Goods & Service Tax (GST) - One Question A Day by CA Sudhir Halakhandi - PART 1 Q. The talks on GST is going on in the News papers very prominently and I came to know that GST will be a single tax replacing all the Central and State indirect Taxes and we will require […]
Do not misunderstand , there will be another Tax !!!!!!!!! Over and Above GST!!!! Some innovation ????
GST: Will it be single tax to replace Central & State indirect Taxes?
Goods & Service Tax (GST) – One Question A Day by CA Sudhir Halakhandi – PART 1
Q. The talks on GST is going on in the News papers very prominently and I came to know that GST will be a single tax replacing all the Central and State indirect Taxes and we will require to deposit a single tax in place of VAT, Central Excise and Service Tax. Please explain the new system Sir.
CA SUDHIR HALAKHANDI:-
What you have described is the "Standard format" of Goods and service tax and this was the format which was initially presented by the Government in 2006 and 2007. Let us see the relevant part of the speech of the erstwhile Finance Minister Mr. P. Chidambaram:-Budget speech – 2006
155. It is my sense that there is a large consensus that the country should move towards a national level Goods and Services Tax (GST) that should be shared between the Centre and the States. I propose that we set April 1, 2010 as the date for introducing GST. World over, goods and services attract the same rate of tax. That is the foundation of a GST. People must get used to the idea of a GST.
Budget speech -2007
116. I wish to record my deep appreciation of the spirit of cooperative federalism displayed by State Governments and especially their Finance Ministers. At my request, the Empowered Committee of State Finance Ministers has agreed to work with the Central Government to prepare a roadmap for introducing a national level Goods and Services Tax (GST) with effect from April 1, 2010.
These two statements made by the then Finance Minister of India in 2006 and 2007 were without any basis and created a false impression in Trade and Industry that a "Single National Level Goods and service tax" is going to be introduced in our country and unfortunately this false impression is also there as it is reflecting from your question.
In our country the system of governance is "Federal" and both states and centre has the power of imposing and collecting indirect taxes. Centre is collecting Central Excise, Service Tax etc. and states are collecting VAT, Entry tax and Central Tax.
Hence the idea of Single National Level GST was rejected by the states at the initial stage of discussion and new compromised formula was emerged in which both the centre and the states will charge GST separately on a single transaction. States will collect State Goods and Service Tax (SGST) and Centre will collect Central Goods and Service Tax (CGST) and further a new and complicated system of collection of Tax on interstate transactions will be introduced in form of Interstate Goods and Service tax (IGST) to transfer the revenue on interstate transactions to the consuming state.
The power to search the premises of the service providers are contained in section 82 of the Finance Act, 1994 which deals with provisions relating to search and seizure of articles, documents etc, as a consequence of search. Search and seizure provisions contained in tax statutes are provided to act as a restraint on evasion of taxes. Such powers are within the constitutional frame work and cannot be considered as violative of Article 19 of Constitution of India.
PFA
Recently, Honourable High Court of Allahabad in Central Excise Appeal No. – 444 of 2010 of Commissioner, Central Excise, Meerut-I, Versus M/S Suraj & Company, reported in 2014(36) S.T.R.1252(All.) held that an appeal to High Court is not maintainable against an order of Tribunal which is itself Passed With Consent of both the parties .
Appeal to High Court Not Maintainable against a Decree of Tribunal i.e. CESTAT
Recently, Honourable High Court of Allahabad in Central Excise Appeal No. – 444 of 2010 of Commissioner, Central Excise, Meerut-I, Versus M/S Suraj & Company, reported in 2014(36) S.T.R.1252(All.) held that an appeal to High Court is not maintainable against an order of Tribunal which is itself Passed With Consent of both the parties .
Order of Tribunal
The Tribunal has passed the following order on 21st May, 2010 :-
Both sides agree that this matter is squarely covered by the judgement of Hon'ble High Court of Madhya Pradesh in the case of Som Distilleries Pvt. Ltd. & Ors. Vs. UOI and Ors. report in 2009 (15) STR 3 (M.P.). The ratio of the said judgement was followed by the Tribunal in the case of Great Galleon Ltd. Vs. Commissioner of Central Excise, Indore reported in 2009 (16) STR 169 (Tri -Delhi.). Finding no dispute, we allow the appeal and also dispose of the stay application".
Respondent Pleaded
The respondent has raised a preliminary objection regarding maintainability of the appeal. He submits that the order passed by the Tribunal being a consent order which is clear from the order itself, no appeal lie against the consent order. He has relied on sub-Section (9) of Section 35G of Central Excise Act as well as Section 96(3) of Civil Procedure Code. Sub-Section (9) of Section 35G is as follows : -
"Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908) relating to appeals of the High court shall, as far as may be, apply in the case of appeals under this section."
Section 96, sub clause (3) of the Civil Procedure Code, 1908 reads :
Appeal from the original decree-
(1) ………
(2) ……..
(3) No appeal shall lie from a decree passed by the Court with the consent of parties".
(1) ………
(2) ……..
(3) No appeal shall lie from a decree passed by the Court with the consent of parties".
High Court Concluded
By virtue of provision of Section 35G sub Section (9) the provision of Civil Procedure Code, in so far as the appeals to the High Court are concerned are applicable.
By virtue of provision of Section 35G sub Section (9) the provision of Civil Procedure Code, in so far as the appeals to the High Court are concerned are applicable.
Sub-section (3) of Section 96 of Civil Procedure Code provides that No appeal shall lie from a decree passed by the Court with the consent of parties. The decree passed by the tribunal being a consent decree, this appeal is clearly not maintainable and is liable to be dismissed on this ground alone.
The preliminary objection is sustained. The appeal is dismissed.
Impact of the Order
If the order of Tribunal is worded to the following effect that
- both sides agree that there is no dispute
- both sides agree that the matter is squarely covered by the judgement
then in such type of cases , none of the parties to the dispute can claim to be aggrieved against such an order in as much as such orders are considered to be a decreee passed by the Tribunal with the consent of parties .
Accordingly, in such cases , no appeal to High Court can be filed under Section 35G of CEA,1944 as applicable to service tax vide Section 83 of Finance Act,1944.
(Anand Mishra, Founder Advocate, AMLEGALS – The author is a leading indirect tax advocate handling cases in CESTAT & High Courts of India. He can be contacted on anand@amlegals.com and for more please refer www.amlegals.com)
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Appeal to High Court Not Maintainable against a Decree o... Recently, Honourable High Court of Allahabad in Central Excise Appeal No. – 444 of 2010 of Commissioner, Central Excise, Meerut-I, Versus M/S Suraj &... | |||||||
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