Indirect Tax News Letter
GST Calendar –Compliances for the month of January’2024
| Nature of Compliances | Due Date |
| GSTR-7 (Tax Deducted at Source ‘TDS’) | January 10, 2024 |
| GSTR-8 (Tax Collected at Source ‘TCS’) | January 10, 2024 |
| GSTR-1 | January 11, 2024 |
| IFF- Invoice furnishing facility (Availing QRMP) | January 13, 2024 |
| GSTR-6 Input Service Distributor | January 13, 2024 |
| GSTR-2B (Auto-Generated Statement) | January 14, 2024 |
| GSTR-3B | January 20, 2024 |
| GSTR-5 (Non-Resident Taxable Person) | January 20, 2024 |
| GSTR-5A (OIDAR Service Provider) | January 20, 2024 |
| PMT-06 (who have opted for the QRMP scheme) | January 25, 2024 |
The Supreme Court has rejected SLP concerning the discrepancy in Input Tax Credit (ITC) between GSTR-2A and GSTR-3B.“
Facts
The Assessee, after receiving a show cause notice (SCN) that alleged the suppression of outward supplies, saw the adjudicating authority pass the assessment order on April 23, 2019. Following this, the Assessee initiated an appeal before the Appellate Authority on December 16, 2019. According to Section 107(1) of the West Bengal Goods and Services Tax Act, 2017, any person feeling aggrieved by a decision or order from an adjudicating authority can file an appeal with the AA within three months from the date of communication of the said decision or order.
Furthermore, in accordance with sub-section (4), the Appellate Authority has the discretion to permit the presentation of an appeal within an additional period of one month if satisfied that the appellant was genuinely prevented from doing so within the initial three months. However, the AA declined to condone the delay based on Section 107. Consequently, the Assessee opted to file a writ petition before the Calcutta High Court. Upon review, the learned single judge, while interpreting the provisions of Section 107 and considering the decision in the case of New India Assurance Company Ltd vs. Hilli Multipurpose Cold Storage Private Limited, concluded that no appeal could be filed beyond the stipulated period of 4 months from the date of order communication. Dissatisfied with this decision, the assessee proceeded to file an appeal before the Division Bench of the High Court.
Rulings
The fundamental principle in assessing the applicability of the Limitation Act to a special law is to scrutinize the framework of the special law to ascertain whether there exists any explicit or implicit exclusion of the Limitation Act provisions.
Section 107, however, does not explicitly state that the appellate authority is barred from exercising jurisdiction to condone the delay beyond the prescribed period of limitation.
In alignment with this, Section 29(2) of the Limitation Act stipulates that, concerning the determination of any limitation period set by any appeal under a special or local law, the provisions contained in sections 4 to 24 of the Limitation Act shall apply only to the extent they are not expressly excluded by such special or local law.
In accordance with Section 5 of the Limitation Act, an appeal may be accepted after the prescribed period if the appellant can demonstrate to the court that there was sufficient cause for not filing the appeal within that stipulated period.
It’s noteworthy that Section 107 lacks a non-obstante clause, making Section 29(2) of the Limitation Act inapplicable. The absence of a specific exclusion of Section 5 of the Limitation Act implies that it would be inappropriate to infer its implied exclusion.
Furthermore, Section 107, in its entirety, has not explicitly stated that Section 5 of the Limitation Act is excluded. Consequently, the provisions of Section 5 of the Limitation Act are applicable, allowing the appellate authority to extend the period for filing the appeal.
High Court Decides Fuel Provided Gratis by Service Recipient is to be Factored into GTA Service Value“
Facts
The Assessee, a Goods Transport Agency (GTA), engaged in an agreement to supply a vehicle along with a driver for transporting goods to the service recipient. According to the terms, the service recipient is obligated to provide fuel at no cost (FOC).
Subsequently, the Assessee sought an advance ruling to determine whether the fuel provided by the service recipient on an FOC basis should be considered in the value of the supplied GTA services.
The Authority for Advance Ruling (AAR) issued a decision stating that FOC fuel would indeed be included in the value of the GTA service. Displeased with this ruling, the Assessee has now lodged an appeal before the Appellate Authority for Advance Ruling (AAAR).
Section 101(3) of the Central Goods and Services Tax Act, 2017 (CGST Act) explicitly states that no advance ruling will be issued regarding questions under appeal or reference if the members of the Appellate Authority disagree on any points. In this case, due to a divergence of opinions between the State and Central members of the Appellate Authority for Advance Ruling (AAAR), no ruling was provided.
Given the impasse and lack of recourse within the system, the Assessee, left with no alternative, filed a writ petition before the Chhattisgarh High Court (HC).
Rulings
The High Court made reference to the Supreme Court’s rulings, which delineated the fundamental components of taxation as: i) The taxable event; ii)
The person on whom the levy is imposed; iii) The rate at which the levy is imposed; and iv) The measure or the value to which the rate will be applied.
The court underscored that the entire viability and existence of the Goods Transport Agency (GTA) business revolve around the utilization of vehicles and fuel for the transportation of goods. This acknowledgment highlights the intrinsic connection of the GTA industry with the essential elements of taxation as articulated by the Supreme Court.
The evident factor is that a vehicle cannot operate without fuel. Hence, the entire framework of Goods Transport Agency activities is structured around the provision of fuel to the respective vehicles.
If the GTA has strategically arranged to deliver its services by securing fuel on a free-of-cost (FOC) basis through a contractual agreement with the recipient company, this occurrence goes beyond the surface level of the contract. Consequently, the revenue authorities have the authority to lift the veil to discern the underlying object and purpose, recognizing a broader shift in the nature of the contract.
Referring to the rulings cited by the assessee, the High Court observed that a meticulous examination of the mentioned proposition would reveal that the nature of services rendered in those cases differed. In the case of Goods Transport Agency (GTA), the crux of the matter revolves around the service provided by the GTA, and this service is inherently reliant on the supply of fuel.
The decisive factor is the nature of the business, and if such a consideration is altered through an agreement, it would encroach upon the domain of the GTA. The parties, through an agreement, cannot override the statutory provisions related to tariff matters.
The responsibility for expenses related to filling diesel in the vehicle, as part of providing services under normal conditions, lies with the Goods Transport Agency (GTA). It is the GTA’s obligation to fulfill such supply. The statutory provision of Section 15(2)(b) encompasses the value of expenses incurred by the recipient. Therefore, even if there is an agreement between the GTA and the service recipient, this statutory liability cannot be circumvented.
Fuel is an indispensable component used in offering transportation services and is crucial for the GTA service provider. The entire business of the GTA is dependent on fuel, and without it, the business cannot thrive. Consequently, fuel cannot be separated to evade tax liability.
The Circular referenced by the assessee is confined to a specific subject matter and does not offer assistance given the nature of the business.
In conclusion, the High Court affirmed that fuel provided free of cost by the service recipient would be included in the value of the supply of
GTA services.
The High Court asserts that a reasonable period for filing a reply to a Show Cause Notice (SCN) is 30 days.
This Tax Alert encapsulates a recent judgment from the Madhya Pradesh High Court [1]. The focal point of the matter was the duration deemed reasonable for responding to a show cause notice (SCN).
In this instance, the Revenue served the SCN to the taxpayer on 3 September 2022, and subsequently, the demand order was issued on 12 September 2022, merely 9 days after the SCN issuance. The taxpayer contested both the SCN and the order before the High Court.
The taxpayer argued that the denial of a reasonable opportunity to be heard occurred as the demand order in question was issued within 9 days of the SCN’s issuance. Additionally, the SCN lacked self-containment by failing to disclose adverse material, forming the basis of the notice.
The High Court noted that Section 73(1) of the Central Goods and Services Tax Act, 2017 (CGST Act) provides an opportunity for the recipient of the notice to respond, explaining why they should not pay the specified amount mentioned in the notice along with any applicable interest and penalty.
While Section 73 doesn’t specify a response time for the noticee, the High Court deems a reasonable period for replying to a Show Cause Notice (SCN) to be at least 15 days, if not more. However, considering the statutory 30-day period for payment mentioned in Section 73(8), the court considers 30 days as reasonable.
In this case, the 9-day gap between SCN issuance and the demand order is deemed insufficient for a reasonable opportunity to be heard. Additionally, the SCN lacks adequate material.
As a result, the High Court sets aside the SCN and the demand order, giving the Revenue the option to issue a fresh, legal SCN.
The High Court asserts that an unsigned order is not considered a valid order in the eyes of the law.
This Tax Alert provides an overview of a recent ruling from the Andhra Pradesh High Court (HC) [1]. The focal point of the matter revolves around the examination of the validity and enforceability of an unsigned order issued by the revenue authority.
In the current case, the competent officer issued an order under Section 73(9) of the Central Goods and Services Tax Act, 2017 (CGST Act). However, the crucial point of contention arises as the order lacks a signature. The assessee responded by filing a writ petition, contesting the validity of the order and asserting that it cannot be legally enforced.
The revenue argued that in accordance with Section 160 of the CGST Act, any assessment, re-assessment, or similar proceedings initiated under the provisions of the CGST Act should not be deemed invalid solely due to a mistake, defect, or omission. The key criterion, according to the revenue, is whether these proceedings are, in substance and effect, in conformity with the intent, purpose, and requirements of the law.
The High Court noted that the phrase “any mistake, defect or omission therein” as used in Section 160 does not encompass the omission to sign the order. The court emphasized that an unsigned order holds no legal standing and, according to the law, it is not recognized as a valid order. Merely uploading the unsigned order on the GST portal by the competent authority, as per Section 169 of the CGST Act, does not rectify the inherent defect of validity associated with the order.
The High Court drew support from its previous ruling in the case of A V Bhanoji Row[2], affirming that signatures cannot be dispensed with. The court underscored that neither Section 160 nor Section 169 would provide a remedy in cases where the order lacks the essential signatures. Consequently, the High Court, based on this precedent, granted approval to the writ petition and annulled the contested order.
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