CBIC notifies the rule which restricts credit for discharging tax liability or claiming refund under GST

Central Board of Indirect Taxes and Customs (CBIC) has issued notifications giving effect to the recommendations made by the Goods and Services Tax (GST) Council in the 38th meeting (refer to EY Tax Alert dated 19 December 2019).

The key changes are:

• With effect from 1 January 2020, the eligibility of input tax credit (ITC) in respect of invoices or debit notes not reflecting in Form GSTR-2A shall be restricted to 10% of the matched credit.

• With effect from 11 January 2020, e-way bill shall be blocked if the taxpayer does not file Form GSTR-1 for two tax periods. 

• Rule 86A has been inserted in Central Goods and Services Tax Rules, 2017, empowering the Commissioner to disallow taxpayer to debit its electronic credit ledger for discharging tax liability or for claiming refund in certain cases.

In order to promote filing of Form GSTR-1, the government has kept the window open until 10 January 2020 by waiving late fee and imposing e-way bill restriction from such date. Taxpayers should make use of this opportunity for filing pending returns and ensure compliance to mitigate unwarranted litigations.

Vide the new rule on credit restriction, the government aims to check the menace of fake invoices. The businesses may need to exercise diligence by assessing the compliance status of their vendors and rationalizing the internal processes. 

CBIC issues standard operating procedure in case of non-filing of GST returns

This Tax Alert summarizes a recent circular[1] issued by Central Board of Indirect Taxes and Customs (CBIC) which prescribes the use of a standard operating procedure  in case of non-filing of GST returns.  

The key steps are as follows:

• After five days from the due date of filing Form GSTR-3B, a notice shall be issued in Form GSTR-3A to the defaulter, requiring him to furnish the return within 15 days.

• If the return is not filed within 15 days, the proper officer may proceed for best judgement assessment.

• If a valid return is furnished within 30 days of the assessment order, the said order shall be deemed to have been withdrawn.

• If the return is not furnished within 30 days from the assessment order, the proper officer may initiate the recovery proceedings.

• In deserving cases, the Commissioner may resort to provisional attachment of property (including bank account) of the defaulter.

• Proper officer would initiate action for cancellation of registration in cases where the returns have not been furnished for continuous period of six months.

To avoid unwarranted disputes, the taxpayers should ensure filing of GST returns well within the due date.

While passing best judgement assessment order for non-filers of GSTR-3B, the tax officials should proceed rationally. The courts have time and again held that best judgement assessment should not be exercised arbitrarily. In one of the recent cases, GST Appellate Authority had set aside the best judgement assessment observing that the estimations had no basis.

While the intention of the government is to boost the compliance, it may consider providing relief to genuine businesses facing working capital issues.

Demand without challenging assessment.

The ruling of the Supreme Court in ITC v. CCE, Kolkata [2019 (368) ELT 216] has been quite unsettling for the assessees, as their refund claims are being rejected on account of non-challenge to the assessment. However, this ruling is likely to pose an issue for the department as well.

Supreme Court upholds validity of belated revised returns filed by amalgamated companies

This Tax Alert summarizes a decision of the Supreme Court (SC), dated 18 December 2019, in the case of Dalmia Power Ltd. and Dalmia Cement (Bharat) Ltd. (“amalgamated companies” or “Taxpayers”), on the issue of the validity of revised return of income (ROI) filed by the amalgamated companies, beyond the statutorily prescribed time limit, pursuant to sanction of scheme of amalgamation after such date.

CBDT notifies new Form 10DA for claiming new employment incentive deduction under section 80JJAA

This Tax Alert explains the significant changes made in Form 10DA of Income Tax Rules, 1962 by Notification issued by the Central Board of Direct Taxes.

Form 10DA is a report to be issued by a practising Chartered Accountant certifying the amount of deduction to be claimed by a taxpayer under section (s.) 80JJAA of the Indian tax laws (ITL). S.80JJAA is an incentive deduction provision for encouraging recruitment of new employees. It grants deduction of 30% of additional employee cost incurred by the taxpayer for three tax years starting from the tax year in which such employment is provided.

The changes in Form 10DA are largely consequential to the amendment made by Finance Act, 2018 (FA 2018) in respect of new employees, who do not complete 240 days in first year but complete 240 days in second year, to treat them as new employees in second year. The changes also clarify the legal position that in any tax year, the taxpayer is entitled to deduction in respect of new employees employed over three years viz. current tax year and two preceding years.

Imp case laws

S. 244A: Interest on refund is compensation for unauthorized retention of money by the Department. When the collection is illegal & amount is refunded, it should carry interest in the matter of course. There is no reason to deny payment of interest to the deductor who had deducted tax at source and deposited the same with the Treasury. The Department is directed to pay interest as prescribed u/s 244-A at the earliest (UOI vs. Tata Chemicals 363 ITR 658 (SC) followed)

ITC allowed on lease rental paid for residential accommodation - CESTAT

CESTAT Blore in the case of Bhuwalka Pipes while allowing the Cenvat credit held that “Perusal of the rental agreement shows that the premises can be used for residential, guesthouse and back office purposes and the appellant have used the same for business purpose only. Thus, the inclusive clause in the definition of input service covers the impugned input service - decided in favor of appellant

No reversal of common ITC on Income from Securities?

The authorities seems to have asked the taxpayers reporting income from sales of securities in their Financials, to reverse part of the common ITC u/s 17(3) considering the same as an exempt supply The definition of exempt supply uGST means supply of any goods/services which attracts nil rate of tax/wholly exempt from tax and includes non-taxable supply (NTS) NTS is further defined as a supply of goods or services or both which is not leviable to tax uGST Hence, an income to fall under the exempt/NT supply should either be a supply of goods or services "goods” uGST means every kind of movable property other than money and securities... “services” uGST means anything other than goods, money and securities 'Securities' as can be seen above, gets excluded both from the definition of 'goods' & 'services' Merely because there is a mention in Rule 45 that the value of an exempt supply in case of 'securities' shall be taken as 1% of its sale value, will there be an obligation to reverse ITC?? Reference may also be drawn from Hon'ble CESTAT ruling agreeing to the assessee's contention that the income from investments in Mutual Funds may not fall under the ambit of 6(3) reversals as its not the business income of the assessee

Understanding section 41(1) of the Income Tax Act.

The caption heading of section 41(1) is ‘Profits Chargeable to tax’. The section falls under Chapter IV –Computation of Income from Business or Profession. At the outset, reference is invited towards the provision of section 41(1) of the Income Tax Act, 1961. The relevant extracts of the same are reproduced here under:  

The Personal Data Protection Bill, 2019

The Personal Data Protection Bill, 2019 aims to protect the privacy of individuals with respect to their personal data and governs the relationship between individuals and entities processing their personal data. It simultaneously strives to create a robust digital economy by ensuring innovation through digital governance.

Electronic Invoices Mandatory from 1 April 2020

The gist of the notifications is as under:

1.     A new sub-rule has been inserted to mandate issuance of electronic invoices by registered persons having an aggregate annual turnover in excess of INR100 crores. The requirement is for supplies made to a registered person only

2.     The aforementioned electronic invoice should mandatorily contain the following:

Ø  Particulars as contained in Form GST INV-01 after obtaining Invoice Reference Number (IRN)

Ø  The tax invoice shall also contain Quick Response (QR) code

3.     Further, where registered persons have a turnover in excess of INR500 crore and   make a supply to an unregistered person (B2C supplies), invoices shall contain the QR code

4.     The changes shall come into effect from 1 April 2020

Notification nos. 68/2019-Central Tax, 70/2019-Central Tax, 71/2019-Central tax and 72/2019-Central Tax dated 13 December 2019]

It may be noted that for the purpose of e-invoice, ten Invoice Registration Portal (IRP) have been notified. The same shall be effective from 1 January 2020.

[Notification no 69/2019-Central Tax dated 13 December 2019]

Our comments

During the last few months, there were several news articles on this subject. Vide the above notifications, the Government has shown its intent to implement e-invoicing from the coming financial year. Also, ten IRPs have been notified from 1 Jan 2020 itself, which means the industry can initiate e-invoicing from 1 Jan 2020.

The industry should now gear up and use the voluntary three-month e-invoice generation

period effective 1 January 2020 and identify challenges/suggestions which can be represented before the Government.

E-Assessment may increase the possibility of litigation.

The tax department is moving towards the digital future. This seemingly right as technology is an enabler if used in the right manner. However, in our context there is a threat of the taxpayer having to face multiple bureaucratic hurdles. The move toward a digital system will result in the need navigate three levels of authorities in the form of Central Processing Center (CPC), National E–assessment and local tax offices. It is highly likely that the tax payer will be burdened in the future with this quagmire of multiple agency coordination and face a harrowing situation.

Tax officer are seemingly under the pressure to meet tax collection targets despite this being a wrong driver to ensure compliance. In the existing assessment process, tax payers are jeopardized despite cooperating and attending personal hearing, providing all the required information and documentation. The new digital assessment is only going to worsen this situation.

To support my view, I am furnishing a few facts:

The service of notice in E-mail mode may be made after office hours or even just before the weekend.  This pressurizes the tax payer as in the normal course they may see the message on the subsequent working day or Monday. It is highly likely that mass emails may be consigned to the junk folder making the taxpayer unaware of the notice.  Further, even if the tax department posts the notice in the e–portal of the taxpayer it is deemed to be a valid mode of communication. As per this new law, taxpayer is expected to check their tax portal daily and check if there are any notices from the tax department.   

 

The burden of proof of any claim has always rested solely on the taxpayer. Under these changes there are no clear guidelines regarding the submission of such information to support their stand.

Under e-assessment the reply of notice should be provided within 15 to30 day of receipt of notice. In case the taxpayer is unable to do that, the department removes the option of reply from the portal resulting in the taxpayer being unable to submit their reply after the due date as prescribed in the notice.  Hence, in the new digital age, there is no scope of any adjournment open to the taxpayer.  Thus, the fundamental rights of taxpayer and natural justice are violated as he is not providing with opportunity to respond.

In today’s digital age, the tax department is the owner of a huge amount of information, which is being used prejudice the interest of the taxpayer. The hapless taxpayer is unaware of the sources of information used against him.

There is also a violation of law by these digital agencies.  The purpose of the summary assessment as per law is to verify the numeric accuracy of the return of Income filed and to report the discrepancy if any.  However, the intimation order passed by CPC nowadays are beyond this, which is a clear violation of the law.

The scheme of E-assessment is a back and forth process and not seamless as the taxpayer are used to in the face to face assessment process. 

In case taxpayer is not able to understand the question asked under the E-assessment process, then there is no scope to obtain any clarification.  Further, the taxpayer is expected to submit the reply in such a way that the tax department can understand the same without any assistance. 

At present, there is no cordial working relation between the above-mentioned branches of the tax department. They often just pass the blame to each other in case the taxpayer raises any concern or grievance.

These few instances explain how tax-payer is set to face more harassment under the e-assessment process. Quite naturally, this will increase litigation.  The government should work to create friendly policies and make taxpayer feel that he is a partner in the nations progress. The tax payer must not be subject to further harassment by the introduction of ill-conceived and illogical policies. 

Deputation of employees abroad - Practical Issues and Experiences

Synopsis

·         Interpretation of DTAAs

·         Concept of a PE and tax incidence thereon

·         PE situation arising out of deputation of employees

·         Installation PE

·         Service PE

·         Dependent agent

·         Conclusion

Interpretation of DTAAs:

Double taxation avoidance agreements (“DTAAs”) are designed to promote mutual trade and investment between the countries that have entered into such agreements. They aim at ensuring that the same income is not taxed in both countries, in the hands of the same entity. The DTAA provides that a particular source of income can be taxed by Country A or by Country B, where Country A and B have entered into the DTAA. Or the DTAA can provide for sharing of the income for the purpose of tax levy between the two countries. India has entered into DTAAs with most of her trading partners. But for a proper interpretation of DTAAs it is also essential to understand the very concept of the DTAA and its applicability versus the domestic laws in each country.

Tax Due Dates - December 2019

S No	Due Date	Related to	Compliance to be made
1	11.12.2019	GSTR – 1	Filing of GSTR – 1 for the month of November 2019
2	20.12.2019	GST	Payment of GST for the month of November, 2019 Filing of GSTR 3B for the month of November, 2019
5	07.12.2019	TDS/TCS (Income Tax)	· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of November 2019. · Deposit TDS from Salaries deducted during the month of November 2019 • Deposit TCS for collections made under section 206C including sale of scrap during the month of November 2019, if any • Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of November 2019, if any
6	15.12.2019	Income tax	Payment of Advance tax for the Corporate and Non Corporate assesses –Amount not less than 75% and 60% of advance tax respectively.
7	31.12.2019	GST	Filing of Annual GST Return for the FY 2018-19

Restriction on Input Tax credit for Mismatch in GSTR 2A - An Analysis.

Capping of ITC to 20%: Analysis of CBIC Circular No.

123/42/2019– GST dated 11.11.2019

Introduction

The Central Government has inserted a new sub-rule (4) to Rule 36 of CGST Rules, 2017 vide Notification No. 49/2019 – Central Tax dated 09.10.2019. As per new rule 36 (4), the input tax credit (ITC) in respect of invoices and credit note not uploaded by the supplier in their respective GSTR-2A shall be capped to 20% of the eligible input tax credit. Effectively, the registered person can claim entire ITC of amount reflected in his GSTR-2A and up to 20% with regard to ITC not reflected in GSTR-2A.

NO AVAILABILITY OF CGST OF OTHER STATE

Whether the Input Tax Credit of Central Tax Paid in Haryana be Available to the Applicant who is Registered in Rajasthan State?

To this end, we need to examine the ITC provisions of the CGST Act, Relevant Section is reproduced here:

Tax Case laws on Burden of Proof

Seetharamamma v/s CIT 57 ITR 532

Where however a receipt is of the nature of income, the burden of proving that it is not taxable because it falls within an exemption provided by the Act lies upon the assessee.

Advantage of Netherland.

The Netherlands is already quite popular in terms of direct investment into India - ranking in 6th place. However, the tax treaty developments give the Netherlands a unique position and unprecedented competitive advantage when it comes to investing in Indian companies: As a result of the amendment of those treaties, the Netherlands is now the only major investor that: 

GST on Restaurant.

Issue: If we ask a general question, “Whether the GST rates are compulsory?” the categorical answer would be “Yes”. A supplier does not have any option as regards the rate at which he can discharge his tax liability on his supplies. Supplier must pay GST only at the rate applicable to his supplies. He has absolutely NO OPTION at all.

How to Read DTAA

What is a Treaty?

Vienna Convention on law of treaties is known as the Bible of Tax Treaties. “Treaty” has been defined by Article 2 of Vienna Convention to mean an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation. Tax Treaty is also known as Double Taxation Avoidance Agreement (DTAA), or Agreement for Avoidance of Double Taxation (AADT) or as Double Tax Conventions (DTCs). These terms can be used interchangeably.

Delhi Tribunal admits taxpayer’s additional ground on applying treaty rate to dividend distribution tax

Background

Indian Companies are required to pay Dividend Distribution Tax (DDT), currently at an effective rate of 21.71%, under section 115-O of the Income-tax Act, 1961 (the
IT Act) in respect of dividend declared, distributed or paid by them. Under most of the Tax Treaties, taxation of dividends [Article 10(2) of OECD model treaty] is
restricted to 5%/10%/15% of the gross amount of dividend. In light of this, the Indian Companies are exploring arguments to cap the rate of DDT, in respect of
dividends paid to their overseas investor(s), at the Tax Treaty rate (i.e. 5%/10%/15% as the case may be). In this regard, recently, Delhi Tribunal had an occasion to
consider whether an additional ground raised for applying treaty rate to dividend distribution tax rate should be admitted or not. We, at BDO, have summarized
this ruling and provided our comments on the impact of this decision.

Fact of the case

Taxpayer, an Indian automobile company, had distributed dividend to its investors (including non-resident investors) and paid DDT at the rate prescribed under
section 115-O of the IT Act. Certain adjustments were made by the Tax Officer to the reported income of the taxpayer during the tax audit which were contested
in appeal by the taxpayer. The matter reached to Delhi Tribunal. While the hearings and arguments of the taxpayer as well as Revenue Authorities were
completed, the case was marked as partly heard. Subsequently, the appeal was released from ‘part-heard’ stage and it was slated for fresh hearing. Before the
fresh date of the hearing, the taxpayer filed an application before the Delhi Tribunal to admit an additional ground of appeal. By this additional ground of appeal,
the taxpayer pleaded that the lower rate prescribed in the Article 10 of the Tax Treaty for taxation of dividend should be applied to dividend distribution by the
Indian company instead of rate of DDT prescribed under Section 115-O of the Act . For the purpose of raising the additional ground of appeal, the taxpayer
contended that the additional ground of appeal is a legal issue. The Revenue raised following objections with respect to taxpayer’s request for raising additional
ground of appeal:
On admissibility of additional ground, the Revenue Authorities contended that the hearings and arguments were complete and therefore additional ground
of appeal cannot be raised before the Delhi Tribunal.
With respect to substituting the Tax Treaty rate for DDT, the Revenue Authorities contended that the additional ground does not relate to assessing the tax
liability of the taxpayer nor facts relating to the issue were part of the record of the tax audit proceedings.

Tribunal ruling

The Delhi Tribunal stated that a legal plea can be raised at any point of time. It also observed that since the matter was subsequently released from ‘part
heard’, it meant that the appeal was never adjudicated by the Tribunal. It further observed that mere procedural lapse, or omission on the part of the
taxpayer cannot lead to denial of substantive benefit / eligible claim in the hands of the taxpayer.
Relying on Apex Court’s Ruling in the case of Tata Tea Co. Ltd , the Delhi tribunal observed that the additional tax levied under section 115-O of the IT Act
could be treated as is tax on income and is a part of tax as defined under section 2(43) of the IT Act.
It also observed that the details regarding admission of DDT have to be provided in the income tax return form and also disclosed in the Tax Audit Report
in Form 3CD. The income tax assessment order read with the computation form quantifies the DDT liability and the IT Act does not provide for separate
adjudication / passing of separate order with regard to adjudication of liability of DDT.
The Delhi tribunal placing reliance on the ratio laid down by the Apex Court Ruling in the case of NTPC stated that since liability of tax under section 115-
O of the IT Act is part of tax liability of taxpayer, the additional ground raised by taxpayer should be admitted for adjudication.
Further, while admitting the admission of additional ground of appeal, it made a noting that all the apprehensions of the Revenue Authorities on the
additional ground will be heard on merits.

TBM  Comments

This is a welcome ruling as it makes an important observation that the additional ground of appeal can be raised at any point of time during the pendency of
appeal as long as the issue raised involves a question of law arising from the facts available on record. Furthermore, while admitting the additional ground of
appeal, the Delhi Tribunal has made preliminary observation that the additional tax levied under section 115-O of the IT Act is a tax on income as held by the
Hon'ble Supreme Court in the case of Union of India vs. Tata Tea Co Ltd. 85. This will give a boost to the taxpayer’s contention that the Tax Treaty rate should be
considered for the purpose of DDT rate. This Ruling will also be helpful for taxpayers whose matter is pending before the higher authorities and they had not
taken an argument to cap the DDT rate at the lower rate prescribed under the tax treaty, before the lower forum.

GST Annual return

 GSTR-9 : Annual return for the regular tax payer
 GSTR-9A: If you have opted for the GST composition scheme, you become
liable for filing the annual return form GSTR-9A, instead of GSTR-9.
 GSTR-9B: Similarly, if you are an e-commerce operator who had filed GSTR-
8during the FY, you need to file GSTR-9B as your annual return.
 GSTR-9C: If your annual turnover exceeds Rs 2 crores, you should file GSTR-
9C along with your annual return. In this case, you also need to get your
accounts audited.

Deemed Income on RIght & Bonus shares.

Allotment of shares to existing shareholder at less than market value not taxable under section 56(2)(vii) where allotment not disproportionately higher than existing shareholding proportion, and part of genuine business transaction

---

·         Following the ruling in Sudhir Menon HUF, allotment of shares to the taxpayer (an existing shareholder of a company) at less than FMV should not be taxable under section 56(2)(vii)(c) where the allotment is not disproportionately higher than proportion of shareholding offered to the taxpayer.  

The Union Cabinet approves introduction of Amendment Bill to replace Ordinance

As per a Press release dated 20 November 2019, the Union Cabinet has approved the introduction of the Taxation Laws (Amendment) Bill, 2019 (Amendment Bill) in order to replace the Taxation Laws (Amendment) Ordinance, 2019 (2019 Ordinance) earlier promulgated on 20 September 2019⁽¹⁾.  

FAQ on Blocking/Unblocking of E-way Bills Generation

1. What is Blocking and Unblocking of E-waybill generation?
Ans:
Blocking of e-waybill generation means not allowing the taxpayer to generate e-waybills if he /she has not filed GST Return for latest two successive months or quarters. The blocked GSTIN cannot be used to generate the e-way bills either as Consignor or Consignee. Unblocking means allowing the generation of e-way bills for the GSTIN (if blocked) after the filing of the Return.
2. How does blocking take place in the e-waybill system?

Special Issue of Global Trade and Customs Journal Launched

A special issue of the Global Trade and Customs Journal was launched at a function held in the India Islamic
Cultural Centre, New Delhi on 15 November, 2019.The special issue was edited by Dr. James J. Nedumpara,
Head and Professor of the Centre for Trade and Investment Law, Indian Institute of Foreign Trade and
published by Wolters Kluwer, Netherlands. The Journal launch was followed by panel discussions on the
theme “India in the International Economic Order: Issues and Perspectives”.
Additional Secretary, Sudhanshu Pandey, Department of Commerce in his inaugural address said thattrade
agreements are important as investors tend to look not just at the foreign markets, but how investments could
be harnessed to achieve greater access and integration in goods and services. He further stated that trade and
investment policies need to be examined holistically and an integrated manner rather than within interministerial
silos.
The Special Issue of Global Trade and Customs Journal has compiled articles pertaining to India and its
involvement in the international trading system. The Journal has focused on topical issues such as India’s
engagement with regional trade agreements, India’s position on electronic commerce and the need for
flexibilities for developing countries such as the Generalized System of Preferences (GSP) and the availability
of import restrictive measures in agriculture, especially when there is a domestic glut.
The panel discussions were chaired by Dr. Ram Upendra Das, Professor and Head, Centre for Regional
Trade.Presentations were made by Ambassador V S Seshadri, India’s former Ambassador to Myanmar, Dr.
Veena Jha, former India Co-ordinator of UNCTAD and Partner,Ikdhwaj Advisors, Prof. Abhijit Das,
Professor and Head, Centre for WTO Studies, Ms. R V Anuradha, Partner, Clarus Law, Mr. Parthasarathy
Jha,Economic Laws Practice, Dr.PrabhashRanjan, South Asian University, and Ms. Rohini Sisodia, Of
Counsel. Theparticipants noted that the decision of a country to adopt a defensive or offensive trade policy
may be done only after analysing the country’s trade and export promotion profile and domestic sensibilities.

GST Master Refund Circular issued

• Fully electronic refund process through FORM GST RFD-01 and single disbursement- super ceding earlier refund circulars
• Filing of refund applications in FORM GST RFD-01   
• Deficiency Memos     
• Provisional Refund     
• Scrutiny of Application           
• Re-crediting of electronic credit ledger on account of rejection of refund claim    
• Application for refund of integrated tax paid on export of services and supplies made to a Special Economic Zone developer or a Special Economic Zone unit
• Disbursal of refunds   
• Guidelines for refunds of unutilized Input Tax Credit           
• Guidelines for refund of tax paid on deemed exports          
• Guidelines for claims of refund of Compensation Cess        
• Clarifications on issues related to making zero-rated supplies         
• Refund of transitional credit 
• Restrictions imposed by sub-rule (10) of rule 96 of the CGST Rules 
• Clarification on calculation of refund amount for claims of refund of accumulated ITC on account of inverted tax structure      
• Refund of TDS/TCS deposited in excess        
• Debit of electronic credit ledger using FORM GST DRC-03   
• Refund of Integrated Tax paid on Exports     
• Clarifications on other issues 
• Annexure-A List of all statements/declarations/undertakings/certificates and other supporting documents to be provided along with the refund application         
• Annexure-B : Statement of invoices to be submitted with application for refund of unutilized ITC      
• Clarification regarding optional filing of annual return under notification No. 47/2019- Central Tax dated 9th October, 2019 - regarding

HC sets aside NAA's order for violation of principles of natural justice

This Tax Alert summarizes a recent ruling of the Bombay High Court (HC)¹. The issue relates to validity of an order passed by National Anti-profiteering Authority.

The petitioner contended that the matter was heard by only three members whereas the impugned order was signed by four members, resulting in a breach of the principles of natural justice.

Revenue argued that as per Central Goods and Services Tax Rules 2019, no act or proceedings of the Authority shall be invalid merely on the ground of any irregularity in the procedure followed by the Authority not affecting the merits.

HC observed that the Authority is bound by the principles of natural justice. Further, the rule that one who hears must pass the order remains the basic proposition and this is a settled position of law.

HC concluded that when three members of the Authority had heard the petitioner, signing of the order by a fourth member results in violation of the principles of natural justice and thus, the order is liable to be set aside.

The ruling may have bearing on all such cases where the Authority has not followed the proper procedure.

Entitlement for CERTIFIED COPY OF ASSESSMENT RECORD

The circular of the Board dt. 28.06.1965 No. 17 (XL-36), provides for inspection fees and fees for certified copies of assessment and other records. This circular clears that the assessee or his A/R are entitled to inspect as well as obtain certified copies of assessment and other records.

Section 35 of the Indian Evidence Act, 1872. Relevancy of entry in public record, made in performance of duty - An entry in any public or other official book, register or record, stating a fact in issue or relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, register or record is kept, is itself a relevant fact   .

Why Section 167A not applicable to Joint Venture.

The Order of the ITAT (Chennai) in the case of – ‘CCCL’, the Consortium- ( CCCL for short), recently reported makes for a curiously interesting reading. That is seen to have unwittingly brought to surface certain not–so- obvious aspects; and not readily perceptible angles. These call for an independent reading and insightful understanding. That is why it has been chosen to be worth a critical and analytical study.

Madras HC allows transitional credit of EC, SHEC and KKC under GST

This Tax Alert summarizes a recent ruling of Madras High Court (HC)¹. The issue relates to transition of accumulated credit of Education Cess (EC), Secondary and Higher Education Cess (SHEC) and Krishi Kalyan Cess (KKC) into Goods and Services Tax (GST).