TaxTMI 
TaxTMI 
2023 (12) TMI 824
X X X X Extracts X X X X
X X X X Extracts X X X X
....fter referred to as the 'new registration'), with retrospective effect from 1.7.2017 i.e the date from when the original registration was granted to the petitioner no.1 bearing registration no. 09AVKPS1666H2Z1 (hereinafter referred to as the 'old registration'). 3. Challenge has also been raised to the order passed by Authority for Advance Ruling dated 17.12.2019, passed at the instance of petitioner no.2 (M/s Vivo Mobile India Private Limited), to the extent the said authority has refused to grant benefit of Input Tax Credit (ITC) that may have arisen against the original Tax Invoices issued against old registration, during July 2017 and August 2017 as are supported by the revised Tax Invoices (for the same transactions) issued by petitioner no.1, under its new registration. 4. The facts are undisputed. Prior to enforcement of the Act, petitioner no.1 (M/s Harbir Singh Contractor) was registered under the Finance Act, 1994 (hereinafter referred to as the 'Service Tax law') for supply of "Manpower Supply Services". Upon enforcement of the Act, by virtue of operation of law namely Section 139 of the Act, the petitioner no.1 provisionally auto-migrated under the Act. At the sam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he supply of goods, subject to such conditions and limitations, as may be notified. Explanation.--For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.] (2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day. Section 25. Procedure for registration.- (1) 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, in such manner and subject to such conditions as may be prescribed: Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business. ^3[Provided further that....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... person, such person shall be offered alternate and viable means of identification in such manner as Government may, on the recommendations of the Council, prescribe: Provided further that in case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration. ^6(6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification: Provided that if an Aadhaar number is not assigned to an individual, such individual shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. ^7[(6C) On and from the date of notification, every person, other than an individual, shall, in o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f goods or services or both received by them, as may be prescribed. (10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed. (11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed. (12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period." 5. Also, the Act introduced the concept of Input Service Distributor (hereinafter referred to as the 'ISD'). Section 2(61) of the Act reads as below: "2(61) "Input Service Distributor" means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid e-mail address. (3) On successful verification of the Permanent Account Number, mobile number and email address, a temporary reference number shall be generated and communicated to the applicant on the said mobile number and e-mail address. (4) Using the reference number generated under sub-rule (3), the applicant shall electronically submit an application in Part B of FORM GST REG-01, duly signed or verified through electronic verification code, along with the documents specified in the said Form at the common portal, either directly or through a Facilitation Centre notified by the Commissioner. ^11 [(4A) Every application made under rule (4) shall be followed by - (a) biometric-based Aadhar authentication and taking photograph, unless exempted under sub-section (6D) of section 25, if he has opted for authentication of Aadhar number; or (b) taking biometric information, photograph and verification of such other KYC documents, as notified, unless the applicant is exempted under sub-section (6D) of section 25, if he has opted not to get Aadhar authentication done, of the applicant where the applicant is an individual or of such indivi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....), it does appear, while filing the original Form GST REG-01 (relevant to the old registration), the petitioner no.1 described his reason to obtain that registration as "ISD". As to the other reason to obtain that registration, though the revenue disputes, a copy of the application form annexed to the Supplementary Counter Affidavit filed by the revenue itself reads - "Others (Not covered above) Specify" and the words "Documents attached", find mention below that description. Thus, that is inconclusive of any other details having been filled up by the petitioner, to obtain registration. 9. Yet, the disclosure made by petitioner no.1 at that stage is clearly established from the document annexed as Annexure SCA-8 to the Supplementary Counter Affidavit, described as Registration Certificate on Form GST REG-06. That document pertaining to the original registration granted to the petitioner first discloses the tax-payer status to be Input Service Distributor (ISD). Yet it goes on to narrate and thus record the description of goods and services being dealt with by petitioner no.1. That part of the Registration Certificate reads as below: "Goods ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AY- 2019, JUN-2019, JULY-2019, AUG- 2019, SEP-2019 Type of Return GSTR-3B 1. Being a registered taxpayer, you are required to furnish return/s for the supplies made or received and to discharge resultant tax liability for the aforesaid tax period/s by due date. It has been noticed that you have filed the said return/s till date. 2. You are, therefore, requested to furnish the said return/s within 15 days failing which the tax liability will be assessed u/s 62 of the Act, based on the relevant material available with this office. Please note that in addition to tax so assessed, you will also be liable to pay interest and penalty as per provisions of the Act. 3. Please note that no further communication will be issued for assessing the liability. 4. The notice shall be deemed to have been withdrawn in case the return/s referred above, is filed by you before issue of the assessment order. DESIGNATION: SUPERINTENDENT C:GAUTAM BUDDHA NAGAR > D: DIVISION I GAUTAM BUDDHA NAGAR > R: RANGE - 5 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS" 12. In the context of the Act, the monthly return on the Form GSTR-3B is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce Distributor or a non-resident taxable person or a person paying tax under section 10 or section 51 or, as the case may be, under section 52 shall furnish a return in FORM GSTR-38, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner, an or before the twentieth day of the month succeeding such tax period: Provided that for taxpayers having an aggregate tumover of up to five crore rupees in the previous financial year, whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Kamataka, Goa, Kerala, Tamil Nadu. Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry. Andaman and Nicobar Islands or Lakshadweep, the return in FORM GSTR- 3B of the said rules for the months of October, 2020 to March, 2021 shall be furnished electronically through the common portal, on or before the twentysecond day of the month succeeding such month: Provided further that for taxpayers having an aggregate turnover of up to five crore rupees in the previous financial year, whose principal place of business is in the St....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the recommendations of the Council, by notification, specify. (2) Subject to the conditions specified in the notification issued under sub- section (1),- (a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax; (b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. (3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act. 39. Furnishing of returns.- "(1) Every registered person, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the Commissioner. (7) Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or subsection (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return: Provided that the Government may, on the recommendations of the Council, notify certain classes of registered persons who shall pay to the Government the tax due or part thereof as per the return on or before the last date on which he is required to furnish such return, subject to such conditions and safeguards as may be specified therein. Provided that every registered person furnishing return under the proviso to sub-section (1) shall pay to the Government, the tax due taking into account inward and outward supplies of goods or services or both, input tax credit availed, tax payable and such other particulars during a month, in such form and manner, and within such time, as may be prescribed. (8) Every registered person who is required to furnish a return under sub-section (1) or sub-section (2) shall furnish a return for every tax period whether or no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nished for the financial year with the audited annual financial statement, and such other particulars as may be prescribed. Explanation. For the purposes of this section, it is hereby declared that the annual return for the period from the 1st July, 2017 to the 31st March, 2018 shall be furnished on or before the 31st January, 2020 and the annual return for the period from the 1st April, 2018 to the 31st March, 2019 shall be furnished on or before the 31st March, 2020. 45. Final return.- Every registered person who is required to furnish a return under sub-section(1) of section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as may be prescribed." 14. Clearly, the undischarged legal obligation under Section 46 of the Act, for which a compliance notice, could be issued, is one that may exist on a registered person other than a ISD. Necessarily, that liability may arise only with respect to filing of returns for the main/business activity, and no other. 15. Then, it is also a fact, upon such notice being ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... example, in a case where recipient a business has ten registrations inside a State, a further registration as ISD may be obtained by a registered person, to allow such a registered person to adjust ITC on services arising at one or any business or at place, against another. It is with respect to that optional and non-mandatoryfacilitation, that obligations exist on the ISD to file its due return disclosing utilization/adjustments of ITC. Violations or infringement of that obligation would invite levy of interest and penalties. However, no tax could be charged or deposited against the ISD registration for the main business activity against supply of goods or services or both. That liability is referable only to the registration granted qua the duly and separately registered main/business activity giving rise to issuance of Tax Invoices and therefore the ITC. 20. However, contrary to the law, such fact occurrence took place in the present case. The original registration was granted primarily with respect to ISD, yet the petitioner no.1 not only mentioned the same on its Tax Invoices but also charged and deposited tax against that registration. At both levels i.e. at the sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....its main/business activity. Yet, in absence of the ISD registration being active or valid for main/taxable business activity, petitioner no. 1 was not enabled to file his monthly returns on Form GST 3B. 24. The mistake with respect to grant of ISD registration, that forms the first error in the chain of errors noted above, may be described as mistake apparent on record. Under the erstwhile law where decisions to issue notice etc., were made only upon due application of mind, to the facts disclosed on paper upon due application of human intelligence, the procedure to offer correction was simple and direct. At present, under the Act, machine processes have been designed including auto-populated and auto-generated Forms, reports, etc., by the GSTN, ostensibly to eliminate avoidable human errors and to improve administrative efficiency. Under the present Act, by virtue of section 146, a digital common portal has been created by the GSTN to provide amongst others facilitation of registration; payment of tax; furnishing of returns; computation and settlement of integrated tax; issuance of electronic way bill etc. Then under the Rules framed under the Act, enabling provisions exi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itioner (Rule 83B), maintenance of electronic liability register (Rule 85), maintenance of electronic credit ledger (Rule 86), maintenance of electronic cash ledger (Rule 87), identification number for each transaction (Rule 88), manner of dealing with difference in liability reported in statement of outward supplies and that reported in return (Rule 88C), application for refund of tax, interest, penalty, fees or any other amount (Rule 89), acknowledgement (Rule 90), Refund of tax to certain persons (Rule 95), refund of integrated tax paid on goods or services exported out of India (Rule 96), export of goods or services under bond or letter of undertaking (Rule 96A), manual filing and processing (Rule 97A), provisional assessment (Rule 98), form and manner of application to the authority for advance ruling (Rule 104), form and manner of appeal to the appellate authority for advance ruling (Rule 106), manual filing and processing (Rule 107A), appeal to the appellate tribunal (Rule 110), tax or duty credit carried forward under any existing law or on goods held in stock on the appointed day (Rule 117), revision of declaration in form GST Tran-1 (Rule 120A), information to be furnishe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....66/- (CGST and SGST) in electronic cash ledger on 22.08.2017 and 25.09.2017 vide three challans. When appellant tried to ne Returns, he was unable to file and then it came to his notice that the registration was granted under Input Service Distributor (ISD) category. The appellant tried and communicated various times with the jurisdictional department and GSTN but the issue was not resolved. He again obtained a fresh registration No. 09AVKPS1660H3Z0 dated 23.10.2017 under proper category and started tax payment onward. For amount lying in Electronic Cash Ledger the appellant filed a refund claim of Rs. 1,44,97,066/- as per Section 54 of the CGST Act, 2017 on 12.12.2017 with the department on common portal with ARN No. AA091217028183C. The adjudicating authority rejected the claim on the ground that the appellant has neither deposited the tax to the Government exchequer during the period July 17 to August 17 nor filed the returns for the period. Being aggrieved the appellant filed the present appeal on the following grounds: (i) The appellant has honestly paid tax liability for the period within the prescribed due dates but he (appellant) was unable to file the returns beca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e department, I find that the appellant made all efforts to deposit the tax in proper head and file the returns. But he couldn't as it was not possible. It was a responsibility of the department to resolve the issue. The appellant should not be suffered for such default of the department. 7. I find that the adjudicating authority again erred in holding that the duty liability arisen during the period July 17 to August 2017 was not discharged by them. The refund claim was filed by GSTN No. 09AVKPS1666H2Z1 (under ISD category), against whom there is no tax liability. The new registrant (GSTN No. 09AVKPS1666H3Z0) under same PAN has separate identity. The tax liability of a tax payer cannot be recovered from another tax payer. Hence, the appellant's claim of refund under GSTN No. 09AVKPS1666H2Z1 appears to be legal and proper and to be allowed." 28. It is also a fact, the entire amount of tax deposited against the ISD/original registration lying in the Electronic Cash Ledger Rs. 1,44,97,066/- was directed to be refunded to the petitioner no.1. As a fact, it was refunded on 1.5.2019. Petitioner no.1 deposited the same on 6.5.2019 against his new registration. H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mongst others on the ground that on the date of amendment sought, the suit was time barred. The amendment was allowed by the trial court. However, the High Court reversed the order of the trial court on the hypertechnical view that Jai Jai Ram Manohar Lal was a "non existing person". Therefore, the amendment should not have been allowed. Reversing that decision, the Supreme Court observed as below: "Rules of procedure are intended to be a handmaid to the administration of justice. A party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The Court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder, he had caused injury to his opponent which may not be compensed for by an order of costs. However negligent or careless may have been the first omission, and however, late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side." From the early days, processual law has been recognized as handmade and not mistress in the administration of justice. In Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... We have also reached the conclusion that initially, the petitioner was not at fault inasmuch as a provisional registration arose in his favour, with respect to "Manpower Supply Services" - upon enforcement of the Act (under virtue of Section 139 of the Act). Further, petitioner no.1 is seen to have disclosed his business activity in the original registration application as "Manpower Supply Service", though he first disclosed his activity of ISD, by making a wrong click on the online form. 33. The error in disclosing the activity of the ISD is seen to have gone unnoticed on a mechanical and deficient machine processing made on the GSTN Portal inasmuch as, in absence of any pre-existing main/business registration, a ISD registration could never have arisen. Such mistake committed by petitioner no.1 was clearly bonafide and lacking of illintent inasmuch as it is not the case of the revenue that the said petitioner either had more than one business or place of business or that he had mis-utilized the original registration for any unmerited gain of ITC etc. 34. At the same time, as noted above, the revenue authorities not only permitted the petitioner to deposit tax against that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ffective from the date 1.7.2017, on a deemed basis. In absence of lack of bonafides and in face of the established machine error that we have noted, grant of that relief has become imperative for non-negotiable justice considerations. Unless that equitable relief is granted, the demand of substantive justice would stand defeated primarily to unintended human errors reflected in imperfect machine processes employed to implement procedural laws. That equitable relief is not found barred in law. Rather, it is well deserved by the petitioner no.1. It must be granted to ensure the justice delivery system does not loose its meaning and purpose to the heartless acts of a machine. 38. As to the actual substantive relief being claimed i.e. benefit of tax deposit, made against the original/ISD registration, in view of the fact that that tax deposit had arisen at the relevant time though under inadequate registration and in view of the further fact that the petitioner no.1 was refunded the amount on 1.5.2019 that he again deposited against his new registration on 6.5.2019, we find the petitioner no.1 is not to blame to that extent. However, that may not be enough to allow consequential ben....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct 31 of 2018, sec.11(a) [w.e.f. 1-2-2019, vide G.S.R. 62(E), dated 29th January, 2019]. ^2 Ins. By the Finance (No.2) Act, 2019, sec.94 [w.e.f. 1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] ^3 Ins. By Act 31 of 2018, sec. 13(a) [w.e.f. 1-2-2019, vide G.S.R. 62(E), dated 29th January 2019] ^4 Subs. by Act 31 of 2018, sec.13(b), for proviso [w.e.f. 1-2-2019, vide G.S.R. 62(E), dated 29th January, 2019]. The proviso, before substitution, stood as under: "Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed." ^5. Ins. By the Finance (No.2) Act, 2019, sec. 95 [w.e.f.1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] ^6 Ins. By the Finance (No.2) Act, 2019, sec. 95 [w.e.f.1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] ^7 Ins. By the Finance (No.2) Act, 2019, sec. 95 [w.e.f.1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] ^8 Ins. By the Finance (No.2) Act, 2019, sec. 95 [w.e.f.1-1-2020, vide G.S.R. 2(E), dated 1st January, 2020] ^9 First proviso omitted G.S.R.63(E), dated 29th January, 201....