No Service Tax on Free Warranty and Labour Services

No Service Tax on Free Warranty and Labour Services

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE

The Text of the Order as follows :

The present appeal is directed against the impugned order dated 16/09/2020 passed by the Commissioner (Appeals) where the Commissioner (Appeals) has rejected the appeal of the appellant and confirmed the demand of Rs. 23,725/- (Rupees Twenty Three Thousand Seven Hundred and Twenty Five only) under Rule 6(3)(i) of Cenvat Credit Rules, 2004 with interest. Briefly the facts of the present case are that the appellant is an Authorized Service Station and on verification of the appellant’s financial record, the Department entertained the view that the appellant is rendering free service and warranty labour charges which is a taxable service but the appellant has not paid any service tax on the said taxable service and the appellant has also not maintained separate accounts of input services utilized for providing exempted services as required under Cenvat Credit Rules, 2004 and has not complied with the conditions prescribed under Rule 6(3) of the Cenvat Credit Rules, 2004. On these allegations, 4 show-cause notices were issued and after following the due process, the demand to the extent of Rs. 23,725/- (Rupees Twenty Three Thousand Seven Hundred and Twenty Five only) was confirmed along with interest under Section 75 and the original authority has also imposed penalty of Rs. 2,000/- (Rupees Two Thousand only) in terms of Rule 15(1) of Cenvat Credit Rules, 2004 read with Section 76 of the Act. Aggrieved by the said order, appellant filed appeal before the Commissioner who rejected the same. Hence the present appeal.

2. None appeared on behalf of the appellant and the appellant vide its letter dated 06/04/2021 has requested the Tribunal to decide the matter on merit after considering the orders of the Deputy Commissioner, Cochin who has decided the identical matter pertaining to Ernakulam North branch which was accepted by the Department. The appellant has also furnished the copy of two decisions on identical issue decided by Commissioner (Appeals), Cochin.

3. Heard the learned AR and perused the records.

4. The issue involved in the present case is whether the appellant is liable to pay service tax on free service and warranty labour provided to customers without any consideration. As per the Department, the free service is an exempted service and therefore, the appellant is liable to reverse 6/7% of the value of exempted service which was not done by the appellant.

5. On the other hand, the grounds raised by the appellant in the grounds of appeal is that the appellant does not receive any income with regard to free service and warranty labour provided to customers and these services are rendered free of charges and the Department has no case that the cost of these services are reimbursed to the dealers. Hence, there cannot be any levy of service tax. Further, I find that the cost of these services are included in the cost of the product accounted at sales showroom and VAT has been paid at the time of sale of the vehicle which is cleared from the cenvat reversal at sales showroom under Rule 6(3A). Further, I find that the learned Commissioner neglected the facts that the income accounted in the Books of Account are through notional entries and these costs are included in the cost of product as confirmed in the refund order. Further, I find that the Department vide its Order-in-Original Nos. 52, 53, 54, 55 & 56/2019 ST dated 19/08/2019 issued to another branch of the company in the identical issue confirmed that the income in service centre for free service and warranty labour is booked through notional entries being worked under the concept ‘separate profit centre’ and corresponding expense is accounted in Head Office books and thereby net income is ZERO. Further it is also held that no service tax can be levied on amounts representing the dealer’s margin or any part of it which was already subject to sales tax. I further note that the Department has not filed appeal against the order which has attained finality and further I find that the Commissioner (Appeals), Cochin in Order-in-Appeal No. 352 to 356/2013 has also allowed the appeal of the assessee and held that no service tax is due on free services and warranty service and set aside the order of demand on free service. In view of the various orders where the Department itself has dropped the demand on free service, I find that confirmation of demand of Rs. 23,725/- (Rupees Twenty Three Thousand Seven Hundred and Twenty Five only) under Rule 6(3)(i) of Cenvat Credit Rules, 2004 is not sustainable in law and I set aside the demand by allowing the appeal of the appellant.

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ICAI extends time period for commencement of Practical Training of CA Students

ICAI extends time period for commencement of Practical Training of CA Students for appearing in CA Final exam November 2023

The Institute of Chartered Accountants of India

Board of Studies
29th April, 2021

ANNOUNCEMENT

Extension of time period for commencement of Practical Training on or before 30th April 2021 to 30th June, 2021 for appearing in Final examination to be held in November, 2023

In exercise of the powers conferred under Regulation 205 of the Chartered Accountants Regulations, 1988 and to remove the hardship caused to the students due to Covid 19 spread, the Council hereby order that –

1. Students who have qualified either of the Groups or both the Groups of Intermediate/IIPC Examinations held in November 2020/January 2021 and are required to commence their Practical Training on or before 30th April, 2021 for being eligible to appear in the Final Examination to be held in November, 2023, but are not able to commence their Practical Training due to lockdown/curfew in various parts the country on account of COVID-19, be allowed to commence their Practical Training on or before 30th June, 2021 instead of 30th April, 2021 and then be allowed to appear in the Final examination to be held in November, 2023.

2. The above relaxation in the requirement of Regulation 29D shall be a one-time measure only due to spread of Covid 19.

Director
Board of Studies, ICAI

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GST: Personal Hearing proceedings’ functionality released by CBIC

GST: Personal Hearing proceedings’ functionality released by CBIC

CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS

OFFICE OF THE ADDITIONAL DIRECTOR GENERAL OF
SYSTEMS AND DATA MANAGEMENT, BENGALURU

Dated: 26.04.2021

DSR ADVISORY NO : 04/2021

SUB: DSR: Release of module: Personal Hearing Proceedings–Reg.

Bangalore Zonal unit of Directorate of Systems and Data management is entrusted with task of development of Dispute settlement and resolution(DSR), Investigation, Audit, Mobility and E-way Bill modules. Adjudication is one of the modules encompassed in the comprehensive Dispute Settlement and Resolution(DSR) module. The functionality for the personal hearing proceedings of Adjudication module is now available for use by the departmental officers.

2. The salient features of the module are detailed as under: –

Legal Provisions: Section 75(4), 75(5) and Rule 142(4)

Forms: FORM GST DRC-01/DRC-02/DRC-06

(i) This is built for the Adjudicating Authority and is a post process for issue of DRC-01/02 (Show Cause Notice/Statement of Demand) to meet the principles of natural Justice. The opportunity for personal hearing can be allowed by the officer through FORM GST DRC-01 (Show Cause Notice) or as desired by the tax payer through FORM GST DRC-06or provided by the Adjudicating Authority himself by fixing the personal hearing. The pre-requisite for executing this functionality is that FORM GST DRC-01/DRC-02 should have been issued in the system (FORM GST DRC-02 is under development).

(ii) The Adjudicating Authority has to select GSTIN and DRC-01 Number from ‘DRC-01s pending for adjudication’ list after following the path: DISPUTE, SETTLEMENT AND RESOLUTION(DSR) >Common List Page > View SCN List. Options ‘View Reply’ and ‘Fix PH’ are provided in the list and the Adjudicating Authority can make use of such options depending upon the circumstances. ‘View Reply’ displays the FORM GST DRC-06 and its contents. ‘Fix PH’ leads to ‘Personal Hearing Management’, wherein platform for 1st‘Personal Hearing’ gets created and the officer can select date & time and issue personal hearing notice to the tax payer through GSTN portal. In case personal hearing is fixed while issuing FORM GST DRC-01, the system displays that personal hearing is fixed and accordingly the Adjudicating Authority can proceed.

(iii) After fixing 1st personal hearing, circumstances may warrant:

a. adjournment or

b. fixing of next personal hearing or

c. conduct of personal hearing or

d. closure of personal hearing or

e. proceed for issue of order-in-original.

In such cases also ‘Fix PH’ option has to be used to get ‘Personal Hearing Management’, wherein the options ‘Adjourn PH’, ‘Record PH’, ‘Close PH’ and ‘Issue OIO’ are available for the officer to make use as under:

• ‘Adjourn PH’: Adjourns the personal hearing already fixed and enables the next personal hearing. The officer has to select date and time and issue personal hearing notice. Adjournments are limited to a maximum of three times.
• ‘Record PH’: Changes the status of personal hearing fixed to record hearing and the officer can enter details of representative and record personal hearing.
• ‘Close PH’: Closes the hearing proceedings and changes the status as closed.
• ‘Issue OIO’: Leads to next process ‘preparation and issue of order-inoriginal’. This option is mandatory and is required to be used to move to next stage of adjudication, otherwise task of adjudication stops here.

Besides, ‘Personal Hearing Management’ provides ‘Reminder’ option to the officer for reminding the tax payer about the personal hearing fixed.

However, the request for adjournment or cancellation of personal hearing has to be made by the tax payer offline. This can be documented by the adjudicating authority while adjourning or cancelling in ’Remarks’ text box and at the same time the offline document/record can be uploaded in the tabs provided.

f. The system has the facility to upload and download documents and also to view/download the documents generated.

3. It may be noted that since the facility for digital signature is not available for the time being, it is advisable to ensure that notices or any documents, which are legal in nature are signed by the respective authorities and issued in addition to the online issuance of the same. The functionality of “Preparation and Issue of Order-in-Original” will be available in production in May, 2021.

4. For clear understanding of the process, user manual has been prepared and enclosed herewith.

Enclosures: As above

(R. SRIRAM)
ADDITIONAL DIRECTOR GENERAL(SYSTEMS)

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HC directs Center to ensure adequate security for lorries transporting oxygen

HC directs Center to ensure adequate security for lorries transporting oxygen

IN THE HIGH COURT OF DELHI

The Text of the Order as follows :

1. Last night, we had passed the order in W.P .(C) No. 4970/2021 on the assurance given by the learned Solicitor General, that Delhi would be provided with Medical Oxygen as per its allocation made on 21.04.2021 – with effect from the same date, i.e. to the tune of 480 MT. We had also taken note of the concern expressed by Mr. Mehra, learned Senior Advocate for the GNCTD that supply of Oxygen to Delhi is being obstructed in the States where it is being produced, and while on its way to Delhi. On this concern being expressed, Mr. Mehta had assured that the Central Govermnent shall facilitate the supply of 480 MT of Medical Oxygen to Delhi in terms of the Allocation Order dated 21.04.2021. It appears that the said Allocation has actually not been practically delivered, and the NCT of Delhi has not received Medical Oxygen to the tune of 480 MT till now.

2. When we took up the matter yesterday, we noted that about 200-250 MT of Medical Oxygen only had been received during the day, and till the we passed the order.

3. It appears that 140 MT of Medical Oxygen, which has been allocated to be supplied from the plant of Air Liquide, Panipathas been obstructed by the local authorities.

4. The position in the NCT of Delhi has turned precarious with several hospitals reporting either complete exhaustion of Oxygen, or depletion to the level that it may not last even for the next few hours. Mr. Tushar Rao, Senior Advocate has pointed out one Mrs. Poonam Kalra, who is admitted at U .K. Nursing Home, Vikas Puri in a serious condition has been asked by the nursing home to take her to some other hospitaL since the hospital has run out of oxygen. Similar is the position with regard to Aakash Hospital in Dwarka.

5. Mr. Mehta has submitted that an order has been issued by the Ministry of Home Affairs on 22.04.2021 under the Provisions of Disaster Management Act in the matter of supply and transportation of Medical Oxygen from the place of production to wherever it is to be supplied. The said order reads as follows:

40-3/2020-DM-l(A)
Government of India
Ministry of Home Affairs

North Block, New Delhi
Dated 22nd April, 2021

ORDER

Whereas, an Order bearing No. 40-3/2020-DM-J(A) dated 23.03.2021, alongwith guidelines for effective control ofCOVID-19 have been issued under section 10(2)(1) of the Disaster Management Act, 2005 (hereinafter referred to as the DM Act) wherein, inter alia, it is mandated that there shall be no restriction on inter-State and intra-State movement of persons and goods;

And whereas, due to rapid rise in COVID-19 cases and with increasing case positivity rate, various States/UTs have imposed some additiona1 restrictions on certain activities and weekend lockdowns/curfews etc. to break the chain of transmission to contain the spread of Covid-19;

And whereas, the avai !ability of adequate and uninterrupted supply of Medical Oxygen is an important pre-requisite for managing moderate and severe cases of COVID-19 and with the increasing cases, the medical oxygen supply will need to keep pace with the requirements of the State/UTs;

And whereas, medical oxygen is an essential public health commodity and any impediment in the supplies of Medical Oxygen in the country may critically impact the management of patients suffering from COVJD-19 disease in other parts of the country;

And whereas, Empowered Group-JI (EG-11), is mandated for coordinating medical logistics, including medical oxygen. EG-II has reviewed the supply of oxygen for industrial use in order to divert the same to meet the rising demand for medical oxygen in the country and save precious lives. Accordingly, EG II has recommended to prohibit the supply of Oxygen for industrial purposes by manufacturers and suppliers forthwith from 22.04.2021 till further orders, with the exception of nine specified industries. The recommendations of the EG-11 have been accepted by the Central Government and the said decision, alongwith the list of nine exempted industries, have been conveyed by Secretary, Ministry of Health & Family Welfare, vide his DO letter dated 18th April 2021 {Annexure-1).

And whereas, keeping in view the requisitions of Medical oxygen and to ensure smooth supplies of it to the States/UTs are concerned, EG-IL in consultations with the States/UTs and oxygen manufacturers etc., prepares supply plan, which is required to be followed by all States, UTs and all the agencies concerned The oxygen supply plans, as revised from time to time by EG-11 based on the assessment of the situation, are circulated by MoHFW to all the States/UTs concerned, and the last revised plan has been circulated vide MoHFW letter dated 21.04.2021 {Annexure //).

Now, therefore, to ensure the uninterrupted supply of medical oxygen across the country for management of COVID-19 patients, in exercise of powers conferred under section 10(2)(1) oftheDM Act, the undersigned, in the capacity as Chairperson, National Executive Committee, hereby directs the State/Union Territory Governments and State/ Union Territory Authorities to ensure the following measures within their areas of jurisdiction;

(i) No restriction shall be imposed on the movement of Medical Oxygen between the States and transport authorities shall be instructed to accordingly allow free inter-state movement of oxygen carrying vehicles;

(ii) No restrictions shall be imposed on oxygen manufacturers and suppliers to limit the oxygen supplies only to the hospitals of the State/ UT in which they are located;

(iii) There shall be free movement of oxygen carrying vehicles into the cities, without any restriction of timings, while also enabling inter-city supply without any restriction;

(iv) No authority shall attach the oxygen carrying vehicles passing through the district or areas for making supplies specific to any particular district(s) or area;

(v) Supply of oxygen for industrial purposes, except those exempted by the Government is prohibited w.e.f 22nd April, 2021 and till further orders;

(vi) States/UTs shall strictly abide by the supply plan of medical oxygen prepared by EG-11 and as revised from time-to-time,· The District Magistrates/ Deputy Commissioners and Senior Superintendents of Police/ Superintendents of Policy/ Deputy Commissioners of Police will be personally liable for implementation of the above directions.

-sd-
Union Home Secretary
and, Chairman, National Executive Committee (NEC)

6. We are informed that the local authorities at Panipat have obstructed the lifting and transportation of oxygen from Air Liquide, Panipat. Yesterday as well, the supply of oxygen from the Faridabad border to Delhi was obstructed for several hours by the local authorities.

7. Mr.Piyush Goei Additional Secretary, Ministry of Home Affairs is also present during the hearing, and he states that the officials in the State of Haryana were persuaded to abide by the Allocation Order and the order dated 22.04.2021 passed under the Disaster Management Act. Thereafter some oxygen has been released from Air Liquide, Panipat Plant. However, the position does not appear to be completely satisfactory and obstructions appear to continue.

8. We direct the Central Government to peremptorily ensure strict compliance of the Allocation Order dated 21.04.2021, its own order passed on 22.04.2021 under the Disaster Management Act, and our order dated 21.04.2021. We also direct all the authorities concerned, who are bound by the allocation order, and the order passed under the Disaster Management Act, to ensure its strict compliance. We make it clear that non-compliance of the said orders and our order passed today will be dealt with very seriously, since non-compliance of these orders is likely to result in grave loss of life. We put everyone conce1ned to notice that non-compliance of this order would also invite action for contempt of Court and also invite criminal and penal action under the Disaster Management Act and under the Indian Penal Code. We direct the Central Government to ensure that the supplies from all the oxygen producing plants, as per the allocation order, is made and transportation takes place without any hindrance. Looking to the present emergent situation, we direct the Central Government to ensure that adequate security is provided to the lorries transporting oxygen, and there is no obstruction on the way. For this purpose, a special corridor be created for immediate transportation of the oxygen. Other aspects of the matter, which are listed before us, shall continue to be taken up hereafter.

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CBDT extends timelines for Income Tax Assessment

CBDT extends timelines for Income Tax Assessment

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 27th April, 2021

S.O. 1703(E).— In exercise of the powers conferred by sub-section (1) of section 3 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020) (hereinafter referred to as the said Act), and in partial modification of the notifications of the Government of India in the Ministry of Finance, (Department of Revenue) No. 93/2020 dated the 31st December, 2020, No. 10/2021 dated the 27th February, 2021 and No. 20/2021 dated the 31st March, 2021, published in the Gazette of India, Extraordinary, Part-II, Section 3, Subsection (ii), vide number S.O. 4805(E), dated the 31st December, 2020, vide number S.O. 966(E) dated the 27th February, 2021 and vide number S.O. 1432(E) dated the 31st March, 2021, respectively (hereinafter referred to as the said notifications), the Central Government hereby specifies for the purpose of sub-section (1) of section 3 of the said Act that, —

(A) where the specified Act is the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act) and, —

(a) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of any order for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof, expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021;

(b) the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to passing of an order under sub-section (13) of section 144C of the Income-tax Act or issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021.

Explanation.— For the removal of doubts, it is hereby clarified that for the purposes of issuance of notice under section 148 as per time-limit specified in section 149 or sanction under section 151 of the Income-tax Act, under this sub-clause, the provisions of section 148, section 149 and section 151 of the Income-tax Act, as the case may be, as they stood as on the 31st day of March 2021, before the commencement of the Finance Act, 2021, shall apply.

(B) where the specified Act is the Chapter VIII of the Finance Act, 2016 (28 of 2016) (hereinafter referred to as the Finance Act) and the completion of any action, referred to in clause (a) of sub-section (1) of section 3 of the said Act, relates to sending an intimation under sub-section (1) of section 168 of the Finance Act, and the time limit for completion of such action expires on the 30th day of April, 2021 due to its extension by the said notifications, such time limit shall further stand extended to the 30th day of June, 2021.

[Notification No. 38 /2021/ F. No. 370142/35/2020-TPL]

RAJESH KUMAR BHOOT, Jt. Secy. Tax Policy & Legislation Division

Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide S.O. No. 4805 dated 31st December, 2020.

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No GST can be demanded from Buyer for the fault of Seller of non-payment of taxes to the Govt

No GST can be demanded from Buyer for the fault of Seller of non-payment of taxes to the Govt

The Hon’ble Madras High Court in M/s. D. Y. Beathel Enterprises v. the State Tax Officer [W.P. (MD) Nos. 2127, 2117, 2121, 2152, 2159, 2160, 2168, 2177, 2500, 2530, 2532, 2534, 2538, 2539, 2540, 2503 & 2504 of 2021 & Ors., dated February 24, 2021] quashed the order passed by the officer levying the entire tax liability on the purchasing dealer without involving the seller, where the payment of tax has been made by the purchasing dealer, but the same has not been remitted to the Government by the Seller. Held that, the omission on the part of the Seller to remit the tax should have been viewed very seriously and strict action ought to have been initiated against the seller.

Facts:

M/s. D. Y. Beathel Enterprises (“the Petitioner”) herein are dealers of Raw Rubber Sheets. According to the Petitioner they had purchased goods from Charles and his wife Shanthi (“Sellers”) and the payments were made by the Petitioners to Sellers included the tax component. A substantial portion of the sale consideration was paid through banking channels. Based on the returns filed by the Sellers, the Petitioner availed Input Tax Credit (“ITC”).

During inspection by the State Tax Officer (“the Respondent”), it came to light that Sellers did not pay any tax to the Government, which necessitated initiation of the proceedings and issuance of show cause notices to the Petitioner. The Petitioner submitted their replies specifically taking the stand that all the amounts payable by them had been already paid, therefore, those Sellers will have to be necessarily confronted during enquiry. Subsequently, without involving the Sellers, the Respondent passed an order (“impugned order”) levying the entire liability on the Petitioners.

Being aggrieved, the Petitioner has filed this petition against the impugned order.

Issue:

Whether the Respondent can levy the entire tax liability on the Petitioner, without involving the Sellers, where the tax has not been remitted to the Government by the Sellers?

Held:

The Hon’ble Madras High Court in W.P. (MD) Nos. 2127, 2117, 2121, 2152, 2159, 2160, 2168, 2177, 2500, 2530, 2532, 2534, 2538, 2539, 2540, 2503 & 2504 of 2021 & Ors., dated February 24, 2021 held as under:

• Analyzed the provision of Section 16 of the Central Goods and Services Tax Act, 2017 (“CGST Act”), and noted that the assessee must have received the goods and the tax charged in respect of its supply, must have been actually paid to the Government either in cash or through utilization of ITC, admissible in respect of the said supply. Therefore, if the tax had not reached the kitty of the Government, then the liability may have to be eventually borne by one party, either the seller or the buyer.
• Observed that, the Respondent has not taken any recovery action against the Seller. When it has come out that the Seller has collected tax from the Petitioner, the omission on the part of the Sellers to remit the tax must have been viewed very seriously and strict action ought to have been initiated against the Sellers.
• Noted that the Respondent took a stand that there was no movement of goods. Held that, if there was no movement of the goods, the examination of Sellers became more necessary and imperative. However, the Respondent did not ensure the presence of Sellers in the enquiry even when the Petitioners insisted on the same. Hence, the Impugned order suffers from certain fundamental flaws.
• Quashed the Impugned order due to non-examination of Sellers in the enquiry and non-initiation of recovery action against Sellers in the first place and remitted back the matter to the Respondent.
• Directed Respondent to hold the enquiry afresh where Sellers will have to be examined as witnesses and to initiate recovery action against Sellers.

Our comments:

To know more, kindly watch our video on “No GST can be demanded from Buyer for fault of Supplier of non-payment of taxes” by CA Bimal Jain at: https://www.youtube.com/watch?v=NUMSf_VNgV4

Relevant Provisions:

Section 16(1) and (2) of the CGST Act:

“16. Eligibility and conditions for taking input tax credit.

(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless,––

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(b) he has received the goods or services or both.

Explanation.-For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services––

(i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;

(ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person.

(c) subject to the provisions of section 41 or section 43A], the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment:

Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:

Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.”

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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Supreme Court order extending limitation period with effect from 14.03.2021 under all general and special laws is uploaded

Supreme Court order extending limitation period with effect from 14.03.2021 under all general and special laws is uploaded

Supreme Court of India

The Text of the Order as follows :

The Court is convened through Video Conferencing.

This Court took suo motu cognizance of the situation arising out of the challenge faced by the country on account of COVID-19 Virus and resultant difficulties that could be faced by the litigants across the country. Consequently, it was directed vide order dated 23rd March, 2020 that the period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15th March, 2020 till further orders.

Thereafter on 8th March, 2021 it was noticed that the country is returning to normalcy and since all the Courts and Tribunals have started functioning either physically or by virtual mode, extension of limitation was regulated and brought to an end. The suo motu proceedings were, thus, disposed of issuing the following directions:

“1. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.

2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply.

3. The period from 15.03.2020 till 14.03.2021 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

4. The Government of India shall amend the guidelines for containment zones, to state.

“Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.”

Supreme Court Advocate on Record Association (SCAORA) has now through this Interlocutory Application highlighted the daily surge in COVID cases in Delhi and how difficult it has become for the Advocates-on-Record and the litigants to institute cases in Supreme Court and other courts in Delhi. Consequently, restoration of the order dated 23rd March, 2020 has been prayed for.

We have heard Mr. Shivaji M. Jadhav, President SCAORA in support of the prayer made in this application. Learned Attorney General and Learned Solicitor General have also given their valuable suggestions.

We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases is not limited to Delhi alone but it has engulfed the entire nation. The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant–public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders.

It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

We have passed this order in exercise of our powers under Article 142 read with Article 141 of the Constitution of India. Hence it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities.

This order may be brought to the notice of all High Courts for being communicated to all subordinate courts/Tribunals within their respective jurisdiction.

Issue notice to all the Registrars General of the High Courts, returnable in 6 weeks.

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