TaxTMI 
TaxTMI 
2025 (9) TMI 1205
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....he Central Goods and Services Tax Act, 2017 as being issued Illegally and without jurisdiction; b) Issue a writ of declaration or any other writ, order or direction quashing Notification No. 2/2017 Central Tax dated 19.06.2017 read with Corrigendum dated 29.07.2019 vide Annexure-B being issued without jurisdiction by the Respondent No. 1 and for being ultra-vires sections 2(91), 3 and 5 of the CGST Act: c) Issue a writ of declaration or any other writ, order or direction quashing Notification No. 14/2017 Central Tax dated 01.07.2017 read with Corrigendum dated 29.07.2019 for being issued without jurisdiction by Respondent No. 1 (vide Annexure-C) and for being ultra-vires section 2(91) read with 3 and 5 of the CGST Act: d) Issue a writ of declaration or any other writ, order or direction quashing Notification No. 2/2022 Central Tax dated 11.03.2022 as being ultra vires section 2(91) read with 3 and 5 of the CGST Act issued by the Respondent No. 1 vide Annexure-B: e) Issue a writ of declaration or any other writ, order or direction quashing Circular No. 3/3/2017-GST dated 05.07.2017 (Vide Annexure-D) issued by the Respondent No. 4 for being issued ....
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....appeal, the AAAR proceeded to pass an order dated 13.11.2020 allowing the appeal filed by the respondents. 2.3 Aggrieved by the aforesaid order dated 13.11.2020 passed by the AAAR, petitioner has preferred W.P.No.3555/2021 before the Division Bench of this Court which passed an interim orders dated 23.03.2022 and 31.10.2023 directing the respondents not to take any precipitative action for recovery against the petitioner. Subsequently, the 2nd respondent issued the impugned show cause notice at Annexure-A 12.02.2024 demanding payment from the petitioner for the period July, 2017 to June, 2021 under Section 74 of the CGST Act on the ground of wilful suppression. Aggrieved by the impugned show cause notice and also challenging the other Notifications, Circulars etc., issued by respondents, petitioner is before this Court by way of the present petition. 3. The respondents have filed their statement of objections and have contested / opposed the petition by disputing and denying the various allegations and claim made by the petitioner, who has filed its rejoinder to the said statement of objections. 4. Heard learned Senior counsel for the petitioner and learned counsel for the....
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....SCC Online SC 200; (viii) Section 2(34), Section 5(1A), Section 6 of the Customs Act, 1962; (ix) Competent Authority v. Barangore Jute Factory and Ors., - (2005) 13 SCC 477; (x) Marathwada University v. Seshrao Balwant Rao Chavan - (1989) 3 SCC 132; (xi) Circular No. 3/3/2017-GST dated 05.07.2017; (xii) Section 11A of the Central Excise Act, 1944; (xiii) UOI v. Kunisetty Satyanarayana-(2006) 12 SCC 28; (xiv) Commissioner of Police, Bombay v. Gordhandas Bhanji - 1951 SCC 108; (xv) Anirudhsinhji Karansinhji Jadeja v. State of Gujarat - (1995) 5 SCC 302; (xvi) State of West Bengal v. Anindya Sundar Das and Ors., - 2022 SCC Online SC 1382; (xvii) State of Maharashtra and Ors. v. Mohammed Salim Khan and Ors., - (1991) 1 SCC 550; (xviii) Relevant portions of the Black's Law Dictionary, Tenth Edition; (xix) The Central Boards of Revenue Act, 1963; (xx) Raghunath International Ltd. vs. Union of India - 2012 (280) ELT 321 (All) (xxi) State of Bombay vs. Narottamdas Jethabhai - 1950 SCC 905; (xxii) R.C. Infra Digital Solutions vs.Union of India, - (2024) 14 C....
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....aresh Kumar Company Pvt. Ltd. - 2022 (67) G.S.T.L 324 (Cal); (xlix) Rays Power Infra Private Limited v. Superintendent of Central Tax -2024 (84) G.S.T.L 146 (Telangana); (l) HCL Infotech Ltd v. Commissioner, Commercial Tax & Anr., - Writ Tax No. 1396/2024 (Allahabad); (li) Commissioner, Central Excise and Customs & Anr., v. Reliance Industries Limited - 2023 SCC OnLine SC 767; (lii) M/s. Filterco and Another v. Commissioner of Sales Tax,Madhya Pradesh and Another - (1996) 2 SCC 103; (liii) Eastland Combines, Coimbatore v. Collector of Central Excise, Coimbatore - (2003) 3 SCC 410; (liv) Cosmic Dye Chemical v. Collector of Central Excise, Bombay - (1995) 6 SCC 117; (lv) Union of India and Anr. vs. Kunisetty Satyanarayana - (2006) 12 SCC 28; (lvi) Union of India and Ors. v. Coastal Container Transporters Association and Ors., - (2019) 20 SCC 446; (lvii) Union Public Service Commission v. Bibhu Prasad Sarangi and Ors., - (2021) 4 SCC 516; (lviii) Whirlpool Corporation v. Registrar of Trademarks, Mumbai and Ors., - (1998) 8 SCC 1; (lix) Oryx Fisheries Private Limited v. Union of India and....
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....uivalent to the tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under subsection (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent. of s....
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....person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122 and 125 are deemed to be concluded. Explanation 2- For the purposes of this Act, the expression "suppression" shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer. 9. A plain reading of Explanation 2 to Section 74 will indicate that the sine qua non for an allegation of 'wilful suppression' under Section 74 of the CGST Act, to be made out is the non-declaration of facts or information which an Assessee is required to declare in its return or any other document furnished under the Act etc., or a failure on the part of the Assessee to furnish information sought by a Proper Officer in writing. It is the specific contention of the petitioner that the impugned Show-cause Notice dated 12.02.2024 issued under Section 74 of the CGST Act, by 2nd respondent on the ground of 'wilful suppression' is ill....
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....her laid down descriptive grounds to buttress its contention that the tests in question did not qualify as OIDAR services; so also, other supporting evidence, in the form of a video explaining the mode of the tests as also a sample GST Payment Receipt were appended as part of the Application submitted for consideration of the AAR; thus, from the very initial stage of the litigation, the Revenue / Department who participated in the proceedings before the AAR in the capacity of an opposite/contesting party had possessed the requisite knowledge in relation to the supply of services of Type-II and Type-III Tests by the petitioner. It is a matter of record that the proceedings before the AAR culminated in a ruling dated 22.05.2020, which opined that while Type-II Tests were classifiable as OIDAR services, Type-III tests did not qualify as OIDAR services under GST Laws; significantly, the Ruling recorded the participation of the OIDAR Division Bengaluru West Commissionerate, in the proceedings before the AAR. 13. It is an undisputed fact that in relation to the findings of the AAR that Type-III Tests were not classifiable as OIDAR services, an appeal dated 27.08.2020 against such Ruli....
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....y as OIDAR services, 4 13.11.2020 Ruling issued by the AAAR Type-III Tests found to be classifiable as OIDAR services. 16. The material on record also indicates that in the absence of anything to establish that the petitioner had failed to furnish information sought by the Revenue Authorities, the very invocation of Section 74 of the CGST Act on grounds of wilful suppression is erroneous and illegal; on the other hand, petitioner had furnished all relevant information/details as sought by the 2^nd respondent in relation to the supply of Type-I, Type-II and Type-III tests to non-taxable recipients In India and the GST paid thereon as and when such information was sought by such Revenue authorities during 2021-22 itself as can be seen from the communications, correspondence etc., detailed in paragraph-82 of the memorandum of writ petition, thereby establishing that the petitioner cannot be said to be guilty of having deliberately, consciously or wilfully suppressed any information so as to evade that payment of tax as wrongly alleged in the impugned show cause notice. 17. As stated supra, it is the specific contention of the petitioner that the impugned SCN dated 12....
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....that a court or a tribunal cannot wrongly assume existence of jurisdictional fact and proceed to decide a matter. The underlying principle is that by erroneously assuming existence of a jurisdictional fact, a subordinate court or an inferior tribunal cannot confer upon itself jurisdiction which it otherwise does not posses. 28. In Halsbury's Laws of England (4th Edn.), Vol. 1, Para 55, p. 61; Reissue, Vol. 1(1), Para 68, pp. 114-15, it has been stated: "Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not conclusive." The existence of a jurisdictional fact is thus a sine qua non or condition precedent to the assumption of jurisdiction by a court or tribunal. Jurisdictional fact and adjudicatory fact 29. But there is distinction between "jurisdictional....
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....ld to be a "jurisdictional fact" (Eversole v. Smith [159 SW 2nd 35]). 33. In Chaube Jagdish Prasad v. Ganga Prasad Chaturvedi [AIR 1959 SC 492 : 1959 Supp (1) SCR 733], the question was whether the landlord was entitled to enhancement of rent. Under the Act, he was not entitled to such rent unless a "new construction" had been made after 30-6-1946. It was held by this Court that the question whether construction was new or not was a "jurisdictional fact" and if the court wrongly decided the said fact and thereby conferred jurisdiction not vested in it, the High Court could interfere with the order. The Court stated (at AIR p. 498, para 21) that "once it had the power it could determine whether the question of the date of construction was rightly or wrongly decided". (See also Arun Kumar v. Union of India [(2007) 1 SCC 732] .) 34. But, in Roshan Lal Mehra v. Ishwar Dass [AIR 1962 SC 646 : (1962) 2 SCR 947] this Court held that the Rent Controller had jurisdiction to fix standard rent for new construction made after 24-3-1947. The question was as to when the construction was made. The Rent Controller recorded a finding of fact that the construction was put up after ....
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....ssistant Commissioner held that the appeal was incompetent. The order of the Appellate Assistant Commissioner was confirmed by the Tribunal. Thereafter, the appellant moved the High Court under Article 226 of the Constitution. That application came up before a Single Judge. The Single Judge after going into the matter in dated came to the conclusion that Messrs Nathirmal and Sons is not a non-resident firm and that being so the appellant was not required to act under Section 18(3-B). He accordingly set aside the order impugned. The revenue went up in appeal against the order of the learned Single Judge to the Appellate Bench. That Bench allowed the appeal with the observations, "in the present case the question before the Income Tax Officer, Rampur, was whether the firm Nathirmal and Sons was non-resident or not. There was material before him on this question. He had jurisdiction to decide the question either way. It cannot be said that the officer assumed jurisdiction by a wrong decision on this question of residence". The Appellate Bench appears to have been under the impression that the Income Tax Officer was the sole Judge of the fact whether the firm in question was resident o....
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....due application of mind and it would, therefore, be incredible to allege as is sought to be done that the Department was not in a position to get first-hand knowledge of the various processes adopted." The appellant had further contended: "We deny each and every allegation contained in the show-cause notice. We submit that from the legal point of view the classification cannot be changed as proposed in the show-cause notice, nor does the factual position warrant modification of the classification. When Heading/Sub-Heading 7211.31 is specific (cold-rolled strips), the goods cannot be consigned to Sub-Heading 7308.90 which is not specific and is a residuary item. As long as the subject goods were not classifiable under TI 68 when it existed, they cannot attract the corresponding Sub-Heading 7308.90. We also submit that Rule 9(2) cited in the show-cause notice is not applicable since there was no clandestine clearance." 66. It is, therefore, evident that the contention of the appellant was that Rule 9(2) cited in the show-cause notice was not applicable. But, unfortunately, despite the same it had not been adverted to by the Tribunal. We must notice that the....
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....n could not have been invoked and in that view of the matter no show-cause notice in terms of Rule 10 could have been issued. 21. In the instant case, a perusal of the material on record will indicate that the 2nd respondent has decided the jurisdictional facts in relation to the alleged wilful suppression by the petitioner erroneously/incorrectly by attempting to vest itself with the jurisdiction under Section 74 of the CGST Act and saddle a GST liability upon the petitioner for the period under dispute, which is impermissible in law and consequently, the very issuance of the impugned SCN dated 12.02.2024 under Section 74 of the CGST Act is illegal and violative of Article 265 of the Constitution inasmuch as the impugned SCN seeks to realize monies from the petitioner under the guise of tax without the authority of the law and the impugned SCN deserves to be quashed. 22. The impugned SCN also fails to consider and appreciate that the issue of classification of Type-III Tests had not attained finality on account of W.P.No.3555/2021 preferred by the petitioner against the order of the AAAR pending adjudication before the Division Bench of this Court, in which there is an inter....
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....ot wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11-A. Misstatement or suppression of fact must be wilful. 25. In the case of Eastland Combines vs. CCE - (2003) 3 SCC 410, the Apex Court held that wilful suppression postulates a positive act and that a mere failure to pay duty which is not due to any suppression of facts is not sufficient to attract the extended period of limitation and that the mere default or failure of the assessee to pay duty, without the existence of any intent to wilfully suppress information/details in itself would attract the extended period of limitation as hereunder: 31. It is settled law that for invoking the extended period of limitation duty should not have been paid, short-levied or short-paid or erroneously refunded because of either fraud, collusion, wilful misstatement, suppression of facts or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful misstatement or suppression of fact or contravention of any provision is not s....
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....n of facts" can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty. When facts were known to both the parties, the omission by one to do what he might have done and not that he must have done, would not render it suppression. It is settled law that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of the assessee to find wilful suppression. Therefore, in view of our findings made hereinabove that there was no deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty, it was not open to the Central Excise Officer to proceed to recover duties in the manner indicated in the proviso to Section 11-A of the Act. We are, therefore, of the firm opinion that where facts were known to both the parties, as in the instant case, it was not open to CEGAT to come to a conclusion that the appellant was guilty of "suppression of facts". In Densons Pultretaknik v. CCE [(2003) 11 SCC 390] this Court held that mere classification under a different sub-heading by the manufacturer cannot be said to be wilful misstatement or "suppre....
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.... In Pushpam Pharmaceuticals Co. v. CCE [Pushpam Pharmaceuticals Co. v. CCE, 1995 Supp (3) SCC 462], this Court, while dealing with a similar fact circumstance wherein the extended period of limitation under the abovementioned proviso had been invoked, held that since the expression "suppression of facts" is used in the company of terms such as fraud, collusion and wilful misstatement, it cannot therefore refer to an act of mere omission, and must be interpreted as referring to a deliberate act of non-disclosure aimed at evading duty, that is to say, an element of intentional action must be present. 15. Similarly, in CCE v. Chemphar Drugs & Liniments [CCE v. Chemphar Drugs & Liniments, (1989) 2 SCC 127 : 1989 SCC (Tax) 245], this Court, while dealing with a similar situation of invocation of extended period of limitation under Section 11-A of the Act, this Court held as under : (SCC p. 131, para 9) "9. ... In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section (1) of Section 11-A of the Act, it has to be established that the duty of excise has not been levied or paid or shor....
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.... 1771 : (2001) 134 ELT 230] was no longer relevant for the period under consideration in these appeals. We have no hesitation in rejecting this contention for two independent reasons. Firstly, this contention too has not been urged in the civil appeal filed by the Revenue and has been urged only during the course of the hearing before this Court. On this count alone the contention deserves to be ignored. Secondly, we also find this contention to be diametrically opposite to what the Revenue itself has been contending on merits right from the show-cause notice till the appeal filed before this Court. 24. On merits, the Revenue's case throughout had been that the issue of valuation is covered against the assessee by the judgment of this Court in IFGL Refractories [CCE v. IFGL Refractories Ltd., (2005) 6 SCC 713]. Even in the order of CESTAT under challenge the Tribunal has proceeded on the basis that the principle of valuation laid down by this Court in IFGL Refractories [CCE v. IFGL Refractories Ltd., (2005) 6 SCC 713] holds good and remains valid even under the amended valuation provisions for the period post July 2000. We therefore find it strange that for the purposes of....
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....have been placed before the Revenue Authorities, the assessee cannot be attributed with any suppression or misstatement of facts with intent to evade duty and hence, cannot be saddled with demand by invoking the extended period of limitation and impugned SCN deserves to be quashed. 31. The respondents placed reliance upon the decision of the Gujarat High Court in Commissioner of Central Excise vs. Neminath Fabrics Pvt. Ltd., -2010 (256) ELT 369 (Guj.) to justify the invocation of the extended period of limitation under Section 74 of the CGST Act by submitting that the concept of knowledge cannot be an appropriate defence; in this context, it is relevant to state that the said judgment is circumscribed and applicable only to cases wherein 'suppression' is established or admitted as can be seen from the relevant portion of the judgment as hereunder: "18. The Proviso comes into play only when suppression etc. is established or stands admitted. It would differ from a case where fraud, etc. are merely alleged and are disputed by an assessee. Hence, by no stretch of imagination the concept of knowledge can be read into the provisions because that would tantamount to rendering....
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....ype III tests were held to be outside the purview of OIDAR by the AAR, which was reversed in appeal by the AAR and therefore, the issue itself is not without doubt and when conflicting views are available with the revenue itself entertaining two views, it is impermissible to allege that the petitioner had suppressed any information with an intention to evade payment of taxes; the petitioner having approached the revenue for an advance ruling with all data available cannot be foisted with a demand alleging suppression of facts. 34. The aforesaid discussion clearly establishes that the impugned Show Cause Notice dated 12.02.2024 issued under Section 74 of the CGST Act, by the 2nd respondent is illegal and arbitrary being manifestly violative of the law for want of satisfaction of the jurisdictional facts contemplated in Section 74 of the CGST Act and that the impugned show cause notice is wholly without jurisdiction or authority of law as the foundational jurisdictional facts to trigger / invoke Section 74 of the CGST Act i.e., existence of wilful suppression to evade / avoid payment of GST in relation to Type - III tests has not been satisfied by the respondents and the impugned ....