the essay of 12 February 2020 · the untouched capture
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<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">FEBRUARY 12, 2020</font></strong></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Vivad se Vivad</em></strong></font></p>
<p align="center"> <u><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>By Vijay Kumar</strong></font></u></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</STRONG> Supreme Court in a recent case reported as <strong><a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTU1OTg0" target="_blank">2020-TIOL-31-SC-CUS</a></strong> observed, </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The State is the largest litigant as often noted. It stands in a category apart having a solemn and constitutional duty to assist the court in dispensation of justice. The State cannot behave like a private litigant and rely on abstract theories of the burden of proof. The State acts through its officer who are given powers in trust. If the trust so reposed is betrayed, whether by casualness or negligence, will the State still be liable for such misdemeanour by its officers betraying the trust so reposed in them or will the officers be individually answerable. In our considered opinion it is absolutely no defence of the State authorities to contend that they were not aware of their own notification dated 18.09.1994. The onus heavily rests on them and a casual statement generating litigation by State apathy cannot be approved. </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">The obligation on the part of the State or its instrumentalities to act fairly can never be overemphasised. </font></em></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then look at the facts of this case: <strong><a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTU2MzA4" target="_blank">2020-TIOL-283-HC-RAJ-GST</a> </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A petition has been filed in the Rajasthan High Court by the Tax Bar Association raising the issue about non-functionality of the GST Department portal i.e. www.gst.gov.in, as a consequence of which, various assessees were unable to upload their returns both GSTR9 and GSTR9C. In view of the fact that the portal was having problems, the department issued a notification dated 3rd February, 2020, requiring the assessees to furnish their returns for the Financial Year 2017-18 by 5th February, 2020. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">When an assessee attempted to upload the returns/forms in GSTR9 and GSTR9C on 31.01.2020 at 5:09 PM, the website of the Govt. noted as follows: </font></p>
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<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">"Dear Tax Payer 1,50,000 tax payers are already submitting their returns at this moment… Please wait for your turn in a few minutes… Thank you for your patience." </font></em></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly attempts were made thereafter on the same date at 6:58 PM as well as 7:50 PM with the same result. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Although a <em>"tweet"</em> was issued by the Central Board of Indirect Taxes & Customs (CBIC) on 31.01.2020 at 10:30 PM indicating that the last date has been extended in a staggered manner ending on 3rd, 5th and 7th February, 2020, yet the notification that was issued thereunder, came to be issued on 03.02.2020. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The subsequent attempts made by the advocates/tax consultants to upload the assessees' returns on 3rd February as well as 4th February, 2020 met with the same fate. Although time has been extended up to 5th February, 2020 yet in the evening of 4th February, 2020 at 8:03 PM attempt was made to upload the return, but such return required mandatory deposit of <em>"late fee"</em>. In other words, the software portal had not been updated at least till that date, even though the notification dated 3rd February, 2020 was already issued by the Government. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Counsel for the Union of India submitted that: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- the last date for filing of returns for the F.Y. 2017-18 was originally fixed as 31st January, 2020 and the assessees had opportunity to file the same on or before the said date. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- the suggestion made by the petitioner to allow the assessees to upload their returns on an e-mail address of any specific officer was not acceptable to the Union of India, on account of the fact that every return is required to be uploaded in the main GST portal for taking input credit and therefore the Union of India is required to resort to auto-ported data. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">- the request of the petitioner to submit their returns in any other mode other than the GST portal cannot be accepted. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This means that the portal does not work and they will not accept the return in any other mode and if you don't upload the return, you will face all the consequences. <em>"Lex non cogit ad impossibilia is an age old concept meaning that the law does not compel the doing of impossibilities"</em> But taxmen are not the law; they would expect you to comply with their impossible demands; after all, they are only performing the sacred patriotic duty of collecting taxes and if once in a way, you are asked to do the impossible or face the consequences, you should understand that you <strong>do </strong> have a choice. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">However, keeping the aforesaid situation being faced by assessee in view, we are of the considered opinion that an interim order needs to be passed in light of the fact that the GST portal of the Govt. of India has not been effectively functioning and clearly there appears to be a physical limit, to which extent returns/forms can be uploaded on any one day (apart from admitted intermittent technical shutdowns). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">We are prima facie satisfied that even if an assessees is ready and willing to comply with the statutory duty, so far as filing of returns are concerned, the website appears to be having technical bottlenecks, which appears to limit the opportunity of an assessee from uploading the forms. We also keep in view the fact that the option suggested by the petitioner for submitting their returns on e-mail of a responsible officer has also been turned down by the Union of India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">Consequently, we hereby direct that the petitioner Association and the assessee, for whom they represent, may keep uploading their returns at the earliest possible and we direct that no late fee shall be charged till 12th of February, 2020 for uploading. The respondents are directed to enable compliance of such uploading by making necessary/consequential corrections on its official portal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"sans-serif" style="background-color:#FFD7AE" span="span">We further direct that if necessary, the Union of India may also direct the service provider to enhance its capacity to accept returns/forms. Since it is well-settled that where the last date of submission has been prescribed by law, it would be incumbent on the part of the revenue to provide for adequate facility for accepting such declarations or returns or forms within the period stipulated. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was on the 5th of February 2020. What did the Government do pursuant to the High Court order? They acted very fast. Did they rush to their system maintenance people to get the portal repaired? Did they try to find out why such lamentable performance takes place? They acted very fast. They actually <strong>can </strong>when they want to, especially if it is against those whom they work for - the citizens and the taxpayers. They identified that the problem was not with the portal but the High Court. If High Courts start interfering with the working of the non-working portal, Revenue should not take it lying down. After all, there is so much opportunity for vivad; why let it go? Let us fight till the last courtroom. And if government does not promote the cause of vivad, who will? With <em>sabka vishwas</em>, they rushed to the Supreme Court the very next day that is 6th February 2020 with an SLP and got a mention on 7th February, a hearing and order on 10th February. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Solicitor General appeared for the Revenue and submitted that <strong>only </strong> Rs. 200/- per day is being charged for the filing of late returns beyond 12.02.2020. He also assured the Apex Court that the authorities, both under the Central as well as State Acts, will not invoke any penal powers in this behalf. (in later cases, Revenue will surely argue that what the Solicitor General tells the Court is not the law). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The counsel appearing on behalf of the respondents submitted that the capacity for on-line processing of GST applications is extremely limited. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The applications being far more in number, the Court directed the Revenue to look into this problem and come out with a solution in accordance with the aforesaid capacity as soon as is practicable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>We do not intend to interfere with the order passed by the High Court. However, we only stay that part of the order which has extended the deadline for submitting the returns</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This was on 10.02.2020, within 5 days of the High Court order, with only two working days in between. Marvellous! Congratulations! Now, that you have <strong>WON </strong> the case in the Supreme Court, will you please remember that you still have a pathetic portal to deal with and you are still answerable to the High Court? </font></p>
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<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, there is a correction made by the Supreme Court in this order. Both, the earlier order and the corrected copy are found uploaded on the apex court portal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Whereas the version earlier mentioned - </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"This is on the basis of Mr. Tushar Mehta, learned Solicitor General's statement to this Court that only Rs.200/- per day is being charged for the filing of late returns beyond 12.02.2020." </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">the revised copy of order makes amends to this sentence and now reads - </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"This is on the basis of Mr. Tushar Mehta, learned Solicitor General's statement to this Court that only Rs.200/- per day is being charged for the filing of late returns, which subject to the outcome of the writ petition will be refunded." </em></font></p></td>
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<p align="justify"><font color="#993300" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>If it is your mistake, you're doomed </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Take this case reported by us recently - <strong><a href="https://taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTU1ODg3" target="_blank">2020-TIOL-128-HC-JHARKHAND-GST</a></strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The dispute relates to the month of September, 2017, i.e., soon after the implementation of the GST, wherein the petitioner filed its GSTR-1, showing his total IGST liability for that month at Rs.74,51,127/-, the CGST liability to be Rs.2,68,470/-, and State GST liability for Rs.2,68,470/-. Subsequently, the petitioner submitted its GSTR- 3B, in which the IGST liability was shown to be Rs.32,52,484.58/- as against the actual liability of Rs.74,51,127/-, and CGST liability was shown to be Rs.44,67,113.71/- as against the actual liability of Rs.2,68,470/-. In other words, in the liability shown under the IGST there was a deficient liability amounting to Rs.41,98,642.42/-, whereas in the CGST the excess was shown to the tune of Rs.41,98,643.71/-, and the tax was also paid accordingly. This remained unnoticed for a period of about one year, and subsequently by letter dated 01.11.2018, the petitioner Company was informed by the Tax Officer that in the course of audit by CERA, it was observed that the petitioner had short paid IGST to the tune of Rs.41,98,842/- and accordingly was asked to make the payment along with the interest. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The petitioner replied that it had actually paid the amount of the IGST of Rs.41,98,643/, but inadvertently it was paid under the head of CGST, instead of IGST, and as such it was not a case of short payment, rather, it was the case of payment of IGST under a different head; that this mistake had occurred in the early phase of implementation of the GST, and accordingly, the adjustment of the said amount may be made in the appropriate head. This request was not acceded to, and the petitioner was again asked to deposit the IGST amounting to Rs.41,98,642/- along with interest thereon, which is under challenge in the present writ application. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Counsel for the petitioner submitted that: </font></p>
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<p>1. <font size="2" face="Verdana, Arial, Helvetica, sans-serif">actually there was no short payment of tax, rather, the payment of tax was made under the wrong head in CGST, in which there was no liability of that amount. The tax was paid well within time and the mistake had occurred due to the fact that it was the early phase of the implementation of the GST regime.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. it was only a bona fide mistake, inasmuch as, in their return GSTR-3B, the petitioner had inadvertently classified the transaction to be the intra-State supply, whereas it was actually an inter-State supply. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The counsel for the CGST, on the other hand, submitted that:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. filing of the form GSTR-1 clearly indicated that the petitioner was fully aware of the nature of the supply that it was inter-State supply made by the petitioner, and accordingly, the GSTR-3B was filed by the petitioner intentionally showing their liability under the IGST to be only Rs.32,52,485/- and also wrongly showing CGST liability to be Rs.44,67,114/- for the reasons best known to the petitioner.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. there is no provision for transfer / adjustment / utilization of paid tax from one head to the other head and accordingly, the submission of the petitioner could not be acceded to.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. the amount available in the 'electronic cash ledger' may be used for making any payment towards tax or other dues under the provisions of this Act, i.e., only under the CGST head, and there is no such provision as is available for 'electronic credit ledger' under Section 49(4) and (5), for using that ledger for payment of the tax either in the IGST head or CGST head or even in the State head.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. since in the present case, the payment was made through 'electronic cash ledger' and not through 'electronic credit ledger', there cannot be any adjustment of the tax paid by the petitioner, from CGST to IGST head. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court did not enter into the question whether the amount deposited by the petitioner wrongly under the CGST head could be adjusted under the IGST head, as the counsel for the petitioner has very fairly conceded that the petitioner can deposit the amount of tax within a week and shall either claim the refund of the amount wrongly deposited under the CGST head, or the same may be adjusted against their future liabilities under the CGST head. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court directed the petitioner to deposit the amount of Rs. 41,98,642/-, under the IGST head within a period of 10 days and held that the petitioner shall not be liable to pay any interest on the said amount. They shall also be entitled to get the refund of the amount deposited by them under the CGST head, or they may get the amount adjusted against their future liabilities, in accordance with law, as they may choose. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Long Live Vivad!</font></p>
<p align="justify"><font color="#993300" size="2" face="Verdana, Arial, Helvetica, sans-serif"" style="background-color:#FFFF00"sans-serif span="span"><strong>P.S: </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And it seems the amount of late fee collected by the CGST from April to December 2019 is 1895 Crores, yes 1895 crores - thanks to that faulty portal. The amount collected for the period during the previous financial year was 1761 crores, making a decent growth of 7.6%. Maybe they can pay 10% of that money as reward to the portal managers for making it next to impossible to file the returns, thereby earning good Revenue for the Government. If some good incentive is provided, they may assure a 10% growth in late fee.</font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Until next week </strong></font></p>
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