M/S LADIWAL JEWELS AND SONS LLP V. PRINCIPAL COMMISSIONER

CW/3731/2021

AI Insights

The case involves M/s Ladiwal Jewels & Sons LLP and its authorized signatory, Honey Ladiwal, as petitioners, who challenged an Advisory Memo issued by the Central Goods & Service Tax & Central Excise authorities. The memo, dated 01.03.2021, was intended to prompt voluntary compliance with tax laws concerning the availing of Input Tax Credit (ITC) which the petitioners allegedly were not entitled to. The petitioners argued that the advisory was issued without proper legal basis and threatened them under the guise of an advisory. The respondents contended that the advisory was merely a preliminary step and any subsequent actions would be in accordance with the law, specifically referring to Chapter XV of The Central Goods and Services Tax Act, 2017.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 726032 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 23-03-2022
• Assessment Year: misc
• Other Referred Cases: M/s. Dhariwal Products Versus Union of India & Others, Rishi Bansal Proprietor of Bansal Sales Corporation Versus Union of India & Others, Makemytrip (India) Pvt. Ltd. Versus Union of India & Others, M/s. Deem Distributors PVT LTD Versus Union of India, Bhumi Associate Versus Union of India, Animal Feeds Diaries and Chemicals Limited Versus Orissa State (Prevention and Control of Pollution) Board and Others, Commissioner of Income Tax Versus Chidambaram Construction Co., Commissioner of C. Ex. Versus Jamshedpur Beverages, Commissioner of Central Excise & Customs, Vadodra Versus Narmada Chematur Pharmaceuticals LTD, Union of India and Others Versus Make My Trip (India) Private Limited, Akhil Krishan Maggu Versus Dy. Dir., D.G. of GST Intelligence
• Laws Referred To: The Central Goods and Services Tax Act, 2017
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SIDDHARTH RANKA
• Assessee Lawyers: S S HORA
• Keywords: ITC; Jurisdiction; Voluntary Compliance; Advisory Memo; Threat in the garb of advisory
• Section: 15

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 3731/2021 1. M/s Ladiwal Jewels & Sons LLP, 2035 Pitaliyo Ka Chok, Johari Bazaar, Jaipur-302003 through Authorized Signatory Shri Honey Ladiwal. 2. Honey Ladiwal S/o Shri Omprakash Ladiwal, aged 30 Years, Authorized Signatory, M/s Ladiwal Jewels & Sons LLP, 2035 Pitaliyo Ka Chok, Johari Bazaar, Jaipur-302003 ----Petitioners Versus 1. Principal Commissioner, Central Goods & Service Tax & Central Excise, Commissionerate, NCR Building, Statue Circle, C Scheme Jaipur. 2. Superintendent (AE), Central Goods & Service Tax & Central Excise, NCR Building, Statue Circle, C Scheme Jaipur. 3. 4. 5. H R Mundel, Superintendent (AE), Central Goods & Service Tax & Central Excise, NCR Building, Statue Circle, C Scheme Jaipur. Member (Investigation), Central Board of Indirect Taxes & Customs, North Block, New Delhi. Commissioner (GST Inv.), Central Board of Indirect Taxes & Customs, Room No.1, 10th Floor, Tower-2, 124, Jeevan Bharti Building, Connaught Circle, New Delhi. ----Respondents For Petitioner(s) : Mr. S.S. Hora Advocate. For Respondent(s) : Mr. Siddharth Ranka Advocate. HON'BLE THE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE SAMEER JAIN Judgment / Order 23/03/2022 (2 of 4) [CW-3731/2021] Heard. The petitioners have filed this petition aggrieved by Advisory Memo dated 01.03.2021 issued to petitioner No.1 to give an opportunity to voluntarily comply with the law with assurance of due consideration, in case of compliance in the matter of conclusion of investigation. Learned counsel for the petitioners would submit that the mode and manner which is being adopted by the respondents authorities is not known to law. He would submit that without following the provisions of law in the matter of allegation of availing ITC to which allegedly the petitioners were not entitled, respondents-authorities are issuing letters which in its spirit is only a threat in the garb of advisory. He would submit that such a letter has been issued in purported exercise of powers conferred under letter dated 19.01.2021 (Annexure-P7) issued by the Commissioner (GST-Inv.) CBIC, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, whereas, the said office memorandum itself is without any authority and jurisdiction. He would submit that such actions are without jurisdiction and in support of his contention, he relies upon the judgment of the Principal Seat of this Court at Jodhpur in the case of M/s. Dhariwal Products Versus Union of India & Others. (D.B. Civil Writ Petition No.2189/2022) decided on 09.02.2022; Judgments of the High Court of Delhi in the case of Rishi Bansal Proprietor of Bansal Sales Corporation Versus Union of India & Others (W.P. (C) 4409/2020) decided on 22.07.2020, Makemytrip (India) Pvt. Ltd. Versus Union of India & Others (W.P. (C) 525/2016 & C.M. 2153/2016 & Connected matters) decided on 01.09.2016; (3 of 4) [CW-3731/2021] Judgment of the High Court of Hyderabad at Telangana in the case of M/s. Deem Distributors PVT LTD Versus Union of India (WP 7063/2021) decided on 03.08.2021; Judgment of the High Court of Gujarat at Ahmedabad in the case of Bhumi Associate Versus Union of India (R/Special Civil Application No.3196 of 2021 and batch of applications) decided on 16.02.2021; Judgment of the Orissa High Court in the case of Animal Feeds Diaries and Chemicals Limited Versus Orissa State (Prevention and Control of Pollution) Board and Others AIR 1995 Orissa 84; Judgment of the Madras High Court in the case of Commissioner of Income Tax Versus Chidambaram Construction Co. (2003) 261 ITR 754; Judgments of the Hon’ble Supreme Court in the case of Commissioner of C. Ex. Versus Jamshedpur Beverages (Civil Appeal No.1691 of 2003) decided on 25.04.2007, Commissioner of Central Excise & Customs, Vadodra Versus Narmada Chematur Pharmaceuticals LTD (2005) 10 Supreme Court Cases 123; Union of India and Others Versus Make My Trip (India) Private Limited (2019) 11 Supreme Court Cases 765; Judgment of the High Court of Punjab and Harayana at Chandigarh in the case of Akhil Krishan Maggu Versus Dy. Dir., D.G. of GST Intelligence (CWP No.24195 of 2019 (O&M) decided on 15.11.2019. At the outset, learned counsel for the respondents- authorities would submit that the petitioners’ petition is based on an apprehension that if the advice is not acted upon, the respondents-authorities would be adopting coercive process without due process of law, which is not correct. He would submit that such letters have been issued only on prima-facie opinion regarding petitioners having availed ITC to which they were not entitled under the law. In case the petitioners are not voluntarily (4 of 4) [CW-3731/2021] accepting, the respondents-authorities shall act only in accordance with law with regard to the demands and recovery as contained in Chapter XV of The Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘Act of 2017’). In view of the statement which has been made by the learned counsel for the respondents and also the averments which have been made in the reply, without commenting upon the merits of the case as to whether the petitioners are guilty of fraud or have availed ITC to which they were not entitled under the law, it appears to us that the advisory has triggered the present petition. It is not the stand of the respondents that the advisory itself, without anything more, would be made a basis for recovery. In view of the clear stand taken before this court by the respondents-authorities that any demand and recovery would be made only by complying with the provisions contained in Chapter XV of the Act of 2017, it is not necessary for this Court to go into all the questions which have been raised. Placing on record the statement as made by the learned counsel for the respondents, this writ petition is disposed off with liberty to the petitioners to take all defences as may be available to them under the law against any action of the demand and recovery. Pending application stands disposed off. (SAMEER JAIN),J (MANINDRA MOHAN SHRIVASTAVA),ACTING CJ Sanjay Kumawat-38 "