GST PDF - MAY 2022

RNI NO. RAJENG/ 2010/37653 Postal Reg. No.
JODHPUR/348-2020-2022
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Print Date : 15.05.2021 .
{ THE COMPLETE MAGAZINE ON GST }
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HARISH CHANDAK
EDITOR ADVISORS BOARD

CA NIKHIL SINGHAL J. N. SHARMA
CA AJAY JOSHI V.C. SOGANI
SATISH GUPTA
Mode of Citation (2022) GTI 257 – 308 .....

(2022) GTI 81 – 102 (st.)..
MAY
2022
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GST INFORMA TIONS

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Jodhpur. Edited by Harish Chandak.
INDEX
ARTICLES & STATUTES
DOCUMENTS REQUIRED FOR AUDIT BY TAX AUTHORITIES AND
RELATED ISSUES. 81
Now that almost five years since the inception of GST Laws have completed, lot
many hit & trials have been done,.......
ONE-THIRD LAND DEDUCTION IN CASE OF CONSTRUCTION SERVICES

IRRESPECTIVE OF ACTUAL VALUE—WHETHER JUSTIFIED. 90
The Real estate industry is prone to taxation disputes and common reason for
same lies in fact that,......
REQUIREMENT OF GST REGISTRATION BY A LIQUIDATOR—ANALYSIS

OF PROVISIONS AND CASE LAWS. 94
The Government, vide Notification No. 11/2020-Central Tax, dated 21.3.2020, as
amended, considered IRP/RP as the class of persons who shall follow the
following special procedure,.....
ASK US ONE...
Input Tax Credit—Eligibility and conditions—Reimbursement of GST

paid on contracts that were entered into in pre-GST regime but
executed after GST. 99
Levy of GST—Justification—Levy of GST alongwith advertisement
tax/fee levied by a Municipal Corporation. 99
Registration—New registration—Requirement of new registration by
IRP/RP appointed under Insolvency and Bankruptcy Code, 2016 in each
of states or Union territories where corporate debtor was registered
earlier. 100
Search & seizure—Detention of goods alongwith vehicle—Gold
ornaments —Confiscation of goods—Proceedings initiated under
section 129 as well as under section 130 of the CGST Act, 2017. 101
Search and seizure—Territorial jurisdiction—Search operations by
multiple agencies—Centralisation of investigation with DGGI—
Applicability of section 6(2)(b). 101
LIST OF CASES
Asterpetal Trade and Services Pvt. Ltd. Vs. Sate of Gujarat (Guj) 296
Ideal Unique Realtors Pvt. Ltd. & Anr. Vs.
Union of India &Ors. (Cal) 284
K.E. Agro Products (P) Ltd. Vs. State Tax
Officer (IB)-I SGST (Ker) 306
K. Kumar Raja Projects Pvt. Ltd. Vs. Asst.
Commissioner GST (Cal) 281
Mandhan Minerals Corp. & Ors. Vs. Union of India & Ors. (Jhk) 286
R.k. Modi And Sons Vs. Union Of India & Ors. (MP) 293
Rahul Agarwal Vs. Union Of India (All) 303
Rajkamal Metal and Alloys Vs. State Tax Officer,
Mobile Squad (Guj) 300
Union of India & Ors. Vs. Willowood Chemicals
Pvt. Ltd. & Anr. (SC) 257
Vyplavi Granites Vs. Deputy Commissioner Of
Central Tax & Ors. (AP) 278
SUBJECT INDEX
ARREST—BAIL—Anticipatory bail—Sale invoice (ITC) income-tax credit—
Certificate produced before GST authority alleged to be fraud —No final
adjudication with regard to nature of same made out— Matter require
reconsideration— Hence bail application allowed. [Rahul Agarwal Vs. Union Of
India(All)] 303
INSPECTION SEARCH & SEIZURE—Seeking of copy of statements recorded in

course of investigation—Reason for not giving copies of statements not
produced—Violation of principles of natural justice. [K.E. Agro Products (P) Ltd.
Vs. State Tax Officer (IB)-I SGST(Ker)] 306
INTEREST ON REFUND—RATE OF INTEREST—Compensation for delayed

refund—High court awarded 9% instead of 6% applying proviso to section 56—
Not proper—Instant cases have not arisen from any order passed by an
adjudicating authority or appellate authority or tribunal or court and cases are
strictly within scope of principal provision of section 56 and not under proviso
thereof—Wherever a statute specifies or regulates interest, interest will be
payable in terms of the provisions of statute. [Union of India & Ors. Vs.
Willowood Chemicals Pvt. Ltd. & Anr. (SC)] 257
LEVY OF GST—Gst on royalty for grant of mining lease and district mineral fund
(DMF)—Decision by seven judges constitution bench in case of India Cement
Limited Vs. State Of Tamil Nadu [1989 (10) TMI 53 - SC] that royalty is a tax, is
under consideration before a nine judges constitution bench of apex court
upon reference made in the case of Mineral Area Development Authority &
Ors. [2011 (3) TMI 1554-SC]—Following interim order passed in the case of
Lakhwinder Singh Vs. Union Of India & Ors. [2021(11)TMI 336-SC], Court
granted interim protection on levy of Gst on mining lease/royalty/DMF.
[Mandhan Minerals Corp. & Ors. Vs. Union of India & Ors.(Jhk)] 286
REFUND—LIMITATION—Application for seeking refund for period from april,
2018 to march, 2019 made on 13.3.2021—Also in response to show cause
notice dated 26.3.2021, detailed reply filed on 2.4.2021—It is apparent from "In
Re: Cognizance for extension of limitation 2021 (3) TMI 497-SC" that while
computing period of limitation for any suit, appeal, application or proceeding,
period from 15.3.2020 till 14.3.2021 is liable to be exc luded—Hence entire
claim for refund is to be accepted. [Vyplavi Granites Vs. Deputy Commissioner
Of Central Tax & Ors.(AP)] 278
REGISTRATION—CANCELLATION—Revocation—Rejection—Violation of
principles of natural justice—Cancellation on ground of non-functioning/non-
existing at the place of business—Appellant carrying on business within the
state—Therefore, order rejecting application for revocation of cancellation of
registration is in total violation of principles of natural justice and arbitrary. [K.
Kumar Raja Projects Pvt. Ltd. Vs. Asst. Commissioner GST(Cal)] 281
REGISTRATION—CANCELLATION—Validity—Issue covered by decision of same
court—Issue covered by Aggarwal Dyeing And Printing Works Vs. State Of
Gujarat & Ors. [2022 (4) TMI 864 GUJ.], wherein it was held that "the
procedural aspects should be looked into by the authority concerned very
scrupulously and deligently"—Show cause notices and impugned order were
therefore held as vague as anything—Impugned order cancelling registration
and show cause notices were quashed and set aside. [Asterpetal Trade and
Services Pvt. Ltd. Vs. Sate of Gujarat(Guj)] 296
SEARCH & SEIZURE—CONFISCATION OF GOODS—Issuance of notice under

section 130 and applicability of sub-section (3) of section 129 of CGST act,
2017— However, matter not decided in view of non availability of exact
amount payable by writ-applicant in terms of sub-section (3) of section 129—
Notice issued to respondents returnable on 20.4.2022. [Rajkamal Metal and
Alloys Vs. State Tax Officer, Mobile Squad(Guj)] 300
SHOW-CAUSE NOTICE—SERVICE OF—Jurisdiction of audit department to issue
a notice called spot memo—Proceedings by different wing already pending on
same issue—Not clear as to why different wings of very same department have
been issuing notices and summons without taking any of earlier proceedings to
logical end—Spot Memos Cancelled And Directions Issued To Consider All
Replies Submitted By Appellants. [Ideal Unique Realtors Pvt. Ltd. & Anr. Vs.
Union of India & Ors.(Cal)] 284
SHOW-CAUSE NOTICE—VALIDITY OF—Reversal of ITC—Return filed beyond

prescribed time limit— Hence, reversal of entries under section 16(4) of the
CGST ACT, 2017—Is a matter of adjudication whether there was any wilful
delay on part of petitioner to submit return or not—Show-cause notice has
been issued and therefore, return is required to be filed before competent
authority. [R.k. Modi And Sons Vs. Union Of India (MP)] 293

(2022) [ARTICLES & STATUTES] 81
DOCUMENTS REQUIRED FOR AUDIT BY TAX AUTHORITIES

AND RELATED ISSUES.
- CA Ajay Joshi
Introduction.
Now that almost five years since the inception of GST Laws have completed,
lot many hit & trials have been done, experiments have taken place and
adjustments are being made in GST returns either knowingly or unknowingly,
either due to mistakes while filing the returns or for correcting such mistakes.
The objective of every assessee has always been to complete compliance timely
in order to avoid penalties, etc.. The stage has come now when the GST
department has started conducting audit of the assessees and has started
sending notices for Audits under section 65 of the CGST Act, 2017 ("the Act" in
short). Eventually the GST department has become very aggressive in
conducting audit under section 65 of the Act. The assesses are required to
provide bunch of documents irrespective of the fact whether the same are
relevant for audit or not. Such kind of requirements by the department are
making the assesses feel harassed. Therefore, some clarifications should be
issued from CBIC to avoid such uncalled and unwarranted details/ documents.
Statutory Provisions
Section 65—Audit by tax authorities.
65. (1) The Commissioner or any officer authorised by him, by way of a
general or a specific order, may undertake audit of any registered person for
such period, at such frequency and in such manner as may be prescribed.
1. The officers referred to in sub-section (1) may conduct audit at the place
of business of the registered person or in their office.
2. The registered person shall be informed by way of a notice not less than
fifteen working days prior to the conduct of audit in such manner as may be
prescribed.
3. The audit under sub-section (1) shall be completed within a period of
three months from the date of commencement of the audit:
Provided that where the Commissioner is satisfied that audit in respect of
such registered person cannot be completed within three months, he may,
for the reasons to be recorded in writing, extend the period by a further
period not exceeding six months.
Explanation.—For the purposes of this sub-section, the expression
"commencement of audit" shall mean the date on which the records and
other documents, called for by the tax authorities, are made
GS T Informations, Dated. 20.05.2022. 9

82 [GST INFORMATIONS] (2022)
available by the registered person or the actual institution of audit at the

place of business, whichever is later.
4. During the course of audit, the authorised officer may require the
registered person,—
(i) to afford him the necessary facility to verify the books of account or
other documents as he may require;
(ii) to furnish such information as he may require and render assistance for
timely completion of the audit.
5. On conclusion of audit, the proper officer shall, within thirty days, inform
the registered person, whose records are audited, about the findings, his rights
and obligations and the reasons for such findings.
6. Where the audit conducted under sub-section (1) results in detection of
tax not paid or short paid or erroneously refunded, or input tax credit wrongly
availed or utilised, the proper officer may initiate action under section 73 or
section 74.
Audit defined.
Section 2(13). "audit" means the examination of records, returns and other
documents maintained or furnished by the registered person under this Act or the
rules made thereunder or under any other law for the time being in force to verify
the correctness of turnover declared, taxes paid, refund claimed and input tax
credit availed, and to assess his compliance with the provisions of this Act or the
rules made thereunder;
Accounts and other records.
Section 35(1). Every registered person shall keep and maintain, at his
principal place of business, as mentioned in the certificate of registration, a true
and correct account of—
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed:
Provided that where more than one place of business is specified in the
certificate of registration, the accounts relating to each place of business
shall be kept at such places of business:
Provided further that the registered person may keep and maintain such
accounts and other particulars in electronic form in such manner as may be
prescribed.
(2) Every owner or operator of warehouse or godown or any other place used
for storage of goods and every transporter, irrespective of whether he is a
registered person or not, shall maintain records of the consigner, consignee and
other relevant details of the goods in such manner as may be prescribed.
10 GST Informations, Dated. 20.05.2022.

(3) The Commissioner may notify a class of taxable persons to maintain

additional accounts or documents for such purpose as may be specified therein.
(4) Where the Commissioner considers that any class of taxable person is
not in a position to keep and maintain accounts in accordance with the
provisions of this section, he may, for reasons to be recorded in writing, permit
such class of taxable persons to maintain accounts in such manner as may be
prescribed.
(6) Subject to the provisions of clause (h) of sub-section (5) of section 17,
where the registered person fails to account for the goods or services or both in
accordance with the provisions of sub-section (1), the proper officer shall
determine the amount of tax payable on the goods or services or both that are
not accounted for, as if such goods or services or both had been supplied by
such person and the provisions of section 73 or section 74, as the case may be,
shall, mutatis mutandis, apply for determination of such tax.
Maintenance of accounts by registered persons.
Rule.56(1). Every registered person shall keep and maintain, in addition to
the particulars mentioned in sub-section (1) of section 35, a true and correct
account of the goods or services imported or exported or of supplies attracting
payment of tax on reverse charge along with the relevant documents, including
invoices, bills of supply, delivery challans, credit notes, debit notes, receipt
vouchers, payment vouchers and refund vouchers.
(2) Every registered person, other than a person paying tax under section
10, shall maintain the accounts of stock in respect of goods received and
supplied by him, and such accounts shall contain particulars of the opening
balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of
by way of gift or free sample and the balance of stock including raw materials,
finished goods, scrap and wastage thereof.
(3) Every registered person shall keep and maintain a separate account of
advances received, paid and adjustments made thereto.
(4) Every registered person, other than a person paying tax under section
10, shall keep and maintain an account, containing the details of tax payable
(including tax payable in accordance with the provisions of sub-section (3) and
sub-section (4) of section 9), tax collected and paid, input tax, input tax credit
claimed, together with a register of tax invoice, credit notes, debit notes, delivery
challan issued or received during any tax period.
(5) Every registered person shall keep the particulars of—
(a) names and complete addresses of suppliers from whom he has
received the goods or services chargeable to tax under the Act;
(b) names and complete addresses of the persons to whom he has

supplied goods or services, where required under the provisions of this

Chapter;
(c) the complete address of the premises where goods are stored by him,
including goods stored during transit along with the particulars of the
stock stored therein.
(6) If any taxable goods are found to be stored at any place(s) other than
those declared under sub-rule (5) without the cover of any valid documents, the
proper officer shall determine the amount of tax payable on such goods as if
such goods have been supplied by the registered person.
(7) Every registered person shall keep the books of account at the principal
place of business and books of account relating to additional place of business
mentioned in his certificate of registration and such books of account shall
include any electronic form of data stored on any electronic device.
(8) Any entry in registers, accounts and documents shall not be erased,
effaced or overwritten, and all incorrect entries, otherwise than those of clerical
nature, shall be scored out under attestation and thereafter, the correct entry
shall be recorded and where the registers and other documents are maintained
electronically, a log of every entry edited or deleted shall be maintained.
(9) Each volume of books of account maintained manually by the registered
person shall be serially numbered.
(10) Unless proved otherwise, if any documents, registers, or any books of
account belonging to a registered person are found at any premises other than
those mentioned in the certificate of registration, they shall be presumed to be
maintained by the said registered person.
(11) Every agent referred to in clause (5) of section 2 shall maintain
accounts depicting the,—
(a) particulars of authorisation received by him from each principal to
receive or supply goods or services on behalf of such principal
separately;
(b) particulars including description, value and quantity (wherever
applicable) of goods or services received on behalf of every principal;
(c) particulars including description, value and quantity (wherever
applicable) of goods or services supplied on behalf of every principal;
(d) details of accounts furnished to every principal; and
(e) tax paid on receipts or on supply of goods or services effected on
behalf of every principal.
(12) Every registered person manufacturing goods shall maintain monthly
production accounts showing quantitative details of raw materials or services
used in the manufacture and quantitative details of the goods so manufactured
including the waste and by products thereof.

(13) Every registered person supplying services shall maintain th e

accounts showing quantitative details of goods used in the provision of services,
details of input services utilised and the services supplied.
(14) Every registered person executing works contract shall keep separate
accounts for works contract showing—
(a) the names and addresses of the persons on whose behalf the works
contract is executed;
(b) description, value and quantity (wherever applicable) of goods or
services received for the execution of works contract;
(c) description, value and quantity (wherever applicable) of goods or
services utilized in the execution of works contract;
(d) the details of payment received in respect of each works con-tract; and
(e) the names and addresses of suppliers from whom he received goods
or services.
(15) The records under the provisions of this Chapter may be maintained
in electronic form and the record so maintained shall be authenticated by means
of a digital signature.
(16) Accounts maintained by the registered person together with all the
invoices, bills of supply, credit and debit notes, and delivery challans relating to
stocks, deliveries, inward supply and outward supply shall be preserved for the
period as provided in section 36 and shall, where such accounts and documents
are maintained manually, be kept at every related place of bu siness mentioned
in the certificate of registration and shall be accessible at every related place of
business where such accounts and documents are maintained digitally.
(17) Any person having custody over the goods in the capacity of a carrier
or a clearing and forwarding agent for delivery or dispatch thereof to a recipient
on behalf of any registered person shall maintain true and correct records in
respect of such goods handled by him on behalf of such registered person and
shall produce the details thereof as and when required by the proper officer.
(18) Every registered person shall, on demand, produce the books of
accounts which he is required to maintain under any law for the time being in
force.
Responsibility of assessee to make available records, etc.
Section 71(2). Every person in charge of place referred to in sub-section (1)
shall, on demand, make available to the officer authorised under sub-section (1)
or the audit party deputed by the proper officer or a cost accountant or chartered
accountant nominated under section 66—
(i) such records as prepared or maintained by the registered person and
declared to the proper officer in such manner as may be prescribed;
(ii) trial balance or its equivalent;

(iii)statements of annual financial accounts, duly audited, wherever

required;
(iv) cost audit report, if any, under section 148 of the Companies Act, 2013
(18 of 2013);
(v) the income-tax audit report, if any, under section 44AB of the Income-
tax Act, 1961 (43 of 1961); and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the chartered accountant or
cost accountant within a period not exceeding fifteen working days from the day
when such demand is made, or such further period as may be allowed by the
said officer or the audit party or the chartered accountant or cost accountant.
Conduct of Audit.
Rule. 101(3). The proper officer authorised to conduct audit of the records
and the books of account of the registered person shall, with the assistance of
the team of officers and officials accompanying him, verify the documents on the
basis of which the books of account are maintained and the returns and
statements furnished under the provisions of the Act and the rules made
thereunder, the correctness of the turnover, exemptions and deductions claimed,
the rate of tax applied in respect of the supply of goods or services or both, the
input tax credit availed and utilised, refund claimed, and other relevant issues
and record the observations in his audit notes.
Meaning of audit.
As per section 2(13) of the Act,
‘Audit’ means detailed examination of:
 Records
 Returns
 And other documents
Maintained or furnished by registered person under:
 Under GST Act or Rules
 Any other Law
Meaning, it is clear that audit can be done of documents prescribed or
maintained under GST Laws or any other laws. In other words, the department
shall not require the assessees to prepare documents/details which are not
required to be maintained.
Documents to be maintained as per GST law.
Section 35(1) of the Act enumerate list of records to be maintained by
registered person at his principal place of business. Such records shall give a
true and correct account of following:
Production or manufacture of goods.
Inward and outward supply of goods or services or both

Stock of goods.
Input tax credit availed.
Output tax payable and paid.
Such other particulars as may be prescribed.
Further, as per section 35(3), Commissioner may notify a class of taxable
persons to maintain additional accounts or document as may be prescribed.
In addition to above, Rule 56 of CGST Rules, 2017 ("the Rules" in short)
further enumerate records to be maintained by certain particular class of
registered person for following specific transactions:
Account of goods or services Imported or Exported.
Account of Supplies attracting payment of tax on Reverse Charge.
Account of Stock (Both finished and raw material) in respect of goods
received or supplied including opening & closing balance and also
details of goods lost, stolen, destroyed, written off, free samples, gift,
scrap and wastage.
Separate account of Advances received, paid and adjustments.
Accounts of Tax Payable, Tax Collected & Paid, Input Tax and Input
Tax Credit claimed.
Records of name and address of supplier from whom goods are
received.
Records of name and address of persons to whom goods are supplied.
Record of the premises where goods are stored.
Agents shall maintain principal wise records of goods received or
supplied.
Manufacturer shall maintain details of monthly production re-cords.
Supplier of services shall maintain records of goods used in provision
of services.
Works Contractor shall maintain account of project-wise details.
Documents to be made available by registered persons during visit of
officers to business premises.
Section 71(2) of the Act, enumerates following documents which a person
in-charge of business premises shall on demand will make available to officer
during their visit to business premises:
Such records or documents as prepared or maintained by the
registered person and declared to the proper officer.
Trial balance or its equivalent.
Statement of Annual Financial Accounts.
Cost Audit Report under section 148 of the Companies Act, 1956.
Income tax Audit report under section 44 AB.

 Any other relevant record.

As per Rule 101(3), proper officer conducting the audit shall verify the
documents on the basis of which the books of accounts are maintained and
returns and statements under the Act is furnished.
Documents to be considered during audit [GST Audit Manual (GSTAM-2019)
issued by Directorate General of Audit, CBIC].
GSTAM- 2019 is a very comprehensive manual published by the CBIC for
internal use of the department. It is being used extensively by the GST Audit
department for initiating, planning and conducting of Audit. Annexure-GSTAM-III
illustrates the following list of documents which should be reviewed at the desk
review stage of audit by the department.
1. Annual Report & Director’s Report
2. Profit & Loss Account
3. Balance sheet
4. Notes to the Accounts
5. Trial balance
6. Cost Audit Report
7. Income tax TDS certificates
Documents required to be maintained under any other law.
As per the provisions of section 2(13) and Rule 56 (18), GST officer can ask
for documents maintained under any other Law for the purpose of Audit.
Assessee should be prepared to provide any such documents in case asked by
the officer. There are other laws in India under which a person may be required
to maintain records, viz, Companies Act, Income tax Act, Limited Liability
Partnership, SEBI guidelines, Money Laundering Act, etc. GST officer may ask
such records maintained under any of the Law for the purpose of Audit.
Practical difficulties in providing documents.
1. Documents already filed and are on GST Portal:
Assessee’s have observed that department is asking for documents which
are already on GST Portal e.g., monthly GST returns, copy of GSTR 9 and
GSTR 9C. In compilation of such requirement unnecessary time and energy of
assessee’s get involved.
2. To submit documents which department should prepare:
Department is asking to submit the data which is primarily their responsibility
to collate, for example, Annexure-GSTAM-I suggested in Audit Manual published
by the Directorate General of Audit, CBIC relates to information about the
registered person. This annexure should be prepared by the department but still
assessee is unnecessarily been burdened.
3. To submit documents which assessees are not required to maintain under
GST Laws or any other Laws:
Assessees are being asked to provide such details or documents which

are not required to be maintained either in GST Laws or any other Laws, e.g., in
case of single Pan with multi-registrations, it is not possible to maintain State-
wise Balance sheet and Profit & Loss A/c, there are many expenses which are
taken care at head office, etc. Department in certain cases is insisting to provide
State-wise Profit & Loss A/c, otherwise, it intends to reject whole books of
account and treat all India sale in that particular State only. As per section 35
and Rule 56, there is no mention to maintain State wise Profit & Loss A/c.
Further, General Trade practices should be kept in consideration while asking for
information for the purpose of Audit. The department is even asking for trading
account from the assesses who are providing services only and they also fail to
understand that trading account is not required to be prepared for assessees
who are providing only services.
4. Issuance of stereotype notices:
Department is issuing stereotype notices in a mechanical manner without
understanding the nature of business or the kind of supply the assesses are
making. It has been observed that details are required which are not relevant at
all for the assesses, e.g., the supplier of services are required to submit the
stock register, etc. Therefore, such uncalled and unwarranted information is
creating hassle for assesses and also resulting in wastage of time for the
department as well as for the assesses.
Conclusion.
In view of above discussion, it is advised that the assesses should maintain
all the documents as envisaged under GST Laws or any other law. Further, the
department should also place requirement for the documents which are required
under law to be maintained. Meaning thereby, there cannot be any ad-hoc
requirement by the department for the details/ documents which are not required
to be maintained under Law. The department should also consider the nature of
business and the complexities of the business while issuing notices and
undertaking audits. The audits shall not be conducted in a mechanical manner
i.e., without understanding the problems and difficulties of the assesses.

ONE-THIRD LAND DEDUCTION IN CASE OF CONSTRUCTION

SERVICES IRRESPECTIVE OF ACTUAL VALUE—WHETHER
JUSTIFIED.
- CA Ajay Joshi
Introduction.
The Real estate industry is prone to taxation disputes and common reason
for same lies in fact that, real estate transactions are considered to be very
complex oneinvolving three components viz., Goods, Services and Land which
are amenable to different taxes by different authorities. For levy indirect taxes,
the attempt of every authority is to collect more revenue and attempt of every
taxpayer is to minimize the tax impact. This has created a big battlefield. When
the very basis of levying VAT/sales tax and Service taxes was held to be wrong,
the Government was compelled to make frequent amendments including in the
Constitution of India to overcome such infirmities. So far as GST is concerned,
when the GST was introduced to subsume Service tax & VAT into a single tax,
many felt that disputes would disappear at least in the areas of the very basis of
taxation and valuation. However, one of the components, i.e., land not being
subjected to GST and the way the GST law has been made with many infirmities
and ambiguities, sufficient scope is still there for continuation of such disputes. In
this write, one of such disputes in valuation for levy of GST on the real estate
transactions has been discussed and analysed in view of decision in case of
Munjaal Manishbhai Bhatt Vs. Union Of India [2022 (5) TMI 397 (Gujarat)].
In a recent case , the division bench of Justices J B Pardiwala and Nisha M
Thakore of Gujarat High Court has held in case of Munjaal Manishbhai Bhatt Vs.
Union Of India (Supra) that, 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.
Background.
Before GST, the VAT was used to be levied on the sale of goods in
Construction activity while service tax was levied on the service component
(Labour). The 3rd component was liable for Stamp duty. Both Service tax & VAT
laws had made provisions to identify their respective components and if not
ascertainable, an option was given to the taxpayer for paying tax at a Composite
rate. For example, Service tax provisions said that identify the labour component
of the transaction and pay ser vice tax at full rate. If not ascertainable, opt for
fixed abatement/deduction of 70% and pay service tax on 30% of the total
amount. Similar provisions were under VAT laws also. Thus, pre-GST laws had

always given chance for ascertaining the actual value of the taxable events and
if not ascertainable then only asked for payment at deemed value after
prescribed deductions.
After introduction of GST, the first two components have been subsumed
into a single tax (GST) and the third component (land) is continued to be liable
for Stamp duty and has been kept out of GST. This required the lawmakers to
provide a mechanism to tax only two out of above three components. For this,
the Government vide Notification No.11/2017-CT(R) dated 28.6.2017, as
amended, provided that the non-taxing component (land) will be one third of the
total amount charged thereby fixing that land value in real estate transaction is
one third irrespective of actual value available or identifiable.
It is a well known fact that the land value may not be the same across the
country as the same depends on various factors including location, Socio &
Economic and it is dynamic. There would be a huge variation in the land c ost
between Metro cities, Towns and Rural areas, while the construction cost may
not vary much in any of the places. Deeming 1/3rd of the total amount charged
as the land value would lead to a levy of GST on the land value in many cases
though the sale of land is neither supply of goods nor supply of services as per
SI. No.5 of Schedule-III and in the non-metros, the construction service would
not get completely taxed.
The following illustration would gives a bird’s eye view of the issue involved
in claiming the deemed deduction toward land:
Sl. No. City Co st o f unit sale price per Average value of % of l and valu e
C o n s tru c tio n p er SFT including land land (C=B-A) (C/B*100)
SFT (A ) - v a lu e (B) -
Guesstimate Guesstimate
1 Ooty 1,500 2,100 525 25
2 Hyderabad 2,375 5,200 2,730 52.50
3 Bangalore 2,500 8000 5,334 66.67
4 New Delhi 2,750 12,500 9,635 77.08
5 Mumbai 3,125 22,000 18564 84.38
Recently, the Hon’ble Gujarat High Court has examined the issue in case of
Munjaal Manishbhai Bhatt Vs. Union Of India (Supra) and held that:
The GST has to be paid on the actual price paid or payable for the
services rendered. When the actual price is available, then tax has to
be imposed on such actual value only. In the instant case, when the
actual value of land is ascertainable, the deeming fiction of 1/3rd of
total agreement value towards land is clearly contrary to the provisions
and scheme of the CGST Act and therefore ultra-vires the statutory
provisions.
Deeming fiction can be applied only where the actual value is not
ascertainable which is not the case in the present case. The High Court
relied on Gannon Dunkerley & Co. Vs. State Of Rajasthan

[1992 (11) TMI 254 (SC)] and WIPRO Ltd. Vs. Assistant Collector Of
Customs & Ors. [2015 (4) TMI 643 (SC)];
The deeming fiction has not made any distinction between a flat and a
bungalow. While a flat would have a number of floors and the transfer
would only be an undivided share in land, the same deduction which is
available on the supply of flats is made available on the supply of
bungalows without any regard to the vast different factual aspects.
Such deeming fiction which leads to arbitrary and discriminatory
consequences is violative of Article 14 of the Constitution of India which
guarantees equality to all and also frowns upon arbitrariness in law.
Due to arbitrary deeming fiction by way of delegated legislation (by way
of Notification), the measure of tax imposed has no nexus with the
charge of tax which is on the supply of construction services. It is well
established that the measure of tax should have nexus with the charge
of tax.
The prescription under section 15(5) of the CGST Act has to be by
rules and not by notification. While holding so, the High Court relied on
decision in the case of Suresh Kumar Bansal & Anuj Goyal & Ors. Vs.
Union of India & Ors. [2016 (6) TMI 192 (Delhi)].
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 the 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,
the same can be definitely held to be ultra-vires when it is found to be
arbitrary and contrary to the scheme of the statute.
Thereby, paragraph 2 of Notification No. 11/2017-Central Tax (Rate)
dated 28.6.2017 and the parallel State 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.
The specific price agreed for land sale in the agreements between the
parties is sufficient to avail the deduction of actual land value in place of
deemed 1/3rd.
Wherever the revenue department doubts the correctness of the land
value or construction activity value, the valuation rules, inter alia Rule
30 & 31 of CGST Rules, 2017 can be resorted to curb tax avoidances,
if any on account of artificial inflation of land value in the agreements.
Implications of judgement.
(a)The actual value of land can be claimed as a deduction where ever it is
available
(b)If the land value is not ascertainable, the value of construction

with the aid of valuation rules can be adopted for payment of GST. Rule
30 of CGST Rules, 2017 provides for cost +10% valuation.
c. There cannot be a sale in respect of construction undertaken prior to
agreement with the buyer and the factum of supply would be initiated
only once the agreement is entered into between the supplier and
recipient for consideration.
Suggestions.
Revenue department may go in appeal before Hon’ble SC and the chance
for retrospective amendment is not ruled out. In that background, the following
are submitted for valuable consideration:
a. To file a refund application for the excess taxes paid in the previous
year. If it was passed onto the customer, the customer can directly file
for a refund or else return the excess tax to the customer and claim a
refund by the Builder.
b. Protest against paying GST on deemed 1/3rd deduction instead of
actuals and claim a refund of the same when the issue is finally settled
by Supreme Court or time limit to make demand is over.
c. A specific clause specifying the value of land in the agreements
entered with the customers for justifying the deduction while such value
shall marry with the combination of construction cost, profit margins
and final sale price.
d. To submit representations to the GST council for implementation of
above decision
Conclusion.
The land value may not be the same across the country and while the
construction cost may not very much in any of the places, there would be a huge
variation in the land cost between Metros, Towns and Rural areas,. Therefore,
deeming 1/3rd of the total amount charged as land value would lead to levy of
GST on the land value in many cases though the sale of land is neither supply of
goods nor supply of services as per SI.No.5 of Schedule-III and in the non-
metros, the construction service would not get completely taxed. The
Government through GST council shall act in true spirit of GST law and a llow the
deduction of the actual value of land more so specially because the State
Government prescribes the minimum land price of every area and collect stamp
duty thereon. The State government shall not escape from this stating that actual
value deduction may lead to disputes or tax avoidance etc.

REQUIREMENT OF GST REGISTRATION BY A LIQUIDATOR—

ANALYSIS OF PROVISIONS AND CASE LAWS.
- CA Ajay Joshi
Introduction.
The Government, vide Notification No. 11/2020-Central Tax, dated
21.3.2020, as amended, considered IRP/RP as the class of persons who shall
follow the following special procedure, from the date of the appointment of the
IRP/Resolution Professional (RP) till the period they undergo the corporate
insolvency resolution process. The said class of persons shall, with effect from
the date of appointment of interim resolution professional(IRP)/ resolution
professional (RP), be treated as a distinct person of the corporate debtor, and
shall be liable to take a new registration in each of the States or Union territories
where the corporate debtor was registered earlier, within thirty days of the
appointment of the IRP/RP or by 30.6.2020, whichever is later: In Shri Nirav
Tarkas Liquidator of Stratus Foods Pvt. Ltd. Vs. Office Of Chief Commissioner
[2022 (3) TMI 869 - Gujarat], The High Court considered the contentions put forth
by the parties to the present writ petition and allowed the petition directing the
respondent authority to grant registration under the CGST Act, 2017 and directed
to allow the GST Number qua Stratus Foods Pvt. Ltd. within two weeks from the
date of receipt of writ of this order.
Registration, Insolvency Process and Liquidation.
Registration: Section 22 of the GST Act, 2017 (‘Act’ for short) provides for
registration of a supplier whose aggregate turnover exceeds Rs. 20 lakhs in a
financial year. Section 24 provides the list of supplier who is compulsorily
required to be registered under the Act irrespective of the turnover. Section 25
provides the procedure of registration under the Act. It provides that every person
who is liable to be registered under section 22 or section 24 shall apply for
registration in every such State or Union territory in which he is so liable within
thirty days from the date on which he becomes liable to registration.
Insolvency Process: The Insolvency and Bankruptcy Code, 2016 (‘Code’ for
short) provides for the insolvency resolution process of the corporate debtors.
According to the Code a financial creditor or an operational creditor or a
corporate applicant itself file an application against a corporate debtor to initiate
corporate insolvency resolution process before the Adjudicating Authority. If the
Adjudicating Authority is satisfied that the application is in order, it shall admit the
application. The corporate insolvency resolution process commences on the date
of order issued by the Adjudicating Authority. The Adjudicating Authority, for the
purpose of resolution process, appoints an interim resolution professional (‘IRP’
for short), who may be confirmed as Resolution Professional (‘RP’ for short)

or replaced by some other Insolvency Professional. The said process is time

bound and is to be completed within 180 days from the commencement date.
This period may be further extended by 90 days by the Adjudicating Authority for
a reason-able cause.
Liquidation: If the corporate insolvency resolution process could not be
completed within the time line, the Adjudicating Authority, on the file of
application by the RP, on the approval of the Committee of Creditors, may order
for the liquidation of the corporate debtor. The Adjudicating Authority may
appoint the RP as the Liquidator or appoint any other Insolvency Professional as
Liquidator. The liquidation proceeding is to be completed within one year from
the liquidation commencement date.
Registration for the purpose of Code.
In the corporate insolvency resolution process or liquidation process, the
corporate debtor may be a going concern and as such the business is continued.
Since the management of the corporate debtor get changed to the IRP/RP the
erstwhile registration is not to be continued as the IRP/RP is considered as
distinct person under the Act. Therefore, a fresh registration is required to be
taken by the IRP/RP. The Government, vide Notification No. 11/2020-Central
Tax, dated 21.3.2020, as amended, considered IRP/RP as the class of persons
who shall follow the following special procedure, from the date of the
appointment till the period they undergo the corporate insolvency resolution
process. The said class of persons shall, with effect from the date of
appointment of IRP/RP, be treated as a distinct person of the corporate debtor,
and shall be liable to take a new registration in each of the States or Union
territories where the corporate debtor was registered earlier, within thirty days of
the appointment of IRP/RP or by 30.6.2020, whichever is later:.
Registration by liquidator.
In Shri Nirav Tarkas Liquidator of Stratus Foods Pvt. Ltd. Vs. Office Of Chief
Commissioner [2022 (3) TMI 869 - Gujarat], an operational creditor namely, filed
Insolvency Application being Company Petition (I.B.) No. 03 of 2017 under
section 9 of the Code to initiate the Corporate Insolvency Resolution process
against the corporate debtors before the Adjudicating Authority which admitted
the application vide order dated 10.4.2017 and Corporate Insolvency Resolution
Process commenced against the Stratus Foods Pvt. Ltd., Vadodora. The
petitioner was appointed as IRP and later confirmed as RP. It filed I.A. No. 489
of 2018 in Company Petition (I.B.) No. 03 of 2017 before the Adjudicating
Authority as required under section 33(1)(a) of the Code with a prayer to initiate
liquidation proceedings against the Stratus Foods Private Limited since no
resolution plan has been received in the corporate insolvency resolution process.
The Adjudicating Authority passed an order directing to go for in liquidation
against the corporate debtor. The petitioner was appointed as Liquidator by the
Adjudicating Authority. This order was passed on 14.2.2019 and the certified
copy was received on the same date. Therefore, the petitioner was to complet e
the liquidation proceedings within one year from 14.2.2019, which is the

liquidation commencement date. Since the liquidation could not be completed

within one year, the petitioner got extension for further one year.
On 2.12.2020, an application was made before the respondent for grant of
registration under the GST Act to enable him to collect GST on sale of assets.
The respondent sought various clarifications about the details of authorized
signatory and principal place of business on 3.12.2020. The supplied the
additional information, however, vide communication dated 11.12.2020, the
respondent rejected the application for grant of GST registration on the ground
that he did not apply in accordance with the Notification No. 11/2020-Central Tax,
dated 21.3.2020, on the ground that the Notification, do not obligate the liquidator
of the company undergoing liquidation process to make an application for
registration within one month or before 30.6.2020.
An appeal was preferred before the Appellate Authority on 15.12.2020. On
various occasions, the petitioner visited the office of the respondent to resolve
the issue and obtain the GST registration to carry out the work of liquidation
which is a time bound process as the period of liquidation was coming to an end.
The petitioner on 27.1.2021 while visiting the office of the respondent produced
the IBBI Circular which categorically states that the IRP/RP/Liquidator is an
officer of the Court. He was asked to once again apply for the registration.
Therefore, the petitioner filed the writ petition seeking the following prayers—
To direct Respondent Authority to grant registration under Goods and
Services Tax Act, 2016 and allot GSTIN number qua Stratus Foods
Private Limited (under liquidation) forthwith;
Pending hearing and final disposal of this petition, to direct Respondent
Authority to grant temporary registration under the Act and allot
temporary GSTIN number qua Stratus Foods Private Limited (under
liquidation) forthwith;
Any other and further relief, which is just and proper, may kindly be
granted as may be deemed expedient by the Court in the facts and
circumstances of the case;
Award cost of the present petition.
The respondent department submitted the following:
Since there is an alternative remedy available in the Act the writ petition
is not maintainable.
There is an appeal provided and hence, when the time limit prescribed
for the application for registration has not been followed, he is not
entitled.
The petitioner had not uploaded the compete order of Adjudicating
Authority dated 31.1.2019 to support the status, but, he only had
uploaded the first page of Adjudicating Authority order where his name
and designation as a liquidator was mentioned.
The application for registration was not filed within the stipulated time
period as provided under the Notification No. 11/2020.

The address of the liquidator has also not been furnished.

He has not properly responded to the query raised by the department
and chose to ignore the same.
Non-furnishing of the requisite documents is the reason and the
respondent has acted as per the notification as the application has
been filed belatedly.
The High Court considered the contentions put forth by the parties and
observed that:
The applicability of the GST arises when the liquidator is unable to sell
the business of company-in-liquidation as a going concern or on slump
sale basis.
Thus, it is necessitated for the liquidator to obtain the registration under
the GST Act when the assets of the company-in-liquidation are to be
sold on a standalone basis after attempting to sell the business as a
going concern or on slump sale basis.
The proper officer has been given discretion to register such person in
such a manner as prescribed, in the event of any delay in obtaining the
registration on its own.
The petitioner is an appointee of National Company Law Tribunal and
is not required to run from the post to pillar for the grant of registration
under the GST Act.
The petitioner already had approached the concerned officer and
therefore, when he was denied the same on the ground of issue of
limitation, he had preferred an appeal, however, the respondent
authority when conveyed him to apply afresh, he has chosen to
approach the High Court.
 Once an application was moved for obtaining the registration under
GST before the respondent authority, the denial of registration under
the GST is completely on an ill conceive ground.
 Since the appointment of the IRP/RP was much earlier and there was
no requirement for him to approach the authority concerned and it is
only after his appointment as a liquidator on 31.1.2019 and when he
could not complete the process of liquidation on 14.2.2020, he
approached the concerned authority after getting extended the
liquidation period up to 31.1.2021 enabling him to continue the said
process.
 Even if the liquidator is bracketed in the class of persons where he is
not explicitly mentioned, then also, his not having approached by
30.6.2020 would not debar him from making a request for registration.
All contentions raised by the respondent authority are absolutely
technical and having no substance what so ever.
To deny merely on the ground of his not having specified of his being a
liquidator or for that matter, a very negligible and minor aspect,
deserves the disapproval of the Court.
The registration under the GST Act is a must for the liquidator

to operate and fulfill the obligations in his capacity as a liquidator as

required under the statute.
1. It is the Adjudicating Authority which has appointed the liquidator who
could not have been asked to run from the post to pillar and
approached this Court by adopting highly technical and deprecated
complexity in awarding the GST Registration Number.
2. In case of any delay in obtaining the registration, section 25(8)
obligates the proper officer to proceed to register such person. He may
impose a penalty in accordance with section 122 of the Act.
3. The liquidator could have approached the concerned authority well in
time, however, if he has not done it because of the various details that
he needed to gather and collate, he could not have been sent from the
post to pillar.
The High Court allowed the petition directing the respondent authority to
grant registration under the GST Act, 2017 and allow the GST Number qua
Stratus Foods Private Limited within two weeks from the date of receipt of the
order. Further that he shall also enjoy immunity so far as the action of
approaching the authority beyond the period of six months is concerned.
Conclusion.
The Government has considered IRP/RP as the class of persons who shall
follow the special procedure, from the date of the appointment of the IRP/
Resolution Professional (RP) till the period they undergo the corporate
insolvency resolution process. The said class of persons shall, with effect fr om
the date of appointment of interim resolution professional (IRP)/ resolution
professional (RP), be treated as a distinct person of the corporate debtor, and
shall be liable to take a new registration in each of the States or Union territories
where the corporate debtor was registered earlier, within thirty days of the
appointment of the IRP/RP or by 30.6.2020, whichever is later.

ASK US ONE...
Input Tax Credit—Eligibility and conditions—Reimbursement of GST

paid on contracts that were entered into in pre-GST regime but
executed after GST
Question 1.
Whether reimbursement of GST paid on contracts that were entered into in
pre-GST regime but executed after GST can be denied on the ground that output
tax was paid by debiting electronic credit ledger?
Answer:
No, reimbursement of GST paid on contracts that were entered into in pre-
GST regime but executed after GST cannot be denied on the ground that output
tax was paid by debiting electronic credit ledger. This was held by the Hon’ble
Gujarat High Court in the case of Bhagwati Construction Vs. Union of India.
Levy of GST—Justification—Levy of GST alongwith advertisement

tax/fee levied by a Municipal Corporation
Question 2.
Whether on coming into force of the GST Act a Municipal Corporation can
levy advertisement tax/fee along with GST?
Answer:
Notice demanding advertisement tax is valid as such tax levied by
municipality is on license granted to put up hoarding whereas GST is levied on
supply of service of making use of hoarding to display advertisements and
therefore, incidence of tax in the two transactions are different without any
double taxation. The Karnataka High Court in the case of Hubballi Dharwad
Advertisers Association Vs. State of Karnataka has declared that there is no
conflict between the power to levy GST under GST Act and power of Municipal
Corporation to levy advertisement fee or advertisement tax under section 134 of
the Karnataka Municipal Corporations Act. A single judge bench of Justice Suraj
Govindaraj gave the declaration while rejecting a petition filed by Hubballi
Dharwad Advertisers Association and others, which had challenged the demand
notice dated 13.6.2018 issued by the respondents calling upon them to make
advertisement tax as regards advertisement hoardings used by them. The bench
noted the GST as stated above is levied on any supply of goods or services. The
petitioners carrying on advertisement business it is during the course of the said
business that the petitioner is required to collect GST from any of its/their clients
and remit it to the authorities. It is not that the petitioners are making payments
of GST out of their own pockets. Following which it observed, "In this transaction
the petitioners are only a collecting agency who collects the GST payable on the
service rendered and deposits the same with the authorities, the incidence of
tax, i.e., GST being on the services rendered or goods supplied,

the obligation of payment being on the person availing the service and or
receiving the goods." It then said, "The incidence of GST is on the service
rendered by the petitioner to its clients and has nothing to do with respondent
No.2-HDMC. The transaction with HDMC is the permission and or license
granted by the HDMC to put up hoarding and or use a hoarding either on the
land belonging to the HDMC and or on land belonging to a private party."
The bench then opined, "The incidence of advertisement tax or
advertisement fee is on the licence granted by HDMC permitting the petitioner to
put up hoarding or make use of the hoardings, this incidence of advertisement
tax or fee has nothing to do with supply or service or goods by the petitioner to its
clients."Accordingly it held, "In view of the above there are two distinct
transactions. The incidence of tax on both transactions are different."
It added, "Both the transactions being independent and distinct the incidence
of both the GST and advertisement fee being on two distinct transactions
inasmuch as the GST not being charged by the respondent No.1- HDMC and
advertisement free not being charged by the GST authorities, though of course
there may be GST charged on the Advertisement Fee charged by the HDMC, I
am unable to accept the submission of Sri.Z ameer Pasha that there is double
taxation." The Court also clarified that, "By extending the analogy the petitioners
cannot contend that on the business being done by them, they are also making
payment of income tax. Therefore, GST cannot be levied or vice-versa. That
would end up in a ridiculous situation that would be completely untenable."
Registration—New registration—Requirement of new registration by

IRP/RP appointed under Insolvency and Bankruptcy Code, 2016 in each
of States or Union territories where corporate debtor was registered
earlier.
Question 3.
Whether IRP/RP appointed under Insolvency and Bankruptcy Code, 2016 is
required to take a new registration in each of the States or Union territories
where the corporate debtor was registered earlier?
Answer:
In the corporate insolvency resolution process or liquidation process, the
corporate debtor may be a going concern and as such the business is continued.
Since the management of the corporate debtor get changed to the IRP/RP the
erstwhile registration is not to be continued as the IRP/RP is considered as
distinct person under the Act. Therefore, a fresh registration is required to be
taken by the IRP/RP. The Government, vide Notification No. 11/2020-Central
Tax, dated 21.3.2020, as amended, considered IRP/RP as the class of persons
who shall follow the following special procedure, from the date of the
appointment of the IRP/RP till the period they undergo the corporate insolvency
resolution process. The said class of persons shall, with effect from the date of
appointment of IRP/RP, be treated as a distinct person of the corporate debtor,
and shall be liable to take a new registration in each of the States or Union

territories where the corporate debtor was registered earlier, within thirty days of
the appointment of the IRP/RP or by 30.6.2020, whichever is later. In the case of
Shri Nirav Tarkas Liquidator of Stratus Foods Pvt. Ltd. Vs. Office Of Chief
Commissioner [2022 (3) TMI 869 - Gujarat], the High Court considered the
contentions put forth by the parties to the writ petition and allowed the petition
directing the respondent authority to grant registration under the CGST Act, 2017
and directed to allow the GST Number qua Stratus Foods Pvt. Ltd. (corporate
debtor) within two weeks from the date of receipt of the order of Court.
Search & seizure—Detention of goods alongwith vehicle—Gold

ornaments —Confiscation of goods—Proceedings initiated under
section 129 as well as under section 130 of the CGST Act, 2017.
Question 4.
In a case where a goldsmith and a native of Rajasthan, while travelling
through Kerala for taking orders from jewellers, carried with him certain gold
jewellery for display purposes. However, assuming that, he was carrying
narcotics or other contraband articles, the sub-Inspector of Police, detained him
and on physical search, found the petitioner carrying 250.800gm of gold
ornaments. Accordingly, he intimated GST Department, who came and seized
the gold ornaments and thereafter, issued order of detention under section
129(1) of the CGST Act. However, while handing over the reply notice to the
respondent, a notice for confiscation under GST MOV-10, was issued to him.
Whether there is absolutely no material to assume any intention to evade the tax
as contemplated under section130 and hence the proceedings so initiated, fails
to satisfy the ingredients of section 130 of the CGST Act?
Answer:
The Kerala High Court in the case of Kamalesh Sen Vs. Assistant State Tax
Officer, WP(C) No. 29966 of 2021, decided on 7.1.2022, observed that the
respondent has given a reason for initiating proceedings under section 130. The
correctness or otherwise of the said reason is not a matter which can be
considered by Court under Article 226 of the Constitution of India, especially in
the light of the fact that, petitioner was not in possession of any documents
contemplated under law. Whether the transport of gold was with an intention to
evade tax or not is a matter which requires appreciation of disputed facts and
hence the statutory authority will have to consider the same after appreciating
the facts. This is not a fit case for invoking the extraordinary jurisdiction under
Article 226 of the Constitution of India. Hence there is no merit in this writ
petition. That since it is submitted that the petitioner was heard sometime in the
past in order to render justice to both sides, the respondent shall affor d an
opportunity of a fresh hearing to the petitioner.
Search and seizure—Territorial jurisdiction—Search operations by

multiple agencies—Centralisation of investigation with DGGI—
Applicability of section 6(2)(b)
Question 5.

Where to bring investigation under one umbrella, the DGGI sought transfer of
investigations being carried out by different Commissioner-ate(s) to itself,
whether he can do that and whether there is any prohibition in the CGST Act or
the SGST Act to such transfer of investigation?
Answer:
Yes, he can do that and there is no prohibition in the CGST Act or the SGST
Act to such transfer of investigation. The High Court Of Delhi has in the case of
Indo International Tobacco Ltd. & Anr. Vs. Vivek Prasad, ADG, DGGI& Ors.,
Cont.Cas(C) 751/2021 & CM No.35806/2021, W.P.(C) 2420/2021, W.P.(C)
4036/2021 & CM 12202/2021, decided on 11.1.2022. The Court held that to bring
investigation under one umbrella, the DGGI AZU sought transfer of investigations
being carried out by different Commissionerate(s) to itself. This was acceded to
by each Commissionerate. There is no prohibition in the CGST Act or the SGST
Act to such transfer of investigation. Neither it has been contended tha t the
DGGI, AZU, would otherwise lack jurisdiction to carry out an investigation against
the petitioners. It is not denied by the petitioners that the DGGI, AZU has a pan-
India jurisdiction. DGGI, AZU would, as Central Tax Officer and in compliance
with the mandate of section 6 of the CGST Act and the SGST Act, have to pass
comprehensive order, both under the CGST Act as also the SGST Act.
In the course of investigating of a tax entity, a situation may arise where the
investigation may have to be carried out from entities which are not within the
territorial jurisdiction of the Officer appointed under the Notification dated
19.6.2017 and/or such State Notifications appointing an Officer with the limited
territorial jurisdiction. It cannot be said that in every such case, the ‘proper officer’
having limited territorial jurisdiction must transfer the investigation to the ‘proper
officer’ having pan India jurisdiction - it would depend on the facts of each case
as to whether such transfer is warranted or not. To lay down the indefeatable rule
in this regard may not be feasible or advisable, and certainly not acceptable.
The investigations were initiated by various jurisdictional authorities against
different entities - section 6(2)(b) of the CGST Act has limited application and
therefore, is not applicable to the facts of the present petitions. Circular dated
5.10.2018 also has no application to the peculiar facts in the present set of writ
petitions.

(2022) Union of India & Ors. Vs. Willowood Chemicals Pvt. Ltd. & Anr. (SC) 257
[2022] GTI 257 (SC)

[IN THE SUPREME COURT OF INDIA]
HON’BLE UDAY UMESH LALIT & HON’BLE S. RAVINDRA BHAT, JJ.
Union of India & Ors. Vs. Willowood Chemicals Pvt. Ltd.

& Anr.
Civil Appeal Nos. 2995-2996 of 2022 and 2997-2998 of 2022
Dated. 19.4.2022.
INTEREST ON REFUND—RATE OF INTEREST— COMPENSATION
FOR DELAYED REFUND—HIGH COURT AWARDED 9% INSTEAD
OF 6% APPLYING PROVISO TO SECTION 56—NOT PROPER—
INSTANT CASES HAVE NOT ARISEN FROM ANY ORDER PASSED
BY AN ADJUDICATING AUTHORITY OR APPELLATE AUTHORITY
OR TRIBUNAL OR COURT AND CASES ARE STRICTLY WITHIN
SCOPE OF PRINCIPAL PROVISION OF SECTION 56 AND NOT
UNDER PROVISO THEREOF—WHEREVER A STATUTE SPECIFIES
OR REGULATES INTEREST, INTEREST WILL BE PAYABLE IN
TERMS OF THE PROVISIONS OF STATUTE.
HELD.—
In terms of section 20 of the IGST Act, 2017 any claim for refund of either unutilized
input tax credit of export of goods under bon d or letter of undertaking or refund of
integrated tax paid on export of goods, is to be governed by the provision s of the CGST
Act, 2017, which would apply mutatis mutandis as if they were enacted in the IGST Act,
2017. The proviso to section 56 of the CGST Act prescribes that where any claim of
refund arises from an order passed by an Adjudicating Authority or Appellate Authority or
Appellate Tribunal or Court and if the same is not refunded within 60 days from the date
of receipt of an application filed con sequent to such an order, the rate of interest payable
would be 9%. The instant cases have not arisen from any order passed b y an
Adjudicating Authority or Appellate Authority or Appellate Tribunal or Court and the
cases are strictly within the scope of the principal provision of section 56 and not under
the proviso thereof. In light of these provision s, the question which arises for
consideration is whether the High Court was justified in awardin g interest at the rate of
9% per annum.
In, a bench of two Judges of Supreme Court considered the question whether
interest on the compen sation amount at the rate of 9% per annum could be awarded when
the terms of section 6 of the Maharashtra Agriculture Lands (Ceiling of Holdings) Act,
1961 prescribed payment of interest only at the rate of 3% per annum. Coming back to the
present cases, the relevant provision has prescribed rate of interest at 6 per cent where
the case for refund is governed by the principal provision of section 56 of the CGST Act.
As has been clarified by this Court in Godavari Sugar Mills Ltd. Vs. State Of Maharash tra
& Ors. 2013 (6) TMI 23 - SC and Modi In dustries Ltd. & Or s. Vs. CIT & Anr. 1995 (9) TMI 324
-SC, wherever a statute specifies or regulates the interest, the interest will be payable in
terms of the provisions of the statute. Wherever a statute, on the other hand, is silent
about the rate of interest and there is no express

bar for payment of interest, any delay in paying the compensation or the amounts due,
would attract award of interest at a reasonable rate on equitable grounds - It is precisely
for this reason that paragraph 9 of the decision in Godavari Sugar Mills Ltd. (su pra)
accepted the submission made by the learned counsel for the respondents and confined
the rate of interest to the prescription made in the statute.
Since the delay in the instant case was in the region of 94 to 290 days an d not so
inordinate as was the case in San dvik Asia Ltd. V s. CIT & Or s. 2006 (1) TMI 55 - SC, the
matter has to be seen purely in the light of the concerned statutory provision s. In terms
of the principal part of section 56 of the CGST Act, the interest would be awarded at the
rate of 6%. The award of interest at 9% would be attracted only if the matter was covered
by the proviso to the said section 56. The High Court was in error in awarding interest at
the rate exceeding 6% in the instant matters. The original writ petitioners would be
entitled to interest at the rate of 6% per annum on amounts that they were entitled by way
of refund of tax.
Shri N. Venkataraman, ASG, Shri Akshay Amritanshu, Shri Merusagar Samantray,
Ms. Indira Bhakar, Shri Manish, Advocates, Shri M.K. Maroria and Shri B. Krishna
Prasad, AOR, for the Petitioner.
Shri Ravi Bharuka, AOR and Shri Ankit Agarwal, Advocate, for the Respondent.
JUDGMENT
Per Uday Umesh Lalit, J.
1. Delay condoned. Leave granted.

2. Appeal arising out of Special Leave Petition (C) Diary No.27099 of 2020
is directed against the judgment and order dated 10.7.2019 passed by the High
Court in Special Civil Application No.18591 of 2018 and against the order dated
13.3.2020 passed in Review Petition arising therefrom being Misc. Civil
Application No.1 of 2019. (For facility, hereinafter referred to as, "the first case")
Appeal arising out of Special Leave Petition (C) Diary No.28455 of 2020 is
directed against the judgment and order dated 10.7.2019 passed by the High
Court of Gujarat in Special Civila Application No.15925 of 2018 and against the
order dated 13.3.2020 passed in Review Petition arising therefrom being Misc.
Civil Application No.1 of 2019. (For facility, hereinafter referred to as, "the second
case")
3. The second case arises out of a Writ Petition, being Special Civil
Application No.15925 of 2018 filed by M/s. Saraf Natural Stone submitting inter
alia that:
"2.5 The Petitioner states that in terms of section 16 of the IGST Act, 2017,
a registered person making exports of goods outside India, shall be eligible
to claim, refund of either unutilized input tax credit on export of goods under
bond or letter of undertaking or refund of Integrated tax paid on export of
goods.
2.6 The Petitioner further states that section 16(3) of the IGST Act, provides
that refund should be claimed in accordance with the provisions of section
54 of the CGST Act or the rules made thereunder. Section 20 of the IGST

Act further provides that provisions of CGST Act relating to refunds shall,
mutatis mutandis, apply, so far as may be, in relation to Integrated tax as
they apply in relation to central tax as if they are enacted under this Act.
2.7. The Petitioners further states that Rule 2 of the Integrated Goods and
Services Tax Rules, 2017 provides that the Central Goods and Services
Tax Rules, 2017, for carrying out the provisions specified in section 20 of
the Integrated Goods and Services Tax Act, 2017 shall, so far as may be,
apply in relation to Integrated tax as they apply in relation to Central tax.
*** *** ***
2.15 The petitioner further states that the Central Government vide
Notification No.13/2017- Central Tax, dated 28.6.2017 and Notification
No.6/2017 -integrated tax dated 28.6.2017 has fixed the rate of interest
from the 1.7.2017 at 6% p.a. and 9% p.a. for the purposes of section 56
and proviso to section 56 of CGST Act, 2017 respectively. Copies of the
aforesaid notifications are enclosed herewith marked at Annexure A and
Annexure B respectively.
*** *** ***
2.19 The petitioner states further that it received the refund of integrated tax
paid on export of goods after substantial period of delay. Details of refund
claimed, date of application of refund and actual date of grant of refund for
the month of July is enclosed herewith and marked as Annexure-D"
3.1 Details of 15 (Fifteen) refunds made to said writ petitioner showed that
there was delay ranging from 94 to 290 days.
3.2 In the circumstances it was prayed inter alia:—
"(a) to issue writ of mandamus and/ or any other appropriate writ(s) for
directions is the Respondents for providing appropriate compensation as
well as interest, for delay in the granting of refund;"
4. The first case arises out of Special Civil Application No.18591 of 2018
filed by M/s. Willowood Chemicals Pvt. Ltd. submitting that said Writ Petitioner
was entitled on the basis of section 16 of the IGST Act read with section 54 of
the CGST Act for compensation in receipt of delayed payment as detailed in
Annexure D of the petition, which in turn dealt with 12 refunds with delay ranging
between 94 to 290 days. The special civil application had thus prayed for
appropriate compensation.
5. In both the petitions it was submitted that inaction leading to inordinate
delay in granting refunds was per se arbitrary and that the inordinate delay
impacted the working capacity of the Writ Petitioners thereby reducing their
ability to conduct business and as such appropriate compensation ought to be
awarded along with interest for delay.
The submissions were opposed by the learned counsel appearing for the
Revenue.

6. The High Court considered the rival submissions in light of the statutory
provisions and relied upon certain decisions including the decision of this Court in
K.T. Plantation Pvt. Ltd. and Anr. Vs. State of Karnataka (2011) 9 SCC 1 ,
Sandvik Asia Ltd. Vs. Commissioner of Income Tax-I Pune and others (2006) 2
SCC 508 and Commissioner of Income Tax, Gujarat Vs. Gujarat Fluoro
Chemicals (2014) 1 SCC 126. In its judgment dated 10.7.2019 which is under
challenge in the second case, the High Court concluded:
"22. The position of law appears to be well settled. The provisions relating
to an interest of delated payment of refund have been consistently held as
beneficial and nondiscriminatory. It is true that in the taxing statute the
principles of equity may have little role to play, but at the same time, any
statute in taxation matter should also meet with the test of constitutional
provision.
(a) The respondents have not explained in any manner the issue of delay
as raised by the writ applicants by filing any reply.
(b) The chart indicating the delay referred to above speaks for itself.
(c) In the overall view of the matter, we are inclined to hold the
respondents liable to pay simple interest on the delayed payment at the
rate of 9% per annum. The authority concerned shall nook into the chart
provided by the writ-applicants, which is at Page-30, Annexure-D to the writ
application and calculate the aggregate amount of refund. On the
aggregate amount of refund, the writ-applicants are entitled to 9% per
annum interest from the date of filing of the GSTR-03. The respondents
shall undertake this exercise at the earliest and calculate the requisite
amount toward the interest. Let this exercise be undertaken and completed
within a period of two months from the date of receipt of the writ of this
order. The requisite amount towards the interest shall be paid to the writ-
applicants within a period of two months form the date of receipt of the writ
of this order."
7. The first case was then disposed of on the same day with the following
observations:—
"4. For the reasons assigned in the Special Civil Application No15925 of
2018, decided on 10.7.2019, this writ application is allowed to the extent
that the writ applicants are entitled to the interest for the delayed payment
at the rate of 9% per annum. The authority concerned shall look into the
chart provided by the writ applicants, which is at Page 30, Annexure D to
the writ application and calculate the aggregate refund, the writ applicants
are entitled to 9% per annum interest from the date of filing of the GSTR38.
The respondents shall undertake this exercise at the earliest and calculate
the requisite amount towards interest. Let this exercise be undertaken and
completed within a period of two months from the date of receipt of the writ
of this order. The requisite amount towards the interest shall be paid to the
writ applicants within a period of two months from the date of receipt of the
writ of this order."

8. The appellant being aggrieved, preferred Review Petitions in both the
cases. It was submitted inter alia:
"4. It is respectfully submitted that this Hon’ble Court has directed the
respondent authority to pay simple interest on the delayed payment at the
rate of 9% per annum from the date of filing of the GSTR-3B.
5. It is respectfully submitted that as per section 56 of the IGST Net Interest
at the rate of not exceeding six percent may be given whereas by order
dated 10.7.2011 this Hon’ble Court was pleased to give interest at the rate
of 9%."
By separate orders dated 13.3.2020 passed in both the cases, the Review
Petitions preferred by the appellant were dismissed.
9. The aforestated judgments and orders passed by the High Court are
under challenge in these appeals. The appellants do not dispute the eligibility of
the respondents for receiving interest for delayed payment of claims but their
submission is that in terms of the relevant statutory provision, the interest could
be awarded at the rate of 6 per cent and not 9 per cent per annum. Considering
the stand taken by the appellants, at the interim stage, this Court directed the
appellants to make good payment of interest at the rate of 6 per cent.
Accordingly, the amounts representing interest at that rate have since then
been made over.
10. We have heard Mr. N. Venkataraman, learned Additional Solicitor
General on behalf of the appellants in both the matters while Mr. Vinay Shraff,
learned Advocate appeared for the respondents in both the cases.
11. Before we deal with the controversy in question, we may extract the
relevant statutory provisions:—
(A) Sections 16 and 20 of the IGST Act are as follows:—
"16. Zero rated supply - (1) "zero rated supply" means any of the following
supplies of goods or services or both, namely:—
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone
developer or a Special Economic Zone unit.
(2) Subject to the provisions of sub-section (5) of section 17 of the Central
Goods and Services Tax Act, credit of input tax may be availed for making
zero-rated supplies, notwithstanding that such supply may be an exempt
supply.
(3) A registered person making zero rated supply shall be eligible to claim
refund under either of the following options, namely:—
(a) he may supply goods or services or both under bond or Letter of
Undertaking, subject to such conditions, safeguards and procedure as
may be prescribed, without payment of integrated tax and claim refund
of unutilized input tax credit; or (b) he may

supply goods or services or both, subject to such conditions,

safeguards and procedure as may be prescribed, on payment of
integrated tax and claim refund of such tax paid on goods or services or
both supplied.
*** *** ***
20. Subject to the provisions of this Act and the rules made thereunder, the
provisions of Central Goods and Services Tax Act relating to,—
(i) scope of supply;
(ii) composite supply and mixed supply;
(iii) time and value of supply;
(iv) input tax credit;
(v) registration;
(vi) tax invoice, credit and debit notes;
(vii) accounts and records;
(viii) returns, other than late fee;
(ix) payment of tax;
(x) tax deduction at source;
(xi) collection of tax at source;
(xii) assessment;
(xiii) refunds;
(xiv) audit;
(xv) inspection, search, seizure and arrest;
(xvi) demands and recovery;
(xvii) liability to pay in certain cases;
(xviii) advance ruling;
(xix) appeals and revision;
(xx) presumption as to documents;
(xxi) offences and penalties;
(xxii) job work;
(xxiii) electronic commerce;
(xxiv) transitional provisions; and
(xxv) miscellaneous provisions including the provisions relating to the
imposition of interest and penalty, shall, mutatis mutandis, apply, so far
as may be, in relation to integrated tax as they apply in relation to
central tax as if they are enacted under this Act:
Provided that in the case of tax deducted at source, the deductor shall
deduct tax at the rate of two per cent from the payment made or credited to
the supplier:
Provided further that in the case of tax collected at source, the operator
shall collect tax at such rate not exceeding two per cent,
as may be notified on the recommendations of the Council, of the net value

of taxable supplies:
Provided also that for the purposes of this Act, the value of a supply shall
include any taxes, duties, cesses, fees and charges levied under any law
for the time being in force other than this Act, and the Goods and Services
Tax (Compensation to States) Act, if charged separately by the supplier:
Provided also that in cases where the penalty is leviable under the Central
Goods and Services Tax Act and the State Goods and Services Tax Act or
the Union Territory Goods and Services Tax Act, the penalty leviable under
this Act shall be the sum total of the said penalties.
Provided also that in cases where the appeal is to be filed before the
Appellate Authority or the Appellate Tribunal, the maximum amount
payable shall be fifty crore rupees and one hundred crore rupees
respectively."
(B) Sections 54 and 56 of the CGST Act are as under:—
"54. Refund of tax - (1) Any person claiming refund of any tax and interest,
if any, paid on such tax or any other amount paid by him, may make an
application before the expiry of two years from the relevant date in such
form and manner as may be prescribed:
Provided that a registered person, claiming refund of any balance in the
electronic cash ledger in accordance with the provisions of sub-section (6)
of section 49, may claim such refund in the return furnished under section
39 in such manner as may be prescribed.
(2) A specialised agency of the United Nations Organisation or any
Multilateral Financial Institution and Organisation notified under the United
Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of
foreign countries or any other person or class of persons, as notified under
section 55, entitled to a refund of tax paid by it on inward supplies of goods
or services or both, may make an application for such refund, in such form
and manner as may be prescribed, before the expiry of six months from the
last day of the quarter in which such supply was received.
(3) Subject to the provisions of sub-section (10), a registered person may
claim refund of any unutilised input tax credit at the end of any tax period:
Provided that no refund of unutilised input tax credit shall be allowed in
cases other than—
(i) zero rated supplies made without payment of tax;
(ii) where the credit has accumulated on account of rate of tax on inputs
being higher than the rate of tax on output supplies (other than nil rated
or fully exempt supplies), except supplies of goods or services or both
as may be notified by the Government on the recommendations of the
Council:

Provided further that no refund of unutilised input tax credit shall be allowed
in cases where the goods exported out of India are subjected to export
duty:
Provided also that no refund of input tax credit shall be allowed, if the
supplier of goods or services or both avails of drawback in respect of
central tax or claims refund of the integrated tax paid on such supplies.
(4) The application shall be accompanied by-
a. such documentary evidence as may be prescribed to establish
that a refund is due to the applicant; and
b. such documentary or other evidence (including the documents
referred to in section 33) as the applicant may furnish to establish
that the amount of tax and interest, if any, paid on such tax or any
other amount paid in relation to which such refund is claimed was
collected from, or paid by, him and the incidence of such tax and
interest had not been passed on to any other person:
Provided that where the amount claimed as refund is less than two lakh
rupees, it shall not be necessary for the applicant to furnish any
documentary and other evidences but he may file a declaration, based on
the documentary or other evidences available with him, certifying that the
incidence of such tax and interest had not been passed on to any other
person.
(5) If, on receipt of any such application, the proper officer is satisfied that
the whole or part of the amount claimed as refund is refundable, he may
make an order accordingly and the amount so determined shall be credited
to the Fund referred to in section 57.
(6) Notwithstanding anything contained in sub-section (5), the proper
officer may, in the case of any claim for refund on account of zero-rated
supply of goods or services or both made by registered persons, other than
such category of registered persons as may be notified by the Government
on the recommendations of the Council, refund on a provisional basis,
ninety per cent. of the total amount so claimed, excluding the amount of
input tax credit provisionally accepted, in such manner and subject to such
conditions, limitations and safeguards as may be prescribed and thereafter
make an order under sub-section (5) for final settlement of the refund claim
after due verification of documents furnished by the applicant.
(7) The proper officer shall issue the order under sub-section (5) within
sixty days from the date of receipt of application complete in all respects.
(8) Notwithstanding anything contained in sub-section (5), the refundable
amount shall, instead of being credited to the Fund, be paid to the
applicant, if such amount is relatable to-
(a) refund of tax paid on export of goods or services or both or on inputs or
input services used in making such exports;

(b) refund of unutilized input tax credit under sub-section (3);

(c) refund of tax paid on a supply which is not provided, either wholly or
partially, and for which invoice has not been issued, or where a refund
voucher has been issued;
(d) refund of tax in pursuance of section 77;
(e) the tax and interest, if any, or any other amount paid by the applicant, if
he had not passed on the incidence of such tax and interest to any
other person; or
(f) the tax or interest borne by such other class of applicants as the
Government may, on the recommendations of the Council, by
notification, specify.
(8A) The Government may disburse the refund of the State tax in such
manner as may be prescribed.
(9) Notwithstanding anything to the contrary contained in any judgment,
decree, order or direction of the Appellate Tribunal or any Court or in any
other provisions of this Act or the rules made thereunder or in any other law
for the time being in force, no refund shall be made except in accordance
with the provisions of sub-section (8).
(10) Where any refund is due under sub-section (3) to a registered person
who has defaulted in furnishing any return or who is required to pay any
tax, interest or penalty, which has not been stayed by any Court, Tribunal
or Appellate Authority by the specified date, the proper officer may —
(a) withhold payment of refund due until the said person has furnished the
return or paid the tax, interest or penalty, as the case may be;
(b) deduct from the refund due, any tax, interest, penalty, fee or any other
amount which the taxable person is liable to pay but which remains
unpaid under this Act or under the existing law. Explanation.—For the
purposes of this sub-section, the expression "specified date" shall
mean the last date for filing an appeal under this Act.
(11) Where an order giving rise to a refund is the subject matter of an
appeal or further proceedings or where any other proceedings under this
Act is pending and the Commissioner is of the opinion that grant of such
refund is likely to adversely affect the revenue in the said appeal or other
proceedings on account of malfeasance or fraud committed, he may, after
giving the taxable person an opportunity of being heard, withhold the refund
till such time as he may determine.
(12) Where a refund is withheld under sub-section (11), the taxable person
shall, notwithstanding anything contained in section 56, be entitled to
interest at such rate not exceeding six per cent. as may be notified on the
recommendations of the Council, if as a result of the appeal or further
proceedings he becomes entitled to refund.

(13) Notwithstanding anything to the contrary contained in this section, the

amount of advance tax deposited by a casual taxable person or a non-
resident taxable person under sub-section (2) of section 27, shall not be
refunded unless such person has, in respect of the entire period for which
the certificate of registration granted to him had remained in force,
furnished all the returns required under section 39.
(14) Notwithstanding anything contained in this section, no refund under
sub-section (5) or sub-section (6) shall be paid to an applicant, if the
amount is less than one thousand rupees.
Explanation.—For the purposes of this section,—
(1) "refund" includes refund of tax paid on zero-rated supplies of goods or
services or both or on inputs or input services used in making such zero-
rated supplies, or refund of tax on the supply of goods regarded as deemed
exports, or refund of unutilised input tax credit as provided under sub-
section (3).
(2) "relevant date" means—
a. in the case of goods exported out of India where a refund of tax
paid is available in respect of goods themselves or, as the case
may be, the inputs or input services used in such goods,—
i. if the goods are exported by sea or air, the date on which
the ship or the aircraft in which such goods are loaded,
leaves India;
or
ii. if the goods are exported by land, the date on which such
goods pass the frontier; or
iii. if the goods are exported by post, the date of despatch of
goods by the Post Office concerned to a place outside
India;
b. in the case of supply of goods regarded as deemed exports
where a refund of tax paid is available in respect of the goods,
the date on which the return relating to such deemed exports is
furnished;
c. in the case of services exported out of India where a refund of tax
paid is available in respect of services themselves or, as the case
may be, the inputs or input services used in such services, the
date of—
i. receipt of payment in convertible foreign exchange 3 "or
in Indian rupees wherever permitted by the Reserve
Bank of India", where the supply of services had been
completed prior to the receipt of such payment; or
ii. issue of invoice, where payment for the services had
been received in advance prior to the date of issue of the
invoice;
d. in case where the tax becomes refundable as a consequence of
judgment, decree, order or direction of the Appellate Authority,

Appellate Tribunal or any Court, the date of communication of such

judgment, decree, order or direction;
(e) in the case of refund of unutilised input tax credit under clause
(ii) of the first proviso to sub-section (3), the due date for furnishing of
return under section 39 for the period in which such claim for refund
arises;
(f) in the case where tax is paid provisionally under this Act or the rules
made thereunder, the date of adjustment of tax after the final
assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of
goods or services or both by such person; and
(h) in any other case, the date of payment of tax. Refund in certain cases.
*** *** ***
56. Interest on delayed refunds— If any tax ordered to be refunded under
sub-section (5) of section 54 to any applicant is not refunded within sixty
days from the date of receipt of application under subsection (1) of that
section, interest at such rate not exceeding six per cent. as may be
specified in the notification issued by the Government on the
recommendations of the Council shall be payable in respect of such refund
from the date immediately after the expiry of sixty days from the date of
receipt of application under the said sub-section till the date of refund of
such tax:
Provided that where any claim of refund arises from an order passed by an
adjudicating authority or Appellate Authority or Appellate Tribunal or Court
which has attained finality and the same is not refunded within sixty days
from the date of receipt of application filed consequent to such order,
interest at such rate not exceeding nine per cent. as may be notified by the
Government on the recommendations of the Council shall be payable in
respect of such refund from the date immediately after the expiry of sixty
days from the date of receipt of application till the date of refund.
Explanation.—For the purposes of this section, where any order of refund is
made by an Appellate Authority, Appellate Tribunal or any Court against an
order of the proper officer under sub-section (5) of section 54, the order
passed by the Appellate Authority, Appellate Tribunal or by the Court shall
be deemed to be an order passed under the said sub-section (5)"
12. These provisions show that a registered person making export of goods
outside India, is entitled in terms of section 16 of the IGST Act to claim refund of
either unutilized input tax credit of export of goods under bond or letter of
undertaking or refund of integrated tax paid on export of goods. In terms of
section 20 of the IGST Act, any claim for refund is to be governed by the
provisions of the CGST Act which would apply mutatis mutandis as if they were
enacted in the IGST Act. The application for refund, therefore, is required to be
preferred in accordance with section 54 of the CGST Act. According to section
56 of the CGST Act, if an applicant is not refunded any tax ordered to be

refunded by the Proper Officer under section 54(5) within 60 days from the
receipt of the application, interest at such rate not exceeding 6 per cent would
become payable after the expiry of 60 days from the date of receipt of application
till the date of refund of such tax. The proviso to said section prescribes that
where any claim of refund arises from an order passed by an Adjudicating
Authority or Appellate Authority or Appellate Tribunal or Court and if the same is
not refunded within 60 days from the date of receipt of an application filed
consequent to such an order, the rate of interest payable would be 9 per cent.
13. The instant cases have not arisen from any order passed by an
Adjudicating Authority or Appellate Authority or Appellate Tribunal or Court and
the cases are strictly within the scope of the principal provision of section 56 and
not under the proviso thereof. In light of these provisions, the question which
arises for consideration is whether the High Court was justified in awarding
interest at the rate of 9 per cent per annum.
14. Before we deal with the question, it must be stated that initially a bench
of two Judges of this Court in Union of India and others Vs. Orient Enterprises
and Another (1998) 3 SCC 501 had observed that a Writ Petition under Article
226 of the Constitution filed solely for relief for payment of interest on delayed
refund would not be maintainable. For facility, the relevant portion from the said
decision is quoted here:
"6. In Suganmal [AIR 1965 SC 1740 : 56 ITR 84 : 16 STC 398] this Court
has laid down that a writ petition under Article 226 of the Constitution solely
praying for the issue of a writ of mandamus directing the State to refund the
money is not ordinarily maintain-able for the simple reason that a claim for
such a refund can always be made in a suit against the authority which had
illegally collected the money as a tax. This Court has made a distinction
between a direction for refund given by way of consequential order in a
case where the legality of the assessment is questioned and a case where
the petition is only for the purpose of seeking refund. It has been observed:
"We do not consider it proper to extend the principle justifying the
consequential order directing the refund of amount illegally realised, when
the order under which the amounts had been collected has been set aside,
to cases in which only orders for the refund of money are sought. The
parties had the right to question the illegal assessment orders on the
ground of their illegality or unconstitutionality and, therefore, could take
action under Article 226 for the protection of their fundamental right, and
the Courts, on setting aside the assessment orders, exercised their
jurisdiction in proper circum-stances to order the consequential relief for the
refund of the tax illegally realised. We do not find any good reason to
extend this principle and, therefore, hold that no petition for the issue of a
writ of mandamus will be normally entertained for the purpose of merely

ordering a refund of money to the return of which the petitioner claims a

right."
7. The Court has emphasised that there was no legal right in the
appellant who had filed the writ petition to claim the refund under the
relevant statute.
8. In the present case also till the insertion of section 27-A in the Act by
Act 22 of 1995 there was no right entitling payment of interest on delayed
refund under the Act. Such a right was conferred for the first time by the
said provision Act 22 of 1995 also inserted section 28-AA which provides
for payment of interest on delayed payment of duty by a person who is
liable to pay the duty. Thus at the relevant time there was no statutory right
entitling the respondents to payment of interest on delayed refund and the
writ petition filed by them was not for the enforcement of a legal right
available to them under any statute. The claim for interest was in the nature
of compensation for wrongful retention by the appellants of money that was
collected from the respondents by way of customs duty, redemption fine
and penalty. In view of the law laid down by this Court in Suganmal [AIR
1965 SC 1740: 56 ITR 84: 16 STC 398] a writ petition seeking the relief of
payment of interest on delayed refund of the amount so collected could not,
in our opinion, be maintained. The decisions on which reliance has been
placed by Shri Rawal were cases where the legality of the orders requiring
payment of tax or duty were challenged and the High Court in exercise of
its jurisdiction under Article 226 of the Constitution, while setting aside the
said orders, has directed the refund of the amount so collected with
interest. The direction for payment of interest in these cases was by way of
consequential relief along with the main relief of setting aside the order
imposing the tax or duty. Those cases stand on a different footing and have
no application to the present case. The appeal is, therefore, allowed, the
impugned judgment of the High Court is set aside and the writ petition filed
by the respondents before the High Court is dismissed. No order as to
costs."
15. However, subsequently another bench of two Judges of this Court in
Godavari Sugar Mills Ltd. in more or less identical circumstances settled the
issue and found the Writ Petition to be maintainable. The observations of this
Court were:
"7. The High Court relying upon the decision of this Court in Suganmal Vs.
State of M.P. [AIR 1965 SC 1740] has held that the prayer in the writ
petition being one for payment of interest, it should be considered to be a
writ petition filed to enforce a money claim and therefore, not maintainable.
The observations in Suganmal [AIR 1965 SC 1740] related to a claim for
refund of tax and have to be understood with reference to the nature of the
claim made therein. The decision in Suganmal [AIR 1965 SC 1740] has
been explained and distinguished in several subsequent cases, including in
U.P. Pollution Control Board Vs. Kanoria Industrial Ltd. [(2001) 2 SCC 549]
and ABL International Ltd. Vs. Export Credit GuaranteeCorpn.

of India Ltd. [(2004) 3 SCC 553] The legal position becomes clear when the
decision in Suganmal [AIR 1965 SC 1740] is read with the other decisions
of this Court on the issue, referred to below:
(i) Normally, a petition under Article 226 of the Constitution of India will not
be entertained to enforce a civil liability arising out of a breach of a
contract or a tort to pay an amount of money due to the claimants. The
aggrieved party will have to agitate the question in a civil suit. But an
order for payment of money may be made in a writ proceeding, in
enforcement of statutory functions of the State or its officers. (Vide
Burmah Construction Co. Vs. State of Orissa [AIR 1962 SC 1320 :
1962 Supp (1) SCR 242] .)
(ii) If a right has been infringed-whether a fundamental right or a statutory
right-and the aggrieved party comes to the Court for enforcement of the
right, it will not be giving complete relief if the Court merely declares the
existence of such right or the fact that existing right has been infringed.
The High Court, while enforcing fundamental or statutory rights, has the
power to give consequential relief by ordering payment of money
realised by the Government without the authority of law. (Vide State of
M.P. Vs. Bhailal Bhai [AIR 1964 SC 1006] .)
(iii) A petition for issue of writ of mandamus will not normally be entertained
for the purpose of merely ordering a refund of money, to the return of
which the petitioner claims a right. The aggrieved party seeking refund
has to approach the civil Court for claiming the amount, though the
High Courts have the power to pass appropriate orders in the exercise
of the power conferred under Article 226 for payment of money. (Vide
Suganmal Vs. State of M.P. [AIR 1965 SC 1740] )
(iv) There is a distinction between cases where a claimant approaches the
High Court seeking the relief of obtaining only refund and those where
refund is sought as a consequential relief after striking down the order
of assessment, etc. While a petition praying for mere issue of a writ of
mandamus to the State to refund the money alleged to have been
illegally collected is not ordinarily maintainable, if the allegation is that
the assessment was without a jurisdiction and the taxes collected was
without authority of law and therefore the respondents had no authority
to retain the money collected without any authority of law, the High
Court has the power to direct refund in a writ petition. (Vide Salonah
Tea Co. Ltd. Vs. Supdt. of Taxes [(1988) 1 SCC 401 : 1988 SCC (Tax)
99 (2)]
(v) It is one thing to say that the High Court has no power under Article 226
of the Constitution to issue a writ of mandamus for making refund of the
money illegally collected. It is yet another thing to say that such power
can be exercised sparingly depending on facts and circumstances of
each case. For instance, where the facts are not in dispute, where the
collection of money was without the authority of law and there was

no case of undue enrichment, there is no good reason to deny a relief
of refund to the citizens. But even in cases where collection of cess,
levy or tax is held to be unconstitutional or invalid, refund is not an
automatic consequence but may be refused on several grounds
depending on facts and circumstances of a given case. (Vide U.P.
Pollution Control Board Vs. Kanoria Industrial Ltd. [(2001) 2 SCC 549]
(vi) Where the lis has a public law character, or involves a question arising
out of public law functions on the part of the State or its authorities,
access to justice by way of a public law remedy under Article 226 of the
Constitution will not be denied. (Vide Sanjana M. Wig Vs. Hindustan
Petroleum Corporation Ltd. (2005) 8 SCC 242)
We are therefore of the view that reliance upon Suganmal was misplaced
to hold that the writ petition filed by the appellant was not maintainable."
16. We, therefore, proceed to consider the merits. Turning to the basic
question it must be noted that in the following cases, this Court dealt with the
question as to payment of interest on the amount due by way of refund:
(A) In Modi Industries Ltd. and another Vs. Commissioner of Income Tax
and Another (1995) 6 SCC 396 a bench of three Judges of this Court was called
upon to consider the effect of section 214 of the Income Tax Act, 1961, and the
questions which arose were set out as under:
"We shall now indicate how the controversy relating to the meaning of the
expression "regular assessment" arises: an assessee pays advance tax
according to his estimate of his income during the financial year relevant to
the particular assessment year. He then files a return and an assessment is
made under section 143. It is found that he has paid more amount by way
of advance tax than the amount of tax assessed. He will be refunded the
extra amount with interest calculated from the first day of April of that
assessment year to the date of assessment. No difficulty arises in such a
case. The difficulty arises in the following situation: indeed it is one of the
many situations - not satisfied with the order of assessment, the assessee
files an appeal. The appeal is allowed as a consequence of which, the
assessment order is revised. As a result of such revised assessment made
pursuant to the appellate order, the tax refund-able to the assessee
becomes larger - say whereas, according to the original assessment he
was entitled to refund of Rs. 10,000/-, he becomes entitled to a total refund
of Rs. 15,000/- as a result of revised assessment made pursuant to the
appellate order. The question is - on what amount and upto which date is
the interest payable? On being elaborated, the question yields the following
sub-questions:
(a) is the interest payable only on Rs. 10,000/- and if so, whether

the interest is payable till the date of first/original assessment or till the
date of the revised assessment?
(b) is the interest payable on Rs. 15,000/- and if payable, is it payable
only till the date of first/original assessment or till the date of the revised
assessment?
After considering various decisions on the point, the conclusion drawn by the
Court was:
"The argument, which was upheld in some of the cases now under appeal,
is that it will be inequitable if the assessee does not get interest on the
amount of advance tax paid, when the amount paid in advance is refunded
pursuant to an appellate order. This is not a question of equity. There is no
right to get interest on refund except as provided by the statute. The
interest on excess amount of advance tax under section 214 is not paid
from the date of payment of the tax. Nor is it paid till the date of refund. It is
paid only upto the date of the regular assessment. No interest is at all paid
on excess amount of tax collected by deduction at source. Before
introduction of section 244(1A) the assessee was not entitled to get any
interest from the date of payment of tax upto the date of the order as a
result of which excess realisation of tax became refund-able. Interest under
section 243 or section 244 was payable only when the refund was not
made within the stipulated period upto the date of refund. But, if the
assessment order was reduced in appeal, no interest was payable from the
date of payment of tax pursuant to the assessment order to the date of the
appellate order.
Therefore, interpretation of section 214 or any other section of the Act
should not be made on the assumption that interest has to be paid
whenever an amount which has been retained by the tax authority in
exercise of statutory power becomes refundable as a result of any
subsequent proceeding.
(B) In Godavari Sugar Mills Ltd., a bench of two Judges of this Court
considered the question whether interest on the compensation amount at the rate
of 9 per cent per annum could be awarded when the terms of section 6 of the
Maharashtra Agriculture Lands (Ceiling of Holdings) Act, 1961 prescribed
payment of interest only at the rate of 3 per cent per annum. The discussion on
the point was:
"9. There is considerable force in the submissions of Ms Madhavi Divan,
the learned counsel for the respondents that the decisions of the Bombay
High Court in Krishnakumar [ WP No. 83 of 1986 decided on 29.6.1991
(Bom)] and Changdeo [ WP No. 3805 of 2000 decided on 7.7.2000 (Bom)]
are not sound, as they completely ignore section 26 of the Act, while
awarding interest at 9% per annum on the belated payment of
compensation.
10. The question as to when and in what circumstances, interest could be
awarded on belated payment of compensation, was considered by this
Court in Union of India Vs. Parmal Singh [(2009) 1

SCC 618] . This Court first referred to the general principle and then the
exceptions thereto, as under: (SCC pp. 624-25, paras 12-13)
"12. When a property is acquired, and law provides for payment of
compensation to be determined in the manner specified, ordinarily
compensation shall have to be paid at the time of taking possession in
pursuance of acquisition. By applying equitable principles, the Courts have
always awarded interest on the delayed payment of compensation in
regard to acquisition of any property.
13......The said general principle will not apply in two circumstances. One is
where a statute specifies or regulates the interest. In that event, interest will
be payable in terms of the provisions of the statute. The second is where a
statute or contract dealing with the acquisition specifically bars or prohibits
payment of interest on the compensation amount. In that event, interest will
not be awarded. Where the statute is silent about interest, and there is no
express bar about payment of interest, any delay in paying the
compensation or enhanced compensation for acquisition would require
award of interest at a reasonable rate on equitable grounds."
This Court, dealing with an acquisition under the Defence of India Act, 1962
(which did not contain any provision either requiring or prohibiting payment
of interest), upheld the award of interest at 6% per annum.
11. Section 24 of the Act requires the Collector, after possession of surplus
land was taken over under section 21(4) of the Act, to cause public notice
requiring persons interested to lodge their claims. Section 25 of the Act
provides for determination of compensation and apportionme nt thereof.
Section 26 deals with mode of payment of amount of compensation and the
same is extracted below:
"26. Mode of payment of amount of compensation.-(1) The amount of
compensation may, subject to the provisions of subsection (3), be payable
in transferable bonds carrying interest at three per cent per annum.
(2) The bonds shall be-
(a) of the following denominations, namely- Rs. 50; Rs. 100; Rs. 200; Rs.
500; Rs. 1000; Rs. 5000 and Rs. 10,000; and
(b) of two classes-one being repayable during a period of twenty
yearsfrom the date of issue by equated annual instalment of principal and
interest, and the other being redeemable at par at the end of a period of
twenty years from the date of issue. It shall be at the option of the person
receiving compensation to choose payment in one or other class of bonds,
or partly in one class and partly in another.
(3) Where the amount of compensation or any part thereof, cannot be paid
in the aforesaid denomination, it may be paid in cash."
The said section contemplates the payment of compensation with interest
at 3% per annum in annual instalments spread over a period

of 20 years or at the end of 20 years. It also contemplates payment being

made either by transferable bonds or in cash. Sub-section (3) of section 26
enabling payment of compensation by cash, in cases where it could not be
paid by such bonds, does not disturb the rate of interest, which is 3% per
annum for 20 years, provided in sub-section (1) thereof. We are therefore
of the view that whether the payment is made by transferable bonds or by
cash, the rate of interest can be only at 3% per annum for a period of 20
years from the date of taking possession.
12. The next question that requires consideration is about the rate of
interest if the payment is not made even after 20 years, and whether it
should be only at the rate of 3% per annum, even after 20 years. Section
26 is silent about the rate of interest payable, if the compensation is not
paid within 20 years. We are therefore of the view that section 26
contemplates payment of the compensation within 20 years from the date
of taking possession with interest at 3% per annum; and for the period
beyond 20 years, the said provision regarding interest will cease to apply
and the general equitable principles relating to interest will apply; and
interest can be awarded at any reasonable rate, in the discretion of the
Court. Interest at the rate of 6% per annum, beyond 20 years would be
appropriate and payable on equitable principles."
(C) In Sandvik Asia Ltd., a bench of two Judges of this Court was called upon
to consider whether the inordinate delay of about 12 to 17 years in making a
refund would entitle grant of interest. In the facts of that case, interest at the rate
of 9 per cent per annum from 31.3.1986 to 27.3.1998 was granted. Even while
doing so this Court observed:
"48. There cannot be any doubt that the award of interest on the refunded
amount is as per the statutory provisions of law as it then stood and on the
peculiar facts and circumstances of each case. When a specific provision
has been made under the statute, such provision has to govern the field.
Therefore, the Court has to take all relevant factors into consideration while
awarding the rate of interest on the compensation."
(D) In Gujarat Fluoro Chemicals, the correctness of the decision in Sandvik
Asia Ltd. came up for consideration before a bench of three Judges of this Court,
and the matter was considered thus:
"3. In order to answer the aforesaid issue before us, we have carefully gone
through the judgment of this Court in Sandvik case [Sandvik Asia Ltd. Vs.
CIT, (2006) 2 SCC 508] and the order of reference. We have also
considered the submissions made by the parties to the lis.
4. We would first throw light on the reasoning and the decision of this Court
on the core issue in Sandvik case [Sandvik Asia Ltd. Vs. CIT, (2006) 2 SCC
508]. The only issue formulated by this Court for its consideration and
decision was whether an assessee is entitled to be compensated by the
Income Tax Department for the delay in

paying interest on the refunded amount admittedly due to the assessee.
This Court in the facts of the said case had noticed that there was delay of
various periods, ranging from 12 to 17 years, in such payment by the
Revenue. This Court had further referred to the several decisions which
were brought to its notice and also referred to the relevant provisions of the
Act which provide for refunds to be made by the Revenue when a superior
forum directs refund of certain amounts to an assessee while disposing of
an appeal, revision, etc. Since there was an inordinate delay on the part of
the Revenue in refunding the amount due to the assessee this Court had
thought it fit that the assessee should be properly and adequately
compensated and therefore in para 51 of the judgment, the Court while
compensating the assessee had directed the Revenue to pay a
compensation by way of interest for two periods, namely, for Assessment
Years 1977-1978, 1978- 1979, 1981-1982, 1982-1983 in a sum of Rs.
40,84,906 and interest @ 9% from 31.3.1986 to 27.3.1998 and in default, to
pay the penal interest @ 15% per annum for the aforesaid period.
5. In our considered view, the aforesaid judgment has been mis-quoted
and misinterpreted by the assessees and also by the Revenue. They are of
the view that in Sandvik case [Sandvik Asia Ltd. Vs. CIT, (2006) 2 SCC
508] this Court had directed the Revenue to pay interest on the statutory
interest in case of delay in the payment. In other words, the interpretation
placed is that the Revenue is obliged to pay an interest on interest in the
event of its failure to refund the interest payable within the statutory period.
6. As we have already noticed, in Sandvik case [Sandvik Asia Ltd. Vs.
CIT, (2006) 2 SCC 508] this Court was considering the issue whether an
assessee who is made to wait for refund of interest for decades be
compensated for the great prejudice caused to it due to the delay in its
payment after the lapse of statutory period. In the facts of that case, this
Court had come to the conclusion that there was an inordinate delay on the
part of the Revenue in refunding certain amount which included the
statutory interest and therefore, directed the Revenue to pay compensation
for the same not an interest on interest."
17. Since reliance was placed by the High Court on the decision of the
Constitution Bench of this Court in K.T. Plantation Pvt. Ltd. and Anr., we must
note that what arose for consideration in that case, was the constitutional validity
of the Devika Rani Roerich Estate (Acquisition & Transfer) Act, 1996, and
section 110 of the Karnataka Lands Reforms Act, 1996 and certain notifications
issued by the State Government. The questions which arose for consideration
were set out in paragraph 25 of the decision as under:—
"Whether the relevant provisions violated the basic structure of the
Constitution in so far as they conferred power on the executive government
for withdrawal of exception without hearing and without reasons and
whether the provisions of the Acquisition Act were

protected by Article 31(A) of the Constitution and whether they were

violative of Article 300(A) of the Constitution?"
After dealing with these questions, the reference was answered thus: We,
therefore, answer the reference as follows:
(a) section 110 of the Land Reforms Act and the Notification dated
8.3.1994 are valid, and there is no excessive delegation of legislative
power on the State Government.
(b) Non-laying of the Notification dated 8.3.1994 under section 140 of the
Land Reforms Act before the State Legislature is a curable defect and it
will not affect the validity of the notification or action taken thereunder.
(c) The Acquisition Act is protected by Article 31-A of the Constitution after
having obtained the assent of the President and hence immune from
challenge under Article 14 or 19 of the Constitution.
(d) There is no repugnancy between the provisions of the Land Acquisition
Act, 1894 and the Rocrich and Devika Rani Rocrich Estate (Acquisition
& Transfer) Act, 1996 (in short "the Acquisition Act"), and hence no
assent of the President is warranted under Article 254(2) of the
Constitution.
(e) Public purpose is a precondition for deprivation of a person from his
property under Article 300-A and the right to claim compensation is also
inbuilt in that article and when a person is deprived of his property the
State has to justify both the grounds which may depend on scheme of
the statute, legislative policy, object and purpose of the legislature and
other related factors. (f) Statute, depriving a person of his property is,
therefore, amenable to judicial review on grounds hereinbefore
discussed."
The aforestated answers and especially one at serial (e) show the context in
which the issue of compensation was considered by this Court, which is
completely distinct and different from the issue with which we are presently
concerned.
18. Coming back to the present cases, the relevant provision has prescribed
rate of interest at 6 per cent where the case for refund is governed by the
principal provision of section 56 of the CGST Act. As has been clarified by this
Court in Modi Industries Ltd. and Godavari Sugar Mills Ltd. wherever a statute
specifies or regulates the interest, the interest will be payable in terms of the
provisions of the statute. Wherever a statute, on the other hand, is silent about
the rate of interest and there is no express bar for payment of interest, any delay
in paying the compensation or the amounts due, would attract award of interest
at a reasonable rate on equitable grounds. It is precisely for this reason that
paragraph 9 of the decision in Godavari Sugar Mills Ltd. accepted the submission
made by the learned counsel for the respondents and confined the rate of
interest to the prescription made in the statute. The award of interest at a rate in
excess of what was prescribed by the statute was only for a period beyond 20
years where the matter was not strictly covered by the statute and as such it

would be in the realm of discretion of the Court. It must also be noted here that
the inordinate delay of up to 17 years in making refunds was a special
circumstance when this Court was persuaded to accept grant of interest at the
rate of 9 per cent per annum in Sandvik Asia Ltd. Even while doing so, the
observations made by this Court in Paragraph 48 of the decision are quite clear
that "the award of interest in refund and amount must be as per the statutory
provisions of law and whenever a specific provision has been made under the
statute such provision has to govern the field." The subsequent decision of the
bench of three Judges in Gujarat Fluoro Chemicals6 noticed that the grant of
interest at the rate of 9 per cent was in the facts of the case in Sandvik Asia Ltd.
19. Since the delay in the instant case was in the region of 94 to 290 days
and not so inordinate as was the case in Sandvik Asia Ltd., the matter has to be
seen purely in the light of the concerned statutory provisions. In terms of the
principal part of section 56 of the CGST Act, the interest would be awarded at
the rate of 6 per cent. The award of interest at 9 per cent would be attracted only
if the matter was covered by the proviso to the said section 56. The High Court
was in error in awarding interest at the rate exceeding 6 per cent in the instant
matters.
20. We, therefore, allow these appeals and direct that the original writ
petitioners would be entitled to interest at the rate of 6 per cent per annum on
amounts that they were entitled by way of refund of tax. Since the concerned
amounts along with interest at the rate of 6 per cent per annum have already
been made over to them, nothing further need be done in both the cases.
21. The instant Civil Appeals are thus allowed to the extent indicated above
without any order as to costs.
**
Vital Point:
Wherever a statute specifies or regulates the interest, the interest
will be payable in terms of the provisions of the statute and
wherever a statute, on the other hand, is silent about the rate of
interest and there is no express bar for payment of interest, any
delay in paying the compensation or the amounts due, would
attract award of interest at a reasonable rate on equitable grounds
***

[2022] GTI 278 (AP)

[IN THE HIGH COURT OF ANDHRA PRADESH]
HON’BLE A. V. SESHA SAI & HON’BLE RAVI NATH TILHARI, JJ.
Vyplavi Granites Vs. Deputy Commissioner Of Central

Tax & Ors.
Writ Petition No. 12197 of 2021
Dated. 25.4.2022.
REFUND—LIMITATION—APPLICATION FOR SEEKING REFUND
FOR PERIOD FROM APRIL, 2018 TO MARCH, 2019 MADE ON
13.3.2021—ALSO IN RESPONSE TO SHOW CAUSE NOTICE DATED
26.3.2021, DETAILED REPLY FILED ON 2.4.2021—IT IS APPARENT
FROM "IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION
2021 (3) TMI 497-SC" THAT WHILE COMPUTING PERIOD OF
LIMITATION FOR ANY SUIT, APPEAL, APPLICATION OR
PROCEEDING, PERIOD FROM 15.3.2020 TILL 14.3.2021 IS LIABLE
TO BE EXCLUDED—HENCE ENTIRE CLAIM FOR REFUND IS TO
BE ACCEPTED.
HELD.—
The information available before the Court, in clear and vivid terms, revealed that for
seeking refund of the amount for the period April, 2018 to March, 2019, the petitioner
made an application on 13.3.2021 and there is absolutely n o di spute with regard to either
submission of the said claim or the receipt of the same by the respondent -authorities. It
is also not in dispute that the petitioner herein filed a detailed reply on 2.4.2021 in
response to the show cau se notice dated 26.3.2021. A reading of the said reply shows
that the petitioner herein also referred to the orders of the Hon’ble Supreme Court in In
Re: Cognizance For Extension Of Limitation 2021 (3) TMI 497-SC. A perusal of the order
under challenge sh ows that as per the provision s of the statute, in order to get
entitlement for refund of the period from April, 2018 to March, 2019, one should have filed
an application on or before 19.5.2020. But in the present case, the petitioner herein filed
such application on 13.3.2021.
It is very much apparent from the order of the Hon’ble Apex Court in In Re:
Cognizance For Extension Of Limitation 2021 (3) TMI 497-SC, that while computing the
period of limitation for any suit, appeal, application or pr oceeding, the period from
15.3.2020 till 14.3.2021 is liable to be excluded. In view of the said order of the Hon’ble
Supreme Court and if the said period is excluded from computation of the period of
limitation, the entire claim of the petitioner herein is liable to be accepted.
The matter is remanded to the said extent for consideration and for passing
appropriate orders by taking into con sideration the directions of the Hon’ble Supreme
Court in the order in the Suo Motu Writ Petition.
Shri K Adi Siva Vara Prasad, for the Petitioner.

Shri Y N Vivekananda, for the Respondent.

(2022)Vyplavi Granites Vs. Deputy Commissioner Of Central Tax & Ors.(AP) 279
ORDER
Per A. V. Sesha Sai, J.
Heard Sri K.Adi Siva Vara Prasad, learned counsel for the petitioner and Sri
Y.N.Vivekananda, learned Government Pleader and the learned Senior Standing
Counsel for Central Board of Indirect Taxes and Customs for the respondents.
2. In the present Writ Petition, challenge is to the order dated 30.4.2021
passed by respondent No.1-The Deputy Commissioner of Central Tax, rejecting
the refund claim of the petitioner for the tax period, commencing from April, 2018
to January, 2019, relying on "Relevant date" prescribed under explanation (2) of
section 54 of the Central Goods and Service Tax Act, 2017. The petitioner herein
is a registered dealer on the rolls of respondent No.1 under the Central Goods
and Service Tax Act, 2017, and is engaged in the business of process of raw
granite blocks and manufacture and export sales of polished granite slabs/tiles.
The petitioner herein claimed refund of Rs. 46,72,862/- towards tax period
commencing from April, 2018 to March, 2019 in Form RFD-01 dated 13.3.2021
under sub-section (3) of section 54 of the Central Goods and Service Tax Act,
2017. Respondent No.1 herein acknowledged the same, vide Form RFD-02
dated 26.3.2021. Thereafter, respondent No.1 herein issued a show cause
notice in Form GST RFD-08 dated 26.3.2021. In response to the same, the
petitioner herein filed a reply on 2.4.2021, wherein the petitioner herein sought to
place reliance on the order of the Hon’ble Supreme Court in Suo Motu Writ
Petition (Civil) No.3 of 2020 dated 8.3.2021. Respondent No.1, by way of an
order dated 30.4.2021, which is the subject matter of the present Writ Petition,
held that the petitioner herein is entitled for the refund of Rs. 6,07,516/ - for the
period from February, 2019 to March, 2019 as per Rule 89(5) of the Central
Goods and Service Tax Rules, 2017, read with section 54 of the Central Goods
and Service Tax Act, 2017, and rejected the claim of the petitioner for the period
commencing from April, 2018 to January, 2019. In the above background, the
petitioner herein has come up before this Court with the present Writ Petition,
obviously, aggrieved by the rejection of his claim by respondent No.1 for the
period commencing from April, 2018 to January, 2019.
3. According to the learned counsel for the petitioner, the order of
respondent No.1, to the extent the same went against the petitioner herein,
rejecting the petitioner’s claim for the period commencing from April, 2018 to
January, 2019, is illegal, arbitrary and opposed to the provisions of section 54 of
the Central Goods and Service Tax Act, 2017, and Rule 89(5) of the Rules
framed thereunder. It is further contended by the learned counsel that while
dealing with the issue, respondent No.1 herein failed to take into consideration
the order passed by the Hon’ble Supreme Court of India in Suo Motu Writ
Petition (Civil) No.3 of 2020 dated 8.3.2021. It is further contended by the
learned counsel that when a similar issue fell for consideration before this Court,
this Court, by way of an order dated 8.2.2022 in W.P.No.3049 of 2022, had set
aside the order impugned in the said Writ Petition and remanded the matter for
fresh consideration. In fact, a copy of the said order passed by a

Co-ordinate Bench of this Court in W.P.No.3049 of 2022 is filed along with the
reply affidavit of the writ petitioner.
4. While strongly resisting the Writ Petition, it is contended by the learned
Senior Standing Counsel, appearing for the respondents, that as the petitioner
herein did not make any claim within the time stipulated in the statute, the
petitioner herein is not entitled to any relief from this Court under Article 226 of
the Constitution of India.
5. The information available before this Court, in clear and vivid terms,
reveals that seeking refund of the amount for the period, commencing from April,
2018 to March, 2019, the petitioner herein made an application on 13.3.2021 and
there is absolutely no dispute with regard to either submission of the said claim
or the receipt of the same by the respon-dent-authorities. It is also not in dispute
that the petitioner herein filed a detailed reply on 2.4.2021 in response to the
show cause notice dated 26.3.2021. A reading of the said reply shows that the
petitioner herein also referred to the orders of the Hon’ble Supreme Court in Suo
Motu Writ Petition (Civil) No.3 of 2020. A perusal of the order under challenge
shows that as per the provisions of the statute, in order to get entitlement for
refund of the period from April, 2018 to March, 2019, one should have filed an
application on or before 19.5.2020. But in the present case, the petitioner herein
filed such application on 13.3.2021. In this context, it may be appropriate to
apposite to refer to the order of the Hon’ble Supreme Court dated 8.3.2021 in
Suo Motu Writ Petition (Civil) No.3 of 2020. The Hon’ble Supreme Court, by way
of the aforementioned order, disposed of the said Writ Petition with the following
directions:
"1. In computing the period of limitation for any suit, appeal, application or
proceeding, the period from 15.3.2020 till 14.3.2021 shall stand excluded.
Consequently, the balance period of limitation remaining as on 15.3.2020, if
any, shall become available with effect from 15.3.2021.
2. In cases where the limitation would have expired during the period
between 15.3.2020 till 14.3.2021, notwithstanding the actual balance period
of limitation remaining, all persons shall have a limitation period of 90 days
from 15.3.2021. In the event the actual balance period of limitation
remaining, with effect from 15.3.2021, is greater than 90 days, that longer
period shall apply.
3. The period from 15.3.2020 till 14.3.2021 shall also stand excluded in
computing the periods prescribed under sections 23(4) and 29A of the
Arbitration and Conciliation Act, 1996, section 12A of the Commercial
Courts Act, 2015 and provisions (b) and (c) of section 138 of the Negotiable
Instruments Act, 1881 and any other laws, which prescribed period(s) of
limitation for instituting proceedings, outer limits (within which the Court or
tribunal can condone delay) and termination of proceedings."
6. It is very much apparent from the above order of the Hon’ble Apex Court
that while computing the period of limitation for any suit, appeal, application or
proceeding, the period from 15.3.2020 till 14.3.2021 is

(2022) K. Kumar Raja Projects Pvt. Ltd. Vs. Asst. Commissioner GST(Cal) 281
liable to be excluded. In view of the said order of the Hon’ble Supreme Court and
if the said period is excluded from computation of the period of limitation, th e
entire claim of the petitioner herein is liable to be accepted. In fact, by placing
reliance on the said orders of the Hon’ble Supreme Court, a Co-ordinate Bench
of this Court in W.P.No.3049 of 2022, passed an order, setting aside the order
impugned in the said Writ Petition and remanded the matter for fresh
consideration by the authorities. It is further evident from a perusal of the
impugned order that though respondent No.1 herein referred to the order passed
by the Hon’ble Apex Court, respondent No.1 herein did not make any endeavour
to consider the directions contained therein.
7. For the aforesaid reasons, this Writ Petition is allowed, setting aside the
order dated 30.4.2021 passed by respondent No.1 to the extent of rejecting the
claim for the period commencing from April, 2018 to January, 2019 and the
matter is remanded to the said extent for consideration and for passing
appropriate orders by taking into consideration the directions of the Hon’ble
Supreme Court in the order dated 8.3.2021 passed in Suo Motu Writ Petition
(Civil) No.3 of 2020. There shall be no order as to costs of the Writ Petition.
As a sequel, interlocutory applications pending, if any, in this Writ Petition
shall stand closed.
**
Vital Point:
It is apparent from "In Re: Cognizance For Extension Of Limitation
2021 (3) TMI 497-SC", while computing period of limitation for any suit,
appeal, application or proceeding, period from 15.3.2020 till 14.3.2021 is
liable to be excluded.
***
[2022] GTI 281 (Cal)
[IN THE HIGH COURT OF CALCUTTA]
HON’BLE T.S. SIVAGNANAM & HON’BLE HIRANMAY BHATTACHARYYA, JJ.
K. Kumar Raja Projects Pvt. Ltd. Vs. Asst. Commissioner

GST
MAT 389 of 2022 with IA No. CAN 1 of 2022
Dated. 22.4.2022.
REGISTRATION—CANCELLATION—REVOCATION—REJECTION—
VIOLATION OF PRINCIPLES OF NATURAL JUSTICE—
CANCELLATION ON GROUND OF NON-FUNCTIONING/NON-
EXISTING AT THE PLACE OF BUSINESS—APPELLANT CARRYING
ON BUSINESS WITHIN THE STATE—THEREFORE, ORDER
REJECTING APPLICATION FOR REVOCATION OF CANCELLATION
OF REGISTRATION IS IN TOTAL VIOLATION OF PRINCIPLES OF
NATURAL JUSTICE AND ARBITRARY.

HELD.—
Considering the facts, the authority committed a grave error in rejecting the
application for revocation of cancellation of registration. That apart in the ultimate order
dated 18.8.2020 which was put to challenge in the writ petition, we find that there is
reference to certain details and data which may not be very germane to decide as to
whether the appellant is an existing dealer who is functioning. Prima facie we are of the
view that the transactions referred to by the respondent in the order dated 18.8.2020
prima facie shows that the appellant is carrying on business within the State of West
Bengal. In an y event, we are satisfied that the order rejecting the application for
revocation of cancellation of registration is in total violation of principles of natural
justice and arbitrary.
The appeal is disposed off along with the writ application b y setting aside the order
dated 8.2.2022 by which the application for revocation of cancellation of registration was
rejected and the application dated 8.2.2022 is restored to the file of the concerned
authority and the appellant shall appear before the authority along with all records to
prove that they were carrying on business within the State of West Bengal and based on
such record after affording an opportunity of personal hearing take a decision on merit
and in accordance with law - application disposed off.
Shri Debanuj Basu Thakur, for the Appellants.

Shri A Ray, Government Pleader, Shri T.M. Siddiqui, Shri D. Ghosh, for the
Respondents.
JUDGEMENT
Per T.S. Sivagnanam, J.
This intra Court appeal is directed against the order dated 9.8.2021 in WPA
5334 of 2021. The appellant had filed the writ petition challenging the order dated
8.11.2019 passed by the respondent cancelling the registration granted in favour
of the appellant under the provisions of CGST Act. The appellant sought for
interim order which was not granted by the writ Cour t and direction was issued to
file affidavit-in-opposition by 9.11.2021 and reply, if any, thereto by 24.11.2021.
It is submitted by the learned advocate for the appellant that the respondents
have not complied with the direction and no affidavit-in-opposition has been filed
within time as directed by the Court. The appellant would contend that it is a
company engaged in various infrastructure projects and currently has been
granted orders for implementing projects with the Airport Authority of India. The
appellant would further state that the appellant has a PAN India presence and
very recently on account of the orders given by various authorities they
commenced business in the State of West Bengal. The appellant made an
application for grant of registration under the said Act which was granted and the
appellant is said to have been carrying on business and remitting taxes. By
proceedings dated 18.11.2019 show cause notice was issued to the appellant as
to why the registration should not be cancelled on the ground that they are non-
functioning/non-existing at the place of business. The appellant did not respond
to the notice. Consequently, the registration was cancelled by order dated

(2022) K. Kumar Raja Projects Pvt. Ltd. Vs. Asst. Commissioner GST(Cal) 283
18.11.2019 i.e. the same date on which the show cause notice was issued.
Therefore, the appellant had filed an application dated 8.2.2022 for
revocation of cancellation of registration which was also rejected on the very
same day of 8.2.2022.
Considering the above facts, we are of the view that the authority committed
a grave error in rejecting the application for revocation of cancellation of
registration. That apart in the ultimate order dated 18.8.2020 which was put to
challenge in the writ petition, we find that there is reference to certain details and
data which may not be very germane to decide as to whether the appellant is an
existing dealer who is functioning. Prima facie we are of the view that the
transactions referred to by the respondent in the order dated 18.8.2020 prima
facie shows that the appellant is carrying on business within the State of West
Bengal. In any event, we are satisfied that the order rejecting the application for
revocation of cancellation of registration is in total violation of principles of
natural justice and arbitrary.
Therefore, we dispose of this appeal along with the writ application by
setting aside the order dated 8.2.2022 by which the application for revocation of
cancellation of registration was rejected and the application dated 8.2.2022 is
restored to the file of the concerned authority and the appellant shall appear
before the authority alongwith all records to prove that they were carrying on
business within the State of West Bengal and based on such record after
affording an opportunity of personal hearing take a decision on merit and in
accordance with law.
The decision shall be taken by the authority uninfluenced by the order dated
18.8.2020 passed by the Joint Commissioner of State Tax (GST Appeal). The
authority who shall deal with the application for revocation shall issue notice to
the appellant within two weeks from the date of receipt of the server copy of this
order calling upon the appellant for appearance and comply with the above
direction. Consequently, the writ petition also stands disposed of. Accordingly,
the application being CAN 1 of 2022 stands disposed of.
**
Vital Point:
Appellant is carrying on business within the State and therefore,
order rejecting application for revocation of cancellation of
registration on ground of non-functioning/ non-existing at the
place of business is in total violation of principles of natural justice
and arbitrary.
***

[2022] GTI 284 (Cal)

[IN THE HIGH COURT OF CALCUTTA]
HON’BLE T. S. SIVAGNANAM AND HON’BLE HIRANMAY BHATTACHARYYA, JJ.
Ideal Unique Realtors Pvt. Ltd. & Anr. Vs. Union of India
& Ors.
FMA 297 of 2022 With I.A. No.CAN 1 of 2022
Dated. 22.4.2022.
SHOW-CAUSE NOTICE—SERVICE OF—JURISDICTION OF AUDIT
DEPARTMENT TO ISSUE A NOTICE CALLED SPOT MEMO—
PROCEEDINGS BY DIFFERENT WING ALREADY PENDING ON
SAME ISSUE—NOT CLEAR AS TO WHY DIFFERENT WINGS OF
VERY SAME DEPARTMENT HAVE BEEN ISSUING NOTICES AND
SUMMONS WITHOUT TAKING ANY OF EARLIER PROCEEDINGS
TO LOGICAL END—SPOT MEMOS CANCELLED AND DIRECTIONS
ISSUED TO CONSIDER ALL REPLIES SUBMITTED BY
APPELLANTS.
HELD.—
It is found that none of the proceedings initiated by the department has been show n
to have been taken to the logical end. If, according to the respon dents department, there
is an irregularity in the availablement of credit, then appropriate proceedings under the
Act should be initiated and after due opportunity to the appellants, the matter should be
taken to the logical end.
Such a procedure had not been adopted in the instant case and the appellants
appears to have been dealt with in a most unfair manner in the sense that from the year
2018 for the very same TRAN-1 issue the appellants have repeatedly been summoned,
issued notices, etc. The spot memos, which have been communicated to the appellants
along with the communications dated 22.3.2021 is also for the very same purpose. It is
not clear as to wh y different wings of the very same department have been issuing
notices and summon s to the appellants without taking any of the earlier proceedings to
the logical end.
The spot memos were quashed and there directions issued to consider the reply
submitted by the appellants dated 14.1.2020 along with the earlier reply given by the
appellants dated 15.6.2018 and 24.7.2018.
Shri Sandip Choraria, Shri Rajarshi Chatterjee, Shri Himangshu Kr. Ray, for the
Appellants.
Shri Vipul Kundalia, Shri Sukalpa Seal, Shri Anurag Roy, for the Respondents.
JUDGMENT
Per: T.S. Sivagnanam, J.
1. This intra Court appeal is directed against the order dated 22.11.2021 in
W.P.A. No.15695 of 2021. The appellants /writ petitioners challenged the
jurisdiction of the 7th respondent, the Sr. Audit Officer / SSCA-FAP-4 in issuing
two communications both dated 22.3.2021 enclosing a memo called as "spot
memo".

(2022) Ideal Unique Realtors Pvt. Ltd. & Anr. Vs. Union of India & Ors.(Cal) 285
The appellants questioned the action of the 7th respondent in the writ petition,
firstly, on the ground that there is no jurisdiction for the audit department to issue
such a notice and in this regard, places reliance on the decision of the High
Court of Bombay in Kiran Gems Private Limited Vs. Union of India reported in
2021 SCC OnLine Bom 98. This decision was relied on for the proposition that
the Central Excise Revenue Audit (CERA) cannot conduct audit of records of a
private entity apart from stating that the appellants have pointed out th at for the
self-same reason three earlier proceedings were commenced firstly by CGST
Department, Park Street Division, Kolkata vide letter dated 15.5.2018 for which
the appellants had submitted their reply on 15.6.2018 along with the documents
called for. For the very same purpose, the Director General of Goods and
Services Tax, DGGI, Kolkata, Zonal Unit had issued summons dated 11.7.2018
for which the appellants had submitted their reply on 24.7.2018. Thereafter,
DGGI issued notice dated 15.11.2019 and thereafter another notice dated
18.11.2019 was issued by the 5th respondent and summons dated 2.1.2020 for
which the appellants have responded and submitted the requisite documents.
2. The appellants appeared before the authority in response to the
summons on 14.1.2020 and stated to have submitted the requisite documents.
In spite of the same, the Superintendent, Range -III, Park Street Division, CGST
& CX, Kolkata South Commissionerate had issued two communications dated
22.3.2021 enclosing two spot memos.
3. The question would be whether the appellants can be dealt with in such a
fashion by the respondents department. From the records placed before us, we
find that none of the proceedings initiated by the department has been shown to
have been taken to the logical end. If, according to the respondents department,
there is an irregularity in the availabilment of credit, then appropriate
proceedings under the Act should be initiated and after due opportunity to the
appellants, the matter should be taken to the logical end.
4. We find that such a procedure had not been adopted in the instant case
and the appellants appears to have been dealt with in a most unfair manner in
the sense that from the year 2018 for the very same TRAN -1 issue the
appellants have repeatedly been summoned, issued notices etc. The spot
memos, which have been communicated to the appellants along with the
communications dated 22.3.2021 is also for the very same purpose.
5. Thus, it is not clear as to why different wings of the very same
department have been issuing notices and summons to the appellants without
taking any of the earlier proceedings to the logical end.
6. Therefore, on that ground, we are of the view that the spot memos, which
have been furnished along with the communications dated 22.3.2021 cannot be
enforced. However, we make it clear that the issue whether CERA audit can be
conducted against a private entity as contended by the appellants is not gone
into as this Court is of the view that it is too premature for the Court to give a
ruling on the said issue.

This is more so because the authorities have not taken forward the proceedings,
which they have initiated earlier from May, 2018.
7. Therefore, it is appropriate for the concerned authority to take the
proceedings to the logical end after affording an opportunity of personal hearing
to the appellants.
8. From the records placed before us, we find that there is no allegation
against the appellants that they have not cooperated with the department in not
responding to the summons issued earlier. Conveniently, the communications
dated 22.3.2021 issued by the Superintendent, Range -III, Park Street Division,
CGST & CX does not refer to any of the earlier proceedings, which have been
initiated against the appellants.
9. For the above reasons, the writ appeal is allowed to the extent indicated.
The spot memos enclosed with the communications dated 22.3.2021 are
quashed and there will be a direction to the 5th respondent, na mely, Additional
Assistant Director, DGGI, Kolkata, Zonal Unit to consider the reply submitted by
the appellants dated 14.1.2020 along with the earlier reply given by the
appellants dated 15.6.2018 and 24.7.2018. The authorised representative of the
appellants shall be afforded an opportunity of personal hearing and a decision be
taken on merits and in accordance with law.
10. The appeal along with connected application are disposed of.
11. No costs.
12. Urgent photostat certified copy of this order, if applied for, be furnished
to the parties expeditiously upon compliance of all legal formalities.
**
Vital Point:
Not clear as to why different wings of very same department have
been issuing notices and summons without taking any of earlier
proceedings to logical end.
***
[2022] GTI 286 (Jhk)
[IN THE HIGH COURT OF JHARKHAND]
HON’BLE APARESH KUMAR SINGH & HON’BLE DEEPAK ROSHAN, JJ.
Mandhan Minerals Corp. & Ors. Vs. Union of India & Ors.
W.P (T) No. 432 of 2021, 4463 of 2021, 4510 of 202, 4518 of 2021, 4520 of 2021, 4545 of 2021,
4608 of 2021 & 4609 of 2021
Dated. 20.4.2022.
LEVY OF GST—GST ON ROYALTY FOR GRANT OF MINING LEASE
AND DISTRICT MINERAL FUND (DMF)—DECISION BY SEVEN

(2022)Mandhan Minerals Corp. & Ors. Vs. Union of India & Ors.(Jhk) 287
JUDGES CONSTITUTION BENCH IN CASE OF INDIA CEMENT
LIMITED VS. STATE OF TAMIL NADU [1989 (10) TMI 53 - SC] THAT
ROYALTY IS A TAX, IS UNDER CONSIDERATION BEFORE A NINE
JUDGES CONSTITUTION BENCH OF APEX COURT UPON
REFERENCE MADE IN THE CASE OF MINERAL AREA
DEVELOPMENT AUTHORITY & ORS. [2011 (3) TMI 1554-SC]—
FOLLOWING INTERIM ORDER PASSED IN THE CASE OF
LAKHWINDER SINGH VS. UNION OF INDIA & ORS. [2021(11)TMI
336-SC], COURT GRANTED INTERIM PROTECTION ON LEVY OF
GST ON MINING LEASE/ROYALTY/DMF.
HELD.—
It is clear that the levy of GST in the instant case, is on the royalty/DMF in respect of
the mining lease granted to the petitioners. The decision of the Apex Court by the seven
Judges Constitution Bench in the case of India Cement Limited V s. State of Tamil Nadu
[1989 (10) TM I53 - SC] that royalty is a tax, is under con sideration before a nine Judges
Constitution Bench of the Apex Court upon reference made in the case of Mineral Area
Development Authority & Ors. [2011 (3) TMI 1554-SC]. Following the interim order passed
by the Apex Court in the case of Lakhwinder Singh Vs. Union Of In dia & Or s. [2021 (11)
TMI 336-SC], this Court had been pleased to grant interim protection on levy of GST on
mining lease/royalty/DMF. In the background of the legal position that royalty has been
considered to be a tax or profit pendre (sic) and the issue is pendin g before the nine
Judge Constitution Bench, the petitioners have made out a case for interim protection. As
such, there shall be stay of recovery of GST for grant of mining lease/ royalty/DMF from
the petitioners till further orders. However, the Revenue is not restrained from conducting
and completing the assessment proceedings.
Respon dent State and CGST were granted three weeks’ time to file counter a ffidavit
in respective writ petitions in which no counter affidavit has been filed.
Shri Biren Poddar, Sr. Advocate, Shri Deepak Kr. Sinha, Shri N.K. Pasari, and Shri
Sumeet Gadodia, Advocates, for the Petitioners.
Shri Amit Kumar, Shri P.A.S. Pati, Advocates, Shri Sachin Kumar, A.A.G-II and
Shri Ashok Kr. Yadav, G.A-I, for the Respondents.
ORDER
Heard learned Senior Counsel Mr. Biren Poddar assisted by learned counsel
Mr. Deepak Sinha and learned counsel Mr. Sumeet Gadodia for the petitioners
in the respective writ petitions. We have also heard Learned A.A.G-II Mr. Sachin
Kumar on behalf of the State and Mr. Amit Kumar and Mr. P.A.S Pati, learned
counsel representing the CGST in respective writ petitions.
2. The present batch of writ petitions have been listed today in view of our
order passed in W.P.(T) No. 432 of 2021 dated 24.2.2022, para 3 whereof reads
as under:
"On being apprised of the order dated 4.1.2022, we deem it necessary to hear

the prayer of the petitioners on the question of stay on payment of GST on

royalty for grant of mining lease. Since this Court has earlier granted stay
on payment of GST for grant of mining lease / royalty in view of the interim
order passed by the Apex Court in the case of M/s Lakhwinder Singh
(supra) in the batch of writ petitions such as W.P (T) No. 4609/2021 and
also W.P (T) No. 4510/2021, those matters be posted along with the
present matters for consideration on the continuation of interim relief
granted to them earlier. As such, learned counsel for the petitioners pray for
an earlier date for hearing on the interim plea."
3. The writ petitions at serial no. 40 to 50 [W.P.(T) No. 855 of 2022, W.P.(T)
No. 897 of 2022, W.P.(T) No. 903 of 2022, W.P.(T) No. 926 of 2022, W.P.(T) No.
927 of 2022, W.P.(T) No. 933 of 2022, W.P.(T) No. 955 of 2022, W.P.(T) No. 974
of 2022, W.P.(T) No. 979 of 2022, W.P.(T) No. 986 of 2022 and W.P.(T) No.
1282 of 2022] also relate to the common issue of levy of Service Tax and / or
GST on royalty and District Mineral Fund (DMF). However, some of the writ
petitions such as from Serial No. 41 to 44 [W.P.(T) No. 897 of 2022, W.P.(T) No.
903 of 2022, W.P.(T) No. 926 of 2022, W.P.(T) No. 927 of 2022] relate
exclusively to levy of service tax on royalty. Therefore, all these writ petitions are
being tagged together. In these cases, no interim order has been passed on the
levy of service tax or GST on royalty and DMF. By the order of this Court dated
2.3.2021 passed in W.P.(T) No. 3878 of 2020 in the case of Sunita Ganguly Vs.
Principal Commissioner, Central GST and Central Excise, Ranchi & others this
Court had been pleased to grant interim protection in respect of levy of service
tax on royalty in the respective petitions. Following the said interim order, similar
interim relief has been granted to other writ petitioner so far as levy of service tax
on royalty and DMF is concerned. This Court had however refused to grant
interim protection so far as levy of GST on royalty and DMF is concerned at that
stage. Later on in view of the order passed by the Apex Court in the case of M/s
Lakhwinder Singh Vs. Union of India & others in Writ petition (Civil) No. 1076 of
2021 dated 4.10.2021 granting interim stay on payment of GST for grant of
mining lease / royalty to the petitioners, this Court also granted similar relief to
several writ petitioners such as W.P(T) No. 4609 of 2021 in the case of M/s
Ratan Black Stone, Sahibganj Vs. Union of India through Principal
Commissioner, Central GST and Central Excise & others and other analogous
cases such as W.P(T) No. 4510 of 2021. When the case of M/s Mandhan
Minerals Corporation in W.P.(T) No. 432 of 2021 was taken up before this Court
on 24.2.2022, this Court was apprised of the judgment dated 4.1.2022 passed in
the case of M/s Lakhwinder Singh (supra) wherein the Apex Court had refused to
entertain the petition under Article 32 of the Constitution of India at the first
instance and relegated the petitioners to avail of the alternative and efficacious
remedy before the concerned High Courts under Article 226 of the Constitution of
India. The petition was dismissed leaving it open to the petitioners to pursue their
remedies in accordance with law. In this background the present batch of writ
petitions have been posted for consideration on the continuation of the interim
relief granted to them earlier, so far as levy of GST on royalty and DMF is
concerned. Some other fresh writ petitions have by now come on board, which
have been tagged together by the instant order also on the same issue.

4. In the respective writ petitions preferred by learned Senior Counsel Mr

Biren Poddar and learned counsel Mr. Sumeet Gadodia, the petitioners have laid
challenge to the show cause notice/ notices issued by the Respondent
Authorities directing them to furnish data relating to payment of royalty against
licensing services for right to use minerals including exploration and evaluation
for different periods concerning levy of GST on royalty. In some of the writ
petitions petitioners have sought declaration that royalty is not a payment in
respect of a taxable service and as such there is no liability to pay GST on
royalty and DMF.
5. Learned counsel for the petitioners have pressed the prayer for interim
protection from levy of GST on royalty and DMF or continuation of the interim
protection granted earlier in some of the writ petitions based on the followin g
plea:
(i) The sheet anchor of the case of the petitioners is that royalty is in the
nature of a "Tax" or profit pendre and cannot be termed as a
consideration towards supply of services in terms of section 15 of the
GST Act. They have placed reliance on the case of India Cement Ltd. &
others Vs. State of Tamil Nadu & others reported in 1990 (1) SCC 12
rendered by the 7 Judges Constitution Bench of the Apex Court where
in it has been held that royalty is a tax. Learned counsel for the
petitioners submit that in view of the opinion of the Apex Court in the
case of State of W.B. Vs. Kesoram Industries Ltd & others reported in
2004(10) SCC 201 rendered by a 5 Judges Constitution Bench of the
Apex Court, the very question whether royalty is a tax or not, is pendin g
consideration before a 9 Judges Constitution Bench of the Apex Court
in view of the reference made in the case of Mineral Area Development
Authority & others Vs. Steel Authority of India & others reported in
2011(4) SCC 450. Till the issue is authorita-tively decided by the 9
Judges Bench, the ratio rendered by the Apex Court by a 7 Judges
Constitution Bench in the case of India Cement (supra) holds the field.
(ii) Learned counsel for the petitioners have drawn the attention of this
Court to the provisions of Article 366 (12 A) of the Constitution of India,
which defines "Goods and Services Tax". Article 366 (12) defines
Taxation and includes the imposition of any tax or impost. Reliance is
also placed upon Article 246 A of the Constitution of India inserted by
101st Constitutional Amendment where under special provisions has
been made in respect of Goods and Service Tax.
(iii) Learned counsel for the petitioners have also placed reliance upon the
relevant provisions of the CGST Act such as section 15, which provide s
for value of taxable supply. However, the basic plea of the petitioners is
that royalty being a tax cannot be the price paid for any supply of
services so to say, conceived under the GST Act for leasing out the
minerals to the writ petitioners / lessee within the meaning of the

expression used under Schedule II of the Act. A Tax in the nature of

GST cannot be imposed on royalty, which in itself has been held to be
tax by the Apex Court in the case of India Cement (supra).
(iv) Learned counsel for the petitioners have also referred to the
observations of the Apex Court relying upon the classic exposition of
Latham CJ in Matthews Vs. Chicory Marketing Board in the case of
Dewan Chand Builders & Contractors Vs. Union of India & Ors.
reported in 2012(1) SC 101. The Apex Court in the said case has relied
upon the Constitution Bench judgment in the case of Hingir Rampur
Coal Co. Ltd. Vs. State of Orissa relating to the challenge to the
constitutional validity of the Orissa Mining Area Development Fund Act,
1952 levying cess upon the petitioner colliery wherein the different
features of "tax", "a fee" and "cess" has been dealt with. A ‘tax’ as per
Latham CJ "is a compulsory exaction of money by public authority for
public purposes enforceable by law, and is not payment for services
rendered".
(v) They have also referred to the judgment rendered by the Apex Court in
the case of Commissioner of Income Tax, Udaipur, Rajasthan Vs.
Mcdowell and Company Limited reported in (2009) 10 SCC 755, para
21 and 22, wherein it has been held that "Tax", "duty", "cess" or "fee"
constituting a class denotes to various kinds of imposts by State in its
sovereign power of taxation to raise revenue for the State.
(vi) Another limb of argument on behalf of the petitioner is that levy of GST
on royalty/ DMF is akin to levy of service tax under the Finance Act,
1994, since by virtue of the 101st constitution amendment, various
indirect taxes prevalent in the country such as VAT, Central Excise
Tax, Service Tax, Entry Tax etc. have been subsumed in one Tax in
the nature of Goods and Services Tax. Article 366 (12A) of the
Constitution of India defines Goods and Services Tax to means tax on
supply of goods and services or both. The nature of levy under the
service tax under the Finance Act, 1994 imposed by the respondents
are akin to GST. On a mistaken notion of supply of services by way of
leasing of mineral rights to the petitioners by the State, GST is sought
to be imposed on royalty. Since the levy of service tax on royalty/ DMF
has been stayed by the Apex Court in the case of Udaypur Chambers
of Commerce and Industry & others Vs. Union of India & Others in
Special Leave to Appeal (C) No. 37326 of 2017 and following the said
order, interim reliefs have been granted by this Court and other High
Courts on levy of service tax on royalty/ DMF, by the same principles
petitioners be granted interim protection from levy of GST on royalty /
DMF.
(vii) It is further submitted that the Apex Court in the case of M/s
Lakhwinder Singh (supra) had earlier been pleased to grant interim
protection on levy of GST on mining lease / royalty being guided by
similar consideration. Though the said writ petition has been dismissed

to enable the petitioners to avail of the alternative remedy before the

concerned High Court under Article 226 of the Constitution of India, the
principles on which such interim protection was granted by the Apex
Court on levy of GST on mining lease/ royalty, should apply to the case
of the petitioners at hand. Interim order has been passed by other High
Courts on independent consideration, such as in the case of Oil India
Limited Vs. Union of India & others (W.P.C. No. 3872 of 2020) by the
High Court of Gauhati vide order dated 17.11.2020. Similar order has
been passed by the Andhra Pradesh High Court in the case of M/s C.R.
Granites Vs. The Assistant Commissioner (ST)(FAC), Addanki Circle,
Addanki & another in Writ Petition No. 30248 of 2021, order dated
22.12.2021. It is submitted that the different High Courts as above have
taken into consideration that the question whether royalty is a tax or not
is pending consideration before the 9 Judge Constitution Bench of the
Apex Court and till then the ratio rendered by the 7 Judges Bench in
the case of India Cement Ltd. (supra) that royalty is a tax holds the
field.
Learned counsel for the petitioners submit that petitioners are suffering
under a constant threat of recovery of GST on royalty/DMF and if interim
protection is not granted, they run the risk of paying interest on any unpaid
amount of GST on such royalty /DMF, which may entail huge unnecessary
burden on the petitioners. Based on these pleas learned counsel for the
petitioners have pressed for interim protection on levy of GST on royalty/DMF.
6. Learned counsel for the respondent State, Additional Advocate General
No.-II Mr. Sachin Kumar at the outset submits that the matter may be posted for
final hearing on any convenient date and no interim protection may be granted.
Learned counsel for the State has made two fold arguments on the interim plea:
(i) That royalty also amounts to a consideration on which GST can be
levied.
(ii) That there is no bar on imposition of GST even if royalty is considered
as a tax as per the judgment of the Apex Court in the case of India
Cement Ltd. (supra).
Counter affidavit has been filed by the State in some of the writ petitions.
7. Learned counsel for the CGST Mr. Amit Kumar and Mr. P.A.S. Pati in
respective cases have also opposed the plea. They have drawn the attention of
this Court to section 7 of the CGST Act, 2017 which explains the expression
"supply" and includes all forms of supply of goods or services or both, such as
sale, transfer, barter, exchange, license, rental, lease etc. He submits that clause
1(a) under section 7 provides that activities such as lease are to be treated as
supply of services as referred to in Schedule II. Referring to the definition clause
of "consideration" under section 2(31), it is submitted that "consideration" in
relation to supply of goods or services or both includes any payment made or to
be made, whether in money or otherwise, in respect of, in response to, or for the

inducement of, the supply of goods or services or both, whether the recipient or
by any other person but shall not include any subsidy given by the Central
Government or a State Government. As such royalty would come within the
meaning of consideration in respect of the services received by the petitioners on
grant of such lease of exploration of minerals. Based on these contentions
learned counsel for the respondents have opposed the prayer.
8. We have considered the submissions of learned counsel for the parties on
the prayer for interim relief on the levy of GST on royalty/DMF. On consideration
of the rival pleas in the canvass of facts and the legal propositions advanced by
them, it is clear that the levy of GST by the respondents is on the royalty/DMF in
respect of the mining lease granted to the petitioners. The decision of the Apex
Court by the 7 Judges Constitution Bench in the case of India Cements Ltd.
(supra) that royalty is a tax is under consideration before a 9 Judges Constitution
Bench of the Apex Court upon reference made in the case of Mineral Area
Development Authority & others (supra).
9. Following the interim order passed by the Apex Court in the case of M/s
Lakhwinder Singh (supra) dated 4.10.2021, this Court had been pleased to grant
interim protection on levy of GST on mining lease / royalty/DMF. In the
background of the legal position that royalty has been considered to be a tax or
profit pendre and the issue is pending before the 9 Judge Constitution Bench, we
are of the considered view that the petitioners have made out a case for interim
protection. As such, there shall be stay of recovery of GST for grant of mining
lease/ royalty/DMF from the petitioners till further orders. However, the Revenue
is not restrained from conducting and completing the assessment proceedings.
Since interim protection has been granted earlier in the case of Sunita
Ganguly and others Vs. Union of India & others vide order dated 2.3.2021 passed
in W.P.(T) No. 3878 of 2020 and other analogous cases on levy of service tax on
royalty/DMF, similar interim protection is being granted in W.P.(T) No. 897 of
2022, W.P.(T) No. 903 of 2022, W.P.(T) No. 926 of 2022, W.P.(T) No. 927 of
2022 where the levy of service tax on royalty/ DMF is under challenge. As such,
interim order dated 2.3.2021 shall govern the case of said writ petitioners also.
10. Learned counsel for the respondent State and CGST are granted 3 weeks’
time to file counter affidavit in respective writ petitions in which no counter affidavit
has been filed. 2 week time thereafter is granted to the petitioners to file rejoinder,
if any. Let these matters be listed in the 1st week of July, 2022.
**
Vital Point:
Following interim order passed in the case of Lakhwinder Singh
Vs. Union Of India & Ors. [2021(11)TMI 336-SC], Court granted
interim protection on levy of GST on mining lease/royalty/DMF.
***

(2022) R.k. Modi And Sons Vs. Union Of India & Ors.(MP) 293
[2022] GTI 293 (MP)

[IN THE HIGH COURT OF MADHYA PRADESH]
HON’BLE VIVEK RUSIA & HON’BLE AMAR NATH KESHARWANI
R.k. Modi And Sons Vs. Union Of India & Ors.

Writ Petition No. 21074 of 2021
Dated. 20.4.2022.
SHOW CAUSE NOTICE—VALIDITY OF—REVERSAL OF ITC—
RETURN FILED BEYOND PRESCRIBED TIME LIMIT— HENCE,
REVERSAL OF ENTRIES UNDER SECTION 16(4) OF THE CGST
ACT, 2017—IS A MATTER OF ADJUDICATION WHETHER THERE
WAS ANY WILFUL DELAY ON PART OF PETITIONER TO SUBMIT
RETURN OR NOT—SHOW-CAUSE NOTICE HAS BEEN ISSUED
AND THEREFORE, RETURN IS REQUIRED TO BE FILED BEFORE
COMPETENT AUTHORITY.
HELD.—
Admittedly, the petitioner in the instant case has filed a return beyond the
prescribed time limit, therefore, the entries have been reversed under section 16(4) of the
CGST Act, 2017. In the show-cause n otice, the respondents have alleged that the
petitioner has wilfully filed the return on a later date than the due date of filing of GSTR -
3B for the financial year 2018-19 to accommodate ITC, therefore, it is a matter of
adjudication whether there was any wilful delay on the part of the petitioner to submit the
return or not. Now the show-cause n otice has been issued, therefore, the petitioner is
required to file a return to the show-cause notice before the competent authority.
Shri Aditya Goyal, counsel, for the Petitioner.

Shri Prasanna Prasad, counsel, for the Respondents.
ORDER
Per Vivek Rusia, J.
The petitioner has filed the present writ petition under Article 226 of the
Constitution of India being aggrieved by the reversal of Input Tax Credit (ITP) of
Rs.39,93,286/- from DRC-03 dated 28.1.2020 (Annexure-P/1) followed by
demand notice dated 18.6.2021 passed by respondents No.2 & 3.
2. The facts of the case in short are as under:—
2.1. The petitioner is a partnership firm engaged in the business of
manufacturing wholesale beedi. The petitioner had declared the ITC pertaining
to the financial year 2017-18 and 2018-2019 by filing Form GSTR 3B prescribed
under section 39 of Central Goods & Service Tax Act, 2017 (in short CGST Act).
Admittedly, the aforesaid form was submitted beyond the time limit prescribed
under section 16(4) of the CGST Act. The Input Tax Credit (ITC), so availed was
reversed on 28.1.2020 under protest. The petitioner submitted a representation

on 19.2.2020 to the respondents by submitting that the aforesaid reversal was

not voluntarily, but under protest.
2.2. According to the petitioner, the respondents did not pass any speaking
order and served an impugned demand notice dated 18.6.2021. According to the
petitioner, it was a genuine hardship and beyond the reasonable control of the
petitioner for filing the GSTR 3B relating to the financial year 2018-19 within time.
However, returns were filed on 6.1.2020 with an applicable late fee, therefore,
the rigor of section 16(4) would not apply in the case of the petitioner.
3. Learned counsel appearing on behalf of the petitioner submits that once
the petitioner has filed the return after payment of applicable late fee under
sections 47 & 50 of the CGST Act which in fact allows the taxpayer to file the
return beyond the due date then such a return should have been accepted
without applying the provision of section 16(4) of the CGST Act. However,
learned counsel fairly admits that the petitioner is not challenging the
constitutional validity of section 16(4) of the CGST Act in this petition, but some
other assessees have challenged the constitutional validity of the aforesaid
provision. It is further submitted that the provision of section 16(4) is procedural
in nature, and respondents should not take away the right of filing of return with a
late fee. There should be a scope of application of mind and consideration of
non-filing of return within time while applying section 16(4) of the CGST Act. The
provision of section 16(4) should not defeat a substantial claim of ITC which is
otherwise allowable under the provisions CGST Act.
4. It is further submitted that the petitioner should not be relegated to the
adjudicating authority as well as the appellate authority as admittedly the
petitioner has availed the Input Credit, but there was a delay in submission of the
return. Hence, a writ of mandamus be issued to the respondents directing them
to permit the petitioner to submit the return with a late fee and grant the refund of
Rs.39,93,286/-. In support of the aforesaid contention, learned counsel for the
petitioner placed reliance upon a judgment delivered by the Division Bench of
this Court in the case of Bharat Heavy Electricals Limited Vs. CEC, Bhopal (MP)
reported in 2015 SCC OnLine MP 5687, wherein the Division Bench of this Court
has considered the provisions of Rule 57G(1) of the Central Excise Rules. The
Division Bench has found that entries made in the documents are maintained
under RG-23 A Part I & Part-II. Even though in Part I the entry is made showing
the date of taking availment of MODVAT credit within the stipulated period of six
months, but Part -II, as the date was beyond six months, the facility of MODVAT
cannot be extended as assessees have not shown availing the benefit in
accordance with the requirement of the Rules. The Division Bench has further
held that when the assessee was entitled to avail the MODVAT credit under Rule
57A merely because of the time fixed in making the entry in Part II of RG-23 A
and only because of some error in making the entry, denial of benefit cannot be
permitted. Learned counsel for the petitioner submits that the same principle
applies here. The petitioner has admittedly claimed the input of CGST then
merely because of delay in filing the return under section 16(4) of the CGST Act,
the petitioner cannot be held entitled to take the ITC.

(2022) R.k. Modi And Sons Vs. Union Of India & Ors.(MP) 295
5. Shri Prasanna Prasad, learned counsel for respondents No.2 & 3 submits
that the present writ petition is not maintainable under Article 226 of the
Constitution of India as the petitioner is having an alternative and efficacious
remedy by filing an appeal before the appellate authority. It is further submitted
that during the pendency of the writ petition, a show-cause notice dated
17.2.2022 has been issued to the petitioner by the Deputy Commissioner (Prev.)
CGST & Central Excise, Ujjain. The petitioner, to the reasons best known to him,
has not challenged the validity of the show-cause notice. Now the petitioner is
required to approach the competent authority along with a reply to the show-
cause notice. It is further submitted that the petitioner is not challenging the
constitutional validity of section 16(4) of the CGST Act, therefore, the authorities
are bound to act in accordance with law. Hence, no fault can be founded unless
the provision is there in the statute.
6. We have heard learned counsel for the parties and perused the record.
7. Admittedly, the petitioner has filed a return beyond the prescribed limit,
therefore, the entries have been reversed under section 16(4) of the CGST Act.
In the show-cause notice, the respondents have alleged that the noticee i.e.
petitioner has wilfully filed the return on a later date than the due date of filing of
GSTR-3B for the financial year 2018-19 to accommodate ITC, therefore, it is a
matter of adjudication whether there was any wilful delay on the part of the
petitioner to submit the return or not? Now the show-cause notice has been
issued, therefore, the petitioner is required to file a return to the show-cause
notice before the competent authority. No case for interference is made out in
the matter.
In view of the above, the Writ Petition stands dismissed.
**
Vital Point:
The petitioner has filed a return beyond the prescribed time limit
and therefore, the entries have been reversed under section 16(4)
of the CGST Act, 2017. In show-cause notice, the respondents
have alleged that the petitioner has wilfully filed return on a later
date than due date of filing of GSTR-3B for financial year 2018-19
to accommodate ITC, therefore, it is a matter of adjudication
whether there was any wilful delay on part of petitioner to submit
return or not.
***

[2022] GTI 296 (Guj)

[IN THE HIGH COURT OF GUJARAT]
HON’BLE J.B.PARDIWALA & HON’BLE NISHA M. THAKORE, JJ.
Asterpetal Trade and Services Pvt. Ltd. Vs. Sate of

Gujarat
R/Special Civil Application No. 7155 Of 2022
Dated. 20.4.2022.
REGISTRATION—CANCELLATION—VALIDITY—ISSUE COVERED
BY DECISION OF SAME COURT—ISSUE COVERED BY
AGGARWAL DYEING AND PRINTING WORKS VS. STATE OF
GUJARAT & ORS. [2022 (4) TMI 864 GUJ.], WHEREIN IT WAS HELD
THAT "THE PROCEDURAL ASPECTS SHOULD BE LOOKED INTO
BY THE AUTHORITY CONCERNED VERY SCRUPULOUSLY AND
DELIGENTLY"—SHOW CAUSE NOTICES AND IMPUGNED ORDER
WERE THEREFORE HELD AS VAGUE AS ANYTHING—IMPUGNED
ORDER CANCELLING REGISTRATION AND SHOW CAUSE
NOTICES WERE QUASHED AND SET ASIDE.
HELD.—
The issue is covered by the decision of same Court in the case of Aggarwal Dyeing
and Printing Works Vs. State of Gujarat & Ors. [2022 (4) TMI 864 Guj.], wherein it was held
that "The procedural aspects should be looked into by the authority concerned very
scrupulously and deligently. Why unnecessarily give an y dealer a chance to make a
complaint before this Court when it could have been easily av oided b y the department."
The show cause notices and the impu gned or der are therefore, as vague as anything.
The impugned order cancelling the registration and the show cause notices were
quashed and set aside. The registration stands restored.
Ms. Dimple K. Gohil, for the Petitioner.

Advance copy served to Government Pleader/PP, for the Respondent.
ORDER
Per : J.B.Pardiwala, J.
1. Rule returnable forthwith. Mr. Utkarsh Sharma, the learned AGP waives
service of notice of rule for and on behalf of the respondents.
2. By this writ application under Article 226 of the Constitution of India, the
writ applicant has prayed for the following reliefs:
"(a) Your Lordships be pleased to issue a Writ of Certiorari or a writ in the
nature of Certiorari or any other writ, order or direction under Article 226 of
the Constitution of India calling for the records pertaining to the Petitioner’s
case and after going into the validity and legality thereof be pleased to
quash and set aside the show cause notices dated 15.6.2021 and

(2022)Asterpetal Trade and Services Pvt. Ltd. Vs. Sate of Gujarat(Guj) 297
28.7.2021 and the impugned order dated 10.8.2021 passed by Respondent
No.3 purporting to cancel the registration of the Petitioner;
(b) Your Lordships be pleased to issue a writ of Madamus or any other
appropriate writ in the nature of Mandamus ordering and directing the
Respondents to forthwith refrain from taking any further steps or
proceeding pursuant to or in implementation of the impugned order dated
10.8.2021 passed by Respondent No.3;
(c) That pending the hearing and final disposal of the above Petition, this
Hon’ble Court be pleased to stay the effect and operation of impugned
order dated 10.8.2021;
(d) An ex-parte ad-interim relief in terms of prayer (c) above may kindly be
granted;
(e) Such other and further order or orders as may be deemed just and
proper in the facts and circumstance of the present case may kindly be
granted."
3. The writ applicant is engaged in the business of trading of bullion and
agricultural commodities. The writ applicant is registered under the GGST Act
with effect from 25.1.2018. The writ applicant came to be served with a show
cause notice dated 15.6.2021 in Form GST REG 17/31 calling upon the writ
applicant to show cause as to why the registration should not be cancelled. The
show cause notice reads thus:
"Form GST REG-17/31
[See Rule 22(1) sub-rule (2A) of rule 21A]
Reference Number:ZA240621056934
Date: 15.6.2021
To,
ASTERPETAL TRADE & SERVICES PRIVATE LIMITED
SF-74, SECOND FLOOR, CITY MALL-1, NAVJIVAN MILL COM-
POUND, KALOL, Gandhinagar, Gujarat, 382721
Show Cause Notice for Cancellation of Registration
Whereas on the basis of information which has come to my notice, it
appears that your registration is liable to be cancelled for the following
reasons:
1-Taxpayer found Non-Functioning/Not Existing at the Principal Place
of Business
You are hereby directed to furnish a reply to the notice within seven
working days from the date of service of this notice.
You are hereby directed to appear before the undersigned on
23.6.2021 at 11:39.
If you fail to furnish a reply within the stipulated date or fail to appear for
personal hearing on the appointed date and time, the

case will be decided ex parte on the basis of available records and on

merits.
Please note that your registration stands suspended with effect from
15.6.2021
Place: Gujarat
Date 15.6.2021
Jagatsinh Vaghubhai Zala
Commercial Tax Officer
Ghatak -25 (Kalol): Range-7, Division-3, Gujarat."
4. We have heard Mr. Prakash Shah, the learned Senior Counsel assisted
by Ms. Dimple Gohil, the learned advocate appearing for the writ applicant and
Mr. Utkarsh Sharma, the learned AGP appearing for the respondents.
5. It appears that no action was taken pursuant to the aforesaid show cause
notice. Later, the Commercial Tax Officer, Ghatak-25 (Kalol) , Range -7, Division
3, Gujarat, issued a fresh show cause notice dated 28.7.2021. The same reads
thus:
"Form GST REG-17/31
[See Rule 22(1) sub-rule (2A) of rule 21A]
Reference Number:ZA240721360490T
Date: 28.7.2021
To,
Registration Number (GSTIN/Unique ID): 24AANCA7754PIZX
POUND, KALOL, Gandhinagar, Gujarat, 382721
Show Cause Notice for Cancellation of Registration
Whereas on the basis of information which has come to my notice, it
appears that your registration is liable to be cancelled for the following
reasons:
1- In case, Registration has been obtained by means of fraud, wilful
misstatement or suppression of facts.
You are hereby directed to furnish a reply to the notice within seven
working days from the date of service of this notice.
You are hereby directed to appear before the undersigned on 5.8.2021
at 11:55.
If you fail to furnish a reply within the stipulated date or fail to appear for
personal hearing on the appointed date and time, the case will be
decided ex parte on the basis of available records and on merits.
Please note that your registration stands suspended with effect from
28.7.2021.

(2022)Asterpetal Trade and Services Pvt. Ltd. Vs. Sate of Gujarat(Guj) 299
Place: Gujarat
Date : 28.7.2021
Ghatak -25 (Kalol): Range-7, Division-3, Gujarat."
6. Ultimately, the final order came to be passed dated 10.8.2021 cancelling
the registration. The order reads thus:
"Reference Number: ZA240821055145S
Date: 10.8.2021
To,
POUND, KALOL, Gandhinagar, Gujarat, 382721.
GSTIN/UIN : 24AANCA7754PIZX
Application Reference No. (ARN): AA240721105624M
Date:28.7.2021
Order for Cancellation of Registration
This has reference to your reply dated 6.8.2021 in response to the notice to
show cause dated 28.7.2021
Whereas no reply to notice to show cause has been submitted.
The effective date of cancellation of your registration is 25.1.2018
Determination of amount payable pursuant to cancellation:
Accordingly, the amount payable by you and the computation and the basis
thereof is as follows:
The amounts determined as being payable above are without prejudice to
any amount that may be found to be payable you on submission of final
return furnished by you.
You are required to pay the following amounts on or before 20.8.2021
failing which the amount will be recovered in accordance with the
provisions of the Act and rules made thereunder.
Head Central Tax State Tax/UT Tax Integrated Tax Cess

Tax 0 0 0 0
Interest 0 0 0 0
Penalty 0 0 0 0
thers 0 0 0 0
Total 0.0 0.0 0.0 0.0
Place: Gujarat
Date : 10.8.2021
Ghatak -25 (Kalol)"
14. The show cause notices, referred to above, and the impugned order are
as vague as anything. The issue is now covered by the decision of this Court in
the case of Aggarwal Dyeing and Printing Works Vs. State of Gujarat & Ors.,
Special Civil Application No.18860 of 2021, decided on 24.2.2022.
15. In view of the aforesaid, this writ application succeeds and is hereby
allowed. The impugned order cancelling the registration and the show cause
notice is hereby quashed and set aside. The registration stands restored. If the
department wants to proceed further it may do so strictly in accordance with law
keeping in mind the observations made by this C ourt in the recent
pronouncement in the case of Aggarwal Dyeing and Printing Works (Supra).
16. Direct service is permitted.
**
Vital Point:
Issue covered by Aggarwal Dyeing And Printing Works Vs. State Of
Gujarat & Ors. [2022 (4) TMI 864 GUJ.], wherein it was held that "the
procedural aspects should be looked into by the authority
concerned very scrupulously and deligently".
***
[2022] GTI 300 (Guj)
[IN THE HIGH COURT OF GUJARAT]
HON’BLE J.B.PARDIWALA & HON’BLE NISHA M. THAKORE, JJ.
Rajkamal Metal and Alloys Vs. State Tax Officer, Mobile

Squad
R/Special Civil Application No. 7425 of 2022 & 7426 of 2022
Dated. 18.4.2022.
SEARCH & SEIZURE—CONFISCATION OF GOODS— ISSUANCE
OF NOTICE UNDER SECTION 130 AND APPLICABILITY OF SUB-
SECTION (3) OF SECTION 129 OF CGST ACT, 2017— HOWEVER,
MATTER NOT DECIDED IN VIEW OF NON AVAILABILITY OF
EXACT AMOUNT PAYABLE BY WRIT-APPLICANT IN TERMS OF
SUB-SECTION (3) OF SECTION 129—NOTICE ISSUED TO
RESPONDENTS RETURNABLE ON 20.4.2022.
HELD.—
The writ-applicant has been served with a show-cause notice in Form GST MOV-10
dated 11.4.2022 calling upon him to sh ow cause as to why the goods should n ot be
confiscated under section130 of the CGST Act, 2017. The principal argument of writ
applicant is that even if the authority concerned thought f it to issue notice under

(2022) Rajkamal Metal and Alloys Vs. State Tax Officer, Mobile Squad(Guj) 301
section130 of the Act in Form GST Mov-10, the authority could not have overlooked or
ignored sub-section (3) of section-129 of the Act. The argument proceeds on the footin g
that in accordance with subsection (3) of section -129, the Proper Officer is obliged to
issue a notice within seven days of detention or seizure specifying the penalty payable
and thereafter, pass an order within a period of seven days from the date of service of
said notice for payment of penalty under clause (a) or clause (b) of sub -section (1).
According to applicant, the aforesaid omission on the part of the Proper Officer renders
the further proceedings bad in law.
The Court held, the larger issue raised in this writ-application, shall be decided.
However, the exact amount payable by the writ-applicant in terms of sub-section (3) of
section 129, is to be known. The possibility of ordering provisional release of the goods
on the condition that the writ-applicant shall deposit the entire amount towards penalty, is
being explored. There is some confusion as regards the exact amount due and payable
towards penalty. Clarification is required regarding the figure. Accordingly notice issued
to the respondents returnable on 20.4.2022.
Nanavati & Co., for the Petitioner.

ORDER
Per : J. B. Pardiwala, J.
1. We have heard Mr. Maulik Nanavati, the learned counsel appearing for
the writ-applicant and Mr. Utkarsh Sharma, the learned AGP appear-ing for the
respondents at length.
2. It appears from the materials on record that the writ-applicant herein is
engaged in the business of metal scrap. The writ-applicant received an order of
purchase of brass scrap from one M/s. Raj Khodal Metal, Jamnagar. The writ-
applicant entered into a sale transaction of 2785 kgs. and 2590 kgs. respectively
of brass scrap with M/s. Raj Khodal Metal, Jamnagar. Thus, the writ-applicant us
the seller and M/s. Raj Khodal Metal, Jamnagar is the purchaser. Two
consignments of the goods were dispatched to M/s. Raj Khodal Metal, Jamnagar
in two trucks owned by the Jamnagar Transport company. Separate e-way bills
were gener-ated for the movement of the consignments.
3. On 8.4.2022, when the goods were in transit, both the conveyance came
to be intercepted near Theba Chowkdi, Jamnagar by the State Tax Officer,
Mobile Squad, Division-11 (ENF), Jamnagar.
4. The writ-applicant is here before this Court as he has been served with a
show-cause notice in Form GST MOV-10 dated 11.4.2022 calling upon him to
show cause as to why the goods should not be confiscated under section-130 of
the GST Act.
5. The principal argument of Mr. Nanavati is that even if the authority
concerned thought fit to issue notice under section-130 of the Act in Form GST
Mov-10, the authority could not have overlooked or ignored Sub-section (3) of
section-129 of the Act. The argument proceeds on the footing that in accordance
with Subsection (3) of section-129, the Proper Officer is obliged to issue a notice
within seven days of detention or seizure specifying the penalty payable and

thereafter, pass an order within a period of seven days from the date of service of
said notice for payment of penalty under clause (a) or clause (b) of Sub-section
(1).
6. According to Mr. Nanavati, the aforesaid omission on the part of the
Proper Officer renders the further proceedings bad in law.
7. Per contra, Mr. Sharma would submit that sections-129 and 130 of the
Act are distinct and independent of each-other. Once the Proper Officer decides
to issue notice in Form GST Mov-10 calling upon the owner of the conveyance
and the goods to show cause as to why the goods and conveyance should not
be confiscated, then it is not obligatory for the Proper Officer to issue notice as
contemplated under Sub-section (3) of section-129.
8. Mr. Nanavati has placed reliance on one decision of the Karnataka High
Court in the case of M.S. Meghdoot Logistics Vs. Commercial Tax Officer; Writ
Petition No.10832 of 2020; decided on 21.12.2020, wherein in Paragraph-29 of
the judgment, the High Court has observed as under:—
"29. In the light of the above discussion it is held that if after interception of
conveyance with goods in transit and detention of the conveyance and
seizure of the Goods with issuance of notice under section 129(3) of the
Act, and when there is information about the intent to evade payment of
tax, it is not open to the proper officer to treat the notice under section
129(3) of Act as having abated or truncate such proceedings and initiate
proceedings under 130 of the Act for confiscation with the issuance of
notice thereunder. The proper officer, who has detained the conveyance
and seized the goods, when he is able to form opinion that there is an
attempt to evade payment of tax, will have to determine the applicable tax
and penalty under section 129 of the Act while simultaneously initiating
proceedings for adjudging confiscation under section 130 of the Act. If
during the pendency of these proceedings, a request for provisional release
as contemplated under sub-clause (3) of section 129 of the Act, is
submitted, the same will have to be considered in the light of the provisions
of section 129 read with sub- clause (6) of section 67 of the Act. If after
adjudging confiscation, the option to pay Fine in addition to the tax payable,
penalty and other charges is not exercised despite opportunity under
section 130(7) of the Act, the Proper officer will have to take and hold
possession of the things confiscated subject to consequences as
contemplated thereunder.
For the foregoing, the writ petition is disposed of restoring the Show Cause
Notice dated 25.8.2020 (Annexure- E) directing the respondent to decide, in
accordance with law, on the proposed levy of tax, penalty and cess as proposed
therein with reasonable opportunity of hearing to the petitioner, who shall have
the liberty to seek provisional release of goods/conveyance as provided for under
sub-clause (2) of section 129 of the Act. The respondent is also directed to
contemporaneously decide on the impugned Show Cause Notice dated 7.9.2020
(Annexure-A) in accordance with the provisions of section 130 of the Act."

(2022) Rahul Agarwal Vs. Union Of India(All) 303
9. We shall definitely decide the larger issue raised in this writ-appli-cation.

However, we would like to know the exact amount payable by the writ-applicant
in terms of Sub-section (3) of section- 129. We are exploring the possibility of
ordering provisional release of the goods on the condition that the writ-applicant
shall deposit the entire amount towards penalty. There is some confusion as
regards the exact amount due and payable towards penalty. We want Mr.
Sharma to tell us the correct figure.
10. Issue notice to the respondents returnable on 20.4.2022. No notice now
be issued by the Registry to the respondents as Mr. Sharma has already entered
appearance on their behalf.
On the returnable date, notify this matter on top of the board.
**
Vital Point:
The larger issue raised in this writ-application, shall be decided.
However, the exact amount payable by the writ-applicant in terms
of sub-section (3) of section 129, is to be known.
***
[2022] GTI 303 (All)
[IN THE HIGH COURT OF ALLAHABAD]
HON’BLE RAJEEV MISRA, J.
Rahul Agarwal Vs. Union Of India

Criminal Misc Anticipatory Bail Application under section 438 CR.P.C. No. 1776 of 2022
Dated. 11.4.2022.
ARREST—BAIL—ANTICIPATORY BAIL—SALE INVOICE (ITC)
INCOME-TAX CREDIT—CERTIFICATE PRODUCED BEFORE GST
AUTHORITY ALLEGED TO BE FRAUD—NO FINAL ADJUDICATION
WITH REGARD TO NATURE OF SAME MADE OUT—MATTER
REQUIRE RECONSIDERATION—HENCE BAIL APPLICATION
ALLOWED.
HELD .—
It was contended on behalf of applicant that only allegation against the applicant is
that the sale invoice (ITC) Income-tax Credit Certificate produced by applicant before GST
Authority is alleged to be fraud. However, no final adjudication with regard to the nature
of above has been made till date. It is then contended that a deman d of Rs.7.36 crore is
being raised again st the applicant out of which Rs. 1 crore has already been deposited b y
the applicant. It is further submitted that applicant is a man of clean antecedents,
inasmuch as, he has no criminal history to his credit except the present one. Applicant
has been co-operating with the proceeding under the GST Act, inasmuch as, no coercive
process has been issued against applicant till date. As such, custodial arrest of

applicant is n ot absolutely necessary during pendency of aforementioned case. However,

irrespective of above, there is imminent threat of the applicant being arrested in
aforementioned case. It is thus urged that liberty of applicant be protected by extending
him the benefit of anticipatory bail.
It was deemed fit by Court that the matter requires consideration. Counsel for
opposite party has already filed a short-counter affidavit. However, considering the facts
and circumstances of the case, he is directed to file a complete counter affidavit within
four weeks. Applicant will have two weeks thereafter to file rejoinder affidavit. In the event
of arrest, applicant shall be released on ad-interim anticipatory bail on his furnishing a
personal bond of Rs. 50,000 with two sureties each in the like amount to the satisfaction
of the Station Hou se Officer of the police station/ concerned Court with the conditions
imposed. Bail Application allowed.
Ms. Pragya Pandey and Shri Anurag Mishra, for the Applicant.
Shri Dileep Chandra Mathur, for the Respondent.
ORDER
Heard Mrs. Pragya Pandey, learned counsel for applicant and Mr. D.C.
Mathur, learned counsel representing opposite party.
Perused the record.
This application for anticipatory bail has been filed by applicant- Rahul
Agarwal in connection with Case No. DGGI/ARU/Gr.B/A.Raaj/10/2021 /519
dated 22.7.2021 under section 70 of the Central Goods and Services Tax Act,
2017.
Mrs. Pragya Pandey, learned counsel for applicant contends that only
allegation against the applicant is that the sale invoice (ITC) Income-tax Credit
Certificate produced by applicant before GST Authority is alleged to be fraud.
However, no final adjudication with regard to the nature of above has been made
till date. It is then contended that a demand of Rs. 7.36 crore is being raised
against the applicant out of which Rs. 1 crore has already been deposited by the
applicant. It is further submitted that applicant is a man of clean antecedents,
inasmuch as, he has no criminal history to his credit except the present one.
Applicant has been co-operating with the proceeding under the GST Act,
inasmuch as, no coercive process has been issued against applicant till date. As
such, custodial arrest of applicant is not absolutely necessary during pendency of
aforementioned case. However, irrespective of above, there is imminent threat of
the applicant being arrested in aforementioned case. It is thus urged that liberty
of applicant be protected by extending him the benefit of anticipatory bail.
Per contra, Mr. D.C. Mathur, learned counsel representing opposite party has
vehemently opposed this application for anticipatory bail. He submits that the
offence complained of against applicant is an economic offenc e and relates to
the revenue of the Union. As such, no indulgence be granted by this Court in
favour of applicant.

(2022) Rahul Agarwal Vs. Union Of India(All) 305
Having heard learned counsel for applicant, learned counsel for opposite
party and upon perusal of record, matter requires consideration.
Mr. D.C. Mathur, learned counsel for opposite party has already filed a short-
counter affidavit. However, considering the facts and circum-stances of the case,
he is directed to file a complete counter affidavit within four weeks. Applicant will
have two weeks thereafter to file rejoinder affidavit.
List for orders after expiry of aforesaid period.
In view of above, in the event of arrest, applicant Rahul Agarwal sha ll be
released on ad-interim anticipatory bail on his furnishing a personal bond of Rs.
50,000/- with two sureties each in the like amount to the satisfaction of the
Station House Officer of the police station/ concerned Court with the following
conditions:—
(i) The applicant shall make himself available for interrogation by the
police officer as and when required;
(ii) The applicant shall not directly or indirectly, make any induce-ment,
threat or promise to any person acquainted with the facts of the case so
as to dissuade from disclosing such facts to the Court or to any police
officer;
(iii) The applicant shall not leave India without the previous permis-sion of
the Court and if he has passport, the same shall be deposited by him
before the S.S.P./S.P. concerned.
(iv) The party shall file computer generated copy of such order downloaded
from the official website of High Court Allahabad.
(v) The concerned Court/Authority/Official shall verify the authen-ticity of
such computerized copy of the order from the official website of High
Court Allahabad and shall make a declaration of such verification in
writing.
In default of any of the conditions, the Investigating Officer/Govt. Advocate is
at liberty to file appropriate application for cancellation of anticipatory bail granted
to the applicants.
The Investigating Officer is directed to conclude the investigation, if pending, of
the present case in accordance with law, expeditiously, independently without
being prejudiced by any observations made by this Court while considering and
deciding the present anticipatory bail appli-cation of the applicant.
The applicant is directed to produce a copy of this order downloaded from the
official website of this Court before the S.S.P./S.P. concerned within ten days from
today, if investigation is in progress, who shall ensure the compliance of present
order.
**
Vital Point:
It was deemed fit by Court that the matter requires consideration.
***

[2022] GTI 306 (Ker)

[IN THE HIGH COURT OF KERALA]
HON’ABLE S.V.BHATTI & HON’BLE BASANT BALAJI, JJ.
K.E. Agro Products (P) Ltd. Vs. State Tax Officer (IB)-I
SGST
WA No. 177, 178 and 181 of 2022
Dated. 8.4.2022.
INSPECTION SEARCH & SEIZURE—SEEKING OF COPY OF
STATEMENTS RECORDED IN COURSE OF INVESTIGATION —
REASON FOR NOT GIVING COPIES OF STATEMENTS NOT
PRODUCED—VIOLATION OF PRINCIPLES OF NATURAL JUSTICE.
HELD.—
The officer had not cited any reason for not giving the copies of the statements
sought for by the appellants. But in the counter affidavit the contention taken was that
section 67(5) of the CGST Act specifically provides that the Officer can deny issuance of
copies of statement if the same is prejudicial to the investigation. The affidavit cannot
supplement the reasons which are not there in the order.
The learned Single Judge has rightly exercised his jurisdiction and set aside above
reason and directed the officer to pass fresh orders in the request submitted by the
appellants for issuance of copies of the statements. The learned Single Judge has in fact
gone a step ahead and discussed the relevant provision s of law under the Act and made
passive ob servations which may be prejudicial to the appellants. In view of the matter,
since the learned Single Judge has set aside the r easons an d directed re-consideration,
the first respon dent who is directed to re-consider the application has to independently
consider the request made by the appellants in tune with the provisions of the Act
untrammelled by the observations made by the learned Single Judge in the judgment
under appeal.
Shri Harisankar V. Menon and Ms. Meera V. Menon, Advocates for the Appeallants.
Mohd Rafiq, Spl. GP, for the Respondents.
JUDGMENT
Per: Basant Balaji, J.
WA No.177 of 2022, WA. No.178 of 2022 and WA No.181 of 2022 are filed
against the judgment in WP(C) Nos.20455 of 2021, No.20453 of 2021 and
WP(C) No.20447 of 2021 respectively. Since a common question arose in all the
three Writ Petitions, the learned Single Judge passed a common judgment. The
main issue that raised was regarding the grant of copy of statements recorded by
the respondents in the course of investigation and non collection of tax for
outward supply of rice.
2. The appellants in all the three appeals are assessees under the
CGST/SGST Act, 2017 (for short ‘the Act’). They are engaged in outward supply
of rice and bran. In connection with the enquiry, the Sales Tax Officer issued

(2022) K.E. Agro Products (P) Ltd. Vs. State Tax Officer (IB)-I SGST(Ker) 307
summons to one of the Directors of the company, Sri. Melvin T Mathew.

Pursuant to the summons, he appeared before the first respondent and
statement was recorded from him. Thereafter, the petitioners in all the writ
petitions filed separate applications requesting for issuance of the statement
recorded from Sri. Melvin T Mathew. A further request was also made for
transfer of the files of enquiry to the place of the appellants/petitioners choice.
Appellants’ request were turned down by the respondent as ‘cannot be
considered’. No specific reasons are stated in the rejection orders.
3. The appellants challenged rejection orders before the learned Single
Judge in the respective writ petitions. A counter affidavit was filed by the
respondent in W.P.(C) No.20453 of 2021 stating that the information gathered
during the enquiry was very crucial and sensitive in nature and the issuance of
copies or sharing of extracts of the statements at the present stage would
prejudicially affect the investigation. The learned Single Judge referring to
section 67(5) and section 70 of the Act came to the conclusion that the only
reason stated for denying the request for the issuance of the copies of the
statement recorded is that ‘cannot be considered’. The proper Officer did not
have a case that giving copy of the statement would cause prejudice to the
investigation. Occular
4. The learned Single Judge relying on the decisions reported in
Commissioner of Police, Bombay Vs. Gordhandas Bhanji (AIR 1952 SC 16 and
Mohinder Singh Gill Vs. Chief Election Commissioner, New Delhi [(1978) 1 SCC
405], found that an affidavit cannot enlarge or supplement reasons which the
order did not contain at the time when it was issued. Thereafter, the learned
Single Judge held that Ext.P10 is liable to be set aside as the reason stated is
not sufficient and the first respondent was directed to re-consider the application
of the petitioners/appellants for giving a copy of the statement obtained in the
course of investigation. Regarding the transfer of files, the counsel for the
appellants submitted that since the Government has eased the restrictions
imposed during the time of covid-19 pandemic, they are not pressing the transfer
of files.
5. A perusal of Ext.P10 would show that the officer has not cited any reason
for not giving the copies of the statements sought for by the appellants. But in
the counter affidavit the contention taken is that section 67(5) of the Act
specifically provides that the Officer can deny issuance of copies of statement if
the same is prejudicial to the investigation. As already held above the affidavit
cannot supplement the reasons which are not there in the order.
On going through the judgment of the learned Single Judge, the learned
Single Judge has rightly exercised his jurisdiction and set aside Ext.P10 and
directed the officer to pass fresh orders in the request submitted by the
appellants for issuance of copies of the statements. The learned Single Judge
has in fact gone a step ahead and discussed the relevant provisions of law
under the Act and made passive observations which may be prejudicial to the
appellants. In view of the matter, since the learned Single Judge has set aside
Ext.P10 and directed re-consideration, we are of the considered opinion that the

first respondent who is directed to re-consider the application has to

independently consider the request made by the appellants in tune with the
provisions of the Act untrammeled by the observations made by the learned
Single Judge in the judgment under appeal.
Accordingly, the Writ appeals are disposed of, directing the first respondent
to take up the applications submitted by the appellants for issuance of the
statements recorded during the course of investigation and to pass final orders
untrammeled by the observations made by the learned Single Judge in the
impugned judgment.
Since the judgment impugned has been passed more six months prior and
the investigation is going on, the first respondent shall take into account the
present stage of the investigation while disposing of the applications submitted
by the appellants.
**
Vital Point:
The learned Single Judge has rightly exercised his jurisdiction and
set aside above reason and directed the officer to pass fresh
orders in the request submitted by the appellants for issuance of
copies of the statements.
***

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RNI NO. RAJENG/ 2010/37653 Postal Reg. No.

{ THE COMPLETE MAGAZINE ON GST }

PUBLISHER & CHIEF EDITOR

EDITOR ADVISORS BOARD

Mode of Citation (2022) GTI 257 – 308 .....

No part of any information published in the journal may be

Editors do not necessaril y agree with the views expressed in the

Publishers have right to refuse any subscription

While every effort has been taken to avoid errors the

All disputes are subject to Jodhpur jurisdiction

With the blessing of "Shri Vinayak ji"

Address your editorial and subscription correspondence to:

GST INFORMA TIONS

ONE-THIRD LAND DEDUCTION IN CASE OF CONSTRUCTION SERVICES

REQUIREMENT OF GST REGISTRATION BY A LIQUIDATOR—ANALYSIS

Input Tax Credit—Eligibility and conditions—Reimbursement of GST

INSPECTION SEARCH & SEIZURE—Seeking of copy of statements recorded in

INTEREST ON REFUND—RATE OF INTEREST—Compensation for delayed

SEARCH & SEIZURE—CONFISCATION OF GOODS—Issuance of notice under

SHOW-CAUSE NOTICE—VALIDITY OF—Reversal of ITC—Return filed beyond

DOCUMENTS REQUIRED FOR AUDIT BY TAX AUTHORITIES

GS T Informations, Dated. 20.05.2022. 9

available by the registered person or the actual institution of audit at the

10 GST Informations, Dated. 20.05.2022.

(3) The Commissioner may notify a class of taxable persons to maintain

GS T Informations, Dated. 20.05.2022. 11

supplied goods or services, where required under the provisions of this

12 GST Informations, Dated. 20.05.2022.

(13) Every registered person supplying services shall maintain th e

GS T Informations, Dated. 20.05.2022. 13

(iii)statements of annual financial accounts, duly audited, wherever

14 GST Informations, Dated. 20.05.2022.

GS T Informations, Dated. 20.05.2022. 15

 Any other relevant record.

16 GST Informations, Dated. 20.05.2022.

GS T Informations, Dated. 20.05.2022. 17

ONE-THIRD LAND DEDUCTION IN CASE OF CONSTRUCTION

18 GST Informations, Dated. 20.05.2022.

GS T Informations, Dated. 20.05.2022. 19

20 GST Informations, Dated. 20.05.2022.

GS T Informations, Dated. 20.05.2022. 21

REQUIREMENT OF GST REGISTRATION BY A LIQUIDATOR—

22 GST Informations, Dated. 20.05.2022.

or replaced by some other Insolvency Professional. The said process is time

GS T Informations, Dated. 20.05.2022. 23

liquidation commencement date. Since the liquidation could not be completed

24 GST Informations, Dated. 20.05.2022.

The address of the liquidator has also not been furnished.

GS T Informations, Dated. 20.05.2022. 25

to operate and fulfill the obligations in his capacity as a liquidator as

26 GST Informations, Dated. 20.05.2022.

Input Tax Credit—Eligibility and conditions—Reimbursement of GST

Levy of GST—Justification—Levy of GST alongwith advertisement

GS T Informations, Dated. 20.05.2022. 27

Registration—New registration—Requirement of new registration by

28 GST Informations, Dated. 20.05.2022.

Search & seizure—Detention of goods alongwith vehicle—Gold

Search and seizure—Territorial jurisdiction—Search operations by

GS T Informations, Dated. 20.05.2022. 29

30 GST Informations, Dated. 20.05.2022.

[2022] GTI 257 (SC)

Union of India & Ors. Vs. Willowood Chemicals Pvt. Ltd.

GS T Informations, Dated. 20.05.2022. 31

1. Delay condoned. Leave granted.