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Supreme Court issues notices on challenge to anti-profiteering rules

editor — Sat, 20 Apr 2024 10:25:32 +0000

The Supreme Court has issued notices to the central government, the Central Board of Indirect Taxes and Customs (CBIC), the Goods and Services (GST) Council, and the National Anti-Profiteering Authority (NAA), which is now under the purview of the Competition Commission of India. These notices come in response to a petition filed by Swati Realty, challenging a Delhi High Court decision that upheld the constitutional validity of anti-profiteering provisions related to the GST system. Swati Realty argues that the High Court failed to recognize that these provisions are unconstitutional.

Earlier in February, the Supreme Court had also issued a notice to the Union government on a similar matter. The advocate representing the real estate player in the Supreme Court highlighted that the Delhi High Court agreed with the real estate companies’ assertion that the methodology employed by the NAA is flawed, especially in the real estate sector where there is no direct link between turnover and input tax credit (ITC) for a specific period.

The NAA was established in November 2017 to ensure that companies pass on the benefits of ITC and GST reductions to consumers by reducing prices. Since December 2022, the Competition Commission of India has been addressing complaints of profiteering by companies.

In January, the Delhi High Court upheld the constitutional validity of anti-profiteering provisions, stating that they aim to ensure a proportional reduction in prices when GST rates are lowered or due to ITC. The court ruled that these provisions are in the public interest and are consistent with the legislative authority granted under the Constitution.

Over 100 companies, including Hindustan Unilever, Patanjali, Jubilant Foodworks, and Phillips, had filed petitions against the anti-profiteering provisions in the High Court.

Source: https://www.business-standard.com/india-news/sc-issues-notice-to-centre-others-on-anti-profiteering-provisions-124041900719_1.html

Legal Bombshell: 101st Constitutional Amendment Act PIL Thrown Out

editor — Fri, 19 Apr 2024 05:56:07 +0000

Introduction

In recent legal proceedings, the Patna High Court addressed a significant case involving the 101st Constitutional Amendment Act related to the Goods and Services Tax (GST). The Public Interest Litigation (PIL) filed by Amit Pandey challenged specific provisions within the amendment, alleging a violation of the Constitution’s basic structure. This article delves into the details of the case, examining the facts presented, the core issues debated, and the court’s ultimate ruling.

Facts of the Case

Amit Pandey, representing himself as the petitioner, initiated a writ petition before the Hon’ble Patna High Court. The crux of Pandey’s argument rested on the contention that certain sections of the 101st Constitutional Amendment Act, namely Sections 2, 9, 12, and 18, infringed upon the fundamental tenets of the Indian Constitution. Furthermore, Pandey asserted that the functioning of Parliament under the guidance of the Goods and Services Tax Council (GST Council) amounted to an abandonment of legislative responsibility.

In response, the Department, acting as the respondent, submitted a counter affidavit. The Department refuted the petitioner’s claims, emphasizing that the GST Council’s role was advisory in nature. It highlighted the Council’s function in addressing taxpayer grievances at both national and state levels, as well as its role in tax apportionment—a domain exclusively within the purview of Parliament.

Issue

The central issue at hand revolved around the constitutional validity of Sections 2, 9, 12, and 18 of the 101st Constitutional Amendment Act. Additionally, the debate encompassed the extent of parliamentary authority vis-à-vis the advisory role of the GST Council.

Held

Following deliberation, the Hon’ble Patna High Court, in the case of CWJC No. 7483 of 2017, dismissed the PIL brought forth by Amit Pandey. The court’s decision rested on two primary grounds. Firstly, it determined that the petitioner, being a legal professional, lacked the requisite locus standi to maintain the writ petition. Secondly, the court opined that individuals transitioning from Value Added Tax (VAT) to GST, as facilitated by the 101st Constitutional Amendment Act, did not constitute a marginalized group incapable of seeking legal redress.

Shocking Verdict: Madras HC Challenges Tax Authority!

editor — Wed, 17 Apr 2024 05:47:46 +0000

In a recent ruling that has significant implications for taxpayers and tax authorities alike, the Madras High Court delivered a landmark judgment concerning Input Tax Credit (ITC) claims. This judgment addresses the issue of rejecting ITC claims solely due to their absence in GSTR-3B filings, emphasizing the need for a thorough review of related documents such as GSTR-2A and GSTR-9 for a comprehensive assessment. Let’s delve into the details of this case and its implications.

Facts of the Case

The case involved Sri Shanmuga Hardwares Electricals challenging assessment orders spanning from 2017 to 2020. The crux of the matter revolved around the company’s ITC claims based on GSTR-2A data, despite filing “NIL” returns in GSTR-3B. These claims were rejected by the State Tax Officer, prompting a legal challenge.

Issue

The central issue at hand was whether Sri Shanmuga Hardwares Electricals was entitled to claim ITC that was not reported in the GSTR-3B returns but was reflected in the GSTR-2A and subsequently in the GSTR-9 annual returns.

Held

In its ruling, the Madras High Court quashed the assessment orders and remanded the case for reconsideration. The court emphasized that rejecting ITC claims solely on the basis of their absence in GSTR-3B filings was unjustified. Instead, it instructed the assessing officer to conduct a thorough examination of all relevant documents to assess the validity of the ITC claim. The petitioner was directed to submit all pertinent documents, and the assessing officer was instructed to issue fresh assessment orders after providing a reasonable opportunity for a personal hearing.

This judgment, delivered in the case of Sri Shanmuga Hardwares Electricals vs. The State Tax Officer, highlights the importance of substantiating ITC claims with comprehensive documentation. It underscores the necessity for tax authorities to consider all relevant returns and documents before making decisions on ITC claims.

This ruling could potentially lead to a more nuanced understanding and handling of ITC claims, benefiting taxpayers who may have encountered similar issues in their filings.

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Supreme Court issues notices on challenge to anti-profiteering rules

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Legal Bombshell: 101st Constitutional Amendment Act PIL Thrown Out

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Shocking Verdict: Madras HC Challenges Tax Authority!

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