Absence of GST Tribunal Deprives Assessee’s Right to Statutory Remedy: Patna HC Refuses

The Patna High Court, while considering a writ petition seeking to grant stay for the GST demand since the statutory remedy through appeal cannot be invoked due to the non-constitution of GST Tribunal, has refused to grant stay holding that the same would amount to staying the effect of Section 16(4) of the GST Act, 2017.

Before the bench comprising Justice Rajeev Ranjan Prasad, the assessee, M/s Manokamna, a proprietorship firm contended that presently the GST Tribunal is not constituted in the State of Bihar, therefore, the petitioner is deprived of availing of the remedy available under Section 112 of the GST Act which provides for appeals to the appellate tribunal.

While pronouncing the oral order, the High Court observed that “in the prayer portion of the writ application in paragraph ‘1’ (L), the petitioner has prayed for quashing of the order dated 16.12.2021 and summary of the demand issue in form GST APL-04 dated 21.12.2021, the petitioner has also challenged the order passed under Section 73 of the GST Act and the summary demand issued in Form GST DRC-07 dated 03.03.2020 but from the tone and tenor of the prayer itself it is clear that such reliefs are by way of consequential reliefs and unless the petitioner succeeds in challenging the vires of Section 16(4), perhaps he may not get the relief as prayed in paragraph ‘1’(L) of the writ application.”

While refusing to stay the order, the Court held that “In the given circumstance, in the opinion of this Court, staying the impugned order in the light of Sub Section (8) of Section 112 of the GST Act would in sum and substance amount to staying the effect of Section 16(4) of the GST Act which this Court would restrain from doing. This Court would take a similar view as has been taken by the Hon’ble Division Bench in C.W.J.C. No. 5703 of 2022. If the petitioner deposits the liability amount in full subject to result of the writ application the saving bank account of the proprietor shall be de-attached.”

GST QRMP Scheme: Govt asks Taxpayers to Pay Tax before 25th June, Late Payment to Attract Interest

In a recent advisory, the Goods and Services Tax (GST) department has issued an advisory asking the taxpayers opted for Quarterly Returns Monthly Payment (QRMP) scheme to pay their taxes on or before 25th June 2022, in order to avoid interest for late payment.

An instruction published in the official twitter handle of the GST Network (GSTN) has stated that “Attention GST Taxpayers who are under QRMP Scheme! Deposit due tax liability for May, 2022 by using Form/Challan PMT-06 by June 25, 2022. Late payment will attract interest.”

The Quarterly Returns Monthly Payment (QRMP) scheme, brought into effect from 1st January, 2021, is one that allows registered taxpayers with an aggregate turnover of up to INR 5 crores in the previous financial year to file returns on a quarterly basis and make tax payments on a monthly basis.

As notified by the Central Board of Indirect Taxes (CBIC), the registered person having aggregate turnover of up to Rs. 5 crores in the preceding financial year and have opted to furnish a return for every quarter would be eligible for QRMP Scheme.

Relief to Indian Oil Corporation: CESTAT deletes Penalty for alleged Excise Duty

In a significant ruling, in favour of Indian Oil Corporation, the Ahmedabad bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that in absence of violation of the rule to evade tax will not invoke penalty under Rule 173Q and quashed the penalty.

The Appellant appealed before the Supreme Court against the Tribunal Final Order No. A/10818-10819/2015 dated 19.06.2015 and was ordered to review petition by way of Misc. Application. The appellant Indian Oil Corporation Ltd. Challenged the applicability of Notification No. 29/89-CE dtd. 01.03.1989 and the legality of the penalty of Rs. 36,00,000/- under Rule 173Q of the Central Excise Rules,1944.

The appellant contended that the exemption under Notification No. 29/89-CE applies to any mineral oil (Kerosene) falling under heading 27.10 of the schedule to the Central Excise Tariff Act 1985 intended for use in the manufacture of Liner Alkyl Benzene or Heavy Alkylate. Further contended that the product classifiable as ‘Kerosene’ under CETH 2710 was not sold through PDS but supplied for manufacture of Liner Alkyl Benzene or Heavy Alkylate and the same would be eligible for exemption Notification No. 29/89.

The appellant submitted that the penalty cannot be imposed when the issue involved was classification dispute or interpretation of Notification.

The respondent contended that there was no specific plea in the appeal memorandum seeking annulment or modification of the penalty imposed on the appellant though invoking of a longer period of limitation as far as the duty demand was concerned has been contested.

It was evident from the notification that the benefit was granted to Kerosene falling under heading No. 27.10 of the Schedule of the Central Excise Tariff Act, 1985 intended for use in the manufacture of liner alkyl benzene or heavy alkylate.

The Tribunal observed that the claim of the Applicant that exemption Notification No. 29/89C.E. applies to any mineral oil (Kerosene) falling under heading 2710 of the Schedule to the Central Excise Tariff Act 1985 is not correct. The said exemption Notification applies only to “Kerosene” and not for any other mineral oil falling under heading 2710. Further observed that it was a matter of difference of opinion regarding the classification of goods between the applicant and the department.

Judicial member Mr Ramesh Nair and Technical Member Mr Raju set aside the penalty and held that “no penalty is imposable upon the appellant under Rule 173Q of the Central Excise Rules 1944 as the applicant has not violated any Rules/provisions with an intention to evade payment of duty”.