By CA Arpit Haldia, Author of Books on GST
Let’s have a visit to following phrase which appears to be similar but have a vast difference
- Section 11A of Central Excise Act, 1944- “any wilful mis-statement or suppression of facts.”
- Section 74 of CGST Act, 2017- “any wilful-misstatement or suppression of facts”.
- Section 122 of CGST Act, 2017- “any wilful misstatement or suppression of facts”
- Section 74A of CGST Act, 2017- “any wilful-misstatement or suppression of facts”
Section 11A of Central Excise Act, 1944 used the following phrase i.e “any wilful mis-statement or suppression of facts.” Hon’ble Apex Court in Cosmic Dye Chemical vs Collector Of Central Excise, Bombay on 6 September, 1994 Equivalent citations: 1994(48)ECC55 while interpreting the given phrase held that so far as misstatement or suppression of facts are concerned, they are clearly qualified by the word “wilful” preceding the words “misstatement or suppression of facts” which means with intent to evade duty. It is, therefore, not correct to say that there can be a suppression or misstatement of fact, which is not wilful and yet constitute a permissible ground for the purpose of the proviso to Section.
Section 74 of CGST Act, 2017 reads as follows- “any wilful-misstatement or suppression of facts”. Do I say that there is any difference between “any wilful mis-statement or suppression of facts.” in Section 11A of CEA, 1944 and “any wilful-misstatement or suppression of facts” in Section 74. On a cursory view, there isn’t but on a careful view, it becomes apparent that the presence of “-“ in “wilful mis-statement” earlier has now been shifted to “wilful-misstatement”. The effect is now the decision in Cosmic Dye Chemical (Supra) stands negated to the extent that wilful now does not attaches itself to both misstatement and suppression but only to misstatement as now “-“ is present between wilful-misstatement rather than mis-statement. Therefore, to this extent the decision of Apex Court stands negated.
But this is not the end of the story as provision of Section 122 reads as “any wilful misstatement or suppression of facts” instead of “any wilful-misstatement or suppression of facts” in Section 74. So the master stroke in Section 74 might be a drafting error as the terminology used in Section 122 is somewhat similar to Section 11A and the principle as laid down by Hon’ble Apex Court in Cosmic Dye Chem (Supra) will again hold forth. So, if one says Section 74 and 122 are to be used together, then language needs to be checked for being pari-materia.
Interestingly Section 74A uses the term as “any wilful-misstatement or suppression of facts” similar to Section 74.
Interesting times ahead and small drafting change may be an error or a master stroke.
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