Veliyath Hardwares v. Union of India / The State of Kerala / The GST Council / Central Board of Indirect Taxes and Customs / Goods and Services Tax Network/The Commissioner, Thiruvananthapuram/The Nodal Officer/STO
[Citation -2020-LL-0703-40]

Citation 2020-LL-0703-40
Appellant Name Veliyath Hardwares
Respondent Name Union of India / The State of Kerala / The GST Council / Central Board of Indirect Taxes and Customs / Goods and Services Tax Network/The Commissioner, Thiruvananthapuram/The Nodal Officer/STO
Court HIGH COURT OF KERALA AT ERNAKULAM
Relevant Act CGST
Date of Order 03/07/2020
Judgment View Judgment
Keyword Tags goods and services tax • limitation prescribed • input tax credit • audit objection • judicial review • ratio decidendi • opening stock • service tax • interest • refund


IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL FRIDAY, 03RD DAY OF JULY 2020 / 12TH ASHADHA, 1942 WP(C).No.12930 OF 2020(M) PETITIONER/S: M/S.VELIYATH HARDWARES MADAPARAMBIL CHAMBERS T.B. JUNCTION, MOOVATTUPUZAH 686 661, REPRESENTED BY ITS MANGING PARTNER SRI. ISSAC. V. KORATH. BY ADVS. SRI.A.KUMAR SRI.P.J.ANILKUMAR SMTG.MINI(1748) SRI.P.S.SREE PRASAD SHRI.JOB ABRAHAM SRI.AJAY V.ANAND RESPONDENT/S: 1 UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NO. 137, NORTH BLOCK, NEW DELHI 110 001. 2 STATE OF KERALA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM 695 001. 3 GST COUNCIL, REPRESENTED BY SECRETARY, 5TH FLOOR TOWER II, JEEVAN BHARTI BUILDING, JANPATH ROAD, CONNACUGHT PLACE, NEW DELHI 110 001. 4 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTED BY ITS SECRETARY (REVENUE), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NO. 137, NORTH BLOCK, NEW DELHI 110 001. 5 GOODS AND SERVICES TAX NETWORK EAST WING, 4TH FLOOR, WORLD MARK 1, AEROCITY, NEW DELHI 110 037. WPC.12930/20 & con. cases 2 6 COMMISSIONER, STATE GOODS AND SERVICES TAX DEPT, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM 695 001. 7 NODAL OFFICER, GOODS AND SERVICES TAX NETWORK, EAST WING 4TH FLOOR, WORLD MARK I, AEROCITY, NEW DELHI 110 037. 8 STATE TAX OFFICER, STATE GOODS AND SERVICE TAX DEPARTMENT, MUDAVOOR P.O. MOOVATTUPUZHA 686 669. R5 BY ADV. SRI.P.R.SREEJITH OTHER PRESENT: SMT. THUSHARA JAMES GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2020, ALONG WITH WP(C).12943/2020(P), WP(C).12949/2020(P), WP(C).12951/2020(T), COURT ON SAME DAY DELIVERED FOLLOWING: WPC.12930/20 & con. cases 3 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL FRIDAY, 03RD DAY OF JULY 2020 / 12TH ASHADHA, 1942 WP(C).No.12943 OF 2020(P) PETITIONER/S: M/S. TOMLUKES INDIA, PROPRIETOR BIJU K. THOMAS, NEDIYUZHATHIL TOWERS, T.C. 20/15-2, KILLIPALAM KARAMANA, THIRUVANANTHAPURAM-695002. BY ADV. SRI.A.KUMAR RESPONDENT/S: 1 UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NO.137, NORTH BLOCK, NEW DELHI-110001. 2 STATE OF KERALA, REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001. 3 GST COUNCIL, REPRESENTED BY SECRETARY, 5TH FLOOR, TOWER II, JEEVAN BHARTI BUILDING, JANPATH ROAD, CANNAUGHT PLACE, NEW DELHI-110001. 4 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTED BY ITS SECRETARY (REVENUE) DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NO.137, NORTH BLOCK, NEW DELHI-110001. 5 GOODS AND SERVICES TAX NETWORK, EAST WING, 4TH FLOOR, WORLD MARK 1, AEROCITY, NEW DELHI-110037. 6 COMMISSIONER, STATE GOODS AND SERVICES TAX DEPARTMENT, GOVERNMENT WPC.12930/20 & con. cases 4 OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM-695001. 7 NODAL OFFICER, GOODS AND SERVICES TAXES NETWORK, EAST WING, 4TH FLOOR, WORLD MARK 1, AEROCITY, NEW DELHI-110037. 8 ASSISTANT COMMISSIONER-II, SPECIAL CIRCLE, TAX TOWER, KARAMANA, THIRUVANANTHAPURAM-695002. R5 BY SHRI.P.R.SREEJITH, SC, GSTN OTHER PRESENT: SMT. THUSHARA JAMES GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2020, ALONG WITH WP(C).12930/2020(M), WP(C).12949/2020(P), WP(C).12951/2020(T), COURT ON SAME DAY DELIVERED FOLLOWING: WPC.12930/20 & con. cases 5 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL FRIDAY, 03RD DAY OF JULY 2020 / 12TH ASHADHA, 1942 WP(C).No.12949 OF 2020(P) PETITIONER/S: THOMSON HOME DEPOT T.C.20/15/-2, NEDIYUZHATHIL TOWERS, KILLIPALAM, KARAMANA, THIRUVANANTHAPURAM-695002, REPRESENTED BY ITS MANAGING PARTNER, SRI. BIJU K.THOMAS BY ADVS. SRI.A.KUMAR SRI.P.J.ANILKUMAR (A-1768) SMTG.MINI(1748) SRI.P.S.SREE PRASAD SHRI.JOB ABRAHAM SRI.AJAY V.ANAND RESPONDENT/S: 1 UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE(DEPARTMENT OF REVENUE), NO.137, NORTH BLOCK, NEW DELHI-110001 2 STATE OF KERALA REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001 3 GST COUNCIL REPRESENTED BY SECRETARY, 5TH FLOOR, TOWER II, JEEVAN BHARATI BUILDING, JANPATH ROAD, CONNAUGHT PLACE, NEW DELHI-110001 4 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS REPRESENTED BY ITS SECRETARY(REVENUE) DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NO.137, NORTH BLOCK, NEW DELHI 110001 WPC.12930/20 & con. cases 6 5 GOOD AND SERVICE TAX NETWORK EAST WING, 4TH FLOOR, WORLD MARK 1, AEROCITY, NEW DELHI-110037 6 COMMISSIONER, STATE GOODS AND SERVICE TAX DEPT. GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM-695001 7 NODAL OFFICER GOODS AND SERVICE TAX NETWORK, EAST WING, 4TH FLOOR, WORLD MARK 1, AEROCITY, NEW DELHI-110037 8 ASSISTNAT COMMISSIONER-II SPECIAL CIRCLE, TAX TOWER, KARAMANA, THIRUVANANTHAPURAM-695002 R5 BY SHRI.P.R.SREEJITH, SC, GSTN OTHER PRESENT: SMT. THUSHARA JAMES GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2020, ALONG WITH WP(C).12930/2020(M), WP(C).12943/2020(P), WP(C).12951/2020(T), COURT ON SAME DAY DELIVERED FOLLOWING: WPC.12930/20 & con. cases 7 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL FRIDAY, 03RD DAY OF JULY 2020 / 12TH ASHADHA, 1942 WP(C).No.12951 OF 2020(T) PETITIONER/S: MS/.VELIYATH STEEL AGENCIES HIGH SCHOOL JUNCTION, EDAPPALY, ERNAKULAM 682 024, REPRESENTED BY ITS MANAGING APARTNESS SRI. ISSAC V. KORATH. BY ADVS. SRI.A.KUMAR SRI.P.J.ANILKUMAR SMTG.MINI(1748) SRI.P.S.SREE PRASAD SHRI.JOB ABRAHAM SRI.AJAY V.ANAND RESPONDENT/S: 1 UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NO. 137, NORTH BLOCK, NEW DELHI 110 001. 2 STATE OF KERALA, REPRESENTED BY ITS SECRETARY, MINISTER OF FINANCE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM 695 001. 3 GST COUNCIL, REPRESENTED BY SECRETARY, 5TH FLOOR, TOWER II, JEEVAN BHARTHI BUILDING, JANPATH ROAD, CONNAGUTHT PLACE, NEW DELHI 110 001. 4 CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, REPRESENTER BY ITS SECRETARY (REVENUE), DEPORTMENT OF REVENUE MINISTRY OF FINANCE, NO. 137, NORTH BLOCK, NEW DELHI 110 001. WPC.12930/20 & con. cases 8 5 GOODS AND SERVICES TAX NETWORK, EAST WING , 4TH FLOOR, WORLD MARK 1, AEROCITY, NEW DELHI 110 037. 6 COMMISSIONER, STATE GOODS AND SERVICES TAX DEPT, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM 695 001. 7 NODAL OFFICER, GODS AND SERVILES TAX NETWORK, EAST WING 4TH FLOOR, WORLD MARK 1, AEROCITY , NEW DELHI 110 037. 8 ASSISTANT COMMISSIONER, STATE GOODS AND SERVICES TAX DEPARTMENT , ALUVA , ERNAKULAM 683 101. R5 BY SHRI.P.R.SREEJITH, SC, GSTN OTHER PRESENT: SMT. THUSHARA JAMES GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2020, ALONG WITH WP(C).12930/2020(M), WP(C).12943/2020(P), WP(C).12949/2020(P), COURT ON SAME DAY DELIVERED FOLLOWING: WPC.12930/20 & con. cases 9 JUDGMENT [ WP(C).12930/2020, WP(C).12943/2020, WP(C).12949/2020, WP(C).12951/2020 ] Dated this 3rd day of July 2020 This order of mine shall dispose of four writ petitions bearing Nos.12930/2020, 12943/2020, 12949/2020 and 12951/2020, whereby raising identical question and prayer has been sought. facts are being taken from W.P.(C)No.12930 of 2020 except for difference in notice, which are Exts.P2 and P4 in W.P(C).12930/20 whereas in other matters it is Ext.P2. On promulgation of Central Goods and Services Tax, 2017, many businessmen adjusted with erstwhile Kerala Value Added Tax, 2003, attempted to transit as per transition provisions prescribed under Section 143 read with Rule 117(4) of CGST Act and Rules framed thereunder. Petitioner filled form TRAN-1 on 24.10.2017 within prescribed period and in other connected matters, before due date. mistake WPC.12930/20 & con. cases 10 while submitting aforementioned form TRANS-1 was that, instead of filing it under Central GST, it was filed under State GST. Petitioner was not aware of such intrication. However, State GST Department, vide communication dated 26.12.2019 Ext.P2, informed petitioner to file explanatory reply within seven days, as stock disclosed by them in TRAN-2 return of cement and steel was not eligible for transition credit owing to non reference of CGST. aforementioned intimation was on basis of audit objection ie., irregular claim of SGST transition credit. 2. Petitioner vide Ext.P3 communication dated 17.01.2020, informed State Tax Officer that they had filed GST TRAN-1 as well as GST TRAN-2 within stipulated time frame to avail transitional credit and opening stock held as on 30.06.2017, purchases which has not been considered at level of revenue. In response to aforementioned reply, petitioner received another notice dated 07.02.2020 as Ext.P4 in WPC.12930/20 & con. cases 11 W.P.(C)No.12930 of 2020 and Ext.P2 in other connected matters, giving details of filing of TRAN-1 as per provisions of Section 143 of Kerala State GST Act, 2017 read with Section 117(4), giving details of stock of cement and steel unsold on appointed date to be not supported by any invoice or documents evidencing payment of tax. It also mentioned that on 22.03.2020, in W.P.(C)No.12930 of 2020, filed TRAN-2 as per provisions of Rule 117(4)(a)(iii) of 2013 rules, for months of July and August 2017, and claimed SGST input tax credit during aforementioned period. Whereas aforementioned provisions envisage that registered person holding stock of goods which have suffered tax at first point of their sale in State and subsequent sale were not subject to tax in State and in accordance with proviso to sub- section (3) of Section 140 shall be allowed to avail input tax credit on goods held in stock on appointed day. Office of Accountant General, Kerala, in their order dated 24.12.2019, objected to WPC.12930/20 & con. cases 12 aforementioned SGST claim regarding stock which were not supported by invoice or documents and referred to letter Ext.P2 dated 26.02.2019 seeking explanation. It informed that as per claim of input credit on Central Excise Portion there was no such registration under Central Excise Act and therefore GST input credit could not be granted. petitioner was given chance to submit reply, failing which notice under Section 73(1) of 2017 would be issued. 3. Mr. A.Kumar, learned counsel appearing on behalf of petitioners submits that, vide Ext.P5 in W.P.(C)No.12930 of 2020 and Ext.P3 in other connected matters has sought rectification of mistake, though expression used in aforesaid request is revision, which is provided under Rule 120A of 2017 Rules. apprehension expressed is that it may not be considered being barred by law of limitation in view of limitation prescribed under Rule 117. As far as rectification is concerned as per amended WPC.12930/20 & con. cases 13 provisions of Rule 117A, it is permitted. In support of aforementioned contentions, judgment of Division Bench of this court in Writ Appeal No.511 of 2020, arising out of order of Single Bench Judgment dated 06.12.2019 rendered in W.P.(C). No.11424 of 2019, wherein on account of difficulties faced by assesses under GST owing to transition period, revision was permitted and appeal preferred by Central Government was dismissed. attention of this Court has been drawn to paragraphs 9 and 10 of judgment. 4. Sri. P.R.Sreejith, learned counsel appearing on behalf of Central Board for Indirect Taxes and Customs submits that, there is no scope for seeking revision of form TRAN-2 owing to fact that period of 190 days as prescribed under Rule 17 are already over for reason that TRAN-1 form was filed way back on 2017 and TRAN-2 in 2018. ratio decidendi culled out in referred judgment was pertaining to non filling of column 7(a) instead of WPC.12930/20 & con. cases 14 7(b), which was not arrested by any period of limitation. It was submitted that as per circular, proper officer would send such request to GST network. On consideration by GST network, it would be sent to ITGRC. He further submits that, this case would not even fall within provisions of Section 117(a) of 2017 Act, as alleged error cannot be construed to falling within expression 'rectification'. Petitioner ought to have filled FORM after understanding provisions as claim was not falling under provisions of SGST, but under provisions of CGST. Petitioner is thus required to seek refund of credit along with interest as per provisions of Act, and urged this court for dismissal of writ petition. 5. Dr.Tushara James, learned Government Pleader supports contentions of Mr. Sreejith and submits that alleged impression of petitioner to rectification or revision is preposterous and would not be brought under provisions of Act and Rules. As WPC.12930/20 & con. cases 15 necessary corollary, petitioner is required to refund amount along with interest. 6. In rebuttal Mr.Kumar did not dispute regarding adoption of procedure on submission of any such request, as pointed out by Mr.Sreejith. 7. I have heard learned counsel for parties, appraised paper book and of view that while exercising powers of judicial review under Article 226 of Constitution of India, it would not be in domain of this court to decide as to whether it is normal credit or was intentional or bonafide error. Since petitioner has already sought rectification vide request, Ext.P5 in W.P.(C)No.12930 of 2020 and Ext.P3 in other items, I am of view that 4th respondent has already received such request on consideration of matter, in case it requires petitioner or representative, take call and thereafter, as per circular and procedure invoked, would send it to SGST network. SGST network on consideration of matter would take WPC.12930/20 & con. cases 16 call on such request by applying principles of natural justice, i.e. affording opportunity of hearing to petitioner and thereafter would strictly adhere procedure prescribed in circular for onward transition to ITGRC. Let entire exercise be undertaken within period of six months. 8. It is submitted that procedure adopted in other matters calling explanation and reply of petitioner, whereas, in instant case, revenue respondent straight away issued demand by raising show cause notice dated 28.01.2020 vide Ext.P2, which would reveal that there is no such reference of opportunity or show cause notice and demands includes not only of reversal of credit but also element of interest, which comes to Rs.3,20,863/-. Petitioner vide Ext.P6 has given reply but there is no such consideration. Thus principles of audi alterm partem have not been strictly adhered to. 9. At this stage Mr.Sreejith submits that, it is not possible for department to straight way issue WPC.12930/20 & con. cases 17 show cause notice as writ petition is bereft of any averments, but, do deny contents of notice dated 28.01.2020. Similar is argument of Dr.Tushara James for other respondents. 10. Having considered said circumstances as well as submissions, I am of view that, if at all department had sent earlier notice, it would have definitely referred to while raising summary of show cause notice including demand any therein. Contents of notice reads as under. dealer submitted TRAN-1 and TRAN-2 return under rule 177 and claimed SGST transition credit in respect of stock having no evidence for tax suffered and took SGST credit of Rs.184404.00. But assessee had already availed IPT credit through VAT return during 2017-18 and paid balance tax. Hence irregular availing of transitional credit under Rule 117(4)(a). Grounds On verification of own sales invoice filed by dealer it is found that assessee had availed IPT credit through VAT return for year 2017-18. assessee had submitted WPC.12930/20 & con. cases 18 same invoices for claiming transitional credit which is not admissible. 11. Since petitioners have already submitted request, procedure as directed to be followed by respondents in other matters, conditions contained therein would also apply in present case. Until such time decision is taken, operation of show cause notice dated 28.01.2020 in W.P.(C)No.12951 of 2020 is ordered to be kept in abeyance. However, it is made clear that, it would not preclude respondent to comply with principles of natural justice by asking for reply as has been done in other matters. Petitioner shall be at liberty to raise all legal pleas, deem it appropriate by referring to any case law or provision of Rules. writ petitions are disposed of accordingly. Sd/- AMIT RAWAL JUDGE uu WPC.12930/20 & con. cases 19 APPENDIX OF WP(C) 12930/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF GST REGISTRATION CERTIFICATE. EXHIBIT P2 TRUE COPY OF NOTICE DATED 26/12/2019. EXHIBIT P3 TRUE COPY OF REPLY DATED 17/01/2020. EXHIBIT P4 TRUE COPY OF NOTICE DATED 07/02/2020. EXHIBIT P5 TRUE COPY OF APPLICATION DATED 11/03/2020. EXHIBIT P6 TRUE COPY OF JUDGMENT IN WRIT APPEAL NO. 511/2020 DATED 04/06/2020. WPC.12930/20 & con. cases 20 APPENDIX OF WP(C) 12943/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF GST REGISTRATION CERTIFICATE. EXHIBIT P2 TRUE COPY OF NOTICE DATED 06/01/2020. EXHIBIT P3 TRUE COPY OF APPLICATION DATED 22/03/2020. EXHIBIT P4 TRUE COPY OF JUDGMENT IN WRIT APPEAL NO.511/2020 DATED 04/06/2020. WPC.12930/20 & con. cases 21 APPENDIX OF WP(C) 12949/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF GST REGISTRATION CERTIFICATE EXHIBIT P2 TRUE COPY OF NOTICE DATED 06.03.2020 EXHIBIT P3 TRUE COPY OF APPLICATION DATED 22.03.2020 EXHIBIT P4 TRUE COPY OF JUDGMENT IN WRIT APPEAL NO.511/2020 DATED 04.06.2020 WPC.12930/20 & con. cases 22 APPENDIX OF WP(C) 12951/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF GST REGISTRATION CERTIFICATE. EXHIBIT P2 TRUE COPY OF NOTICE DATED 28/10/2020. EXHIBIT P3 TRUE COPY OF APPLICATION DATED 16.03.2020. EXHIBIT P3 (A) TRUE COPY OF REPLY DATED 16/03/2020. EXHIBIT P4 TRUE COPY OF JUDGMENT IN WRIT APPEAL NO. 511/2020 DATED 04/06/2020. Veliyath Hardwares v. Union of India / State of Kerala / GST Council / Central Board of Indirect Taxes and Customs / Goods and Services Tax Network/The Commissioner, Thiruvananthapuram/The Nodal Officer/STO
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