Tax Cases Monthly Round-Up: September 2022

Indirect TaxesSupreme Court Disputes Related To Tax Concessions Are Not Arbitrable: SupremeCourt Case Title: M/s Shree Enterprise Coal Sales Pvt Ltd. Versus Union Of India Citation: 2022 LiveLaw (SC) 774 The Supreme Court has held that disputes related to tax concessions are not arbitrable. The division bench of Justice Dhananjaya Y Chandrachud and Justice Hima Kohli has observed that the High Court was in error in holding that the terms of e-auction provided that any dispute was arbitrable. Undoubtedly, a contractual dispute would be amenable to being resolved by arbitration. However, in the present case, the relief related to tax concessions was not of an arbitrable nature. Delhi High Court Intention To Evade Tax Is Absent, Taxpayer Needs To Be Given Another Chance: Delhi High Court Case Title: Nirmal Kumar Mahaveer Kumar Versus Commissioner of CGST The Delhi High Court has held that the petitioner/taxpayer needs to be given another chance to establish why the subject goods did not reach their designated designation before the expiry of the e-way bill. The division bench of Justice Rajeev Shakdher and Justice Tara Vitasta Ganju has remanded the matter to the respondent to take a fresh decision on the matter, after giving the petitioner due opportunity to produce relevant material and evidence to establish its case. EOU Entitled To Claim Deemed Export Drawback On Inputs Which Remained Unutilized With Then-Existing DTA Unit: Delhi High Court Case Title: M/s Combitic Global Caplet Pvt. Ltd. Versus Union Of India The Delhi High Court has held that duty drawback for goods should extend to unutilized goods which were available at the time of conversion of the Domestic Tariff Area (DTA) unit into a 100% Export Oriented Unit (EOU). The division bench of Justice Rajiv Shakhdher and Justice Tara Vitasta Ganju has observed that the restriction against the claim of concession in duties and taxes applied only vis-à-vis plants, machinery and equipment that had already been installed. The petitioner was allowed to carry forward the advance authorization to the convertedunit,t i.e., 100% EOU, and thereafter fulfil the outstanding export commitment. Physical Verification Of Business Premises For GST Registration Without Issuing Notice Is Violation Of Principle Of Natural Justice: Delhi HighCourt Case Title: Curil Tradex Pvt. Ltd. Versus The Commissioner Citation: 2022 LiveLaw (Del) 905 The Delhi High Court has held that the physical verification of business premises for GST registration without issuing a notice is a violation of the principle of natural justice. The division bench of Justice Rajeev Shakdher and Justice Taravitasta Ganju has noted that the proper officer opted to have the petitioner's business premises inspected, albeit without the presence of its authorised representative. Had notice or intimation been given, the glitch could have been overcome. GST Not Payable On Renting Of A Residential Dwelling ForPersonal Use: Delhi High Court Case Title: Seema Gupta Versus Union Of India The Delhi High Court has held that Goods and Service Tax is not payable on renting a residential dwelling for personal use. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh has observed that the rental of a residential dwelling to a proprietor of a registered proprietorship firm who rents it in his personal capacity for use as his own residence and not for use in the course or furtherance of the business of his proprietorship firm and such renting is on his own account and not that of the proprietorship firm, shall be exempt from tax under Notification No.04/2022-Central Tax (Rate) dated 13.07.2022. Bombay High Court Secured Creditors Shall Take Priority Over Government Dues Under SARFAESI Act: Bombay High Court Case Title: Jalgaon Janta Sahakari Bank Ltd. Versus Joint Commissioner of Sales Tax Nodal 9 The Bombay High Court has held that the rights of secured creditors to realise secured debts shall have priority over government dues, including revenues, taxes, cesses, and rates due to the Central Government, State Government, or local authority under the SARFAESI Act. The three judge bench headed by Chief Justice Dipankar Dutta, Justice M.S.Karnik and Justice N.J. Jamadar has observed that the Sales Tax Commissioners did not claim that they registered the claim with the CERSAI to adhere to the mandate contained in section 26B(4) of the SARFAESI Act. Non-registration of the claim and/or order of attachment entails the consequences envisaged under section 26C (2) of the SARFAESI Act. Thus, dual disability sets in. Firstly, in the absence of material to show that the first charge under section 37 of the MVAT Act was enforced by a valid attachment order before the registration of security interest by the petitioner/secured creditors with the CERSAI, the petitioner cannot be...

Tax Cases Monthly Round-Up: September 2022

Mariya Paliwala

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