Tax Cases Monthly Round-Up: August 2022

Indirect TaxSupreme Court Advise States To Implement Digital DIN System : Supreme Court To Centre & GST Council Pradeep Goyal vs Union of India Citation: 2022 LiveLaw (SC) 654 The Supreme Court has directed the GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a Document Identification Number (DIN) in the indirect tax administration. The bench comprising Justices MR Shah and BV Nagarathna observed that the system, which is already being implemented by the States of Karnataka and Kerala, would be in the larger public interest and enhance good governance. It will bring in transparency and accountability in the indirect tax administration, which are so vital to efficient governance, the bench said. Service Tax On Composite Works Contracts Not Leviable Prior To2007 Amendment To Finance Act 1994 : Supreme Court Case Name: M/s. Total Environment Building Systems Pvt. Ltd. v. Deputy Commissioner of Commercial Taxes And Ors. Citation: 2022 LiveLaw (SC) 656 The Supreme Court, on Tuesday, held that service tax could not be levied on composite works contracts prior to the introduction of the Finance Act, 2007, which by amending the Finance Act, 1994 had introduced Section 65(105)(zzzza) defining works contracts. The Apex Court noted that in the absence of a charging section and the modalities to levy and assess, service tax cannot be levied on the service element of works contract. Delhi High Court Assessee Entitled To Refund Of Unutilized CENVAT Credit OnAccount Of Export Of Legal Services: Delhi High Court Case Title: Commissioner of CGST Delhi East Versus Anand and Anand The Delhi High Court has held that the assessee is entitled to a refund of unutilized CENVAT credit under the CENVAT Credit Rules, 2004 on account of the export of legal services under rule 5 of the CENVAT Credit Rules, 2004. The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that, as per Rule 5, as long as the service provider provides an output service which is exported without payment of service tax, such a service provider will be eligible for a refund of CENVAT credit. Bombay High Court Exporter Not Required To Hold IEC Number To Avail Benefits Under'Service Exports From India' Scheme: Bombay High Court Case Title: Smarte Solutions Pvt. Ltd. versus Union of India and Ors. The Bombay High Court has ruled that the requirement of holding an Import Export Code (IEC) number at the time of rendering services in order to avail the benefits under the Services Export from India Scheme (SEIS), as imposed by the Foreign Trade Policy 2015-2020 (FTP), is against the intent and purpose of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act). The Division Bench of Justices S.V. Gangapurwala and Vinay Joshi held that the said condition cannot be termed as mandatory in nature for availing the benefits under the SEIS since it is against the principal legislation, i.e., the FTDR Act. Assessee Eligible For SVLDRS Declaration Since The Demand Of Duty Quantified On Or Before June 30, 2019: Bombay High Court Case Title: B. Chopda Construction Private Limited V/s. Union of India and Ors. The Bombay High Court has allowed the declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the grounds that although there was an audit, the amount of duty quantified has also been quantified before 30th June 2019. The division bench of Justice K.R. Shriram and Justice Milind N. Jadhav has observed that the rejection of the petitioner's declaration on the ground that the final audit report was issued after June 30, 2019 was incorrect. Customs Authorities Cannot Encash Bank Guarantee Before Expiry Of The Limitation Period For Filing An Appeal: Bombay High Court Case Title: S. J. Enterprises & Anr. versus Union of India The Bombay High Court has reiterated that Customs Authorities cannot encash the Bank Guarantee furnished by the assessee before the expiry of the statutory period available for filing an appeal. The Division Bench consisting of Chief Justice Dipankar Datta and Justice M. S. Sonak ruled that despite the assurances given to the Bombay High Court in the case of Legrand (India) Pvt. Ltd. versus Union of India (2007), the Customs Authorities had breached the law by adopting coercive measures and encashing the Bank Guarantees before the expiry of the limitation period available for filing a statutory appeal. Bombay High Court Directs CBIC To Issue Clarification RegardingDistribution/ Reporting Of ISD Credit Case Title: Unichem Laboratories Limited versus Union of India and Ors. The Bombay High Court has directed the Central Board of Indirect Taxes and Customs (CBIC) to issue a clarification in relation to the distribution/ reporting of the...

Tax Cases Monthly Round-Up: August 2022

Mariya Paliwala

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