Page 205 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] IN RE : OMSAI PROFESSIONAL DETECTIVE AND SECURITY SERVICES PVT. LTD. 123
from the clients. The ideal average time taken for the realisation is 90
days from the date of raising the invoice. Whereas, the appellant has
to pay the salaries to the security personnel on monthly basis and
certain clients allow raising invoice only after the payment of sala-
ries to them. The interest/finance cost on the overheads (mainly sal-
aries to the security personnel) is almost shelling out the margins of
the appellant. Adding to the above difficulties, the GST at the rate of
18% has to be paid immediately on raising of the invoice which is
becoming an added burden to the appellant. All these led to huge
working capital crisis, ultimately leading to cash crunch in the
hands of the appellant. Further, the main reason of bringing the se-
curity services under reverse charge (w.e.f. 1-1-2019) is relieve the
suppliers of ‘security services’ from the above mentioned difficul-
ties. Further, the bank accounts were frozen which had further add-
ed to the difficulties of the appellant in remitting the salaries to the
security personal affecting the livelihood of the 20,000 employees of
the appellant.
(4) Though the client was facing cash crunch, it prioritized the revenue
of the government over business needs and started depositing cash
into the electronic cash ledger as and when the collections were
made from the debtors. The same can be evidenced from the Elec-
tronic cash ledger which is enclosed herewith as Annexure---
(5) Thus, no sooner did they feel that the amount in the cash credit
ledger would be sufficient to discharge the liability of a particular
month, they filed the return as in the case of December, 2017.
(6) Therefore, what has to be understood here is that, there was no rea-
son with the client for non-filing of return except for the fact that
they had no money to discharge the output liability, and as soon as
even a part of receivables were being realized, efforts were being
made to accumulate the same in the electronic cash ledger until the
accumulated amount was enough to offset the liability for the re-
spective month.
(7) Also, as on date, the client has filed its return for the month Decem-
ber, 2017, which shows that but for the liquidity crunch, the client
had all the intentions to pay the taxes and file the return regularly in
full compliance of law.
(8) Appellant further submits that GSTR-01 disclosing the details of
outward supplies was filed for the subject period. As the turnover is
available from the form GSTR-01, the Ld. Adjudicating authority
could have raised the demand based on the actual turnovers instead
of estimated turnover. The same Ld. Adjudicating authority has
raised the demand based on the turnover declared in the GSTR-01
for the month of February 2018, while the same analogy was not be-
ing followed in this month. Therefore, the demand (if any) may be
restricted, on the turnover declared in GSTR-01 and not beyond that.
(9) Notwithstanding anything contained above, the appellant states
that, Section 62 requires that a notice under Section 46 be issued be-
fore passing any Best Judgment Assessment under this section. An
extract of the said section is produced herewith for your reference,
“.... where a registered person fails to furnish the return under
Section 39 or Section 45, even after the service of a notice un-
GST LAW TIMES  2nd July 2020  205