News

GST Council has no power to ratify any notification issued by Central Government

The Madras High Court has held that GST Council has no power to ratify any notification issued by the Central Government either under Section 9 or Section 11 of the CGST Act, 2017.

Glucometers are classifiable Heading 9027 and not under Heading 9018 of Customs Tariff – Use in field of medicine is not material

The CESTAT Mumbai has reiterated that Glucometer, a small portable device used to measure the concentration of glucose (sugar) in the blood, is classifiable under Tariff Item 9027 80 90 of the Customs Tariff Act, 1975 and not under TI 9018 90 99 ibid.

Healthcare services through another hospital are also exempt; Classification of service must follow its substance

The Karnataka High Court has allowed benefit under Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate) to the assessee in a case where the assessee was providing healthcare services to patients through a Medical Services Agreement with another hospital and was receiving an amount from the hospital as consideration for rendering medical services.

Partners of a company (taxable person) can be imposed penalty under Section 122(1A) and for periods before the said provision

The Gauhati High Court has answered in affirmative the question as to whether partners of a company (taxable person) can be imposed penalty under Section 122(1A) of the CGST Act, 2017. The Court for this purpose noted the following:

Intimation under Form DRC-01A is mandatory, notwithstanding use of word ‘may’ in Rule 142(1A)

Observing that statutory provision contained in the principal legislation that is Section 74(5) of the CGST Act, 2017, is mandatory, the Allahabad High Court has held that the use of the word ‘may’ in Rule 142(1A) of the CGST Rules must be given the same interpretation. According to the Court, the provisions of Rule 142(1A) must be read in conjunction with Section 74(5).

Patents – Bolar provision – Defendant in infringement suit must discharge a heavier burden to establish supply under Section 107A providing exception

Allegations of fraud or misuse in registered transactions require foundational proof first before burden shifts to the other party

The Supreme Court upheld the Madras High Court’s judgment that when a party alleges fiduciary misuse in property transactions executed through a General Power of Attorney (‘GPA’), that party must first prove the basic facts showing such fraud. The burden does not shift to the beneficiaries unless and until such foundational evidence is placed on record.

Import of parts vs. Import in CKD form – Aggregation of disparate imports over a period of time to claim CKD form is not correct

The CESTAT Chennai has allowed assessee’s appeal in a case where the Revenue department had alleged misdeclaration of imports by importing goods in CKD form as parts. The dispute in Subash Iyappan v. Commissioner involved import of e-vehicles, allegedly in CKD form and thus being not eligible for benefit of reduced customs duty. The Tribunal for this purpose noted the following:

ITC when supplier not paid tax – Gujarat HC declines to read down Section 16(2)(c) and advises govt. to implement tracking mechanism

The Gujarat High Court has declined to read down Section 16(2)(c) of the CGST Act and thus not declaring it ultra vires Part III of the Constitution of India, including Article 14 thereof. Not agreeing with the contentions of the assessee that they cannot be subjected to denial of ITC solely on the ground that the supplier had failed to deposit the tax with the State Government, the Court observed the following:

Patents – Making available fungicide for use in high-temperature regions is ‘enhancement in efficacy’ under Section 3(d)

The Delhi High Court has held that the fact that the fungicide is made available to be used and sprayed at regions where the temperature would ordinarily go beyond 40°C, without crystallization, would clearly be an enhancement in the efficacy of the compound.

Common/consolidated SCN for multiple FYs/tax periods permissible, however, each period forming part of notice must satisfy limitation

The Karnataka High Court has answered in affirmative the question as to whether it would be permissible to issue consolidated/common show cause notice under Sections 73 and 74 of the CGST Act covering multiple financial years or multiple tax periods. The Division Bench of the Court in Commissioner v. Chimney Hills Education Society observed the following:

Trademarks – Transborder reputation and establishment of goodwill in India – SC decision in Prius distinguished

The Division Bench of the Delhi High Court has ordered removal of the registration for the mark ALPHARD in favour of the respondents in a case where the dispute involved determining whether the appellant’s same word mark, by virtue of its alleged prior adoption and asserted transborder reputation, qualified as a ‘well-known trademark’ on the date of the respondent’s application for registration within the same business sector.