BackgroundThe writ applicant, a practicing advocate, entered into an agreement dated 29th September 2020 with Navratna Organisers & Developers Pvt. Ltd. for purchase of a plot of land admeasuring 1021 sq. mtrs. at "Kalhar Blues and Greens", Ahmedabad, along with construction of a bungalow thereon. Separate and distinct consideration was fixed for (i) sale of land and (ii) construction of bungalow. The developer, relying on Entry 3(if) of Notification No. 11/2017-Central Tax (Rate) read with Paragraph 2 thereof, demanded GST @ 9% CGST + 9% SGST on the entire consideration (land + construction) after deducting only 1/3rd of total value towards land, instead of deducting the entire actual land consideration. Tax was collected from the petitioner under protest. In the companion writ applications, developers had filed advance ruling applications; the authority held only 1/3rd deduction admissible. Those orders were affirmed by the Appellate Authority for Advance Ruling. All three petitions were heard together, with SCA No. 1350 of 2021 treated as the lead matter.Court Observations (Verbatim — Crucial Paragraphs)Para 87:"Thus the legislative intent is to impose tax on construction activity undertaken by a supplier at the behest of or pursuant to contract with the recipient. There is no intention to impose tax on supply of land in any form and it is for this reason that it is provided in the Schedule III to the GST Acts that the supply of land will be neither supply of goods nor supply of services."Para 88:"If the statutory provisions are interpreted from this perspective then the difference sought to be drawn by the learned A.S.G. between developed and undeveloped land pales into insignificance. As such, when the entry in the Schedule III says 'sale of land' then it can be land in any form."Para 90:"However, in the present case what is sought to be argued by the revenue is that the exclusion of sale of land will not be available since the land is a developed piece of land. It is difficult for us to accept such argument as at the point of time when the buyer entered into the picture, the land was already developed. Thus, even without going to Schedule III, the only service which is supplied by the supplier to the recipient is the construction undertaken for the buyer and it is such supply alone which can be taxed. Hence the fact that the land is not a plain parcel of land but a developed land cannot be a ground for imposing tax on the sale of such land."Para 96:"The answer has to be in the negative. When the statutory provision requires valuation in accordance with the actual price paid and payable for the service and where such actual price is available, then tax has to be imposed on such actual value. Deeming fiction can be applied only where actual value is not ascertainable."Para 100:"Thus, mandatory application of deeming fiction of 1/3rd of total agreement value towards land even though the actual value of land is ascertainable is clearly contrary to the provisions and scheme of the CGST Act and therefore ultra-vires the statutory provisions."Para 105:"Such deeming fiction which leads to arbitrary and discriminatory consequences could be clearly said to be violative of Article 14 of the Constitution of India which guarantees equality to all and also frowns upon arbitrariness in law."Para 109:"Thus, the prescription under Section 15(5) of the CGST Act has to be by rules and not by notification. Be that as it may, wherever a delegated legislation is challenged as being ultra-vires the provisions of the CGST Act as well as violating Article 14 of the Constitution of India, the same cannot be defended merely on the ground that the Government had competence to issue such delegated piece of legislation. Even if it is presumed that the Government had the competence to fix a deemed value for supplies, if the deeming fiction is found to be arbitrary and contrary to the scheme of the statute, then it can be definitely held to be ultra-vires."Para 122:"In the result, the impugned Paragraph 2 of the Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 and identical notification under the Gujarat Goods and Services Tax Act, 2017, which provide for a mandatory fixed rate of deduction of 1/3rd of total consideration towards the value of land is ultra-vires the provisions as well as the scheme of the GST Acts. Application of such mandatory uniform rate of deduction is discriminatory, arbitrary and violative of Article 14 of the Constitution of India."Para 123–124:"While we so conclude, the question is whether the impugned paragraph 2 needs to be struck down or the same can be saved by reading it down. In our considered view, while maintaining the mandatory deduction of 1/3rd for value of land is not sustainable in cases where the value of land is clearly ascertainable or where the value of construction service can be derived with the aid of valuation rules, such deduction can be permitted at the option of a taxable person particularly in cases where the value of land or undivided share of land is not ascertainable. The impugned paragraph 2 of Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 and the parallel State tax Notification is read down to the effect that the deeming fiction of 1/3rd will not be mandatory in nature. It will only be available at the option of the taxable person in cases where the actual value of land or undivided share in land is not ascertainable."Final VerdictParagraph 2 of Notification No. 11/2017-Central Tax (Rate) read down — mandatory 1/3rd deemed deduction for land value held ultra-vires and violative of Article 14; it shall operate only as an option for the taxable person where actual land value is not ascertainable. Refund of excess tax directed to petitioner with 6% interest within 12 weeks. Advance ruling appellate orders in companion petitions quashed.  

BACKGROUNDThe National Consumer Disputes Redressal Commission directed the appellant to pay Rs.265.01 Crores with interest at 10% p.a. from 19.09.2016. The complainant had obtained two insurance policies from the appellant by paying a premium of Rs.10,38,03,912/-, obtained for a construction contract awarded by the Government of Basra, Iraq. When the contract was withdrawn due to internal conflict and payments were suspended, the appellant rejected the insurance claim. The complaint was filed and decided under the Consumer Protection Act, 1986. The appellant filed an appeal before the Supreme Court under Section 23 of the 1986 Act, depositing Rs.50,000/- as pre-deposit in accordance with the 1986 Act. However, the Consumer Protection Act, 2019 had come into force on 20.07.2020, and under Section 67 of the 2019 Act, the condition for filing an appeal is deposit of 50% of the entire awarded amount — with no upper ceiling — which would mean depositing approximately Rs.132 Crores. FACTSThe pre-deposit condition under the two Acts is starkly different. Under the 1986 Act, the condition was 50% of the awarded amount or Rs.50,000, whichever is less. Under the 2019 Act, it is a flat 50% of the awarded amount with no ceiling whatsoever. The appellant filed an Interlocutory Application praying that the appeal be entertained under the conditions prescribed by the 1986 Act, i.e., the law applicable at the time the complaint was filed and proceedings were initiated. The respondent contended that the 2019 Act applies as it was in force at the time of filing of the appeal and that pre-deposit is a mere procedural requirement, hence retrospective. The Court examined a long line of Constitution Bench judgments on the doctrine of vested right of appeal and whether imposition of a more onerous pre-deposit condition amounts to curtailing a substantive right that had already accrued. COURT OBSERVATIONS (Verbatim)(From Hoosein Kasam Dada — approved and relied upon by the Court): "The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right."(From Garikapati Veeraya — Constitution Bench principles approved and applied): "(ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."(From State of Bombay v. Supreme General Films Exchange — applied by the Court): "it has been held that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment which does so is not retrospective unless it says so expressly or by necessary intendment."(Court's own final conclusion — Para 34): "In view of the binding precedents of the Constitution Bench judgments referred to above, we hold that onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act." FINAL VERDICTThe Interlocutory Application was allowed. The Supreme Court held that the more onerous pre-deposit condition of 50% of the entire awarded amount under Section 67 of the Consumer Protection Act, 2019 will not apply to appeals arising from complaints filed prior to the commencement of the 2019 Act. The right of appeal is a vested substantive right governed by the law in force at the time of initiation of the proceedings, and it cannot be curtailed by the new law unless the new law expressly or by necessary intendment says so.👍 IN FAVOUR OF APPELLANT KEY CASES REFERRED AND RELIED UPON BY THE COURT#Case NameCitation1Nogendra Nath Bose v. Mon Mohan Singha Roy & Ors.AIR 1931 Cal. 100 (Calcutta HC — approved by SC)2Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors.AIR 1953 SC 221 (Supreme Court)3Garikapati Veeraya v. N. Subbiah Choudhry & Ors.AIR 1957 SC 540 (Constitution Bench)4State of Bombay v. M/s. Supreme General Films Exchange Ltd. & Anr.AIR 1960 SC 980 (Three-Judge Bench)5Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., NagpurAIR 1967 SC 344 (Constitution Bench)6M/s. Hardeodas Jagannath v. State of Assam & Ors.AIR 1970 SC 724 (Supreme Court)7K. Raveendranathan Nair & Anr. v. Commissioner of Income Tax & Ors.(2017) 9 SCC 355 (Supreme Court)8Anant Mills Co. Ltd. v. State of Gujarat & Ors.(1975) 2 SCC 175 (Four-Judge Bench)9Ramesh Singh & Anr. v. Cinta Devi & Ors.(1996) 3 SCC 142 (Supreme Court)10M/s Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors.(1992) 1 SCC 428 (Supreme Court)11Thirumalai Chemicals Limited v. Union of India & Ors.(2011) 6 SCC 739 (Supreme Court)12Neena Aneja & Anr. v. Jai Prakash Associates Ltd.2021 SCC OnLine SC 225 (Supreme Court)13Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors.2021 SCC OnLine SC 1044 (Three-Judge Bench)14New India Assurance Co. Ltd. v. Smt. Shanti Misra(1975) 2 SCC 840 (Supreme Court)15M/s. Dream Castle & Anr. v. Union of India & Ors.W.P. No. 13431 of 2015 decided on 18.04.2016 (Madras HC, Division Bench) 

BackgroundThe petitioners challenged notices denying ITC on purchases and demanding penalty and interest. The GST authorities alleged that the suppliers were fake and non-existing, their bank accounts had been opened using fake documents, the petitioners had not verified their genuineness and identity, and the suppliers' registrations had subsequently been cancelled retrospectively covering the relevant transaction period.The petitioners contended that the transactions were genuine and supported by the required documents. They stated that the suppliers' registrations were shown as valid on the Government portal at the time of the transactions, payments including GST were made through banking channels, and the invoices were reflected on the GST portal in GSTR-2A. They argued that they could not be penalised merely because the suppliers were subsequently found to be fake unless the department established concrete material showing collusion between the purchasers and suppliers.Court ObservationThe Court observed, subject to further verification, that it could not be said that the petitioners had failed to comply with any statutory obligation before entering into the transactions or in verifying the genuineness of the suppliers.The Court directed that the genuineness of the transactions, actual payment of purchase consideration and GST, timing of the transactions vis-à-vis cancellation of the suppliers' registrations, and compliance with the statutory obligation to verify the identity of the suppliers should be examined. The Court also required consideration of the judgments relied upon by both sides.Final VerdictThe writ petitions were disposed of by remanding the matters to the concerned respondents for fresh consideration of the petitioners' entitlement to ITC. If the documents establish that the purchases were genuine, supported by valid documents and made before cancellation of the suppliers' registrations, the petitioners were to be granted the benefit of ITC.The authorities were directed to pass a reasoned and speaking order after giving an effective opportunity of hearing, considering the judgments relied upon by the petitioners, within eight weeks from communication of the order. 

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