goods, and proves payment to the supplier through bank accounts, ITC cannot be allowed in the absence of the supplier's payment of the tax to the Government.Accordingly, the writ petition was dismissed, with the parties directed to bear their respective costs.Cases Referred by CourtSri Vinayaga Agencies v. The Assistant Commissioner (CT) & Anr. — Madras High Court — 29.01.2013.D.Y. Beathel Enterprises v. The State Tax Officer (Data Cell) — Madras High Court — 24.02.2021.ALD. Automotive Pvt. Ltd. v. The Commercial Tax Officer & Ors. — Supreme Court — Civil Appeal Nos. 10412–10413 of 2018.Godrej & Boyce Mfg. Co. Pvt. Ltd. & Others v. Commissioner of Sales Tax & Others — Supreme Court — 1992 (3) SCC 624.The State of Karnataka v.  Ecom Gill Coffee Trading Private Limited — Supreme Court — Civil Appeal No. 230 of 2023.

Aastha Enterprises v. State of Bihar & Ors. 18-08-2023
Eligibility of ITC under Section 16(1) & 16(2)(a)–(d) where the supplier collected but failed to deposit tax with the Government.

BackgroundThe dispute arose from denial of ITC claimed on purchases made against tax invoices. The purchasing dealer contended that the purchases were genuine, payments for the goods and tax were made through bank accounts, invoices were available, and movement of goods was established. However, the selling dealer, after collecting the tax component from the purchaser, did not deposit the corresponding tax with the Government. The petitioner argued that recovery should instead be made from the defaulting selling dealer and that denying ITC would result in double taxation.The State opposed the claim by relying upon Section 16 of the BGST Act, submitting that ITC is subject to the statutory conditions prescribed therein. The Court also noted that the assessment order had not been challenged through the statutory appeal under Section 107 within the prescribed period, but proceeded to examine the substantive ITC issue because it involved interpretation of the statutory provision.Court ObservationThe Court held that the conditions prescribed under Section 16(2)(a), (b) and (c) are cumulative and must be satisfied together. Possession of a tax invoice and proof of receipt/payment of goods are not, by themselves, sufficient for availing ITC. Section 16(2)(c) specifically requires that the tax charged on the supply must have been actually paid to the Government, either in cash or through admissible ITC.The Court relied upon the Supreme Court's decision in State of Karnataka v. Ecom Gill Coffee Trading Private Limited, observing that the claimant of ITC bears the statutory burden of establishing the conditions necessary for the credit. It further held that production of invoices, proof of movement of goods and payment through banking channels does not overcome the requirement under Section 16(2)(c) that the tax must actually reach the Government.The Court rejected the contention that denial of ITC amounted to double taxation. It observed that merely because the purchaser paid the tax component to the supplier, the tax liability to the Government cannot be treated as satisfied unless the supplier actually deposits the tax with the Government. The statutory mechanism available to recover the unpaid tax from the selling dealer does not absolve the purchasing dealer from satisfying the conditions for ITC.Final VerdictThe Court concluded that the purchasing dealer cannot claim ITC unless the tax collected by the supplier has actually been paid to the Government. Even where the purchaser possesses tax invoices, establishes movement and receipt of goods, and proves payment to the supplier through bank accounts, ITC cannot be allowed in the absence of the supplier's payment of the tax to the Government.Accordingly, the writ petition was dismissed, with the parties directed to bear their respective costs.Cases Referred by CourtSri Vinayaga Agencies v. The Assistant Commissioner (CT) & Anr. — Madras High Court — 29.01.2013.D.Y. Beathel Enterprises v. The State Tax Officer (Data Cell) — Madras High Court — 24.02.2021.ALD. Automotive Pvt. Ltd. v. The Commercial Tax Officer & Ors. — Supreme Court — Civil Appeal Nos. 10412–10413 of 2018.Godrej & Boyce Mfg. Co. Pvt. Ltd. & Others v. Commissioner of Sales Tax & Others — Supreme Court — 1992 (3) SCC 624.The State of Karnataka v.  Ecom Gill Coffee Trading Private Limited — Supreme Court — Civil Appeal No. 230 of 2023.

View Download
204Punit Kumar Choubey vs The Commissioner, Commercial Tax, Patna & Ors.10-08-2023Appeal – Limitation for filing appeal under Sections 107(1) and 107(4) of the BGST Act, 2017 – writ petition against assessment order when appeal filed beyond statutory limitation. View Download

Facts :The petitioner challenged an assessment order dated 10.12.2021 passed under Section 73(9) of the BGST Act determining excess input tax credit. Notices were issued through the GST portal and reminders were sent, but the petitioner did not respond. The petitioner later filed an appeal with delay, which was rejected as time-barred, and thereafter approached the High Court.Court Decision:The Court held that the statutory remedy of appeal under Section 107 must be filed within three months with a further condonable period of one month. Even considering the extension of limitation granted by the Supreme Court in In Re: Cognizance for Extension of Limitation, the appeal should have been filed by 28.06.2022, but it was filed only on 10.07.2022.The Court held that when the statute prescribes a specific period for condonation of delay, neither the appellate authority nor the High Court under Article 226 can extend the limitation further. As the petitioner failed to avail the statutory appellate remedy within the prescribed period and no jurisdictional error or violation of natural justice was established, the writ petition was dismissed.Cases Referred by Court: In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No.3 of 2020 (Supreme Court of India ; State of H.P. & Ors. v. Gujarat Ambuja Cement Limited & Anr., (2005) 6 SCC 499

Punit Kumar Choubey vs The Commissioner, Commercial Tax, Patna & Ors. 10-08-2023
Appeal – Limitation for filing appeal under Sections 107(1) and 107(4) of the BGST Act, 2017 – writ petition against assessment order when appeal filed beyond statutory limitation.

Facts :The petitioner challenged an assessment order dated 10.12.2021 passed under Section 73(9) of the BGST Act determining excess input tax credit. Notices were issued through the GST portal and reminders were sent, but the petitioner did not respond. The petitioner later filed an appeal with delay, which was rejected as time-barred, and thereafter approached the High Court.Court Decision:The Court held that the statutory remedy of appeal under Section 107 must be filed within three months with a further condonable period of one month. Even considering the extension of limitation granted by the Supreme Court in In Re: Cognizance for Extension of Limitation, the appeal should have been filed by 28.06.2022, but it was filed only on 10.07.2022.The Court held that when the statute prescribes a specific period for condonation of delay, neither the appellate authority nor the High Court under Article 226 can extend the limitation further. As the petitioner failed to avail the statutory appellate remedy within the prescribed period and no jurisdictional error or violation of natural justice was established, the writ petition was dismissed.Cases Referred by Court: In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No.3 of 2020 (Supreme Court of India ; State of H.P. & Ors. v. Gujarat Ambuja Cement Limited & Anr., (2005) 6 SCC 499

View Download
205Arhaan Ferrous and Non-Ferrous Solutions Pvt. Ltd. & Anr. v. State of Andhra Pradesh & Ors.03-08-2023Detention/confiscation of goods under Sections 129 & 130 where proceedings were initiated against an alleged fictitious seller. View Download

BackgroundThe petitioners challenged the detention of iron scrap and the vehicles transporting it while the goods were in transit from Vijayawada to Sankarampet, Telangana. The goods were accompanied by invoices, e-way bills and other documents. The Revenue detained the consignment on the ground that the seller shown in the documents did not have a place of business at Vijayawada and subsequently alleged that the seller was a fictitious/non-existing entity. The seller's GST registration was suspended and proceedings under Section 130 were initiated against him.The petitioners contended that they had purchased the goods for valuable consideration after verifying the seller's GST registration on the official portal and that, at the time of interception, the goods were accompanied by valid documents. They argued that if the Revenue had any doubt regarding the transaction or the petitioners' bona fides, proceedings under Section 129 ought to have been initiated against them, rather than applying the Section 130 proceedings against the seller to the petitioners' goods.Court ObservationThe Court examined Section 68 and Rule 138A concerning inspection of goods in movement and the documents required to accompany a consignment. It noted that the officer had the authority to intercept and verify the goods and documents. However, the principal issue was whether the petitioners' goods could be confiscated merely because proceedings had been initiated against the seller under Section 130.Relying upon the distinction between Sections 129 and 130, the Court held that detention proceedings under Section 129 and confiscation proceedings under Section 130 operate in different contexts. The Court observed that although proceedings could be initiated against the seller under Section 130 because of his doubtful existence and business credentials, the petitioners' goods could not be confiscated merely because they had purchased the goods from that seller.The Court further observed that the petitioners' responsibility was to establish their own bona fides—namely, that they had purchased the goods for valuable consideration after verifying the seller's GST registration and that the transaction, payment and receipt of goods were supported by authenticated documents. They could not, however, be expected to establish the seller's business activities or whether the seller had obtained registration through fabricated documents. The Revenue was therefore required to initiate independent proceedings under Section 129 against the petitioners if it intended to proceed against their goods.Final VerdictThe High Court disposed of the writ petitions and granted liberty to the first respondent to initiate proceedings against the petitioners under Section 129 of the CGST/APGST Act, 2017 within two weeks from receipt of the order. The petitioners were to be given an opportunity of hearing and the matter was to be decided in accordance with law.In the meantime, the detained goods were directed to be released in favour of the purchaser on deposit of 25% of their value and execution of a personal bond for the balance. The vehicles were also directed to be released upon execution of personal security bonds for their value as determined by the concerned Road Transport Authority. No costs were awarded.Cases Referred by the CourtRajeev Traders v. Union of India — High Court of Karnataka, Dharwad Bench — Order dated 16.08.2022, W.P. No. 100849/2022 (T-RES). The Court relied upon this decision for the distinction between the powers of detention under Section 129 and confiscation under Section 130.Synergy Fertichem Pvt. Ltd. v. State of Gujarat — High Court of Gujarat — 2020 (33) G.S.T.L. 513 (Guj.) / MANU/GJ/3200/2019. The Court referred to this decision for the proposition that Sections 129 and 130 are independent and mutually exclusive provisions dealing respectively with detention/seizure/release and confiscation. 

Arhaan Ferrous and Non-Ferrous Solutions Pvt. Ltd. & Anr. v. State of Andhra Pradesh & Ors. 03-08-2023
Detention/confiscation of goods under Sections 129 & 130 where proceedings were initiated against an alleged fictitious seller.

BackgroundThe petitioners challenged the detention of iron scrap and the vehicles transporting it while the goods were in transit from Vijayawada to Sankarampet, Telangana. The goods were accompanied by invoices, e-way bills and other documents. The Revenue detained the consignment on the ground that the seller shown in the documents did not have a place of business at Vijayawada and subsequently alleged that the seller was a fictitious/non-existing entity. The seller's GST registration was suspended and proceedings under Section 130 were initiated against him.The petitioners contended that they had purchased the goods for valuable consideration after verifying the seller's GST registration on the official portal and that, at the time of interception, the goods were accompanied by valid documents. They argued that if the Revenue had any doubt regarding the transaction or the petitioners' bona fides, proceedings under Section 129 ought to have been initiated against them, rather than applying the Section 130 proceedings against the seller to the petitioners' goods.Court ObservationThe Court examined Section 68 and Rule 138A concerning inspection of goods in movement and the documents required to accompany a consignment. It noted that the officer had the authority to intercept and verify the goods and documents. However, the principal issue was whether the petitioners' goods could be confiscated merely because proceedings had been initiated against the seller under Section 130.Relying upon the distinction between Sections 129 and 130, the Court held that detention proceedings under Section 129 and confiscation proceedings under Section 130 operate in different contexts. The Court observed that although proceedings could be initiated against the seller under Section 130 because of his doubtful existence and business credentials, the petitioners' goods could not be confiscated merely because they had purchased the goods from that seller.The Court further observed that the petitioners' responsibility was to establish their own bona fides—namely, that they had purchased the goods for valuable consideration after verifying the seller's GST registration and that the transaction, payment and receipt of goods were supported by authenticated documents. They could not, however, be expected to establish the seller's business activities or whether the seller had obtained registration through fabricated documents. The Revenue was therefore required to initiate independent proceedings under Section 129 against the petitioners if it intended to proceed against their goods.Final VerdictThe High Court disposed of the writ petitions and granted liberty to the first respondent to initiate proceedings against the petitioners under Section 129 of the CGST/APGST Act, 2017 within two weeks from receipt of the order. The petitioners were to be given an opportunity of hearing and the matter was to be decided in accordance with law.In the meantime, the detained goods were directed to be released in favour of the purchaser on deposit of 25% of their value and execution of a personal bond for the balance. The vehicles were also directed to be released upon execution of personal security bonds for their value as determined by the concerned Road Transport Authority. No costs were awarded.Cases Referred by the CourtRajeev Traders v. Union of India — High Court of Karnataka, Dharwad Bench — Order dated 16.08.2022, W.P. No. 100849/2022 (T-RES). The Court relied upon this decision for the distinction between the powers of detention under Section 129 and confiscation under Section 130.Synergy Fertichem Pvt. Ltd. v. State of Gujarat — High Court of Gujarat — 2020 (33) G.S.T.L. 513 (Guj.) / MANU/GJ/3200/2019. The Court referred to this decision for the proposition that Sections 129 and 130 are independent and mutually exclusive provisions dealing respectively with detention/seizure/release and confiscation. 

View Download
206Blackberry India Pvt. Ltd. vs. The Assistant Commissioner, 03-08-2023Whether interest under Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 on refund of unutilised CENVAT Credit is to be calculated from the date immediately after expiry of three months from the original refund app View Download

Background & Relevant FactsThe petitioner, Blackberry India Pvt. Ltd., was engaged in providing marketing, administration and support services to Blackberry Singapore Pte. Ltd., an overseas entity. The petitioner claimed these services constituted export of services under the Service Tax Rules, 1994 and accordingly filed three separate applications for refund of unutilised CENVAT Credit for the following periods:April–June 2012: Rs. 3,18,11,287/- filed on 28.03.2013April–June 2013: Rs. 2,89,94,208/- filed on 31.03.2014July–September 2013: Rs. 2,47,28,850/- filed on 30.06.2014Total: Rs. 8,55,34,345/-The refund applications were not processed for years. The Adjudicating Authority issued a Show Cause Notice dated 22.01.2020, proposing to reject the refund on the ground that the petitioner was an "intermediary" and hence the place of provision of services was India, not outside India. By Order-in-Original dated 31.08.2020, the refund claims were rejected. The Commissioner (Appeals) upheld this rejection on 19.08.2021.The petitioner appealed to CESTAT, which by Final Order No. 51150/2022 dated 07.12.2022 allowed the appeal and held the services to be export of services — entitling the petitioner to refund. Even after CESTAT's order, the refund was not processed. The petitioner sent a letter dated 07.02.2023 requesting processing of the refund. The Revenue also filed an appeal against the CESTAT order before the Delhi High Court (SERTA 7/2023), which was dismissed on 12.07.2023.The Adjudicating Authority then processed the refund by the impugned order dated 04.05.2023 — sanctioning the principal amount of Rs. 8,55,34,345/- but denying interest under Section 11BB, treating the petitioner's letter dated 07.02.2023 as the date of refund application and holding that since refund was granted within three months thereof, no interest was payable. The petitioner challenged only the denial of interest in the present writ petition.Court Observations (Verbatim)"In a case where Revenue denies the claim for refund and the assessee succeeds before the Appellate Authorities, the interest is required to be calculated from the date immediately after the expiry of three months from the date of application for the refund and not from the date of the appellate orders. This issue was settled by the Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India: (2011) 10 SCC 292.""The said contention [that interest should be calculated from three months from the CESTAT order dated 07.12.2022] is unmerited and as stated above, the said issue stands authoritatively settled by the Supreme Court in Ranbaxy Laboratories Ltd. (supra).""The impugned order is, ex facie, erroneous to the extent it rejects the petitioner's claim for interest. The impugned order sets out a tabular statement...clearly stating the dates on which the petitioner had made its claim for refund.""The Adjudicating Authority has failed to consider that the petitioner had filed its applications of refund on 28.03.2013, 31.03.2014 and 30.06.2014 for the tax periods April-June 2012, April-June 2013, and July-September 2013 respectively. And the interest payable to the petitioner is required to be calculated from the date immediately after expiry of three months from the dates on which those applications were made."Final VerdictWrit petition allowed. The Adjudicating Authority directed to forthwith process the petitioner's claim for interest under Section 11BB of the Central Excise Act read with Section 83 of the Finance Act, computed from the date immediately after expiry of three months from the original application dates (28.03.2013, 31.03.2014 and 30.06.2014 respectively) — not from the letter dated 07.02.2023. 👍 In favour of Assessee.

Blackberry India Pvt. Ltd. vs. The Assistant Commissioner, 03-08-2023
Whether interest under Section 11BB of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 on refund of unutilised CENVAT Credit is to be calculated from the date immediately after expiry of three months from the original refund app

Background & Relevant FactsThe petitioner, Blackberry India Pvt. Ltd., was engaged in providing marketing, administration and support services to Blackberry Singapore Pte. Ltd., an overseas entity. The petitioner claimed these services constituted export of services under the Service Tax Rules, 1994 and accordingly filed three separate applications for refund of unutilised CENVAT Credit for the following periods:April–June 2012: Rs. 3,18,11,287/- filed on 28.03.2013April–June 2013: Rs. 2,89,94,208/- filed on 31.03.2014July–September 2013: Rs. 2,47,28,850/- filed on 30.06.2014Total: Rs. 8,55,34,345/-The refund applications were not processed for years. The Adjudicating Authority issued a Show Cause Notice dated 22.01.2020, proposing to reject the refund on the ground that the petitioner was an "intermediary" and hence the place of provision of services was India, not outside India. By Order-in-Original dated 31.08.2020, the refund claims were rejected. The Commissioner (Appeals) upheld this rejection on 19.08.2021.The petitioner appealed to CESTAT, which by Final Order No. 51150/2022 dated 07.12.2022 allowed the appeal and held the services to be export of services — entitling the petitioner to refund. Even after CESTAT's order, the refund was not processed. The petitioner sent a letter dated 07.02.2023 requesting processing of the refund. The Revenue also filed an appeal against the CESTAT order before the Delhi High Court (SERTA 7/2023), which was dismissed on 12.07.2023.The Adjudicating Authority then processed the refund by the impugned order dated 04.05.2023 — sanctioning the principal amount of Rs. 8,55,34,345/- but denying interest under Section 11BB, treating the petitioner's letter dated 07.02.2023 as the date of refund application and holding that since refund was granted within three months thereof, no interest was payable. The petitioner challenged only the denial of interest in the present writ petition.Court Observations (Verbatim)"In a case where Revenue denies the claim for refund and the assessee succeeds before the Appellate Authorities, the interest is required to be calculated from the date immediately after the expiry of three months from the date of application for the refund and not from the date of the appellate orders. This issue was settled by the Supreme Court in Ranbaxy Laboratories Ltd. v. Union of India: (2011) 10 SCC 292.""The said contention [that interest should be calculated from three months from the CESTAT order dated 07.12.2022] is unmerited and as stated above, the said issue stands authoritatively settled by the Supreme Court in Ranbaxy Laboratories Ltd. (supra).""The impugned order is, ex facie, erroneous to the extent it rejects the petitioner's claim for interest. The impugned order sets out a tabular statement...clearly stating the dates on which the petitioner had made its claim for refund.""The Adjudicating Authority has failed to consider that the petitioner had filed its applications of refund on 28.03.2013, 31.03.2014 and 30.06.2014 for the tax periods April-June 2012, April-June 2013, and July-September 2013 respectively. And the interest payable to the petitioner is required to be calculated from the date immediately after expiry of three months from the dates on which those applications were made."Final VerdictWrit petition allowed. The Adjudicating Authority directed to forthwith process the petitioner's claim for interest under Section 11BB of the Central Excise Act read with Section 83 of the Finance Act, computed from the date immediately after expiry of three months from the original application dates (28.03.2013, 31.03.2014 and 30.06.2014 respectively) — not from the letter dated 07.02.2023. 👍 In favour of Assessee.

View Download
207Suncraft Energy Private Limited & Anr. v. Assistant Commissioner, State Tax, Ballygunge Charge & Ors.02-08-2023forms under GST (Sections involved: Section 16(2) and Section 73 of the West Bengal Goods and Services Tax Act, 2017) View Download

Facts The appellant availed Input Tax Credit on purchases made from a supplier and paid the tax amount along with the value of goods/services. The department issued notices alleging mismatch between GSTR-2A and GSTR-3B and non-reflection of supplier invoices in GSTR-1. A demand order under Section 73(10) was passed reversing ITC along with interest and penalty. The writ petition was disposed of directing the appellant to file a statutory appeal, which led to the present intra-court appeal. Court Decision:The High Court set aside the demand order and held that reversal of ITC was not justified without first taking action against the selling dealer. The Court held that when the purchasing dealer has fulfilled conditions under Section 16(2), including possession of invoice, receipt of goods/services, and payment of tax, ITC cannot be denied merely due to non-reflection in GSTR forms. It was further held that proceedings against the purchaser can arise only in exceptional circumstances such as fraud, collusion, or where the supplier is non-existent or without assets. Cases Referred by Court:•    Union of India v. Bharti Airtel Ltd. •    Arise India Limited v. Commissioner of Trade and Taxes, Delhi •    Commissioner of Trade and Taxes v. Arise India Limited (SLP dismissed)   

Suncraft Energy Private Limited & Anr. v. Assistant Commissioner, State Tax, Ballygunge Charge & Ors. 02-08-2023
forms under GST (Sections involved: Section 16(2) and Section 73 of the West Bengal Goods and Services Tax Act, 2017)

Facts The appellant availed Input Tax Credit on purchases made from a supplier and paid the tax amount along with the value of goods/services. The department issued notices alleging mismatch between GSTR-2A and GSTR-3B and non-reflection of supplier invoices in GSTR-1. A demand order under Section 73(10) was passed reversing ITC along with interest and penalty. The writ petition was disposed of directing the appellant to file a statutory appeal, which led to the present intra-court appeal. Court Decision:The High Court set aside the demand order and held that reversal of ITC was not justified without first taking action against the selling dealer. The Court held that when the purchasing dealer has fulfilled conditions under Section 16(2), including possession of invoice, receipt of goods/services, and payment of tax, ITC cannot be denied merely due to non-reflection in GSTR forms. It was further held that proceedings against the purchaser can arise only in exceptional circumstances such as fraud, collusion, or where the supplier is non-existent or without assets. Cases Referred by Court:•    Union of India v. Bharti Airtel Ltd. •    Arise India Limited v. Commissioner of Trade and Taxes, Delhi •    Commissioner of Trade and Taxes v. Arise India Limited (SLP dismissed)   

View Download
208Pepsico India Holdings Pvt. Ltd. vs. Union of India & 3 Ors.13-02-2023Whether issuance of a Demand-cum-Show Cause Notice under Section 73(1) of the CGST Act, 2017 without prior issuance of Form GST ASMT-10 under Section 61 read with Rule 99 of CGST Rules, 2017 is legally valid and jurisdictionally competent. View Download

BACKGROUND The Department issued a Demand-cum-Show Cause Notice under Section 73(1) of the CGST Act alleging wrongly availed Input Tax Credit amounting to Rs. 19.51 crores for Financial Year 2017-18. The alleged discrepancy was that the petitioner-assessee had not submitted information in Table 14 of Form GSTR-9C, resulting in a mismatch with details in Form GSTR-9. The assessee challenged the notice before the High Court contending that Table 14 of GSTR-9C had been made optional for FY 2017-18 onwards by a series of Government Notifications, and more crucially, that the mandatory pre-condition of issuing Form GST ASMT-10 under Section 61 read with Rule 99 was never complied with before jumping directly to the SCN under Section 73(1). The Department admitted non-issuance of Form GST ASMT-10 but argued that CAG letters had been sent to the assessee and that natural justice was not violated since the SCN itself provided an opportunity of hearing. CRUCIAL COURT OBSERVATIONS (Verbatim)"Prior to issuance of a show cause notice under Section 73[1] of the CGST Act, 2017, it is mere discrepancy. At that stage, the alleged discrepancy would only be a discrepancy simplicitor but at the stage of issuance of Demand-cum-Show Cause Notice under Section 73[1] of the CGST Act, 2017, there is formation of a prima facie opinion on the part of the Proper Officer that there is an act, which is in violation of the statutory obligation cast on the noticee.""The issues raised in the present writ petition, prima facie, are not relatable to any disputed questions of fact. The petitioner has raised a contention that the statutory prescriptions contained in Section 61 and Section 73 of CGST Act, 2017 r/w Rule 99 of the CGST Rules, 2017 have not been adhered to and without adherence to the conditions precedent, that is, issuance of notice to the registered person in Form GST ASMT-10 to provide the noticee either to accept or not to accept the discrepancy or to furnish an explanation for the discrepancy in Form GST ASMT-11 or not to furnish any explanation, at a period of time anterior to the impugned Demand-cum-Show Cause Notice, the Proper Officer could not have assumed jurisdiction to issue the Demand-cum-Show Cause Notice under sub-section [1] of Section 73 of the CGST Act, 2017.""Prima facie, this Court finds force in the above contentions advanced by the petitioner that an act of issuance of the impugned Demand-cum-Show Cause Notice dated 05.09.2023 under Section 73[1] of the CGST Act, 2017 by the Proper Officer was without compliance of the mandatory conditions precedent, prescribed under the CGST Act, 2017 and the CGST Rules, 2017, more particularly, the provisions of Section 61 of the CGST Act, 2017 r/w Rule 99 of the CGST Rules, 2017, to derive jurisdiction to issue such a Demand-cum-Show Cause Notice under Section 73[1] of the CGST Act, 2017." FINAL VERDICT The High Court stayed the operation of the impugned Demand-cum-Show Cause Notice, finding prima facie force in the petitioner's contention that issuance of Form GST ASMT-10 is a mandatory condition precedent before invoking Section 73(1) and its non-compliance goes to the root of jurisdiction. 👍

Pepsico India Holdings Pvt. Ltd. vs. Union of India & 3 Ors. 13-02-2023
Whether issuance of a Demand-cum-Show Cause Notice under Section 73(1) of the CGST Act, 2017 without prior issuance of Form GST ASMT-10 under Section 61 read with Rule 99 of CGST Rules, 2017 is legally valid and jurisdictionally competent.

BACKGROUND The Department issued a Demand-cum-Show Cause Notice under Section 73(1) of the CGST Act alleging wrongly availed Input Tax Credit amounting to Rs. 19.51 crores for Financial Year 2017-18. The alleged discrepancy was that the petitioner-assessee had not submitted information in Table 14 of Form GSTR-9C, resulting in a mismatch with details in Form GSTR-9. The assessee challenged the notice before the High Court contending that Table 14 of GSTR-9C had been made optional for FY 2017-18 onwards by a series of Government Notifications, and more crucially, that the mandatory pre-condition of issuing Form GST ASMT-10 under Section 61 read with Rule 99 was never complied with before jumping directly to the SCN under Section 73(1). The Department admitted non-issuance of Form GST ASMT-10 but argued that CAG letters had been sent to the assessee and that natural justice was not violated since the SCN itself provided an opportunity of hearing. CRUCIAL COURT OBSERVATIONS (Verbatim)"Prior to issuance of a show cause notice under Section 73[1] of the CGST Act, 2017, it is mere discrepancy. At that stage, the alleged discrepancy would only be a discrepancy simplicitor but at the stage of issuance of Demand-cum-Show Cause Notice under Section 73[1] of the CGST Act, 2017, there is formation of a prima facie opinion on the part of the Proper Officer that there is an act, which is in violation of the statutory obligation cast on the noticee.""The issues raised in the present writ petition, prima facie, are not relatable to any disputed questions of fact. The petitioner has raised a contention that the statutory prescriptions contained in Section 61 and Section 73 of CGST Act, 2017 r/w Rule 99 of the CGST Rules, 2017 have not been adhered to and without adherence to the conditions precedent, that is, issuance of notice to the registered person in Form GST ASMT-10 to provide the noticee either to accept or not to accept the discrepancy or to furnish an explanation for the discrepancy in Form GST ASMT-11 or not to furnish any explanation, at a period of time anterior to the impugned Demand-cum-Show Cause Notice, the Proper Officer could not have assumed jurisdiction to issue the Demand-cum-Show Cause Notice under sub-section [1] of Section 73 of the CGST Act, 2017.""Prima facie, this Court finds force in the above contentions advanced by the petitioner that an act of issuance of the impugned Demand-cum-Show Cause Notice dated 05.09.2023 under Section 73[1] of the CGST Act, 2017 by the Proper Officer was without compliance of the mandatory conditions precedent, prescribed under the CGST Act, 2017 and the CGST Rules, 2017, more particularly, the provisions of Section 61 of the CGST Act, 2017 r/w Rule 99 of the CGST Rules, 2017, to derive jurisdiction to issue such a Demand-cum-Show Cause Notice under Section 73[1] of the CGST Act, 2017." FINAL VERDICT The High Court stayed the operation of the impugned Demand-cum-Show Cause Notice, finding prima facie force in the petitioner's contention that issuance of Form GST ASMT-10 is a mandatory condition precedent before invoking Section 73(1) and its non-compliance goes to the root of jurisdiction. 👍

View Download
209Ram Prakash Chauhan v. Commissioner of Delhi (GST) & Anr.19-01-2023Validity of detention order and demand of tax and penalty under Section 129 of the CGST Act, 2017 for alleged defective documents accompanying goods in transit — whether payment of tax and penalty for release of detained goods amounts to voluntary payme View Download

BACKGROUNDThe petitioner, a sole proprietor trading in steel/iron bars, purchased a consignment of steel and sold it onward. An e-way bill was generated for transporting the goods directly from the seller's premises to the buyer's premises. The e-way bill reflected the petitioner's GSTIN, while the address mentioned was that of the buyer, since the goods had already been sold. RELEVANT FACTSThe truck carrying the goods was intercepted by GST authorities on 19-10-2020 at 11:00 p.m. and detained on the ground that the documents accompanying the goods were found defective. A detention order dated 23-10-2020 was passed, followed on the same date by a show-cause notice under Section 129(3) of the CGST Act stating the reason as "prima facie, the documents tendered are found to be defective" — without specifying any particular defect. Simultaneously, an order of demand of tax and penalty of Rs. 2,78,129 each was raised. Since the petitioner urgently required the goods, he paid the demanded tax and penalty to secure release of the goods. Thereafter, the petitioner filed an appeal, which was dismissed by the appellate authority on 31-12-2021, which also failed to disclose the specific discrepancy alleged between the e-way bill and the goods. The petitioner then filed the present writ petition before the Delhi High Court challenging both orders. COURT OBSERVATIONS (Verbatim)Para 20: "We are unable to accept that the order of demand and penalty is a consent order and the petitioner was precluded from challenging the same. The goods had been detained and it is not disputed that the same would not have been released unless the tax and penalty was paid. We are persuaded to accept that the petitioner had paid the tax and penalty for release of the goods and the said payment was not voluntary."Para 21: "As stated above, it is apparent that neither the show-cause notice nor the order of demand clearly sets out the reason for imposing the tax liability as well as penalty."Para 22: "In the given facts, we are of the view that it would be apposite to remand the matter to the GST officer concerned to decide afresh after giving the petitioner full opportunity to address the allegation against him." FINAL VERDICT 👍Both the order dated 23-10-2020 raising demand of tax and penalty, and the appellate order dated 31-12-2021, were set aside. The matter was remanded to the GST officer concerned, who was directed to issue a fresh show-cause notice within two weeks and pass a fresh order after affording the petitioner a reasonable opportunity of hearing. 

Ram Prakash Chauhan v. Commissioner of Delhi (GST) & Anr. 19-01-2023
Validity of detention order and demand of tax and penalty under Section 129 of the CGST Act, 2017 for alleged defective documents accompanying goods in transit — whether payment of tax and penalty for release of detained goods amounts to voluntary payme

BACKGROUNDThe petitioner, a sole proprietor trading in steel/iron bars, purchased a consignment of steel and sold it onward. An e-way bill was generated for transporting the goods directly from the seller's premises to the buyer's premises. The e-way bill reflected the petitioner's GSTIN, while the address mentioned was that of the buyer, since the goods had already been sold. RELEVANT FACTSThe truck carrying the goods was intercepted by GST authorities on 19-10-2020 at 11:00 p.m. and detained on the ground that the documents accompanying the goods were found defective. A detention order dated 23-10-2020 was passed, followed on the same date by a show-cause notice under Section 129(3) of the CGST Act stating the reason as "prima facie, the documents tendered are found to be defective" — without specifying any particular defect. Simultaneously, an order of demand of tax and penalty of Rs. 2,78,129 each was raised. Since the petitioner urgently required the goods, he paid the demanded tax and penalty to secure release of the goods. Thereafter, the petitioner filed an appeal, which was dismissed by the appellate authority on 31-12-2021, which also failed to disclose the specific discrepancy alleged between the e-way bill and the goods. The petitioner then filed the present writ petition before the Delhi High Court challenging both orders. COURT OBSERVATIONS (Verbatim)Para 20: "We are unable to accept that the order of demand and penalty is a consent order and the petitioner was precluded from challenging the same. The goods had been detained and it is not disputed that the same would not have been released unless the tax and penalty was paid. We are persuaded to accept that the petitioner had paid the tax and penalty for release of the goods and the said payment was not voluntary."Para 21: "As stated above, it is apparent that neither the show-cause notice nor the order of demand clearly sets out the reason for imposing the tax liability as well as penalty."Para 22: "In the given facts, we are of the view that it would be apposite to remand the matter to the GST officer concerned to decide afresh after giving the petitioner full opportunity to address the allegation against him." FINAL VERDICT 👍Both the order dated 23-10-2020 raising demand of tax and penalty, and the appellate order dated 31-12-2021, were set aside. The matter was remanded to the GST officer concerned, who was directed to issue a fresh show-cause notice within two weeks and pass a fresh order after affording the petitioner a reasonable opportunity of hearing. 

View Download
210Genpact India Pvt. Ltd. vs. Union of India and Others11-11-2022Whether BPO services provided by an Indian company (Genpact India) to its overseas group entity (Genpact International Inc., USA) under a Master Services Sub-Contracting Agreement constitute View Download

Background & Relevant FactsThe petitioner, Genpact India Pvt. Ltd., is a BPO service provider registered under Haryana GST, employing approximately 50,000 employees. It is engaged in providing a host of BPO and IT-enabled services including maintaining vendor/customer master data, processing vendor invoices, book-keeping, software development, technical IT support, data analysis, supply chain management support etc. — all rendered from India remotely through telecommunication/internet links using its own infrastructure.The petitioner entered into a Master Services Sub-Contracting Agreement (MSA) dated 01.01.2013 with Genpact International Inc. (GI), a US entity. Under the MSA, the petitioner was sub-contracted by GI to actually perform and deliver BPO/IT services directly to GI's overseas customers, on a principal-to-principal basis. The petitioner raised invoices on GI and received payment in convertible foreign exchange. There was no separate agreement between the petitioner and GI's customers.For the period July 2017 to March 2018, the petitioner filed a refund application on 18.10.2018 claiming refund of unutilised ITC of Rs. 27,26,27,276/- under Section 16 of the IGST Act read with Section 54 of the CGST Act. The Deputy Commissioner by Order-in-Original dated 14.03.2019 sanctioned Rs. 26,34,61,625/- accepting the services as export of services.However, the Principal Commissioner exercised revision powers under Section 107(2) of the CGST Act and filed an appeal contending that the petitioner's services were "intermediary services" — relying on a Circular dated 18.07.2019 which was subsequently withdrawn on 04.12.2019. The Joint Commissioner (Appeals) by order dated 27.05.2020 held the services to be intermediary services and ordered recovery of the entire refund of Rs. 26,34,61,625/-.In an earlier round of litigation (CWP No. 10302/2020), this Court set aside the order dated 27.05.2020 and remanded the matter for fresh decision. The Appellate Authority on remand again passed order dated 15.02.2021 holding the petitioner to be an intermediary and denying the refund, additionally denying a further claim of Rs. 82,15,102/-. Refund applications for subsequent periods (April 2018–March 2019) were also rejected on identical grounds. Aggrieved by the order dated 15.02.2021, the present writ petition was filed. Court Observations (Verbatim)"A bare perusal of the recitals and relevant clauses of the MSA...do not in any manner indicate that petitioner is acting as an 'intermediary' so as to fall within the scope and ambit of the definition of 'intermediary' under Section 2(13) of the IGST Act. Such clauses cannot also be interpreted to conclude that the petitioner has facilitated the services. The said clauses are in relation to the modalities of how the actual work would be carried out and do not in any manner establish that the petitioner was required to arrange/facilitate a 3rd party to render the main service which has actually been rendered by the petitioner.""As per definition of 'intermediary' under Section 2(13) of the IGST Act the following three conditions must be satisfied for a person to qualify as an 'intermediary'; First, the relationship between the parties must be that of a principal-agency relationship. Second, the person must be involved in arrangement or facilitation of provisions of the service provided to the principal by a 3rd party. Third, the person must not actually perform the main service intended to be received by the service recipient itself.""There is no change in the legal position i.e. with regard to the scope and ambit of 'intermediary' services under the service tax regime vis-a-vis the GST regime and there being no change of facts as it is the MSA of 2013 (Annexure P-1) which continues to operate, the department cannot take a different view for different periods.""The finding recorded by the respondents-department to hold the petitioner to be in a principal agent relationship with the GI to be without any basis and to be clearly erroneous. The impugned order proceeds oblivious of Clause 21.6 of the MSA... Nothing in this Agreement shall constitute or be deemed to constitute a relationship of employer and employee, agency, joint venture or partnership between the parties hereto...""Even as per the afore-noticed circular dated 20.09.2021 and in reference to para 3.5 it stands clarified that sub-contracting for a service is not an 'intermediary' service.""The written statement seeks to justify the impugned order on grounds which are not even part of the impugned order and which is clearly impermissible in law." [Relying on Mohinder Singh Gill vs. Chief Election Commissioner]"The principle of consistency as such ought to apply in the present matter as well and we find merit in the stand taken on behalf of the petitioner that the view taken in the order in original dated 25.01.2018...holding the petitioner to be not an 'intermediary' under the MSA, should prevail even under the GST regime."Final VerdictWrit petition allowed. Impugned order dated 15.02.2021 quashed. Order-in-Original dated 14.03.2019 granting refund of Rs. 26,34,61,625/- restored. Directed that the benefit of this order shall enure to the petitioner for subsequent refunds as well. 👍 In favour of Assessee.   

Genpact India Pvt. Ltd. vs. Union of India and Others 11-11-2022
Whether BPO services provided by an Indian company (Genpact India) to its overseas group entity (Genpact International Inc., USA) under a Master Services Sub-Contracting Agreement constitute

Background & Relevant FactsThe petitioner, Genpact India Pvt. Ltd., is a BPO service provider registered under Haryana GST, employing approximately 50,000 employees. It is engaged in providing a host of BPO and IT-enabled services including maintaining vendor/customer master data, processing vendor invoices, book-keeping, software development, technical IT support, data analysis, supply chain management support etc. — all rendered from India remotely through telecommunication/internet links using its own infrastructure.The petitioner entered into a Master Services Sub-Contracting Agreement (MSA) dated 01.01.2013 with Genpact International Inc. (GI), a US entity. Under the MSA, the petitioner was sub-contracted by GI to actually perform and deliver BPO/IT services directly to GI's overseas customers, on a principal-to-principal basis. The petitioner raised invoices on GI and received payment in convertible foreign exchange. There was no separate agreement between the petitioner and GI's customers.For the period July 2017 to March 2018, the petitioner filed a refund application on 18.10.2018 claiming refund of unutilised ITC of Rs. 27,26,27,276/- under Section 16 of the IGST Act read with Section 54 of the CGST Act. The Deputy Commissioner by Order-in-Original dated 14.03.2019 sanctioned Rs. 26,34,61,625/- accepting the services as export of services.However, the Principal Commissioner exercised revision powers under Section 107(2) of the CGST Act and filed an appeal contending that the petitioner's services were "intermediary services" — relying on a Circular dated 18.07.2019 which was subsequently withdrawn on 04.12.2019. The Joint Commissioner (Appeals) by order dated 27.05.2020 held the services to be intermediary services and ordered recovery of the entire refund of Rs. 26,34,61,625/-.In an earlier round of litigation (CWP No. 10302/2020), this Court set aside the order dated 27.05.2020 and remanded the matter for fresh decision. The Appellate Authority on remand again passed order dated 15.02.2021 holding the petitioner to be an intermediary and denying the refund, additionally denying a further claim of Rs. 82,15,102/-. Refund applications for subsequent periods (April 2018–March 2019) were also rejected on identical grounds. Aggrieved by the order dated 15.02.2021, the present writ petition was filed. Court Observations (Verbatim)"A bare perusal of the recitals and relevant clauses of the MSA...do not in any manner indicate that petitioner is acting as an 'intermediary' so as to fall within the scope and ambit of the definition of 'intermediary' under Section 2(13) of the IGST Act. Such clauses cannot also be interpreted to conclude that the petitioner has facilitated the services. The said clauses are in relation to the modalities of how the actual work would be carried out and do not in any manner establish that the petitioner was required to arrange/facilitate a 3rd party to render the main service which has actually been rendered by the petitioner.""As per definition of 'intermediary' under Section 2(13) of the IGST Act the following three conditions must be satisfied for a person to qualify as an 'intermediary'; First, the relationship between the parties must be that of a principal-agency relationship. Second, the person must be involved in arrangement or facilitation of provisions of the service provided to the principal by a 3rd party. Third, the person must not actually perform the main service intended to be received by the service recipient itself.""There is no change in the legal position i.e. with regard to the scope and ambit of 'intermediary' services under the service tax regime vis-a-vis the GST regime and there being no change of facts as it is the MSA of 2013 (Annexure P-1) which continues to operate, the department cannot take a different view for different periods.""The finding recorded by the respondents-department to hold the petitioner to be in a principal agent relationship with the GI to be without any basis and to be clearly erroneous. The impugned order proceeds oblivious of Clause 21.6 of the MSA... Nothing in this Agreement shall constitute or be deemed to constitute a relationship of employer and employee, agency, joint venture or partnership between the parties hereto...""Even as per the afore-noticed circular dated 20.09.2021 and in reference to para 3.5 it stands clarified that sub-contracting for a service is not an 'intermediary' service.""The written statement seeks to justify the impugned order on grounds which are not even part of the impugned order and which is clearly impermissible in law." [Relying on Mohinder Singh Gill vs. Chief Election Commissioner]"The principle of consistency as such ought to apply in the present matter as well and we find merit in the stand taken on behalf of the petitioner that the view taken in the order in original dated 25.01.2018...holding the petitioner to be not an 'intermediary' under the MSA, should prevail even under the GST regime."Final VerdictWrit petition allowed. Impugned order dated 15.02.2021 quashed. Order-in-Original dated 14.03.2019 granting refund of Rs. 26,34,61,625/- restored. Directed that the benefit of this order shall enure to the petitioner for subsequent refunds as well. 👍 In favour of Assessee.   

View Download
Total: 240 case laws