Newsletter - Vol. 2, Issue 21 - GST

Iron Ore Fines even though attracts Nil Rate of tax will falls within the ken of exempt supply and the petitioner would be entitled to refund on such export transaction as zero-rated supply: Hon’ble Orissa High Court

In M/s National Venture Pvt. Ltd. v. UOI and Ors., W.P(C). No.2271 of 2022, Hon’ble HC held that The export of “Iron Ore Fines” even though attracts Nil Rate of Tax, in view of Second Schedule to the Customs Tariff Act, 1975, the Petitioner would be entitled to refund on such export transactions. In view of Section 16 of the IGST Act read with Section 54(3) of the OGST/CGST Act, export of goods or services or both is levied with zero-rate. “NIL rate of Tax” falls within the ken of the term “exempt supply” defined under Section 2(47) of the OGST/CGST Act. Relied upon M/s BS Minerals v. State of Odisha and Ors.

An Indian importer cannot be subject to the levy of IGST on the component of ocean freight paid by the foreign seller to a foreign shipping line, on a reverse charge basis: Hon’ble Supreme Court

In UOI v. Mohit Minerals and Ors., Hon’ble Supreme Court held that the impugned levy imposed on the ‘service’ aspect of the transaction is in violation of the principle of ‘composite supply’ enshrined under Section 2(30) read with Section 8 of the CGST Act. Since the Indian importer is liable to pay IGST on the ‘composite supply’, comprising of supply of goods and supply of services of transportation, insurance, etc. in a CIF contract, a separate levy on the Indian importer for the ‘supply of services’ by the shipping line would be in violation of Section 8 of the CGST Act.?

The opportunity of personal hearing not provided, violation of the basic principles of natural justice; cancellation of registration: Hon’ble Gujarat High Court

In Pantone Enterprises Pvt Ltd. v. UOI and Ors., R/SCA No. 6847 of 2022 and Ors., Hon’ble HC held having examined the show cause notices as well as the orders impugned in this batch of writ applications, we notice that the show cause notice issued by the respondent authority is bereft of any material particulars. Not only that, no sufficient opportunity has been provided by the respondent authority while adjudicating such show cause notice. We could not overlook the fact that all the show cause notices seeking cancellation of registration in this batch of writ applications are issued during the surge of Covid-19 pandemic i.e. in the month of March, 2021. The reply was placed on record by the writ applicant specifically requesting for personal hearing through video conferencing. In fact in the reply, the attention of the respondent authorities has been drawn to the fact that no reason or details have been furnished to respond to such show cause notice. Even the order impugned lacks the reasons. Even otherwise, the reason assigned by the respondent authority is without any basis being found in the show cause notice. Even in the show cause notice, seeking revocation of cancellation of registration, the authorities have choose to proceed on the ground other than the reason given in the original show cause notice seeking cancellation of registration. Order Quashed.?

The department will treat the manual refund application as an application for refund: Hon’ble Gujarat High Court

In Ayana Pharma Limited v. UOI and Ors., R/SCA No. 14158 of 2021, Hon’ble HC held that Rule 89 lays down the procedure for filing of an application for refund of tax, interest, penalty, fees or any other amount. Rule provides that any person except the person covered under the Notification issued under Section 55 claiming refund of tax, interest, penalty, fees or other amount paid by him other than the refund of integrated tax paid on goods exported out of India, may file an application electronically in the form GST RFD 01 through the common portal - it seems that the respondent No.4 has no idea about Rule 97A of the Rules which starts with the non-obstante clause. Rule 97A clarifies that notwithstanding anything contained in Chapter x of the Rules any reference to electronic filing of an application would include manual filing of the said application. The Deputy State Tax Commissioner, Circle-2, Ahmedabad are directed to treat the manual application dated 01.09.2020 as an application for refund. The respondents are further directed to permit the writ applicant to furnish it’s stance to any objections, before the same is relied upon by the respondent authority, by providing sufficient opportunity to produce supporting documents and also to provide opportunity of hearing to the writ applicant - petition disposed of.

There is neither any intention to evade the payment of tax nor any fault nor any contravention of the Act as all valid documents were accompanying with the goods as required under the Act, therefore, the proceedings initiated against the petitioner cannot sustain and are hereby quashed: Hon’ble Allahabad High Court

In Sleevco Traders v. Additional Commissioner and Ors., WTax No. 464 of 2021, Hon’ble HC held that there is neither any intention to evade the payment of tax nor any fault nor any contravention of the Act as all valid documents were accompanying with the goods as required under the Act, therefore, the proceedings initiated against the petitioner cannot sustain and are hereby quashed. In the case in hand once the valid document i.e. e-way bill and tax invoice, bilty was accompanying with the goods, therefore the authorities ought not to have drag the petitioner in an unnecessary litigation. In view of above, the writ petition is allowed with cost of Rs. 5000/- (five thousand) payable to the petitioner. The impugned order is set aside.

Time period for filing appeal would start only when the order is uploaded in GST portal: Hon’ble Andhra Pradesh High Court

In M/s Navya Foods Pvt. Ltd. v. Superintendent of Central Tax and Ors., WP No. 1612 of 2022, petitioner contended: the summary of the order was uploaded by the adjudicating authority only on 18.11.2021 and as such, the period of limitation for filing an appeal has to be reckoned from the said date. Hon’ble HC held that a perusal of above provisions would make it clear that the appeal is required to be filed in an electronic mode only and if any other mode is prescribed, then, the same is required to be notified by way of a notification. There is nothing on record to show that any notification was issued prescribing any other mode by which an appeal could be filed. Therefore, the argument of the learned counsel for the petitioner that the time period for filing appeal would start only when the order is uploaded in GST portal cannot be brushed aside more so, in view of the Division Bench Judgment of the Gujarat High Court (Gujarat State Petronet Limited vs. Union of India), which has been placed before this Court. Appeal within limitation, matter remanded back.