Article

(In)voluntary payments made during investigations – Perspectives from Bundl Technologies

By Kiran Manokaran and M.V. Vishal Sundar

The article in this issue of Tax Amicus discusses a recent decision of the Division Bench of the Karnataka High Court in the case of Bundl Technologies upholding the view of the Single Bench that the amounts deposited with the Department at odd hours during the DGGI investigations were paid involuntarily. The Department was held liable to refund the amount. Elaborating on the findings of the Court, the authors find it reassuring that the Court emphasized on how statutory powers must be exercised reasonably and in good faith, and not with a view to instill fear in the mind of the taxpayers. They also observe that while it is necessary for the assesses to co-operate with the authorities, it is imperative for one to also adopt a balanced strategy so as to mitigate liability without foreclosing any legal rights. The authors in this regard also list down various points which may be kept in mind by the assesses while facing search and seizure proceedings under Section 67 of the Central Goods and Services Tax Act, 2017...

Goods & Services Tax (GST)

Notifications and Circulars

• Test purchases by Revenue department – Tamil Nadu GST authorities lay down guidelines
• Proper officers for adjudication in cases of DGGI notices – All India jurisdiction notified for specified Additional/Joint Commissioners
• Scrutiny of returns for FY 2017-18 and 2018-19 – Standard Operating Procedure prescribed

Ratio decidendi

• Amount deposited involuntarily during investigation violates Articles 265 and 300-A of the Constitution – To be refunded to assessee – Karnataka High Court
• Confiscation – No vicarious liability, in respect of goods, on the owner of conveyance – Punjab and Haryana High Court
• Service of notice through registered/speed post or courier to continue till problems with GST portal are resolved – Madras High Court
• Provisional attachment of personal property of partner of LLP, not permissible – Gujarat High Court
• Non-issuance of notice under Section 46 before assessment under Section 62 is a serious lacuna – Jharkhand High Court
• Demand – DRC-01 notice is also mandatory – Notice under DRC-01A not enough – Madras High Court
• Demo cars not eligible for Input Tax Credit – Appellate AAR Haryana
• Input Tax Credit – Invoice dated 1 April 2020 but pertaining to supply in 2018-19 is barred by limitation under Section 16(4) – Appellate AAR Andhra Pradesh
• Renting of property of partner to the partnership firm is supply – Taxable event even if no consideration – AAR Tamil Nadu
• Drilling and blasting using explosives for construction of tunnel is composite supply of works contract – AAR Maharashtra
• Seeds for sowing are not agricultural produce – Exemption under Notifications Nos. 11 and 12/2017-Central Tax (Rate) not available – AAR Telangana
• Designing, supplying, installing, testing and commissioning of onboard train collision avoidance system is a composite supply but not works contract – AMC a separate contract – AAR Telangana
• Construction of administrative building for Telangana State Industrial Infrastructure Corporation Limited eligible for benefit under S. No. 3(vi) of Notification No. 11/2017-Central Tax (Rate) – AAR Telangana

Customs

Notifications and Circulars

• Automation in IGCR Rules – CBIC issues elaborate circular
• Time-limit for filing applications for specified MEIS, RoSCTL, RoSL further extended

Ratio decidendi

• Quantum of pre-deposit – Substitution to remove discretion of appellate authority – Provisions earlier at time of incident/act, not applicable – Supreme Court
• EOU – DTA clearance entitlement – Twisted yarn and ropes are similar goods – Supreme Court
• Settlement application not maintainable in absence of show cause notice – Bombay High Court
• Amendment of shipping bills post exports – No requirement of physical examination of exports under Section 149 – CESTAT Chennai
• Digital still image video cameras – Exemption under ITA bound notification – Issue referred to Larger Bench – CESTAT New Delhi
• SCN by DRI officers – Even Section 28(11) of Customs Act not helpful – CESTAT Kolkata
• Appeal to High Court – Entitlement to exemption is not an issue in relation to rate of duty – Supreme Court

Central Excise, Service Tax & VAT

Ratio decidendi

• No confiscation of land, building and plant and machinery after omission of Central Excise Rule 173Q(2) – Supreme Court
• Dues of secured creditors have priority even after insertion of Section 11E in Central Excise Act, 1944 – Supreme Court
• No demand from successor entity when tax paid by predecessor during period from appointed date till approval of scheme of demerger by High Court – Gujarat High Court</>
• Refund claim of service tax whether maintainable in absence of challenge/assessment/self-assessment in appeal – Issue referred to Larger Bench – CESTAT Chandigarh
• Refund of service tax on cancellation of sale of flat – Relevant date – CESTAT Ahmedabad
• Agricultural Produce Market Committees liable to service tax for leasing out shops prior to 1 July 2012 – Supreme Court
• Amount received from service recipients for payment to vendors is not consideration for any service – CESTAT Delhi
• Interest, by service provider when service recipient mistakenly paid tax under RCM, when not payable – Madras High Court
• Overburden removal during the mining of lignite is not covered under Site formation and clearance, excavation, earth moving and demolition service – CESTAT Ahmedabad
• Valuation – Related person – Common director and 50% share-holding is not material – CESTAT Mumbai
• Refund when duty reduced subsequent to clearance and price difference refunded to dealers through cheques – CESTAT Allahabad