#TaxmannPPT | Analysis of Latest Judgments in GST – March 2024 by Taxmann

Latest Judgements for the Quarter January March 2024 in GST

Presented at Taxmann’s Webinar on Monthly Round up of Latest Judgements in GST

BY CA DR ARPIT HALDIA

As the Presentation covers Judgements for the Quarter January –March 2024, thus for the ease of referring-

Particulars Specification

Cases Discussed for January-2024 are

Highlighted in the Following Colour

Cases Discussed for February-2024 are Highlighted in the Following Colour

Cases Discussed for March-2024 are

Highlighted in the Following Colour

Cases on Section 3 of CGST Act, 2017

1. R.C. Infra Digital Solutions v. Union of India [2024] 158 taxmann.com 272 (All.)

2. Fomento Resorts & Hotels Ltd. v. Union of India [2024] 159 taxmann.com 577 (Bom.)

Notification No. 14/2017 dated 01.07.2017 was not ultra vires to the powers provided to the Government under the CGST Act, 2017.

The Court observed that Central Government and the Board have exercised powers vested in them by Section 3 and 5, respectively, in the context of assigning the functions of “proper officer” upon the Commissioner or the officers of the Central Tax. The Central Government has issued the notification dated 19.06.2017 in the exercise of powers conferred by Section 3 r/w. Section 5 of the CGST Act constitutes the Commissioner of Central Tax (Audit) and Central Tax officers subordinate to him as central tax officers. The impugned circular dated 05.07.2017 is issued by the Board which is the proper authority in terms of Section 2(91) of the CGST Act. This is the reason why reference was made to Section 2(91) of the CGST Act.

Section 5 of the CGST Act provides that subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under the said Act. Further, Section 5 of the CGST Act inter alia provides that an officer of central tax may exercise the powers and discharge the duties conferred or imposed under the said Act on any other officer of central tax who is subordinate to him. By the impugned circular dated 05.07.2017, the Board has inter alia assigned the Deputy or the Assistant Commissioner of Central Tax to function as a “proper officer” in relation to the CGST Act. This includes clause (v) of Section 65(6) concerning the communication of the audit report on the conclusion of the audit. Thus Deputy Commissioner of CGST (Audit) was the “proper officer” to communicate the audit report under Section 65(6) of the CGST Act to the petitioner vide the communication dated 15.11.2022.

S. No. Case Citation Relevant Text

Cases on Section 5 of CGST Act, 2017

1. R.C. Infra Digital Solutions v. Union of India [2024] 158 taxmann.com 272 (All.)

2. Aasanvish Technology (P.) Ltd. v. Director General of GST Intelligence [2024] 158 taxmann.com 50 (Delhi)

3. Nektar Therapeutics India (P.) Ltd. v. Union of India [2024] 159 taxmann.com 757 (Telangana)

4. Mansoori Enterprises v. Union of India [2024] 160 taxmann.com 261 (All.)

Officer of DGSTI was proper officer in relation to the function to be performed under the CGST Act, 2017 as contemplated under Section 2 (91) of the CGST Act, 2017, and as such, was entitled to issue summons under Section 70 of the CGST Act, 2017 in connection with the inquiry initiated against the petitioner.

Multiple notices were issued and therefore highest demand was covered under notice issued to Belz Tech Private Limited, which was registered in Thane and by applying paragraph 7.1 of the Circular dated 9-2-2018 amended by the Circular dated 12-3-2022, as set out above, would thus be applicable

The Court observed that the counsel for the respondents fairly conceded that Assistant Commissioner, was not the proper officer as clarified by circular No.31/05/2018-GST dated 09.02.2018 issued by the Central Board of Excise and Customs inasmuch as the proper officer would be Additional or Joint Commissioner of Central Tax. Therefore, the show cause notice was set aside with liberty to the respondents to issue the same afresh by a proper officer.

The department admitted that the impugned order was not proper to the extent that it was not passed by proper officer as per the monetary limit stated in Circular No. 31/05/2018-GST dated 9th February, 2018. In light of the above, the court held that it was evident that the impugned order, was without jurisdiction and was accordingly set aside. Liberty was granted to the respondents to proceed afresh in accordance with law.

S. No. Case Citation Relevant Text

Cases on Section 6 of CGST Act, 2017

1. Vivek Narsaria v.State of Jharkhand [2024] 158 taxmann.com 523 (Jhar.)

2. Subhash Agarwalla v. State of Assam [2024] 159 taxmann.com 723 (Gau.)

Proceedings at the instance of State Authorities or the Preventive Wing or the DGGI were at initial stage and the proceedings on the basis of 'Search & Seizure' by the State Authorities, was prior in point of time, therefore all proceedings transferred to the state authorities

Pursuant to the Show Cause Notice issued on same matter both by Central and State Authorities, the authority under the CGST Act has passed an Order-in-Original on 14.11.2023. Subsequently, the authority under the SGST Act has passed an Order-in-Original on 11.12.2023. The Court observed that having regard to the provisions contained in Section 6 of the CGST/SGST Act, more particularly, Section 6[2] which inter alia indicates that once a proceeding is initiated either of the above two Acts, another proceeding for the same period under the other Act is not to be initiated, the operation of the Order-in-Original dated 11.12.2023 passed by the respondent was to remain suspended till the returnable date.

3. Mahabir Prasad Kedia v. Assistant Commissioner of State Tax [2024] 159 taxmann.com 752 (Cal.)

4. Tvl. Vardhan Infrastructure v. Special Secretary, Head of the GST Council Secretariat, New Delhi [2024] 160 taxmann.com 771 (Mad.)

The Court observed that the audit authority failed to take note of the submission made by the assessee and the subject matter was pending adjudication by the CGST Authority, who has issued the show cause notice dated 28.3.2023 which reply has been submitted by the appellant/assessee on 2nd May, 2023. Therefore, the audit wing of the State GST Authority ought to keep the matter abeyance so far as the discrepancy note is concerned. The SGST authority thereafter issued a show cause notice dated 29.12.2023. Accordingly, the appeal along with the connected application and the writ petition were disposed of by directing the audit wing of the SGST Authority to keep in abeyance all proceedings in respect of the discrepancy note no.3 alone including the show cause notice dated 29.12.2023 and abide by the adjudication order to be passed by the CGST Authority, on the show cause notice dated 28.03.2023.

Section 6(1) of the respective GST Enactments empowers Government to issue notification on the recommendation of GST Council for cross-empowerment. However, no notification has been issued except under Section 6(1) of the respective GST Enactments for the purpose of refund although officers from the Central GST and State GST are proper officers under the respective GST Enactments. Since, no notifications have been issued for cross-empowerment with advise of GST Council, except for the purpose of refund of tax under Chapter-XI of the respective GST Enactments r/w Chapter X of the respective GST Rules, impugned proceedings are to be held without jurisdiction. Consequently, the impugned proceedings are liable to be interfered in these writ petitions. Officers under the State or Central Tax Administration as the case may be cannot usurp the power of investigation or adjudication of an assesse who is not assigned to them.

5. Rais Khan v. Add. Commissioner, Enforcement Wing-II, Rajasthan [2024] 160 taxmann.com 546 (Rajasthan)

The dispute before the Court was issuance of summons under Section 70 of the CGST Act, when notices were already issued by the State Authorities. A prayer was made to quash and set-aside the issuance of the summons under Section 70 of the CGST Act.

The Court referred to the judgement by the respondents wherein it was held that scope of Section 6(2)(b) and Section 70 of the CGST Act are different and distinct, as the former deals with any proceedings on subject matter, whereas the latter deals with power to issue summon in an inquiry and therefore, the words "proceedings" and "inquiry" cannot be mixed up to read as if there is a bar for the respondents to invoke the power under Section 70 of the CGST Act. The Court referred to the Judgement wherein it was held that issuance of summons is not initiation of proceedings referable to under Section 6(2)(b) of the CGST Act. Similar was the view of Madras High Court wherein, it was held that in issuance of summons for conducting an inquiry and to obtain a statement from the appellant cannot be construed to be bar under Section 6(2)(b) of the CGST Act. Thus, the Court held that issuance of summons under Section 70 of the CGST Act is not hit by Section 6(2)(b) of the CGST Act.

S. No. Case Citation Relevant Text

Cases on Section 7 of CGST Act, 2017

1. Yonex India (P.) Ltd. v. Union of India [2024] 159 taxmann.com 71 (Karnataka)

2. Prahitha Contruction (P.) Ltd. v. Union of India [2024] 159

taxmann.com 437 (Telangana)

3. Sterlite Power Transmission Ltd. v. Union of India [2024] 160

taxmann.com 381 (Delhi)

During the pendency of the petition, circular was issued clarifying that holding of shares by the holding company in its subsidiary cannot be treated or classified as "supply of service". Thus, impugned order dated 2-11-2022 which proceeded on the basis that the said holding of shares amounted to "supply of service" was clearly illegal, arbitrary and without jurisdiction or authority of law, and the same deserves to be quashed.

The Court held that taking into consideration the provisions of Article 246A of the Constitution of India and also considering the extraordinary powers which have been conferred upon the GST Council and upon whose recommendation the Government has issued the notification clarifying the aspect of transfer of development rights being attracted to GST/TGST, the challenge to the notification issued by the Government of India can be safely held to be devoid of merits.

Notice was issued on writ petition filed seeking a declaration that activity of holding company providing a Corporate Guarantee to a subsidiary was not in nature of supply of services taxable under section 9, and in meantime no coercive action was to be taken against assessee

S. No. Case Citation Relevant Text

Cases on Section 9 of CGST Act, 2017

1. Sree Ramu College of Arts and Science v. Authority for Clarification and Advance Ruling [2024] 158

taxmann.com 417 (Mad.)

2. Tvl.Kalyan Jewellers India Ltd. v. Union of India [2024] 158

taxmann.com 302 (Mad.)

3 Mahavir Sharmik and Nirman

Swalambi Sahkari Samiti Ltd.

v. State of Bihar [2024] 158

taxmann.com 496 (Patna)

4. Naga Ltd. v. Puducherry Authority for Advance Ruling [2024] 158 taxmann.com 306 (Mad.)

5 K.Elango v. Deputy State Tax Officer[2024] 159 taxmann.com 436 (Mad.)

6 Dipak Sarkar v. State of West Bengal [2024] 159 taxmann.com 291 (Cal.)

7 Tarini Minerals (P.) Ltd. v. Union of India [2024] 159 taxmann.com 295 (Orissa)

Services provided to petitioner by the University relating to grant or renewal of affiliation not exempted by way of Entry No. 66 of Notification No. 12/2017-CT(Rate)

Dated 28th June 2018 since not related to admission to, or conduct of examination

Voucher per se is neither a goods or a service is correct in view of Section 7 r/w III Schedule to GST Enactments.

Work of collection and disposal of waste materials from each household, shop and commercial centres as also sanitation work of drainages/road in the specified seventeen wards of the Municipality is not a works contract as there is no supply of goods as would be required by the definition of 'works contract’ and thus exempt from Levy of GST.

If the wheat imported qualifies as an "agricultural produce", the mere fact that the buyer of "agricultural produce" intended to subject it to various other processes subsequently resulting in conversion of wheat into maida, atta and sooji would not take the services of loading, unloading, packing, storage and warehousing of the "agricultural produce" out of Serial No. 54(e) of the Exemption Notification.

On the question of levy of GST on Royalty, Court directed that the authority concerned shall proceed with the adjudication, on merits and in accordance with law, after affording reasonable opportunity of being heard to the petitioners. However, the orders of adjudication shall be kept in abeyance until the Nine Judge Constitution Bench decides the issue as to the nature of royalty. It was also made clear that there shall be no recovery of GST on royalty until the Nine Judge Constitution Bench takes a decision.

GST Act is a complete code in itself and payment of tax is not subject to realization of tax by an assessee.

The question of law in the matter framed were-

a) Whether during the tax period from 1-7-2017 to 31-12-2018 the tax rate @ 5% [CGST = 2.5% + OGST = 2.5%] is attracted with respect to transactions qua Serial No. 257 with Group 997334 Service Code (Tariff) 997337 having Service Description: Licensing services for the right to use minerals including its exploration and evaluation qua Sl. No. 17 under Heading 9973 (Leasing or rental services, with or without operator) with residuary entry under Description of Service?

b) whether clarification vide Circular issued by Government of India in Ministry of Finance, Department of Revenue (Tax Research Unit), being CBIC-190354/207/2021-TO (TRU-II)-CBEC, dated 6-10-2021 has no retrospective operation as suggested by the opposite parties, thereby the levy of tax @ 18% [CGST = 9% + OGST = 9%] is valid?

Notice was issued by the Court alongwith the observation that the court was satisfied that prima facie case was made out as the petitioner had demonstrated that its transactions fell within the scope of residuary entry of Serial No. 17 with the Heading 9973 (Leasing or rental services, with or without operator) which attracted rate of tax @ 5% [CGST = 2.5% + OGST = 2.5%] and it had discharged liability for the transactions effected during the period 1-7-2017 to 31-12-2018, to which no objection was raised by the Revenue.

S. No. Case Citation Relevant Text

8. Tvl. A. Venkatachalam v. Assistant Commissioner (ST) [2024] 159 taxmann.com 325 (Mad.)

9. Chandra Sekhara Rice Merchant v. Assistant Commissioner (State Taxes) [2024] 159 taxmann.com 342 (A.P)

10. Dhola Infra Projects Ltd. v. Union of India [2024] 159 taxmann.com 363 (Gau.)

Where Assessing Authority had levied GST on value of by-products i.e., broken rice, bran and husk treating them as part of consideration paid to assessee for milling of paddy, impugned order was set aside in view of earlier judgement/order passed in Shiridi Sainath Industries v. Dy. CST (International Taxation) [2020] 122 taxmann.com 25/[2021] 83 GST 566/2021 (51) G.S.T.L. 374 (Andhra Pradesh).

The Petitioner The petitioner assailed Agenda no. 6 of the 43rd Meeting of the GST Council held on 28-5-2021 and Circular dated 17-6-2021 issued by CBIC providing clarification regarding applicability of GST on the activity of construction of road where considerations are received in deferred payment annuity, which have been made the basis of the impugned Demand-cum-Show Cause Notice dated 29-9-2023. The Court held that having regard to the discussion made in respect of Agenda Item 13[iv] of the 22nd GST Council Meeting, held on 6-10-2017, wherein it has been observed that annuity is a consideration for the service provided by concessionaires to NHAI and the Notification dated 13-10-2017 issued under sub-section [1] of Section 11 of the CGST Act, 2017 read with provisions contained in sub-section [3] of Section 11 of the CGST Act, 2017, petitioner has been able to made out a prima facie case for interim relief. It was also noticed that Hon'ble Karnataka High Court has already set aside the Circular dated 17-6-2021 by the afore-mentioned Judgment. Thus, it was directed that till the returnable date, the impugned Demand-cum-Show Cause Notice dated 29-9-2023 shall be kept in abeyance.

11. Agrawal Int Udyog v. State of U.P [2024] 159 taxmann.com 683 (All.)

12. Rama Reddy Palaksha v. State Tax Officer (FAC) [2024] 159 taxmann.com 787 (Mad.)

13. B.M.R. Industries (P.) Ltd. v. Assistant Commissioner (ST) [2024] 159 taxmann.com 73 (A.P)

14. V. Mohanraj v. Deputy State Tax Officer [2024] 160 taxmann.com 702 (Mad.)

15. Prince Udyog v. Union of India [2024] 160 taxmann.com 224 (Raj.)

The Court held that until further orders, payment of GST for grant of mining lease/royalty by the petitioner shall remain stayed.

Product Minwa and Minwa plus is neither a shrimp feed nor a supplement or additive of the shrimp feed. The products' main purpose is not to act either as a shrimp food or a food supplement or additive, but its main purpose is to maintain PH level in the shrimp pond. Therefore, the said product does not fall within the ambit of HSN code 2309 and notification number 2/2017 CTR dated 28-6-2017.

The present writ petition was filed by the petitioner challenging the show cause notice/assessment orders issued by the respondent - GST Department raising demand of GST on royalty paid to the respondent - Mining Department towards mining lease. The Court relying upon its earlier judgement dismissed the writ petition and alongwith the stay petition.

S. No. Case Citation Relevant Text

Cases on Section 15 of CGST Act, 2017

1. Supreme Paradise v. Assistant Commissioner [2024] 159 taxmann.com 143 (Mad.)

A discount by itself will not qualify as subsidy. However, a discount offered by a distributor or a supplier or the manufacturer to buyer/recipient simplicitor cannot form part of the "transaction value" unless such a discount is offered on account of the subsidy for such supplies by a 3rd party. There is no scope for confusing the discount offered to the petitioner and the discounted price at which the petitioner effects further sale to its customers. They are two independent transactions and there is no scope for intermingling them for demanding tax from the petitioner. The discounted price at which the petitioner sells the goods is relevant only for determining the "transaction value" adopted by the petitioner.

2. Downtown Motors (P.) Ltd. v. Union of India [2024] 160 taxmann.com 598 (Guj.)

In the instant case, the petitioners have prayed for quashing and setting aside order dated 21-12-2021 passed under section 74 of the GST Act on the ground that the petitioners are liable to pay GST on the amount of discount received by it on purchase of the motor vehicles contrary to the circular issued by Central Board of Indirect Taxes and Customs and the appellate orders passed under similar provisions under the Finance Act.

The Court observed that the appellate order relied upon by the petitioners was under challenge before the Customs Excise and Service Tax Appellate Tribunal (For short "CESTAT"). In such circumstances, the petition is required to be kept pending till the CESTAT decides such issue since petitioner challenged the order-in-original without availing alternative remedy on the ground that the respondent authorities is bound by the appellate order passed in identical facts. Therefore, in the view of the court, matter was required to be considered on merits without relegating the petitioners to avail alternative remedy. Ad interim granted earlier to continue as interim relief till the final disposal of this petition.

S. No. Case Citation Relevant Text

Cases on Section 16 of CGST Act, 2017

1. Tvl.Kavin HP Gas Gramin Vitrak v. Commissioner of Commercial Taxes [2024] 158 taxmann.com 204 (Mad.)

2. State of Uttar Pradesh v. Vivo Mobile India (P.) Ltd. [2024] 158 taxmann.com 276 (SC)

3. Laxmi Traders v. Assistant Commissioner of State Tax [2024] 159 taxmann.com 172 (Cal.)

4. Karumpelil Medicals v. Assistant Commissioner [2024] 159 taxmann.com 191 (Ker.)

5. Engineering Tools Corporation v. Assistant Commissioner (ST) [2024] 159 taxmann.com 576 (Mad.)

If GSTN would have provided option for filing GST Return without payment of tax or incomplete GSTR-3B, the dealer would be eligible for claiming of input tax credit. The same was not provided in GSTN network hence, the dealers are restricted to claim ITC on the ground of non-filing of GSTR-3B within prescribed time. if the option of filing incomplete filing of GSTR-3B are provided in the GSTN network the dealers would avail the claim and determine self-assessed ITC in online.

SLP filed against the decision of High court in Vivo Mobile India Pvt. Ltd. v. State of Uttar Pradesh [2023] 155 taxmann.com 324/100 GST 577 (All.) was dismissed having regard to the peculiar facts of this case, court was not inclined to interfere in the matter. The reason why It was so said is that although the scheme was between March, 2020 to August, 2020, in the instant case, the respondents had sought benefit or extension of the scheme only by one month, that is, September, 2020

In view of the earlier decision, order set aside as the authority before proceeding against the buyer for non-payment of tax by the seller, should first proceed against the seller and only if exceptional circumstances, as clarified in the press release issued by the Central Board of Indirect Taxes and Customs, can be made out in a particular case, the buyer can be proceeded against.

Order for denying Input Tax Credit upheld as Burden of proof casted under the provision of Section 155 was not discharged as petitioner did not produce any credible documents in respect of the inward supplies such as GSTIN of the tax payer was not present in the invoices, and the seal of the supplier was also not present in the invoices.

The operative portion of the impugned order states that ITC was reversed exclusively on the ground that the GST registration of M/s.Shikhar Technologies was cancelled with retrospective effect. The Court observed that contentions of the petitioner were rejected entirely on the ground that the petitioner should have proved the existence of M/s.Shikhar Technologies. The petitioner purchased goods in 2017-2018 and, at the highest, the petitioner may be called upon to produce evidence of the existence of the supplier at the relevant point of time. In addition, the petitioner may be called upon to prove that the transaction was genuine by providing relevant documents such as tax invoices, e-way bills, lorry receipts, delivery challans, proof for payment and the like. In the case at hand, it appears that the petitioner submitted such documents but these documents were disregarded. The impugned assessment order is unsustainable in the facts and circumstances and hence, the impugned assessment order was quashed and the matter is remanded for reconsideration.

6. Sri Shanmuga Hardwares Electricals v. State Tax Officer [2024] 159 taxmann.com 756 (Mad.)

7. Tvl. Lakshmi Tex v. Deputy State Tax Officer[2024] 160 taxmann.com 627 (Mad.)

When the registered person asserts that he is eligible for ITC by referring to GSTR-2A and GSTR-9 returns, the assessing officer should examine whether the ITC claim is valid by examining all relevant documents, including by calling upon the registered person to provide such documents. The Court stated that the claim was rejected entirely on the ground that the GSTR-3B returns did not reflect the ITC claim. Therefore, interference is warranted with the orders impugned herein. Thus, the orders impugned were quashed and matters were remanded for reconsideration. The petitioner was permitted to place all documents pertaining to its ITC claims before the assessing officer. Upon receipt thereof, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh assessment orders within a maximum period of two months from the date of receipt of documents from the petitioner.

The Court observed that the entire tax liability was with regards to disparity between the GSTR-3B and GSTR-2B returns. The petitioner, albeit subsequent to the issuance of such order, explained that ITC was validly availed of by submitting documents in support thereof. Undoubtedly, the petitioner was negligent in not doing so upon receipt of the intimation and show cause notice. Nonetheless, if the explanation of the petitioner is valid, the interest of justice would be prejudiced unless the petitioner is provided an opportunity to explain the alleged disparity. Therefore, impugned order was quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner was also permitted to submit a reply within the aforementioned period.

S. No. Case Citation Relevant Text

Cases on Section 29 of CGST Act, 2017

1. Hari Om Metals v. C.C. GST [2024] 158 taxmann.com 605 (Delhi)

Retrospective Cancellation results in denial of ITC to recipients of tax payer, therefore registration should be cancelled with retrospective effect only where such consequences are intended and are warranted

2. Een Een Sales Corporation v. Asstt.

C.C. GST [2024] 158 taxmann.com 411 (Delhi)

3. Sant Ram v. Delhi State GST [2024] 158 taxmann.com 253 (Delhi)

4. Akshar Enterprise v. State of Gujarat [2024] 158 taxmann.com 123 (Guj.)

5. Raj Enterprises v. Superintendent, Range 25 GST Division [2024] 158 taxmann.com 143 (Delhi)

6. Shree Shyam Metals v. CGST [2024] 158 taxmann.com 144 (Delhi)

7. Kali Shankar Enterprises v. Additional Commissioner [2024] 158 taxmann.com

190 (A.P)

8. Kundan Impex v. Principal Commissioner of Department of Trade and Taxes [2024] 158 taxmann.com

300 (Delhi)

9. Suresh Kumar Chaudhary v. Asstt. Commissioner [2024] 158 taxmann.com

299 (Cal.)

10. Hello Plastic (P.) Ltd. v. Commissioner, Delhi GST [2024] 158 taxmann.com

587 (Delhi)

"Non compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed." -Show Cause Notice and consequential order bereft of reason proposing cancellation of registration held to be vague and invalid

Registration cancelled merely on the basis of a letter received from another authority and the said letter was neither attached to the impugned SCN nor did the impugned SCN referred to the contents thereon held to be invalid

"Rule 21(a)- a person does not conduct any business from declared place of business”-Show Cause Notice and consequential order bereft of reason proposing cancellation of registration held to be vague and invalid

Sole ground for cancelling the petitioner's GST registration was that it had not filed its return for a continuous period of six months. Absent anything more, this would not be sufficient ground to cancel the petitioner's registration even for the period during which the petitioner had filed its returns

"The DDGST VIDE ITS LETTER DATED 20-9-2022 ISSUED CIDE F. No. DGGI/GZU/GR-H/INV/291/22-23/14255 HAS INFORMED THAT THE PARTY IS NON EXISTENT". the said letter was neither attached to the impugned SCN nor did the impugned SCN referred to the contents thereon held to be invalid.

"filing nil returns continuously for more than 6 months". –Cancellation on such ground is invalid since Section 29(2) does not contain any such ground for cancelation. In the Rules also there is no such ground for cancellation. In the show cause notice or in the order it is not the case of the respondents that the 'nil returns' were filed incorrectly, contravening any provision of the GST Act or the Rules

Cancellation set aside as it did not give any reason or detail but merely refers to letter dated 12.06.2023 of Assistant Commissioner (Okhla Division) GST, South Delhi Commissionerate and that too was not provided

Rejection of Revocation Application held to be valid as , there was a categorical finding that at the time when the registration was obtained, the appellant had uploaded the electricity payment receipt, which was found to be a forged document and as also the rental agreement

"letter no. 26 received from DGGI regarding fraudulent purchase“-The court observed that the impugned order did not disclose any reason for cancelling the petitioner's GST registration. The space available for filling in the said reasons, was left blank. The court held that it is clear from the above that the impugned SCN cannot be sustained as it does not clearly set out the allegations required to be met by the petitioner.

S. No. Case Citation Relevant Text

11. My Trading Overseas v. Commissioner Delhi Goods & Service Tax [2024] 158

taxmann.com 558 (Delhi)

12. Shree Balaji Transport v. Commissioner of Central Tax [2024] 159 taxmann.com

41 (Delhi)

13. Mohana Blue Metal v. Asstt. Commissioner [2024] 159 taxmann.com 121 (Mad.)

14. Mahuya Sinha v. Jt. Commissioner of Revenue [2024] 159 taxmann.com 140 (Cal.)

15. Deepali Kapoor v. Avato Ward-63, State Goods & Services Tax [2024] 159 taxmann.com 157 (Delhi)

16. Sri Ganesh Constructions v. Asstt. Commissioner (ST) [2024] 159

taxmann.com 159 (Mad.)

"1 In case, Registration has been obtained by means of fraud, wilful misstatement or suppression of facts.” - Show Cause Notice and consequential order bereft of reason proposing cancellation of registration held to be vague and invalid

Retrospective Cancellation was invalid for "failure to furnish returns for a continuous period of six months" merely because a taxpayer has not filed the returns for some period does not mean that the taxpayer's registration is required to be cancelled with retrospective date also covering the period when the returns were filed and the taxpayer was compliant.

The Court restored Registration in view of the fact that petitioner has been continuing his business operations and due to the ill health of the Managing Partner of the petitioner-Firm, who was incharge of filing the GST returns of the petitioner, the petitioner-Firm was not in a position to file GST Returns.

Cancellation of registration set aside as SCN alleged violation of Rule 21(a) and 21(b) only whereas the provisions contained in Rule 21(e) and Rule 18(2) was also invoked for cancelling the registration of the petitioner when the same was not the ground of show cause notice. The court also observed that it is the cardinal principle that the show cause notice must contain the allegation on which the authority proposes to initiate an action/proceeding so as to enable the noticee to deal with such allegation effectively and in the case on hand, authorities travelled beyond the show cause notice while passing the impugned order.

Registration was cancelled for non-filing of return and no one on behalf of the petitioner appeared against the show cause notice issued. The Court set aside the order and observed that most of the small scale entrepreneurs like carpenters, electricians, fabricators etc... are almost uneducated and they are not accustomed with handling of e-mails and other advance technologies. Though they are providing e-mail IDs at the time of Registration, the applications are prepared by some agents by creating an e-mail IDs, however, on reality most of the Traders are not accustomed with handling of e-mails. They are also not aware about the consequences of not paying the Returns in Time. The department shall workout the possibilities of issuing these notices in the respective regional languages and also by SMS and registered post. So that, the uneducated traders can also respond to these notices to some extent, otherwise, these notices will be an empty formality and will not serve any purpose for which it has been issued. The object of any Government is to promote the trade and not to curtail the same. The cancellation of registration certainly amounts to a capital punishment to the traders, like the petitioner.

17. S B Jewels v. Union Of India [2024] 159

taxmann.com 163 (Guj.)

18. Dharmadutt Brick Field v. State of U.P. [2024] 159 taxmann.com 202 (All.)

19. Sreenidhi Alloy Metal Suppliers v. Superintendent (GST) [2024] 159

taxmann.com 234 (Mad.)

Order cancelling the registration was set aside as show cause notice, which was issued upon the petitioners dated 8th April 2022, directed them to remain present on the very same date i.e. on 8th April 2022 for the purpose of explaining the show cause notice and petitioners were not given any material evidence which was sought to be relied upon in support of the show cause notice.

The Court relying upon its decision quashed the order and held that impugned order does not assign any reason whatsoever for cancelling registration of the petitioner and is passed only on the ground that reply to the show cause notice is not given. The non-submission of reply to the show cause cannot be a ground for cancellation of the registration.

Impugned order was quashed and remanded back as the registration was obtained in the year 2019 and no material was placed on record to support the inference that the registration was obtained in early 2019 by means of fraud, wilful misstatement or suppression of facts.

No. Case Citation Relevant Text

20. Sri Avanthika Sai Venkata (JV) v. Deputy State Tax Officer [2024] 159

taxmann.com 235 (Telangana)

Impugned order for cancellation of registration was set aside as plain perusal of the impugned order dated 11.07.2022 and the contents therein coupled with the statement of oath made by the learned counsel for the petitioner affirmed that show cause dated 07.06.2022 was never served upon the petitioner nor had he submitted any reply to the said show cause notice on 08.07.2022 as has been contended by the authority. The court also took note of the fact that the impugned order did not make a reference of the contents of the reply, if any, submitted by the petitioner. At the same time, the authorities themselves had made a statement that no such reply has been submitted by them to the show cause notice issued. To make things worse, the impugned order also does not disclose the grounds on which the authorities concerned were compelled to issue the cancellation of the registration.

21. Pankaj Plastic v. Commissioner of Delhi

Goods & Service tax [2024] 159

taxmann.com 261 (Delhi)

22. R. Trading Co. v. Commissioner of Delhi Goods and Services Tax [2024] 159 taxmann.com 267 (Delhi)

The Court observed that that Show Cause Notice states that petitioner failed to furnish returns for a continuous period of six months however, no particulars or details were mentioned in the Show Cause Notice. Show Cause Notice extracted the reason in a standard format. Further, the Show Cause Notice also did not mention the quantum of returns. The impugned order also did not state any reasons for cancellation of the GST registration retrospectively except to state that no reply to the show cause notice was received. Both the show cause notices and the impugned order were bereft of any reasoning and particulars and were held not to be sustainable. The impugned order also sought to cancel the registration with effect from 1-7-2017. There was no material on record to show as to why the registration is sought to be cancelled retrospectively. Further, the Show Cause Notice also did not put the petitioner to notice that the registration was liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration.

As per the Petitioner, Mr. Rajendra Kumar Bothra expired on 13.04.2021 and consequently, No GST returns were filed after April, 2021 on account of his passing away. Since no reply was received to the show cause notice, the Assistant Commissioner passed the impugned order dated 30.12.2021, cancelling the registration retrospectively with effect from 01.07.2017. The Court held that there was nothing on record to show that the deceased was not making the requisite compliances under the Act. As such the retrospective cancellation is not warranted. SCN also did not put the noticee to notice that the registration was liable to be cancelled retrospectively. Accordingly, the Petitioner had no opportunity to even object to the retrospective cancellation of the registration. In view of the fact that petitioner does not seek to continue the registration, the impugned order was modified to the limited extent that registration shall now be treated as cancelled with effect from 13.04.2021 i.e., date of demise of late Mr. Rajendra Kumar Bothra..

23. Engineered And Innovative (P.) Ltd.

v.State of U.P. [2024]

159 taxmann.com

310 (All.)

24. A. John Peter v. State Tax Officer [2024]

159 taxmann.com 339 (Mad.)

High Court held that petitioner was able to demonstrate valid reasons for delay of 95 days while filing the said appeal i.e. various medical documents to demonstrate that Managing Director was suffering from Tuberculosis during the said period. Petitioner had deposited all pending amount of the GST along with late fee and interest and the receipt dated 31.05.2023 has also been annexed to demonstrate the same. Regarding cancellation of registration, court held that cancellation has a very serious consequences and accordingly, considering the fact that the petitioner has been able to demonstrate that he was seriously ill during the period and on the said account could not submit the reply to the show cause notice, on account of which, his registration was cancelled. Further, petitioner has already deposited tax along with late fee and interest and accordingly, respondents were directed to restore the GST Licence of the petitioner.

Order of cancellation of registration was issued on 23.11.2022 pursuant to an application made by the petitioner on 10.10.2022. The final return was on record, and document clearly indicated that such return was filed after the cancellation of registration on 17.03.2023. The petitioner stated that he received demand notices dated 15.12.2023 for nonpayment of GST arrears. Thereafter, he realized that an assessment order was issued on 13.07.2023 without providing an opportunity to raise objections with regard to such assessment. The Court observed that nonetheless, in view of the cancellation of registration, it was likely that the petitioner would not have reason to access the portal in the manner that a registered person would be required to. In any event, the assessment order disclosed that the petitioner did not participate in proceedings culminating in such assessment order. Therefore, the assessment order was quashed and so are the notices issued pursuant thereto and matter remanded for fresh consideration.

S. No. Case Citation Relevant Text

25. Section 29 Sri Krishan Traders v. Principal Commissioner of Goods and Service Tax [2024] 159 taxmann.com 380 (Delhi)

Petitioner submitted an application seeking cancellation on 23.02.2023 as petitioner had closed down his business. Said application had been rejected by an order dated 14.12.2023 stating "neither the party appeared for PH on given time and date nor submitted the required documents viz. possession document, reconciliation statement and ID proofs etc.". Thereafter, on 03.01.2024, a Show Cause Notice was issued to the petitioner for cancellation of the GST registration on the ground that petitioner has failed to furnish the GST returns and registration was cancelled retrospectively. The Court observed that Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. The order of cancellation was modified to the extent that the same shall operate with effect from 23.02.2023, i.e., the date on which the petitioner made an application for cancellation of registration and the registration was suspended.

26. Section 29 Gupta Enterprises v. State of Punjab [2024] 159 taxmann.com 403 (Punj. & Har.)

27. Section 29

28. Section 29

Deepak Trading Co. v. Government of NCT of Delhi [2024] 159 taxmann.com 416 (Delhi)

The Court observed that a very technical approach was resorted to by the authorities. It was the specific case of the petitioner that the premises in question were the brother's residential house and, therefore, the expectation that the expenses would be shown in the balance sheets of the partnership concern would not be acceptable as apparently it is a residential house and has no connection with the partnership firm concerned. It was not the case of the respondents that the petitioner was not conducting any business as per Rule 21(a). The Court held that civil consequences of the cancellation as such, thus, apparently out-weigh the manner in which the respondents have as such proceeded in dealing with the case regarding the physical verification which should have been done and proper opportunity should have been afforded.

Petitioner had submitted an application seeking Cancellation of Registration Certificate on 17.07.2020 on ground of discontinuation of business with effect from 31.03.2020, however the same was rejected on the ground of unsatisfactory reply without specifying that why the same was not proper. Thereafter, notice was issued for suo-motu cancellation of registration and order was passed purporting to cancel the registration with retrospective effect from 01.07.2017. However, there was no material on record to show as to why the registration is sought to be cancelled retrospectively. The Show Cause Notice dated 02.12.2021 also did not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, petitioner had no opportunity to even object to the retrospective cancellation of the registration. The Court in view of the above, modified the order to the extent that the same shall operate with effect from 31.03.2020, i.e., the date on which the petitioner discontinued his business.

29. Section 29

NP Trading Co. v. Commissioner of GST [2024] 159 taxmann.com 417 (Delhi)

Shyam Shanti Scrap Traders v. State of U.P. [2024] 159 taxmann.com 418 (All.)

Petitioner sought quashing of order dated 23.12.2021 whereby the CGST registration of the petitioner has been cancelled w.e.f. 01.07.2017. Petitioner submitted that Show Cause Notice dated 05.11.2021 was itself defective in as much as it did not provide any details of the alleged invoices or bills which were made without supply of goods or services. Also no enquiry was conducted to even certain as to which invoice or bill has been issued without any underlying supply. It was further submitted that since there were no details provided the petitioner was precluded from filing a reply to the Show Cause Notice. The Court set aside the impugned order and remanded the matter and directed the respondent to furnish all material that they possess in support of the Show Cause Notice dated 05.11.2021 to the petitioner.

Petitioner's registration was cancelled on 13.4.2022 w.e.f. 28.2.2022. The Court thus observed that in view of the above, it did merit acceptance that the petitioner was not obligated to visit the GST portal to receive the show cause notices that may have been issued to the petitioner in September 2022, June 2023 and October 2023 through e-mode, preceding the adjudication order dated 17.10.2023 passed in pursuance thereto. Also the petitioner was not served with any physical/offline notice before the impugned order came to be passed. The Court this held that that since essential requirement of rules of natural justice had remained to be fulfilled, thus the order was set aside for fresh adjudication.

S. No. Section Case Citation Relevant Text

30. Section 29 V.Sasikumar v. GST Superintendent [2024] 159 taxmann.com 438 (Mad.)

The court ordered that the order cancelling the registration was issued mechanically as is evident from the reference to a reply in the first line followed by the statement in the second line that no reply was given. Therefore, since such impugned order has resulted in great prejudice to the petitioner without the petitioner being provided a reasonable opportunity to respond, the impugned order calls for interference.

31. Section 29

32. Section 29

Khandelwal Brothers v. State of U.P [2024] 159 taxmann.com 544 (All.)

Ansal Hi-Tech Town Ships Limited v. State of UP [2024] 159 taxmann.com 575 (All.)

33. Section 29 Green Work Metal v. Principal Commissioner of GST [2024] 159 taxmann.com 578 (Delhi)

Order for Cancellation of registration was passed and petitioner stated that the order was passed without any application mind and in mechanical manner as in the first line, the order states that a reply was filed by the petitioner whereas the second line contradicts the above statement saying that no reply was filed by the petitioner. The court set aside the order taking into consideration that the original order being non-reasoned.

Petitioner submitted an application seeking cancellation on 16.01.2021 as petitioner had closed down his business. Said application had been rejected by an order dated 27.01.2021 stating unsatisfactory reply, the order does not specify any specific cogent reason for the same. Thereafter, on 29.01.2021, a Show Cause Notice was issued to the petitioner for cancellation of the GST registration on the ground that “Collects any amount as representing the tax but fails to pay the same to the account of the Central/State Government beyond a period of three months from the date on which such payment becomes due." Registration was cancelled retrospectively. The Court observed that Show Cause Notice dated 29-1-2021 also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. The order of cancellation was thus modified to the extent that the same shall operate with effect from 16.01.2021, i.e., the date on which the petitioner made an application for cancellation of registration and the registration was suspended.

34. Section 29 Kanyaka Parameswari Oils (P.) Ltd. v. Dy. Commissioner, Andhra Pradesh. [2024] 159 taxmann.com 611 (A.P)

Petitioner stated that SCN dated 25-8-2023 was issued stating that registration of petitioner is liable to be cancelled for "non-compliance of any specific provision in the GST Act or the Rules made thereunder as may be prescribed". Learned counsel would submit that the show cause notice is as vague as it could be since no specific provision which was violated by the petitioner was mentioned in the said show cause notice. Learned counsel would submit that since the issuing authority's name is not mentioned in the show cause notice dated 25-8-2023, the petitioner could not take immediate steps to file his reply. The petitioner also stated that without considering the submissions and the aspect that he has been conducting his trading activities from the same business premises where he earlier used to conduct manufacturing activities and there is no change in the location of his business premises. In the light of the above respective submissions of both the learned counsel, the order of rejection of application for revocation of the cancellation dated 24-1-2024 passed by the 1st respondent was set aside and matter is remitted back to the 2nd respondent

S. No. Section Case Citation Relevant Text

35. Sachin Kaushal v. State of U.P. [2024] 159 taxmann.com 658 (All.)

36. Iron Style v. Additional Commissioner (Appeals) [2024] 159 taxmann.com 687 (All.)

37. JMCL Frames v. Superintendent of Central Tax [2024] 159 taxmann.com 688 (Telangana)

Order for Cancellation of registration was passed and petitioner stated that the order was passed without any application mind and in mechanical manner as in the first line, the order states that a reply was filed by the petitioner whereas the second line contradicts the above statement saying that no reply was filed by the petitioner. The court set aside the order and taking into consideration that the original order being non-reasoned.

The Court observed that a plain perusal of the impugned order and the contents therein coupled with the statement of oath made by the learned counsel for the petitioner that the show cause dated was never served upon the petitioner nor has he submitted any reply to the said show cause notice as has been contended by the authority. The court also took note of the fact that the impugned order did not make a reference of the contents of the reply, if any, submitted by the petitioner. The impugned order, to make matters worse also did not disclose the grounds on which the authorities concerned were compelled to issue the cancellation of the registration. Therefore, the impugned order was held to be liable to be interfered with this ground alone. Considering the above facts and circumstances, the impugned order dated was set aside/quashed.

38. Kwatra Auto Industries v. Commissioner of Delhi Goods and Services Tax [2024] 159 taxmann.com 751 (Delhi)

39. Friends Media Add Company v. Principal Commissioner of Goods and Service Tax [2024] 159 taxmann.com 781 (Delhi)

Petitioner, received a Show Cause Notice for cancellation of the GST registration on the ground “Taxpayer found Non-Functioning/Not Existing at the Principal Place of Business” and the impugned order dated 25-11-2019 merely stated that " No reply to the show cause notice has been submUted" and the effective date of cancellation of registration is 1-7-2017 i.e. with retrospective effect. The Court observed that Show Cause Notice also does not put the petitioner to notice that the registration is liable to be cancelled retrospectively. The order of cancellation was modified to the extent that the same shall operate with effect from 01.10.2019, i.e., the date on which business was shut down.

The Court observed that Show Cause Notice stated that invoice or bill was issued by the petitioner without supply of goods and/or services leading to wrongful availment or utilization of input tax credit or refund of tax. No particulars or details were mentioned in the Show Cause Notice. There was no reference to any invoice or bill which the petitioner is alleged to have issued without making any supplies. It appeared that the Show Cause Notice extracts the reason in a standard format as there are several other options mentioned in the reason i.e. "without supply of goods and/or services" and "leading to wrongful availment or utilization of input tax credit or refund of tax". The Court also observed that department was using a template for issuing said notices without providing any particulars. There was no clarity as to whether the petitioner had issued invoices or bills without supply or the action of the petitioner led to wrongful availment or utilization of input tax credit or refund of tax. Further, Show Cause Notice also did not mention the quantum of wrongful availment of input tax credit or any refund claimed on the said account. The impugned order also did not state any reasons for cancellation of the GST registration retrospectively. Both the show cause notices and the impugned order are bereft of any reasoning and particulars. Further, Show Cause Notice also did not put petitioner to notice that the registration is liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. In view of the above facts and circumstances, the order of cancellation was modified to the extent that the same shall operate with effect from 25-8-2023, i.e., the date on which the Show Cause Notice was issued.

40. Mauli Sai Developers (P.) Ltd. v. Union of India [2024] 159 taxmann.com 784 (Bom.)

The Court observed that vide Order dated 8th September 2022, a decision adverse to the Petitioner was passed. In these circumstances, department was bound to give a personal hearing to the Petitioner before passing the said Order dated 8th September 2022. This would be irrespective of the fact as to whether the Petitioner had asked for such a personal hearing or not. However, order has been passed without giving any personal hearing to the Petitioner, the same is in violation of the principles of natural justice and ex-facie contrary to the provisions of Section 75(4) of the CGST/MGST Act.

S. No. Case Citation Relevant Text

41. RR Balaji Ad v. Commissioner of SGST Delhi [2024] 160 taxmann.com

701 (Delhi)

The Court observed that notice did not specify any cogent reason and merely stated "Non-compliance of any specified provisions in the GST Act or the Rules made thereunder as may be prescribed". Further, the said Show Cause Notice also did not put petitioner to notice that the registration is liable to be cancelled retrospectively. Thus, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. The impugned order stated that the registration was liable to be cancelled for the following reason "The taxpayer has not responded to the notices issued u/s 61 of GST Act.". The order further stated that effective date of cancellation of registration was 1-7-2017 i.e., a retrospective date. The Court held that, the impugned order does not qualify as an order of cancellation of registration. On one hand, it states that the registration is liable to be cancelled and on the other, in the column at the bottom there are no dues stated to be due against the petitioner and the table shows nil demand. Thus, it was held that Show Cause Notice and the impugned order are bereft of any details accordingly the same cannot be sustained. Neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. The registration was thus restored.

42. V.S.K. Traders & Services v. Assistant Commissioner (ST) [2024] 160 taxmann.com 658 (Mad.)

Petitioner submitted that show cause notice was uploaded on the GST portal, but was not otherwise communicated to the petitioner. Being a small business person, the petitioner was unaware of the posting of the show cause notice on the portal. Therefore, petitioner could not reply to the show cause notice. By inviting my attention to the impugned order, learned counsel points out that the said order was issued mechanically as is evident from the reference to a reply dated 4-10-2022 in the first line followed by the statement in the second line that no reply was given.

The Court followed the Judgement and held that when said show cause notice is read with the impugned order, it was quite evident that the whole process was undertaken mechanically. As pointed out by learned counsel for the petitioner, lines 1 and 2 of the impugned order were undoubtedly contradictory. Since such impugned order has resulted in great prejudice to the petitioner without the petitioner being provided a reasonable opportunity to respond, the impugned order was quashed and registration was restored.

43. Manisha Gupta v. Union of India [2024] 160 taxmann.com 609 (Delhi)

44. Fayiz Nangaparambil v. Union of India [2024] 160 taxmann.com 441 (Delhi)

Petitioner stopped the business on 28-1-2019 and submitted an application on 3-8-2022 seeking cancellation of registration. Pursuant to the said application, notice was given to the Petitioner on 4-8-2022, seeking additional information and documents relating to application for cancellation of registration. Petitioner stated that reply could not be submitted as she did not have regular business and could not look up the portal. Pursuant, to non-supply of the said documents order dated 16-8-2022 was passed rejecting the application for cancellation filed by the Petitioner.

The Court observed that thereafter show cause notice issued to the petitioner on 23-9-2022 by the department did not specify any cogent reason, there was an observation in the notice stating "failure to furnish returns for a continuous period of six months". Further, the impugned order dated 7-10-2022 stated that the registration was liable to be cancelled for the following reason "no response received from the taxpayer". It sought to cancel the registration with effect from 2-7-2017. There was no material on record to show as to why the registration was sought to be cancelled retrospectively and Show Cause Notice dated 23-9-2022 also does not put the petitioner to notice that the registration was liable to be cancelled retrospectively. Accordingly, it was held that the petitioner had no opportunity to even object to the retrospective cancellation of the registration.In view of the above facts and circumstances, the order of cancellation was modified to the extent that the same shall operate with effected from 28-1-2019, i.e., the date on which the petitioner is alleged to have last carried on business.

The High Court held that the expression 'shall issue an order' used in rule 22 (3) of the Rules cannot be construed as mandatory for proceedings under rule 21 and directory for proceedings under Rule 20. Accordingly, it was held that the expression "shall be passed within 30 days" used in rule 22(3) of the Rules is not mandatory but is only directory. In view of the above, the court did not accept the contention of learned counsel for the petitioner that the authorities have lost the right to pass an order after the lapse of period of 30 days of the filing of the reply by the petitioner to the Show Cause Notice issued under Rule 21 of the Rules.

S. No. Case Citation Relevant Text

The order for cancellation of registration was passed on account of non-filing of returns. However during the pendency of petition it was argued by the department that registration was not cancelled for the reasons of non-filing of return but for irregular availment of Input Tax Credit.

The Court observed that so far as the default on the part of the petitioner in not filing returns within the stipulated period of time at the relevant point of time is concerned, the impugned order did not in any manner deal with the fact that the petitioner has subsequently submitted the returns after the show cause notice having been issued on 2-7-2020 and the default pointed out in the show cause notice stood cured and rectified. Thereafter, there was no such default on the part of the petitioner so far as non-furnishing of returns upto April, 2023.

As regards the the contentions raised by the learned counsel for the Department so far as the alleged fraudulent act of the petitioner availing fraudulent I.T.C. to the tune of Rs. 31 Crores is concerned, the court observed that the plain reading of the order of cancellation did not reflect any such allegation against the petitioner. On the contrary the order of cancellation references to the show cause notice, dated 2-7-2020 alone. The order of cancellation, dated 25-8-2023 reflects that there was substantial period of time of more than three (3) years at the hands of the respondents, during which period they could have taken appropriate steps against the petitioner, if at all they intended to do so. So far as the so-called fraudulent availing of I.T.C. is concerned, the impugned order did not reflect any of these developments that have transpired during the intervening said three (3) years period.

The Court thus held that in the given factual backdrop, particularly taking into consideration the submissions made by the learned senior counsel for the petitioner that after the show cause notice having been issued, taking advantage of the circular of the Government of India extending the time of furnishing the returns, the returns have already been filed by the petitioner within the extended period of time, the impugned order, therefore, was not sustainable and the same deserved to be and was accordingly set-aside/quashed. The respondent authorities were directed to forthwith restore the G.S.T. registration of the petitioner.

46. Krishan Mohan v. Commissioner of GST [2024] 160 taxmann.com 428 (Delhi)

Vide Show Cause Notice dated 17-7-2019, petitioner was called upon to show cause as to why the registration be not cancelled for the reason "Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months". The Counsel for the Petitioner submitted that Sh. Krishan Mohan passed away on 14-3-2018 and the petition was filed by Mr. Praphul Mohan Aggarwal, son of Late Mr. Krishan Mohan, who had the GST registration. It was also submitted that after the death of Mr. Krishan Mohan the business was closed down and, thereafter, Mr. Praphul Mohan Aggarwal i.e., his son was carrying on a different business and was looking after the subject business for its closure and had not carried out any business in the name and style of the proprietorship concern of Late Shri Krishan Mohan.

The Court observed that a show cause notice dated 17-7-2019 was issued to the petitioner. Though the notice did not specify any cogent reason, it merely stated "Any Taxpayer other than composition taxpayer has not filed returns for a continuous period of six months". Further, the impugned order dated 31-7-2019 passed on the Show Cause Notice dated 17-7-2019 did not give any reasons for cancellation. It, however, stated that the registration was liable to be cancelled for the following reason "whereas no reply to the show cause notice has been submitted; whereas on the day fixed for hearing you did not appear". However, the said order in itself was contradictory. The order stated "reference to your reply dated 26-7-2019 in response to the notice to show cause dated 17-7-2019" and the reason stated for the cancellation was "whereas no reply to notice show cause has been submitted; whereas on the day fixed for hearing you did not appear". The order further stated that effective date of cancellation of registration was 1-7-2017 i.e., a retrospective date.

The Court further observed that neither the show cause notice, nor the order spell out the reasons for retrospective cancellation. In fact, order dated 31-7-2019 did not qualify as an order of cancellation of registration. On one hand, it stated that the registration was liable to be cancelled and on the other, in the column at the bottom there were no dues stated to be due against the petitioner and the table showed nil demand. Show Cause Notice did not put the noticee to notice that registration was liable to be cancelled retrospectively.

The Court thus observed that that both the Petitioners and the department want cancellation of the GST registration of the Petitioner, though for a different reason, therefore in view of the above facts that Petitioner does not seek to carry on business or continue with the registration, the impugned order dated 31-7-2019 was modified to the limited extent that registration shall now be treated as cancelled with effect from 14-3-2018 i.e., the date when Sh. Krishan Mohan passed away.

S. No. Case Citation Relevant Text 45. DNC Infrastructure

(P.) Ltd. v. Superintendent [2024] 160 taxmann.com 597 (Telangana)

47. Manish Anand v. Avato

Ward-45 State Goods and Services Tax [2024]

160 taxmann.com 429 (Delhi)

Show Cause Notice was issued to the petitioner on 2-12-2021.

The Court observed that though the notice does not specify any cogent reason, there was an observation in the notice stating "failure to furnish returns for a continuous period of six months". Further, the said Show Cause Notice also did not put the petitioner to notice that the registration was liable to be cancelled retrospectively. Accordingly, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. Further, the impugned order dated 15-12-2022 passed on the Show Cause Notice did not give reason of cancellation. It stated that the registration was liable to be cancelled for the following reason "whereas no reply notice to show cause has been submitted". However, the said order in itself was contradictory. The order stated "reference to your reply dated 02/01/2022 in response to the notice to show cause dated 02/12/2021" and the reason stated for cancellation is "Whereas no reply to notice to show cause has been submitted". The order further stated that effective date of cancellation of registration is 1-7-2017 i.e., a retrospective date.

There is no material on record to show as to why the registration is sought to be cancelled retrospectively.

The Court was of the view that order dated 15-12-2022 did not qualify as an order of cancellation of registration. On one hand, it states that the registration is liable to be cancelled and on the other, in the column at the bottom there are no dues stated to be due against the petitioner and the table shows nil demand. Show Cause Notice and the impugned order were bereft of any details accordingly the same cannot be sustained and neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation.

The Court thus held that both the Petitioner and the department want cancellation of the GST registration of the Petitioner, though for different reasons. In view of the fact that Petitioner did not seek to carry on business or continue the registration, the impugned order dated 15-12-2022 was modified to the limited extent that registration shall now be treated as cancelled with effect from 2-12-2021 i.e., the date when the Show Cause Notice was issued.

48. Ganesh Sales Corporation v. Union of India [2024] 160 taxmann.com 425 (Delhi)

Show Cause Notice dated 5-1-2024 was issued to the Petitioner seeking to cancel its registration on the ground "Section 29(2)(e)- registration obtained by means of fraud, wilful misstatement or suppression of facts". Said Show Cause Notice required the petitioner to appear on 11-1-2024 at 2:05 PM before the undersigned i.e. authority issuing the notice. The Court observed that the said Notice did not give the name of the officer or place where the petitioner had to appear. Further, digital signatures in the Show Cause Notice merely mentioned "digitally signed by DS GOODS AND SERVICES TAX NETWORK 07." Further, the said Show Cause Notice also did not put the petitioner to notice that the registration is liable to be cancelled retrospectively. Thus, the petitioner had no opportunity to even object to the retrospective cancellation of the registration. Thereafter, the impugned order dated 29-2-2024 passed on the said Show Cause Notice also did not give reasons of cancellation. It merely stated "reference to show cause notice issued dated 5-1-2024" and subsequently states "effective date of cancellation of your registration is 5-5-2018". The Court thus observed that the Show Cause Notice and the impugned order were bereft of any details accordingly the same cannot be sustained. Neither the Show Cause Notice, nor the order spelled out the reasons for retrospective cancellation. In view of the aforesaid, order dated 29-2-2024 cannot be sustained and was accordingly set aside. The GST registration of the petitioner was restored.

49. Udal Singh v. State of UP [2024] 160 taxmann.com 299 (All.)

The petitioner submitted that the order for cancellation of registration has been passed without any application of mind whatsoever and the same was clear from the very first two lines of the order dated December 22, 2022. The relevant part of the said order is quoted below:

"This has reference to your reply dated 21/10/2021 in response to the notice to show cause dated 07/10/2021. Whereas no reply to notice to show cause has been submitted;"

The Court relied upon its earlier judgement and held that although the appeal is barred by time under section 107 of the Act, however, taking into consideration the original order and the same being non-reasoned, thus the same is set aside and petitioner is allowed to file reply to the show cause notice.

S. No. Case Citation Relevant Text

50. Selvaraj Subramaniam v. Assistant Commissioner [2024] 160 taxmann.com 265 (Mad.)

The Court observed that from the show cause notice, it appeared that the proposed cancellation was on the basis of a report from the State Tax Officer, Investigation Survey Unit-I, Erode Division to the effect that the petitioner was not carrying on business activities at the registered place of business. The impugned order recorded that the petitioner did not appear in person or through an authorised representative upon receipt of the show cause notice. It also recorded that the petitioner did not reply to the show cause notice. Thus, the record revealed that the petitioner was not heard before the impugned order of cancellation was issued and hence the Court was of the opinion that petitioner should be provided an opportunity to contest the cancellation of registration and accordingly, the matter was remanded for re-consideration.

51. Vinayaga Enterprises v. Appellate Authority/Additional Commissioner of GST [2024] 160 taxmann.com 123 (Mad.)

In the present case, registration of assessee was cancelled for non-filing of returns and it could not file returns in time on account of ill health. The Court directed to revive the registration on payment of tax, interest, penalty and uploading of returns.

52. Sreenidhi Alloy Metal Suppliers v. Superintendent (GST) [2024] 160 taxmann.com 90 (Mad.)

53. Shree Ram Glass Bachauli Kuftabad Beekapur Thru. v. State Of U.P [2024] 160 taxmann.com 84 (All.)

The Court observed that the show cause notice merely made reference to Section 29(2)(e) of the CGST Act. Otherwise, the said notice was devoid of any reasons or justifications for calling upon the petitioner to show cause as to why the registration should not be cancelled.

The Court further observed that Section 29(2)(e) of the CGST Act undoubtedly enabled the proper officer to cancel the registration even with retrospective effect. However, cancellation may be effected under clause (e) only based on material supporting an inference that the registration was obtained by means of fraud, wilful misstatement or suppression of facts. In this case, the registration was obtained in the year 2019 and no material was placed on record to support the inference that the registration was obtained in early 2019 by means of fraud, wilful misstatement or suppression of facts. Therefore, the impugned order was quashed and the matter was remanded back.

Registration of the petitioner was cancelled pursuant to the show cause notice issued to him where the petitioner did not respond to the same and it was found that the petitioner did not conduct any business activity from the registered place of business.

The Court held that merely because at the place of business no stock was found it was concluded that the petitioner did not conduct any business activity. There is no law which mandates a businessman to always retain stock at the place of business. To come to such a conclusion the authorities should have undertaken further exercise to indicate that the returns filed by the assessee themselves were fraudulently filed only to claim Input Tax Credit. The authorities have failed to discharge the duties and merely because the place of business did not contain any stock the registration of the petitioner was cancelled.

Thus, the Court held that the impugned orders were illegal and arbitrary and accordingly set aside. The Court further stated that it was open for the authorities to issue a fresh notice on any specific ground mentioned under section 29 (2) of the GST Act, which proceedings, if any initiated, may be decided on its own merits without being prejudiced by any of the observation made in this order.

S. No. Case Citation Relevant Text

Cases on Section 37 of CGST Act, 2017

1. Anvita Associates v. Union of India [2024] 158 taxmann.com 660 (Bom.)

2. Akshaya Building Solution v. Assistant Commissioner of CGST & Central Excise [2024] 158 taxmann.com 471 (Mad.)

3. Railroad Logistics (India) (P.) Ltd. v. Union of India [2024] 159 taxmann.com 69 (Bom.)

4. NRB Bearings Ltd. v. Commissioner of State Tax [2024] 159 taxmann.com 656 (Bom.)

5 Southern Engineering Services v. Deputy State Tax Officer - 1 [2024] 160 taxmann.com 514 (Mad.)

Petitioner allowed to rectify the inadvertent error made in filing of GSTR-1 for the Year 2017-18

Inadvertent Error in filing of GSTR-1 allowed to be rectified

Where a genuine mistake was committed in filing of GSTR-1 by the petitioner in mentioning GSTIN of the recipient, court held that once a bona fide mistake of such nature has occurred, it needs to be rectified and more particularity, considering the observations as made by the Court, that as there is no loss of revenue, in the event such rectification is permitted to the petitioner.

Petitioner approached the jurisdictional officer to allow the petitioner to alter/amend the invoice details pertaining to F.Y. 2017-18 in GSTR-1 for the month of December, 2019. The court observed that in cases where there was a bonafide error in filing of the return and when there was no loss of revenue caused to the Government/exchequer, the technicalities on any legitimate rectification ought not to come in the way of the assessee, so as to suffer an inadvertent error, which would have a cascading effect. For the aforesaid reasons, court was of the opinion that the petition needs to be allowed.

The petitioner had made a GST Supply to SEZ which was correctly reflected in GSTR-3B as a Zero Rated Supply, however it was reported as Taxable Supply in GSTR-1.

The Court observed that the petitioner placed on record the relevant tax invoice. Such tax invoice indicated prima facie that the supply was made to a SEZ unit and that it consequently qualified as a zero-rated supply. GSTR-3B return of the petitioner was in line with the supply being zero rated. It was also noticeable from the invoice and returns that the supply pertained to the July quarter of assessment period 2017-18. This was during the nascent stage of GST implementation.

The Court held that by taking into account the above facts and circumstances, this was an appropriate case to provide an opportunity to the petitioner. Consequently, the impugned assessment order was quashed and the matter was remanded for re-consideration by the assessing officer. The petitioner was permitted to submit a reply to the show cause notice within a maximum period of fifteen days from the date of receipt of a copy of this order by enclosing all relevant documents. Upon receipt thereof, the assessing officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order.

No. Case Citation Relevant Text

Cases on Section 50 of CGST Act, 2017

Since in the present case, the tax amount has already been credited to the cash ledger i.e. Government Account within the prescribed time limit, i.e., before due date, the question of payment of interest would not arise.

No. Case Citation Relevant Text 1. Eicher Motors Ltd. v. Superintendent of GST and Central Excis [2024] 158

taxmann.com 593 (Mad.)

Cases on Section 54 of CGST Act, 2017

1. VSM Weavess India (P.) Ltd. v. Assistant Commissioner (ST) [2024] 158 taxmann.com 519 (Mad.)

2. Suchita Millenium Projects (P.) Ltd. v. Assistant Commissioner of Central Goods and Service Tax & Central Excise [2024] 158 taxmann.com 120 (Cal.)

3. Mittal Footcare v. Commissioner of Central Goods & Services-tax [2024] 158 taxmann.com 145 (Delhi)

4. Real Prince Spintex (P.) Ltd. v. Union of India [2024] 158 taxmann.com 191 (Guj.)

5. Trafigura Global Services (P.) Ltd. v. Principal Commissioner of CGST & Central Excise [2024] 159 taxmann.com 296 (Bom.)

Refund claim for zero rated exports does not disentitle petitioner from claiming refund for unutilized ITC under inverted duty structure

6. Engineers India Ltd. v. Assistant Commissioner (Central Tax) [2024] 159 taxmann.com 364 (Mad.)

The ground on the basis of which refund application was rejected appeared to have not been specifically mentioned in the show-cause notice dated 7th June, 2022 and therefore, rejection of the application for claim for refund on the said ground is in total violation of the principles of natural justice

7. Sunil Kumar Poddar v. Additional Commissioner (Appeal) [2024] 159 taxmann.com 54 (Cal.)

8. Afortune Trding Research Lab LLP v. Additional Commissioner (Appeals I) [2024] 159 taxmann.com 780 (Mad.)

A refund cannot be rejected merely on the ground of non-supply of authenticated document. In case party is entitled to refund, it is open to the Department to call for further clarification or documents as may be required to satisfy itself that refund is due and payable.

Once the Court has issued the directions, the same are binding upon the respondent-authorities and the respondent-authorities had no reason to take a different view than the directions issued by this Court while exercising the powers under Article 226 of the Constitution of India.

Court was of the opinion that neither the Original Authority nor the Appellate Authority has taken into consideration the fact that the filing of the petitioner's application by the online method was permissible under the circular of the revenue. Hence, once same was appropriately filed, on such count the application could not have been rejected on the ground of limitation. This apart, even assuming that the petitioner subsequently submitted the relevant documents, it could not have been held that the petitioner's application was barred by limitation, as filing of the application was not in dispute and any deficiency noted thereafter was a curable defect which could not have affected the date on which such application was filed and which was within its prescribed limitation.

The refund claim was rejected on the ground that the application was filed under the category "Any Others". The court held that a refund claim cannot be rejected merely on the ground that such refund claim does not fall within the specific categories enumerated in Circular No. 125/44/2019-GST dated 18-11-2019 and sub-section (1) of Section 54 of the CGST Act appears to be wide enough to embrace any claim for refund of tax or interest provided such claim is made within a period of two years reckoned from the relevant date. Since the order impugned was issued without providing adequate reasons for rejection of the refund claim, the said order called for interference and thus the same was remanded back for fresh consideration.

If a taxpayer possesses the valid shipping bills, but for some reason may not have been able to upload the same in Form GSTR-1 at the time of claiming refund, the law should not be so rigid so as not to permit the claimant to rectify the mistake that has been committed inadvertently. There is nothing on record to show that the petitioner deliberately did not upload the required details. Apart from the fact that the petitioner did not upload the shipping details in Form GSTR-1, there is no reason for withholding or rejecting the claim for refund sought for by the petitioner.

Merely because the receipts are rooted through the intermediary and received in Indian currency ipso facto would not mean that the petitioner has not exported services within the meaning of Section 2(6) of the IGST Act, 2017. Receipt of payment by an intermediary for and on behalf of its client like the petitioner will qualify as payment received by the client. As the only requirement is with the payments received is freely convertible foreign exchange has to be directly remitted into the authorized dealers account as otherwise an intermediary will be violate the requirements of the foreign exchange. .Thus, without doubt, the petitioner is entitled for refund. Reference to Circular No.88/07/2019-GST dated 01.02.2019 to concluded that the petitioner has not realized the amount in freely convertible foreign exchange therefore cannot be countenanced.

S. No. Case Citation Relevant Text

9. Tushar Kumar Chhaganlal Kothiya v. Union of India [2024] 159 taxmann.com 144 (Bom.)

10. Malabar Fuel Corporation v. Assistant Commissioner Central Tax & Central Excise [2024] 159 taxmann.com 219 (Ker.)

Where petitioner is ready and willing for adjustment of the higher duty drawback as availed, balance amount being IGST Refund minus higher duty drawback be refunded to the petitioner.

The petitioner received bulk supply of LPG from various refineries wherein petitioner was required to pay GST @ 18%. However, after bottling, when the LPG was supplied in cylinders to domestic and commercial customers, GST at the rate of 5% and 18%, respectively, on the value of the cylinder was charged. The refund application as However, the said applications/claims of the petitioner were rejected on the basis of Circular No.135/05/2020-GST dated 31.3.2020. The Court observing that the condition laid down in clause 3.2 of the Circular, which denies refund of credit accumulated to a dealer as a result of higher tax on inputs than the output supplies, when the input and output supplies are one and the same, would have to be ignored, held that the petitioner is entitled for refund of the credit accumulated on account of payment of higher rate of tax, i.e. @ 18%, on input supplies received by him for bottling of LPG for domestic supply, when the rate of tax is only @ 5%.

11. M Trans Corporation v. State Tax Officer [2024] 160 taxmann.com 766 (Ker.)

12. ESL Steel Ltd. v. Principal Commissioner, Central Goods and Service Tax & Central Excise [2024] 160 taxmann.com 333 (Jhar.)

The petitioner instead of claiming the CGST/SGST claimed IGST and claimed that it was a bonafde mistake committed by the petitioner and thus should not be punished for a genuine mistake. The Court held that Section 54 read with Section 49 prescribes for refund of excess tax etc., paid by the registered dealer by moving an application within the period of two years from the last date of fling the returns for the relevant year. Admittedly, the petitioner did not move any application within the time prescribed and even the extended time. Thus, the Court, in exercise of its limited jurisdiction cannot amend the statute and prescribe different time limit for moving such an application. Thus, writ petition was dismissed.

SCN dated 15-7-2020 was served upon the petitioner through e-mail on 16-7-2020 at 12.03 p.m, requiring the petitioner to furnish reply within fifteen days. Aforesaid fifteen (15) days expires on 31-7-2020, on which date the petitioner furnished its reply dated 31-7-2020, sent through e-mail dated 31-7-2020. But the date of Personal Hearing (PH) as per the proviso to Rule 92(3) has been pre-maturely fixed on 30-7-2020 itself.

The Court observed that while a Personal Hearing (P.H.) was fixed on 30-7-2020, but admittedly it was premature in nature; thus, another personal hearing should have been granted to the petitioner after 31-7-2020 i.e., after receipt of reply to SCN, for making submissions and production of relevant/necessary papers and documents, to ensure that the Adjudicating Authority can examine such submissions and verify those documents before passing any order. However, interestingly, the final order itself was passed on 31-7-2020.

The Court held that the order was also non-speaking order i.e., without recording any reasons, though the same was mandatory under Rule 92(3) of the Rules, 2017, and therefore unsustainable and was fit to be quashed, inasmuch as, none of the submissions made by the petitioner were considered and the claim of refund was rejected on the ground that P.H. scheduled on 30-7-2020, in this case, was not attended and no documents were uploaded/submitted to clarify/resolve the discrepancies as pointed in the SCN uploaded dated 15-7-2020 in form RFD-08.

The Court also held that the impugned order was also bad in law, inasmuch as, from perusal of show-Cause notice dated 15-7-2020 and the rejection order of refund dated 31-72020, it would transpire that there was no DIN quoted on those Notice/Order, and as such those Notice/Order were invalid and deemed to have never been issued as per the Circular No. 122/41/2019-GST dated 05-11-2019 and Circular No. 128/47/2019-GST dated 23-12-2019, therefore the entire subsequent proceedings were null and void.

S. No. Case Citation Relevant Text

Yogesh Rajendra Mehra v. Principal Commissioner of Central Goods and Service Tax [2024] 160 taxmann.com 31 (Bom.)

The Court observed that Petitioner's first registration stood cancelled by an order dated 1st January 2019. Petitioner, was granted a fresh registration on 26th March 2022 which was his valid registration under the CGST Act, under which the Petitioner was expected to file his return. However, it appeared that there was an inadvertent / bona fide mistake, on the part of the petitioner's Chartered Accountant in filing the Petitioner's return for the first quarter of the year 2022 on both the registrations instead of filing such returns under the new / second registration. Not only this, the returns were identical, also, the tax deposited was of the similar amount of Rs.1,22,220/-. Considering these facts, it was required to be considered by the authorities below that an assessee cannot be expected to file his return and deposit any tax under an invalid cancelled registration number. Further, a legitimate and proper return was filed by the Petitioner under the second (new) registration which was a valid registration. Thus, insofar as the tax deposited under the first (cancelled) registration is concerned, the said registration itself being non-existent, the tax return filed thereunder and any tax deposited under such return, could not have been retained by the respondents as it was not a deposit as per law, it also cannot be a deposit received or any collection of tax under authority of law. Insofar as the second registration return is concerned, the same was appropriately filed and similar amount of Rs.1,22,220/- was deposited. The Court in these circumstances held that it was not correct for the original authority to furnish the reasons, as noted by us above, so as to deny the refund claim of the Petitioner. The Petitioner was entitled to refund of the amounts which was deposited by him under the erroneous return filed under the cancelled registration No.27AQEPM6029PIZA being an amount of Rs.1,22,220/-.

The Court further observed that Petitioner had filed his appeal online on 18th August 2022, which was within the prescribed limitation i.e. within a period of four months from the impugned order dated 8th June 2022. Although, in paragraph 4.5 of its order, the appellate authority had recorded the said fact, however, merely on the ground that physical copies were not furnished and/ or on some deficiencies on documents to be uploaded being not complied by the Petitioner, the appellate authority taking a hyper-technical view of the matter, rejected the Petitioner's appeal, without examining such essential facts and without touching the merits of the Petitioner's case. Such approach of the appellate authority, in the opinion, was not only contrary to the record and illegal, but also not consistent with the provisions of Sections 107(1) and (4) of the CGST Act.

14. Ginny Food v. Union of India [2024] 160 taxmann.com

132 (Bom.)

15. Sarvesh Pharma Glass v. Assistant Commissioner [2024] 160 taxmann.com 87 (Guj.)

The contention of the petitioner was that he would be entitled to the refund of IGST paid by the Petitioner during the transitional period, after deducting the differential amount of duty drawback. The Court relied upon Judgements and directed Respondent Authorities to grant refund of IGST paid on goods exported by the Petitioner during the Transitional Period, after deducting the differential amount of duty drawback

Petitioner contended that they had paid IGST on reverse charge mechanism on Ocean Freight amounting to Rs. 14,85,772/- and as per the aforesaid decision of the Hon'ble Supreme Court, the respondents are liable to refund the said amount. The petitioner accordingly filed refund applications in Form-RFD-01 for the amount of IGST paid on Ocean Freights along with supporting documents before the respondent-authorities. However, the respondent-authorities issued deficiency memo in Form-RFD-03 on 10-3-2023 asking the petitioner to file a fresh refund application on the ground that the decision of the Hon'ble Supreme Court cannot be given effect retrospectively and secondly, the IGST does not have enough balance through out the period in the electronic credit ledger.

The Court disposed of with a direction to the respondent-authority to consider the refund application of the petitioner as per the decision of the Hon'ble Supreme Court in case of Mohit Minerals Private Ltd. (supra). The respondent-authorities were directed to process the refund application in accordance with law.

S. No. Case Citation Relevant Text 13.

Cases on Section 56 of CGST Act, 2017

1. Baba Super Minerals (P.) Ltd. v. Union of India [2024] 158 taxmann.com 221 (Raj.)

2. Raghav Ventures v. Commissioner of Delhi GST [2024] 160 taxmann.com 117 (Delhi)

'the date of receipt of the application', is to be read as date of receipt of a 'complete application' i.e. in case, there are deficiencies, from the date deficiencies are removed. Interest only payable when there is delay in grant of refund beyond 60 days from date of receipt of complete application after removing the deficiencies

The Court held that payment of interest under section 56 of the Act being statutory is automatically payable without any claim, in case the refund is not made within 60 days from the date of receipt of the application. Payment of interest does not depend on the claim made by petitioner and therefore cannot be denied on the ground of waiver on the claim of interest in FORM GST-RFD-01. Moreover, the question of payment of grant of interest arises only if the refund is not granted within 60 days from the date of receipt of application.

No justification was shown by the respondent for delay in payment of refund within the stipulated period. Thus, even though, the petitioner may not have claimed interest in his refund applications, his claim of interest cannot be denied under section 56 of the Act as the same is mandatory and payable automatically in terms of the provisions of the Act.

S. No. Case Citation Relevant Text

Cases on Section 63 of CGST Act, 2017

Arupa Nanda Dhal v. Additional Commissioner of State Tax (Appeal) [2024] 159 taxmann.com 684 (Orissa)

There is patent error of jurisdictional fact as revealed from the records available. The Registration Certificate (Original as also Amended) granted with effect from 01.07.2017 much prior to issue of notice under Section 63 and the Assessment Order dated 29.03.2023 passed under Section 74 of the GST Act evince that the Assessing Authority was well aware of the fact that the petitioner does not fall within the scope of the expression “where a taxable person fails to obtain registration even though liable to do so” employed in Section 63, so as to invoke power to proceed with the assessment thereunder. This apart, it is not denied that the Assessing Authority is not authorized or competent to verify the status of the petitioner. Thus the Court held that Order dated 09.08.2023 passed in Appeal bearing No. AD210223003708N by the Additional Commissioner of State Tax (Appeal), Central Zone-II, Odisha, is liable to be set aside in view of the aforesaid analysis and discussions made.

S. No. Case Citation Relevant Text 1.

Cases on Section 65 of CGST Act, 2017

1. PBL Transport Corporation (P.) Ltd. v. Assistant Commissioner (ST) [2024] 158 taxmann.com 552 (A.P.)

2. ABT Ltd. v. Additional Commissioner of GST & Central Excise [2024] 159

taxmann.com 289 (Mad.)

it was not disputed that petitioner had filed the reply and the same was not considered while finalizing the findings of the audit. The Final Audit Report is therefore in violation of the principles of natural justice as also the statutory provisions. Consequently, the impugned Final Audit Report was liable to be quashed.

The principal contention of the petitioner was that the audit report did not contain findings of fraud, wilful-misstatement or suppression of facts. The Court observed that on examining the audit report, undoubtedly, it indicated that tax was not paid or short paid or that ITC was wrongly availed or utilised. Thus, the obligation imposed by statute with regard to the content of the audit report appeared to be satisfied. The Court observed that there is nothing in the language of Section 65 to indicate that audit report should contain such findings. On the contrary, subject to the audit report disclosing the aforesaid, sub-section (7) of Section 65 prescribes that the proper officer may initiate action under section 73 or 74. Thus, the relevant provision indicates that the proper officer has the option. It is for the proper officer to allege fraud, wilful-misstatement or suppression of fact, if he initiates action under section 74.

S. No. Case Citation Relevant Text

Cases on Section 67 of CGST Act, 2017

1. Narendra Polypack Industries v. Additional Director General Directorate General of GST Intelligence [2024] 158 taxmann.com 525 (Delhi)

2. Harp Resorts (P.) Ltd. v. Union of India [2024] 158 taxmann.com 354 (Bom.)

3. Santosh Kumar Gupta v. Union of India [2024] 158 taxmann.com 194 (Delhi)

4. Santosh Kumar Gupta v. Union of India [2024] 158 taxmann.com 194 (Delhi)

5. Santosh Kumar Gupta v. Union of India [2024] 158 taxmann.com 194 (Delhi)

6. Santosh Kumar Gupta v. Commissioner, Delhi Goods & Services Tax Act [2024]

158 taxmann.com 226 (Delhi)

7. Santosh Kumar Gupta v. Commissioner, Delhi Goods & Services Tax Act [2024]

158 taxmann.com 226 (Delhi)

8. Santosh Kumar Gupta v. Commissioner, Delhi Goods & Services Tax Act [2024]

158 taxmann.com 226 (Delhi)

Search was carried out after recording the reasons to believe that petitioner was engaged in clandestine manufacturing and supply of their product, i.e. various types of laminations. Thus, silver, though being a movable asset, was not "goods" liable for confiscation while exercising power U/Sec 67 in relation to products being traded by petitioner

Department is duty-bound to comply with the requirement of Section 67(5) as Section provides that the person from whose custody any documents are seized shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation.

The fact that petitioner had purchased the goods from a supplier, which was found to be non-existent at his principal place of business, has a direct link in forming the belief that the petitioner wrongfully availed of the ITC

The provisions of Section 6(2)(b) of the CGST Act do not preclude the central officers from conducting an inspection for concluding an ongoing investigation merely because a prior inspection or search was conducted by the DGST authorities.

Amount deposited through FORM GST DRC-03 from the laptop carried by the visiting team and Petitioner filed the present petition on 23-11-2022, that is, within a period of less than ten days, claiming refund of the amount paid. In view of the above, it was directed to the respondents to refund sum of Rs. 10,00,000/- deposited by the petitioner in FORM GST DRC-03 on 12-11-2022.

Authorization dated 18-10-2022 was issued by selecting all reasons (except that the taxpayer had availed of a refund) as set out in clause 'A' of the said form. The reasons, as stated, also exhaustively comprise of reasons for issuing such authorization as set out in Section 67(1)(a) of the DGST Act. Therefore, it does not appear that the authorization was issued without specifically noting the relevant reason for such search

Respondents had not issued an acknowledgment in FORM GST DRC-04. Thus, procedure under Rule 142 of Delhi Goods & Services Tax Rules, 2017 (hereafter 'the DGST Rules') was not followed.

Refund of the amount deposited during Survey allowed as there was no acknowledgment that the invoices covering supplies from those suppliers were fake and the petitioner had not paid the consideration and the applicable GST to the said suppliers. There is no adjudication of the question whether the taxpayer was required to reverse the ITC in respect of purchases made from dealers whose registration was cancelled after the receipt of supplies, albeit retrospectively. The Court also observed that in the present case, the petitioner has stoutly disputed that the reversal of ITC was voluntary. Undisputedly, the same has been made while the petitioner's premises were being searched and he was being subjected to questioning/enquiries. The Court did not find it difficult to accept that the petitioner may have found the circumstances intimidating and had, accordingly, agreed to reverse the ITC. The court was further unable to accept that the reversal of ITC was made voluntarily without any suggestion or encouragement by the officers. But for the search continuing till late at night, there were no circumstances which would, in normal course, lead the petitioner to reverse the ITC late at night.

9. Goyal Metal Udyog v. Commissioner of Central Goods & Services Tax [2024] 159 taxmann.com 36 (Delhi)

The Court relying upon the decision in Deepak Khandelwal Proprietor M/s Shri Shyam Metal v. Commissioner of CGST, Delhi West & Anr. : Neutral Citation No. 2023:DHC:5823-DB held that In so far as the power under section 67(2) of the CGST Act, to seize cash on the ground that it is unaccounted cash is concerned, , currency cannot be seized and thus directed be released to the petitioner.

S. No. Case Citation Relevant Text

10. Jagannathdham Superstructures (P.) Ltd. v. Deputy Director, Directorate General of Goods and Service Tax Intelligence [2024] 159 taxmann.com 112 (Orissa)

11. K. M Food Infrastructure (P.) Ltd. v. Director General DGGI Headquarters [2024] 159 taxmann.com 610 (Delhi)

12. Commissioner of CGST v. R.J. Trading Co. [2024] 160 taxmann.com 532 (SC)

The Court allowed rejection letters issued by the Deputy Director, DGGI (Opposite Party No.l), refusing to grant certified copies of the order sheet/note sheet and search warrant. The court was further of the opinion that the show-cause notices issued by the Deputy Director, DGGI for non-payment of GST on "Works Contract Services" have been issued in accordance with law.

The Court held that word "things" appearing in Section 67 of the CGST Act, 2017 does not include "money", and therefore, that being so, action on the part of the Officers of the respondents seizing/resuming the cash was illegal and arbitrary.

“We are not inclined to interfere with the impugned judgment and order passed by the High Court. However, question of law is kept open. The observations made in the writ petition will not have a bearing on the adjudication proceedings.” Original Judgement in R.J. Trading Co. v. Commissioner of CGST, Delhi North [2021] 128 taxmann.com 344 (Delhi)

A careful perusal of this communication would show (something that we have noticed hereinabove) that the Joint Commissioner (AE), Gautam Budh Nagar wanted to know, in connection with the investigation of an entity going by the name M/s Mridul Tobie Inc., as to whether RJT, which was its L2 category supplier, actually existed. There is nothing stated in the document which could have formed the basis for issuing an authorization of even date by the Additional Commissioner CGST Delhi North Commissionerate. In other words, the communication dated 5-3-2021 gives no clue that "any" goods of RJT were liable for confiscation or "any" documents, or books or things which would be useful for or relevant for proceedings under the CGST Act had been secreted to any place; a prerequisite for the formation of belief, and therefore, for the exercise of powers concerning search and seizure.

As noticed above, both the order of seizure of documents and the order of prohibition, simply replicate the language of sub-section (2) of section 67 and the corresponding Rule i.e. rule 139(2). Thus, according to us, the very trigger for conducting the search [i.e. the authorization issued by the Additional Commissioner, CGST Delhi North Commissionerate] was flawed and unsustainable in law.

13. Kanak Timber House v. Assistant Commissioner of Sales Tax [2024]

160 taxmann.com 394 (Cal.)

14. Jagdish Bansal v. Union of India [2024] 160 taxmann.com 28 (Delhi)

In the instant case, on dated 24th March 2023, in terms of first proviso to Section 67(2) of the GST Act, a prohibitory order was issued. Since then, on 26th December, 2023, a notice under section 122 of the GST Act was issued. The petitioner stated by relying upon Section 67(7) of CGST Act, 2017 that since show-cause under section 122 of the GST Act has been issued beyond the prescribed period of six months, the respondent no. 1 was obliged to return the goods to the petitioner.

The court held that the assessee has not approached the respondents under section 67(6) of the GST Act and as such, there is no reason for this Court to interfere at this stage save and except, if any application is made by the assessee with the respondent no. 1 in terms of Section 67(6) of the GST Act, the same shall be considered in accordance with law.

The court held that 'cash' is clearly excluded from the definition of the term 'goods' and would fall with the definition of 'money' as defined in Section 2 (75) of the Act. Thus, since cash was not goods, it could not have been seized under the provision of the Act, as seizure is limited to the goods liable for confiscation.

S. No. Case Citation Relevant Text

Cases on Section 73/74 of CGST Act, 2017

1. Ingram Micro India (P.) Ltd. v. State Tax Officer [2024] 158 taxmann.com 554 (Mad.)

Order passed for rejection of ITC for non-payment to creditors within 180 days held to be invalid as passed taking the balance of PAN india Creditors of a multi state registered entity. The court observed that under the Companies Act, 2013, every company is required to file financial statements in respect of its entire operations and there is no provision for filing State-specific financial statements. However, the petitioner has submitted a certificate from a Chartered Accountant stating that the trade payables attributable to the State of Tamil Nadu are Rs. 1816.48 millions. Learned counsel for the petitioner also submits that the petitioner would provide all the invoices issued by the suppliers with regard to the aggregate sum of Rs. 1816.48 millions. It was held that the assessing authority has clearly not applied its mind before drawing the conclusions extracted above.

2. Mondelez India Foods (P.) Ltd.

v. Deputy Commissioner (ST) [2024] 158 taxmann.com 497 (TELANGANA)

3. Sri Ganapathy Steels v. Deputy State Tax Officer II (ST) [2024] 158 taxmann.com 52 (Mad.)

4. Garg Rice Mills v. State of Punjab [2024] 159 taxmann.com 98 (Punj. & Har.)

5. Titan Company Ltd. v. Joint Commissioner of GST & Central Excise [2024] 159 taxmann.com 162 (Mad.)

Since the proceeding had been initiated under section 73 of the Act, the very provision of Section 73 of the Act starts with the words where it appears to be for the authority concerned which by itself meant that at the time where the authority appeared to found it necessary for initiating the proceedings, there ought to had been some material, information or even sort of a complaint available with them as regards the suspicious transactions or the alleged evasion of tax made by the petitioner

Although the order passed by the respondent cannot be faulted as the petitioner failed to respond to notice in DRC -01 dated 11-3-2023 issued for the respective Assessment years, the fact remained that dispute pertained to ITC availed by petitioner on common suppliers to the petitioner and petitioner’s sister company. Similar proceeding were initiated against the petitioner's sister company vide notice issued on 6-7-2022. Thus, considering the fact that the order was passed in favour of the petitioner's sister company, the Court set aside the impugned order and remitted the cases back to the respondent to pass a fresh order

Validity of Notice issued on 27th December 2023 for the year 2018-19 was challenged as being time barred on the argument that extension of due date of issuing of notice was illegal and ultravires, the court issued the notice and directed that in the meantime, proceedings may carry on but the final order may not be passed.

The Court held that by issuing bunching of show cause notices for five Assessment Years starting from 2017-18 to 2021-22, the respondents was trying to do certain things indirectly which they are not permitted to do directly and the same is not permissible in law. If law states that a particular action has to be completed within a particular year, the same has to be carried out accordingly. The limitation period of three years would be separately applicable for every assessment year and it would vary from one assessment year to another. It is not that it would be carried over or that the limitation would be continuing in nature and the same can be clubbed. The limitation period of three years ends from the date of furnishing of the annual return for the particular financial year.

6. Eris Oaknet Healthcare (P.) Ltd. v. Deputy Commissioner of Commercial Taxes [2024] 159 taxmann.com 292 (Kar.)

7. K. R. Pulp Papers Ltd. v. Goods and Services Tax Council [2024] 159 taxmann.com 312 (All.)

8. K.S.Janarthanam v. Deputy State Tax Officer [2024] 159 taxmann.com 329 (Mad.)

The audit notice was issued on 7-1-2021 but the notice for the proceedings was issued on 31-01-2023 and the impugned order was passed on 19-04-2023. The Court observed that in the light of the undisputed fact that the respondent had issued Adjudication Notice only on 31-1-2023 to which the petitioner submitted its reply and also requested for an opportunity and an opportunity of personal hearing, it can not be said that there was a delay of 768 days on the part of petitioner in submitting its reply by incorrectly computing/reckoning the period from date of audit notice i.e. prior to issuance of the Adjudication Notice dated 31-1-2023.

Validity of Notification No. 09/2023 dated 31.3.2023 and Notification No. 515/SI-2-23-9(47)/17-T.C215-U.P. Act-1-2017-Order-(273/2023) dated 24.4.2023 challenged as there did not exist any valid reason to grant second extension of time to issue show cause notice under Section 73(10) of the U.P. GST Act, 2020. The court directed that In view of interim order granted in the lead case, proceedings in pursuance of the impugned notice dated 21.12.2023 may go on but no final order may be passed except with leave of the Court.

Petitioner stated that 100% penalty was imposed although the show cause notice was issued under Section 73. The Court observed that on examining the notices on record, it was clear that such notices were issued under section 73 and not under section 74 of the TNGST Act. Therefore, the impugned order required for interference as regards the imposition of penalty at 100% on the SGST dues and for reasons set out above, the impugned order is quashed only insofar as it pertained to imposition of penalty under the two heads indicated in the revenue abstract of the impugned order.

S. No. Case Citation Relevant Text

9. Chennai Metals v. Assistant Commissioner (State Tax) [2024] 159 taxmann.com 343 (Mad.)

Impugned Assessment order came to be passed due to generation of Multiple E-way Bills for same transaction. Petitioner supplied SS-Scrap to Swamy Steel Corporation under invoice dated 19.09.2018. The taxable value of such invoice was Rs.7,94,294/- and the total value, inclusive of taxes, was Rs.9,38,447/-. The petitioner asserts that e-way bills were made mandatory from 02.06.2017 and that the invoice referred to above was issued during the nascent period of e-way bill implementation. Consequently, it is asserted that three e-way bills were originally generated inadvertently. Out of the three e-way bills, Bill No.511055459386 was cancelled within a short time of the generation thereof. The Court held that The tax invoice dated 19.09.2018 reveals that the taxable value of supply was Rs.7,94,294/- and that the gross value was Rs.9,38,447/-. On comparing this with the impugned assessment order, it is evident that tax liability has been imposed on twice the gross value of Rs.9,38,447/-. In light of the fact that tax was paid on such invoice, even assuming that there is tax liability in respect of the second e-way bill, the manner of computation of tax in the impugned assessment order is completely unsustainable.

10. Unique Speciality Chemicals v. Deputy Commissioner of State Tax [2024] 159 taxmann.com 344 (Bom.)

11. SIP Academy India (P.) Ltd. v. State Tax Officer [2024] 159 taxmann.com 378 (Mad.)

Petitioner stated that in relation to the E-way bill in question, the taxable value of the E-way bill was Rs.3,081.60. However, the Petitioner had mistakenly punched the HSN Code in the "Taxable Value" column of the E-way bill which is "34049090" and, therefore, the system calculated the GST of Rs.61,28,836.20, which according to the Petitioner, resulted in a tax demand which is 1817 times what was really due and payable. The total demand with interest and liability was 3870 times than what was actually payable. It is the case of the Petitioner that there was no mismatch in credit since the same is reversed voluntarily much before the notice was issued on 11th March 2022, being show cause notice in Form DRC-01A, but the mismatch was between the GST payable as per E-way bill and the returned figures in the GSTR-3B. The Court relying upon the decision held that there was a clear error in the punching and because of which the system calculated a tax amount which was certainly not commensurate with the actual E-way bill when the tax amount was only Rs.3081/-. Therefore, an appropriate decision could have been taken by the Designated Officer in consultation with the higher authorities. Therefore, Petitioner needs to be permitted to correct the bona fide mistakes, more particularly considering that there is no loss of revenue to the Department.

Wherein the petitioner, in its reply relied upon notifications under which registered persons are exempt from paying GST under reverse charge mechanism up to a specified limit or for a specified period and also explained that some of the purchases under each head were from registered dealers. Therefore imposition of tax, penalty and interest on the basis of the total expenditure incurred towards advertisement and business promotion, repairs and maintenance, and computer and software maintenance, by drawing on figures provided in the respective financial statement is a conclusion reached without proper application of mind. Further regarding exempted turnover, petitioner relied upon Notification No.12/2017 and submitted that it provides training or coaching in relation to art and culture which are exempted supplies. Thus, in spite of the petitioner's replies to such effect, the Assessing Officer recorded the bizarre conclusion that the petitioner was engaged in the sale of painting and art works. These conclusions in view of the High Court indicate non-application of mind to the material placed on record. Therefore, matter was remanded for fresh consideration.

12. Appario Retail (P.) Ltd. v. Deputy Commissioner of Commercial Tax [2024]

159 taxmann.com 509 (Kar.)

13. Eden Real Estates (P.) Ltd. v. Senior Joint Commissioner of Revenue [2024]

159 taxmann.com 540 (Cal.)

14. TVS Scs Global Freight Solutions Ltd. v. Assistant Commissioner (ST) [2024]

159 taxmann.com 726 (Mad.)

The Court observed that there could be some debate on the merits of the change in Rule 142(1A) in providing that the Proper Officer may communicate the details in Part A of FORM GST DRC - 01A before issuance of notice under section 73(1) of the GST Act, but there cannot be any debate about the requirement that once the intimation is issued in Part A of FORM GST DRC-01A communicating the details of any tax, interest and penalty as ascertained and submissions are filed in Part B of Form GST DRC 01A under Rule 142(2A) against such proposal, the proper officer must reason why the submissions filed cannot be accepted before assuming jurisdiction to issue notice under section 73(1) of the GST or under section 74(1) or the other provisions mentioned in Rule 142(1A). This would be crucial because of the consequences of penalty under section 73 of the GST Act.

Petitioner challenged the impugned show-cause form GSTDRC-01, on the ground that the same was in violation of principle of natural justice and is non-speaking and without considering the reply/details submission made by the petitioner on 26th December, 2023 against intimation to pre-show cause notice. The Court observed that the same has neither been dealt nor discussed at all by the WBGST authority concerned before issuing show-cause notice dated 29th December, 2023. The petition was disposed of by setting aside the impugned show-cause notice dated 29th December, 2023 and the matter was remanded back to the GST authority concerned to reconsider the case of the petitioner by taking into consideration the aforesaid detailed reply dated 26th December, 2023 before proceeding any further.

On perusal thereof, it was evident that the petitioner dealt with each alleged defect as the petitioner has annexed relevant documents corresponding to each alleged defect. The Court observed that, the assessment order was issued without duly taking into consideration the replies and documents submitted by the petitioner, and the sequence of dates and events leads to the inference that the entire process appears to have been concluded in haste. For such reasons, the impugned assessment order called for interference and hence, it was quashed and the matter was remanded for re-consideration.

. No. Case Citation Relevant Text

15. Paras Enterprises v. Union of India [2024] 159 taxmann.com 657 (Delhi)

The impugned order, after recording the narration, recorded that the reply uploaded by the tax payer was not satisfactory. The order further observed that it merely stated that "no further additional reply or explanation has been received from the taxpayer despite sufficient repeated opportunities which indicate that the taxpayer has nothing to say in the matter. Hence, the order recorded that the undersigned is left with no other option to create a demand ex parte, in accordance with provisions of CGST/DGST Act." The Proper Officer opined that reply is not clear and unsatisfactory. The Court observed that in case the Proper Officer was of the view that reply is incomplete and further details were required, the same could have been sought from the petitioner, however, the record does not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details. Further petitioner was not provided with an adequate opportunity to defend the show cause notice by way of a hearing. In view of the above, the order was held not to be sustainable and the matter was liable to be remitted to the Proper Officer for re-adjudication.

16. GAC Shipping India (P.) Ltd. v. Sales Tax Officer [2024] 159 taxmann.com 686 (Delhi)

17. Yash Building Material v. State of U.P [2024] 159 taxmann.com 487 (All.)

The Court noted that the impugned order, however, after recording the narration, records that the reply uploaded by the tax payer is unsatisfactory and taxpayer has not been able to submit substantial proof in support of his reply. The Proper Officer has opined that the reply is unsatisfactory and taxpayer failed to appear for personal hearing despite being given repeated opportunities. The Court further stated that In case the Proper Officer was of the view that reply is incomplete and further details were required, the same could have been sought from the petitioner, however, the record does not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details. It was also noted that hearing was fixed on 7-11-2023, which was prior to the reply furnished by the petitioner. Further, petitioner was not provided with an adequate opportunity to defend the show cause notice by way of hearing. Thus, in view thereof, the order was held not to be sustainable and the matter was remitted to the Proper Officer for re-adjudication.

Notice was issued to the petitioner under Section 74(5) of the Act wherein officer asserted that the tax was payable by the assessee. However, upon non-payment of the tax, Section 74(7) of the Act would come into play and the proper officer was required to give a notice under Section 74(1) of the Act. The procedure, that was to be followed, was not followed and no show cause notice was issued to the petitioner. Instead of the same, the impugned order dated July 30, 2021 was passed. From the above factual matrix, it was clear that proper show cause notice was not issued to the petitioner, and therefore, all the orders impugned herein are without any basis of law, and thus the impugned orders were required to be set aside.

18. Origin B.R. Digitalsigns (P.) Ltd. v. State of U.P. [2024] 159 taxmann.com 617 (All.)

19. B. Sivakumar v. State Officer [2024] 159 taxmann.com 719 (Mad.)

Wherever any person is asked to give his response and the charges are bases on certain material and documents then it is mandated that the delinquent should be provided all the material on the basis of which the said charges are framed and by not giving such materials will severely prejudice the case of a person who is asked to respond to the said charges. In the present case not providing copy of the SIB report has severely prejudiced the case of the petitioner and accordingly on this ground alone the proceedings are arbitrary being in violation of the principles of natural justice.

The dispute in the instant matter was related to wrong availing of input tax credits by assessee under provisions of respective GST enactments. It was submitted that since business premises of assessee was under lock and seal by Bank records could not be presented. GST official visited assessee's premises with bank officials to obtain related records but could not find required records and documents. Assessee replied to show cause notice and had requested GST Official to permit assessee to cross-examine officers from Bank who had put assessee's mills/factories under lock and seal under provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 read with Security Interest (Enforcement) Rules, 2002. It was further submitted that no Panchanama was prepared by bank during takeover process as was required under Rule 4 of the Security Interest (Enforcement) Rules, 2002. It was submitted that Bank ought to have intimated by notice enclosing Panchanama drawn and inventory made and since there was a violation of procedure followed in complying with requirements of said Rule 4, impugned proceeding without permitting assessee to cross-examine officials of Bank had to be interfered with. Further, despite officials of bank, being summoned for cross-examination also, assessee was not allowed to cross examine them and if cross-examination was allowed, assessee would have established that all documents for proving that Input Tax Credit were validly availed for deciding tax liability. Thus it was held that the Impugned orders had been passed in violation of principles of natural justice in as much as, assessee was not allowed to cross examine Bank officials who had taken possession of factory. Therefore, impugned orders were liable to be set aside

. No. Case Citation Relevant Text

20. Garg Sons Estate Promoters (P.) Ltd. v. Commissioner of State Taxes & Excise [2024] 159 taxmann.com 720 (H.P.)

In the instant case, there was duplication of proceedings in so far as dealing of the petitioner with M/S R.J. Trading Company is concerned as two orders were passed for the same supplies. The Court observed that based on the documents placed on record, a prima facie case exists in favour of the petitioner. Balance of convenience also lies in favour of the petitioner. Grave irreparable loss, which cannot be compensated in terms of money shall be occasioned to the petitioner, if in case the respondents were not restrained from giving effect to the order.

21. M. Ramakrishnan v. Deputy State Tax Officer-2 [2024] 160 taxmann.com 437 (Mad.)

22. Rays Power Infra (P.) Ltd. v. Superintendent of Central Tax [2024] 160 taxmann.com 190 (Telangana)

Order was passed against the petitioner under Section 73. The Court observed that according to the petitioner, the respondent has imposed penalty on the petitioner for non-willful misstatement and the same was uploaded in the common portal and not communicated to the petitioner physically. The petitioner's contention is that he is having all the required documents to substantiate that there is no discrepancy and he is ready to submit the same. The learned counsel has relied on the order of the Division Bench of the Gujrat High Court, wherein, it was held that show-case notice and other related orders in physical form shall be dispatched to the dealers by RPAD, till the technical glitches are cured. The Court allowed the writ petition by holding that since petitioner is ready to produce all the necessary documents, the respondent is also inclined to provide one more opportunity to the petitioner. The matter was thus remanded back to the respondent for fresh consideration.

The point of issue for consideration in the present writ petition was as to whether the petitioner having been discharged his entire tax liability along with the accrued interest immediately upon the finding of the audit team having been made available to the petitioner. Could respondent authorities have subsequently initiated proceeding under Section 74 of the C.G.S.T Act.

The Court observed that Section 74 would get attracted only in the event of their being strong materials available on record to show that the petitioner had played fraud or there was any misstatement made by him and there being any suppression of fact. Applicability of Section 74 would come into play only if the conditions stipulated in Section 73 has not been met with by the taxpayer i.e. to say in the event if the conditions stipulated in Sub-Section (5) of Section 73 is not honored by the taxpayer in spite of the tax liability being brought to his knowledge. Then in the said circumstances, Section 74 would automatically attract and in those circumstances, the contention of the learned Senior Standing Counsel would be acceptable. The attempt of the learned Senior Standing Counsel trying to bring the conduct of the petitioner within the purview of fraud, misstatement and suppression of fact would not be sustainable and the said contention stands negated by the Bench simply for the reason that Sub-Section (1) of Section 73 permits a taxpayer to even clear wrongly availed I.T.C. and also wrongly utilized I.T.C. and it is this what is alleged against the petitioner of having wrongfully and irregularly availed I.T.C.Thus, it was held that the action on the part of the respondents in initiating the show cause proceedings under Section 74 and passing of the impugned order dated 15.11.2023 both were in excess of their jurisdiction and the same therefore were set-aside / quashed.

23. Indus Towers Ltd. v. Union of India [2024]

160 taxmann.com 15 (Gauhati)

24. Quess Corp Ltd. v. Deputy Commissioner (ST)-1, Large Tax Payers Unit [2024] 160 taxmann.com 65 (Mad.)

The Petitioner contended that in the Explanation to Section 168A of the CGST Act, 2017, the expression "force majeure" means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of the Act. It was noticed that the time limit under sub-section [10] of Section 73 of the SGCT Act was extended once prior to the Notification dated 31-3-2023.

The Court considering the aspects as stated by the petitioner, including the nature of orders passed by the Hon'ble Allahabad High Court, the Hon'ble Gujarat High Court, the Hon'ble Punjab & Haryana High Court and the Hon'ble Madras High Court, observed that the petitioner shall file its reply to the impugned Show Cause Notice on or before 15-3-2024. It was further observed that till the returnable date, the proceedings initiated pursuant to the impugned Show Cause notice may proceed, but no final order in respect of the impugned Show Cause Notice shall be passed.

Petitioner submitted that the intimation in Form DRC-01A was for an aggregate sum of Rs.85,53,571.42/-. This increased to a sum of Rs.7,93,10,788/- in the show cause notice in Form GST DRC-01. Eventually, the tax demand under the assessment order was far higher and was for the sum of Rs.63,36,17,592/-.

The Court observing the intimation, show cause notice and assessment order on record held that on examining the same, it was evident that the amount communicated in the intimation was much lower than the amount in respect of which the petitioner was called upon to show cause. Similarly, the tax demand under the impugned assessment order was much higher than the amount in respect of which the petitioner was called upon to show cause. The petitioner had also place on record the request for adjournment. As a result of the denial of such request, it was clear that the impugned order came to be issued without considering the submissions of the petitioner. In the overall facts and circumstances, the impugned assessment order was quashed and the matter was remanded for re-consideration.

. No. Case Citation Relevant Text

Cases on Section 75 of CGST Act, 2017

1. Alok Steel Industries (P.) Ltd. v. State of Jharkhand [2024] 158 taxmann.com 604 (Jhar.)

2. Menacherry Lonappan Jayan v. State Tax Officer [2024] 158 taxmann.com 610 (Ker.)

3. IJM Concrete Products (P.) Ltd. v. State of M.P. [2024] 158 taxmann.com 695 (M.P.)

4. MakeMyTrip (India) (P.) Ltd. v. State Tax Officer [2024] 158 taxmann.com 492 (Mad.)

5. Goutam Bhowmik v. State of West Bengal [2024] 158 taxmann.com 399 (Cal.)

6. Brakes India (P.) Ltd. v. Assistant Commissioner (ST) [2024] 158 taxmann.com 219 (Mad.)

7. Eastern Machine Bricks & Tiles Industries v. State of U.P [2024] 158 taxmann.com 384 (All.)

Summary SCN and consequential order set aside as no opportunity of being heard provided and also no SCN issued and only a Summary of Show Cause Notice has been issued to the Petitioner

Order passed without considering reply of petitioner was violative of Principle of Natural Justice

8. A.H. Enterprises v. Deputy Commercial Tax Officer [2024] 158 taxmann.com 220 (Mad.)

9. Tata Steel Ltd v. State of Chhattisgarh [2024] 158 taxmann.com 256 (Chhattisgarh)

10. Basheer Bags v. Deputy State Tax Officer -2 [2024] 158 taxmann.com 583 (Mad.)

Although, in the first portion, Section 75(4) talks about a specific request, the portion after the word 'or' makes it clear like cloudless sky that opportunity of hearing is required to be given, even in those cases where no such request is made but adverse decision is contemplated against such person

Non-consideration of reply to the SCN certainly prejudices petitioner and denies petitioner a reasonable opportunity to establish its position

Where an adverse decision is contemplated against the person, such a person even need not to request for opportunity of personal hearing and it is mandatory for the authority concerned to afford opportunity of personal hearing before passing an order adverse to such person

Show cause notice was served on the petitioner by e-mail on 25-10-2023. The show cause notice fixed the personal hearing on the same date at 2.00 pm, i.e. within two hours from the time of receipt of e-mail. Consequently, thus reasonable opportunity was not provided to the petitioner to submit relevant documents and, more importantly, explain the facts and circumstances

It was further submitted that as the petitioner had already cancelled its registration voluntarily, it was not required to check the web portal. It was further stated that revenue proceeded on the basis of a Special Investigation Branch report (SIB report) behind the back of the petitioner without providing a copy of the same to the petitioner.

The phrase, denoting "hear the other side," is emblematic of the sacrosanct right vested in individuals to be accorded a fair and impartial hearing before the adjudication of their rights or interests

The Court observed that In view of the statutory mandate for personal hearing and non-compliance therewith, the impugned order calls for interference. Therefore, the impugned order dated 11-10-2023 is quashed and the matter is remanded for reconsideration.

It was quite clear that though in the opening para of the notice the petitioner was granted the opportunity to appear before the authority for a personal hearing, no details in this regard were mentioned in the notice and the date of personal hearing, time of personal hearing and venue were left blank. Therefore, given the contention put forth on either side, the provisions of Section 75(4) of the Act of 2017 and the contents of the notice dated 11-8-2021, the petition was disposed of thereby directing the authorities to afford an opportunity of hearing to the petitioner strictly in accordance with the provisions of Section 75(4) of the Act of 2017.

A registered person carrying on a small business did not have the opportunity to respond to the claim made by the tax department with regard to the discrepancy between the returns in Form GSTR-1 and Form GSTR-3B. The high court thus held that solely for the purpose of providing an opportunity to the petitioner.

S. No. Case Citation Relevant Text

11. K. J. Enterprises v. State of U.P. [2024] 159 taxmann.com 56 (All.)

12. B.M.R. Industries (P.) Ltd. v. Assistant Commissioner (ST) [2024] 159 taxmann.com 73 (A.P.)

13. Kabita Rath v. Chief Commissioner, C.T. & G.S.T. [2024] 159 taxmann.com 101 (Orissa)

14. Patanjali Ayurved Limited v. State Of Madhya Pradesh [2024] 159 taxmann.com 102 (M.P.)

Even if no request is received from the person chargeable with tax or penalty, an opportunity of personal hearing must be granted if any adverse decision is contemplated against such person.

Impugned order reflected that the petitioner placed reliance on the decision in Sun Export Corporation, Bombay v. Collector of Customs, Bombay [MANU/SC/0703/1997 = AIR 1997 SC 2658], and some other decisions to the effect that the supplements and additives of shrimp feed will also fall under the category of shrimp feed. However, the same was not discussed and analyzed before recording conclusion. Therefore, impugned order was liable to be set aside to that extent and the matter requires remand for fresh consideration.

The Court held that since the State Tax officer while passing the order dated 18-11-2023 has not been given opportunity of hearing to the Petitioner, the said order cannot be sustained in the eye of law.

Even law makers while prescribing the statutory form visualized different stages for the purpose of 'personal hearing'. The one stage is when the reply is submitted and the other stage is date, venue and time of the personal hearing. Thus, line of argument of learned Government Advocate that 'opportunity of hearing' does not include the opportunity of 'personal hearing' was rejected. Whether or not the petitioners have specifically asked for personal hearing, fact remains that the adverse decision was contemplated against the petitioners. In that event, it was obligatory and mandatory on the part of respondents to provide the petitioners opportunity of personal hearing.[4]

15. Garg Vanijya (P.) Ltd. v. State of West Bengal [2024] 159 taxmann.com 334 (Cal.)

16. Joshikaa Enterprises v. Assistant Commissioner (ST) [2024] 159 taxmann.com 187 (Mad.)

17. KEC International Ltd. v. Union of India [2024] 159 taxmann.com 205 (All.)

18. JRK Diagnostic v. Deputy State Tax Officer-I [2024] 159 taxmann.com 218 (Mad.)

The petitioner, in reply to his show-cause, expressly requested to have an opportunity of hearing. The observation of the appellate authority that the appellant was given reasonable opportunity at the adjudicating level does not get support of the records inasmuch as at the adjudicating level, only the case disclosed in the reply to the show-cause has been discussed which obviously is far short of the requirement of Section 75(4) of the said Act of 2017. The order impugned, for the aforesaid reasons was not sustainable and thus accordingly set aside

Order quashed ands remanded for fresh adjudication as no opportunity of being heard provided to the petitioner.

19. Nav Bharat Tea Processing (P.) Ltd. v. Deputy Commissioner of State Tax Bureau of Investigation [2024] 159 taxmann.com 516 (Cal.)

The Court observed that he could not deny either the fact that the first date fixed in the proceeding was 16.11.2023 or the fact that the petitioner had filed adjournment application for the date fixed. However, no reason has been ascribed to reject the same. Section 75(4) of the Act, 2017 gives perfect right to the petitioner to be personally heard before any adverse order may be passed and thus, it was held that for the facts noted above, the impugned order cannot be sustained.

Intimation in Form GST-DRC-01A was issued on 27-9-2023 and that, even without waiting for a reasonable period, the show cause notice in Form GST- DRC-01 was issued on 29-9-2023. The petitioner replied on 30-10-2023 and requested for a personal hearing to enable the petitioner to place relevant documents on record. Reminder letter dated 18-122023 was issued by the respondent requesting for a reply to the show cause notice and that the petitioner requested for a month's time to do so by reply dated 25-12-2023. The court observed that said reply dated 25-12-2023 was disregarded and in effect, in spite of request, no personal hearing was provided and there was breach of principles of natural justice. For that reason, the impugned order warrants interference. Therefore, the impugned order dated 30-12-2023 was quashed.

Section 75(4) of the Act mandates that an opportunity of hearing shall be given where a request is received in writing, to the person chargeable with tax or penalty or where any adverse decision is contemplated against such person. The Court thus held that petitioners, therefore, were entitled to an opportunity of such hearing, accordingly the order impugned is set aside.

S. No. Case Citation Relevant Text

20. T S Lines India (P.) Ltd. v. State of Maharashtra [2024] 159 taxmann.com 407 (Bom.)

21. A.D. Jeyaveerapandia Nadar & Bros. v. State Tax Officer [2024] 159 taxmann.com 413 (Mad.)

No mistake can be attributed to the Petitioner for not having noticed the Notice or the Order on the portal. It is clear that all orders and notices were required to be placed in the "View Notices and Orders" window/portal. It also appears to be quite clear from the perusal of the record that the Petitioner was not heard. It had no opportunity to reply to the show cause notice. In the aforesaid circumstances, it was held that it would be in the interests of justice that the impugned orders are quashed and set aside.

The Court observed that as regards turnover mismatch, the assessing officer set out the particulars provided by the petitioner, recorded that the petitioner had produced the balance sheet and profit and loss account for the year 2017-2018 and thereafter recorded the following conclusion: "The reply of the dealer is not acceptable". Thus, the assessing officer has merely recorded a conclusion in the nature of ipse dixit without any reasoning to support such conclusion. As regards reversal of ITC, the petitioner/assessee stated that it had availed ITC and used the same exclusively for taxable and zero-rated supplies. After noticing such submission, the assessing officer has recorded the conclusion that ITC was used partly for effecting taxable supplies and partly for effecting exempt supplies. The latter conclusion appears to be clearly contrary to the submissions made by the assessee. As regards tax liability under the head 'sundry creditors', the petitioner/assessee stated that the payments to creditors are below 180 days and Rule 37 was not contravened. It was further stated that no ITC was involved. The reply of the assessee dated 09.10.2023 disclosed that the sundry creditors' list, payment date, bank date and bank statement were enclosed. Without considering these documents, a finding that bank statement was not provided is recorded in the impugned order. Therefore, it appeared that the impugned order was issued without taking into account the relevant material placed on record by the assessee. Consequently, in view of the Court, the said order called for interference and was thus quashed matter remanded for reconsideration by the assessing officer.

22. Murugesan Jayalakshmi v. State Tax Officer [2024] 159 taxmann.com 545 (Mad.)

23. Oswal Agencies (P.) Ltd. v. Union of India [2024] 159 taxmann.com 547 (Delhi)

Respondent issued both an intimation in Form GST DRC-01A and SCN in Form GST DRC-01 and reminders before issuing the impugned assessment orders. The impugned notices and assessment orders were uploaded on the 'View Additional Notices' tab in the GST portal. Earlier, such notices and orders were uploaded on the 'View Notices' tab. It was also brought to my notice that the GST authorities have redesigned the dashboard of the portal in January 2024 and clearly specified the type of notices and orders which may be viewed under the 'View Notices' tab and the 'View Additional Notices' tab. Therefore, in view of the above circumstances, solely with a view to provide an opportunity to the assessee to contest the proceedings, the impugned orders were quashed and matter remanded back subject to the condition that petitioner remits sums equal to 7.5% of the disputed tax demand under each assessment order.

The High Court observed that perusal of the impugned order reflected that the impugned order recorded that no proper reply was submitted and reply stated to be improper was not found to be satisfactory. The court stated that the order was cryptic order without any reasons and without taking into account the reply filed by the petitioner. None of the averments of the petitioner were taken into account while passing the impugned order dated 05.12.2023. Accordingly, it was held that said order cannot be sustained and the matter calls for a remit. In view of the above, the impugned order dated 05.12.2023 was set aside and matter remitted to the proper officer to pass a fresh speaking order taking into account the reply filed by the petitioner.

24. Atlas Cycles Haryana Ltd. v. State of U.P. [2024] 159 taxmann.com 718 (All.)

The Court observed that the first notice issued to the petitioner under Section 73 dated 29.09.2023 did intend to call for a reply from the petitioner but did not propose to grant personal hearing as the abbreviation "NA" was specified against the column "date of personal hearing". Similar narration appears in the further notice issued to the petitioner dated 28.11.2023. In that against the columns to specify the date of personal hearing, time of personal hearing and venue for personal hearing, the abbreviation "NA" i.e. Not Applicable were recorded. In view of the above position admitted on the record, high court stated that the only conclusion possible to be drawn is that the petitioner was never afforded any opportunity of personal hearing. Accordingly the impugned order was set aside and matter remitted.

25. Reet Traders v. State of U.P. [2024] 160 taxmann.com 86 (All.)

The impugned order was set aside as despite written replies submitted, the impugned order made no discussion of the same. On the contrary, a perverse observation was recorded therein that the petitioner did not file any reply to the show-cause notices issued to him. Further, despite adverse order being contemplated, no opportunity of being heard was given.

S. No. Case Citation Relevant Text

26. Vadakkoot Chackoo Devassy v. Assistant State Tax Officer [2024]

160 taxmann.com 659 (Ker.)

27 Tvl. Aarthi Enterprises v. Assistant Commissioner (ST) [2024] 160 taxmann.com 638 (Mad.)

28. Sri Ranganathar Constructions (P.)

Ltd. v. Assistant Commissioner (ST) (FAC) [2024] 160

The Court observed that ASMT-10 was issued on dated 29-9-2023 and on the very next day, notice under section 73 was issued. The petitioner was not afforded any time for filing reply to the notice in GST ASMT-10. The Court also observed that it was also not in dispute that the petitioner's GST registration was cancelled before the said notices were uploaded in the GST portal. Therefore, in view of the above, it was held that there was violation of the principles of natural justice and, therefore, the impugned assessment order was unsustainable and the same was set aside. The matter was remanded back to the file of the assessing authority to pass fresh a order.

The Court directed the dealer to file the reply to ASMT-10 and held that Merely because representations from the Tamil Nadu Kerosene Dealers Association for exemption from GST and exemption from TDS are pending consideration, the petitioner cannot evade the obligation to respond to a notice alleging discrepancies in returns filed by the petitioner.

taxmann.com 633 (Mad.) The Court observed that the petitioner requested for two months' time to reply by citing the pending proceedings at the instance of the central GST authorities. The petitioner also pointed out that a deposit of Rs. 1,50,00,000/- was made with regard to three assessment periods. However, petitioner's reply was not taken into account and the petitioner was not provided time as requested in the said reply.

The Court in view of the above facts, observed that albeit by putting the petitioner on terms, the petitioner should be provided another opportunity and thus orders impugned were quashed. Also since the bank account of the petitioner was attached pursuant to a communication from the respondent to the Bank, the respondent was directed to appropriate 10% of the disputed tax demand in respect of each assessment year from such bank account. The petitioner was permitted to submit a reply to the show cause notice within a period of three weeks from the date of receipt of a copy of this order. Upon receipt of the petitioner's reply and upon being satisfied of the receipt of 10% of the disputed tax demand in respect of each assessment year, the Assessing Officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh orders within a period of two months.

29. Aarem Tradex (P.) Ltd. v. Sales Tax Officer [2024] 160 taxmann.com 592 (Delhi)

Petitioner submitted impugned order does not record any finding on the said reply or even advert to the reply filed by the petitioner. It merely states that the reply was not found comprehensive.

The Court observed that the order dated 22-12-2023 records that "Since, no payment has been made within 30 days of the issue of the notice by you; therefore, on the basis of documents available with the department and information furnished by you, if any, demand is created for the reasons and other details attached in annexure".

The High Court stated that the impugned order dated 22-12-2023 is not sustainable for the reasons that the reply filed by the petitioner is a detailed reply. The proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that since no payments has been made within 30 days of the issue of notice by you and no proper reply/explanation has been received" which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner. Accordingly, the Impugned order being bereft of any reasoning was held to be not sustainable and was set aside. The matter was accordingly remitted to the proper officer to readjudicating the Show Cause Notice after giving an opportunity of personal hearing to the petitioner.

30. Samsung India Electronics (P.) Ltd.

v. Union of India [2024] 160

taxmann.com 535 (Delhi)

Petitioner submitted that Show Cause Notice dated 24-9-2023 was received by the petitioner to which a detailed point-wise reply was submitted.

The High Court noticed that the order dated 31-12-2023 records that no proper reply/explanation has been received from the tax-payer despite sufficient and repeated opportunities which indicates that the tax-payer has nothing to say in the matter.

The observation in the impugned order dated 31-12-2023 was held not to be sustainable for the reasons that the reply filed by the petitioner is a detailed reply. The proper officer had to at least consider the reply on merits and then form an opinion whether the explanation was sufficient or not. He merely held that no proper reply/explanation has been received which ex-facie shows that proper officer has not even looked at the reply submitted by the petitioner. Accordingly, impugned order dated 31-12-2023 was set aside. The matter was remitted to the proper officer for re-adjudication of the show cause notice issued under section 73 of the Act after giving an opportunity of personal hearing to the petitioner.

S. No. Case Citation Relevant Text

31 Bhagyam Exports v. Assistant Commissioner [2024] 160 taxmann.com 521 (Mad.)

The High Court observed that the order refers to the tax payer's reply but does not discuss such reply or record any findings in relation thereto. In the reply, the petitioner/tax payer contended that the audit report issued on 21-2-2022 is beyond the period of limitation prescribed in sub-section (4) of Section 65. This contention and other contentions raised in such reply were completely disregarded in the impugned assessment order and no findings were recorded in relation thereto. The Court without expressing any opinion on the merits of such contentions, in view of the fact that no findings were recorded in relation thereto, held that the impugned assessment order called for interference. It should also be noticed in this regard that the petitioner remitted 10% of the disputed tax demand. Thus, the impugned assessment order was quashed and the matter was remanded for reconsideration. The assessing officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh speaking assessment order after duly taking note of all the contentions of the petitioner.

32. Signet Industries Ltd. v. State Tax Officer [2024] 160 taxmann.com 460 (Mad.)

Petitioner received a show cause notice dated 27.09.2023. In response thereto, the petitioner submitted a certificate from the Chartered Accountant, M/s.Gupta & Jain, certifying the turnover attributable to operations in Tamil Nadu. The petitioner also submitted a reply dated 13.10.2023 dealing with each defect that forms the subject of the show cause notice. The impugned assessment order was issued thereafter on 22.12.2023.

The Court reproduced the relevant part of the Order as follows

“In failure to furnish the relevant documents for Tamil Nadu branch, you were once again requested to furnish all the connected records of Tamil Nadu branch and afforded appropriate opportunity and also personal hearing prospected, having received the notices and noticed the personal hearing opportunity afforded, the tax payer has neither filed objection/reply or not availed opportunity of personal hearing, and not even demanded for further extension of time, therefore, it is construed that the tax payer has no objection to the proposal found in the DRC-01, hence, the tax payer is assessed for the year 2017-2018 under Section 73(9) of the TN GST Act as follows"

Court observed that in the face of chartered accountant's certificate dated 12.10.2023 and the petitioner's reply dated 13.10.2023, the above findings were completely unsustainable and clearly indicate non application of mind. Even otherwise, impugned order was completely unreasoned. Hence, interference was warranted with the order. For reasons set out above, impugned assessment order dated 22.12.2023 quashed and matter was remanded for reconsideration

33. Mahendra Educational (P.) Ltd. v. State of U.P.* [2024] 160 taxmann.com 443 (All.)

34. Ambika Stores v. Deputy State Tax Officer-I [2024] 160 taxmann.com

433 (Mad.)

The Court relying upon the principle in earlier judgement held that once it has been laid down by way of a principle of law that a person/assessee is not required to request for "opportunity of personal hearing" and it remained mandatory upon the Assessing Authority to afford such opportunity before passing an adverse order, the fact that the petitioner may have signified 'No' in the column meant to mark the assessee's choice to avail personal hearing, would bear no legal consequence. Even otherwise in the context of an assessment order creating heavy civil liability, observing such minimal opportunity of hearing is a must. Principle of natural justice would commend to this Court to bind the authorities to always ensure to provide such opportunity of hearing. It has to be ensured that such opportunity is granted in real terms. The stand of the assessee may remain unclear unless minimal opportunity of hearing is first granted. Only thereafter, the explanation furnished may be rejected and demand created. Not only such opportunity would ensure observance of rules of natural of justice but it would allow the authority to pass appropriate and reasoned order as may serve the interest of justice and allow a better appreciation to arise at the next/appeal stage, if required. Bharat Mint & Allied Chemicals v. CCT [2022] 136 taxmann.com 275

The Court observed that there were two tables in Show Cause Notice. In the first table, the CGST and SGST amounts in GSTR-3B were shown as Rs. 3,33,787/-, whereas in the second table dealing with the difference between the GSTR-3B return and the auto populated GSTR-2A return, the GSTR-3B amounts were specified as Rs. 5,19,362/- both for CGST and SGST. The sum of Rs. 5,19,362/- tallied with the ITC availed of by the petitioner. Thus, the show cause notice was held to be contradictory. Further the assessing officer did not take into account the reply dated 29.09.2023 and record reasons as to why such reply is not satisfactory. Hence, impugned assessment order was thus quashed by leaving it open to the respondent to initiate fresh proceedings by issuing a fresh show cause notice.

. No. Case Citation Relevant Text

35. Madhu Filament v. Assistant Commissioner (ST) (FAC) [2024] 160 taxmann.com 396 (Mad.)

The Court observed that on perusal of the petitioner's reply, dated 10-10-2023, it was seen that petitioner had not made a request for personal hearing in his reply. However, Court by relying upon the provision under section 75(4) of the GST Act, 2017 in WP Nos. 4105, 4110 and 4108 of 2023, dated 13-2-2023 held that the respondents ought to have provided an opportunity of personal hearing, if they contemplated an adverse decision as against the assessee. The Court set aside the impugned order that considering the fact that personal hearing was not provided to the petitioner after the notice in Form DRC-01, dated 29-9-2023 and taking into consideration of the fact that the reply of the petitioner Company, dated 10-10-2023 was not considered by the respondent. The issue was remanded back to the respondent for fresh consideration.

36. Tvl. Viveka Essence Mart v. Deputy State Tax Officer-II [2024] 160 taxmann.com 375 (Mad.)

37. Shubham Steel Traders v. State of U.P. [2024] 160 taxmann.com 374 (All.)

Since GST was implemented with effect from 1st July, 2017 and the assessing officer was cognizant of the necessity to exclude the sales turnover between 1-4-2017 and 306-2017 but which he lost sight reflects non application of mind resulting in patent errors. For such reason, the impugned assessment order was quashed and the matter was remanded for re-consideration.

The Court held that once the authority had fixed the matter for hearing on 6-11-2023, it was incumbent on that authority either to pass the order or to fix another date and communicate the same to the petitioner. Communication of the other date was necessary as according to the assessing authority the petitioner failed to appear before it on the date fixed on 6-11-2023. By not passing the order on 6-11-2023 and not communicating the next date fixed in the proceedings, the assessing authority forced the ex-parte nature of the order on the petitioner, by its own conduct. In absence of any provision under the Act to allow for ex-parte proceedings to arise in such facts, it was held that the breach of natural justice pressed by the petitioner is real. Also, the Court was mindful that proceedings had remained pending for four months since reply was filed by the petitioner, without any date being fixed. Thus, the short time of five days granted by the notice dated 13-6-2023 itself suggested the unnecessary hurry in which the proceedings were sought to be concluded. Thus, since no order was passed on 6-11-2023 and no notice was issued for next date 20-11-2023, it was held that proceedings had been wrongly concluded ex-parte against petitioner.

38. Max Healthcare Institute Ltd. v. Union of India [2024] 160 taxmann.com 339 (Delhi)

39. Svelte Furnitures (P.) Ltd. v. Sales Tax Officer [2024] 160 taxmann.com

298 (Delhi)

The Court observed that impugned order, after recording the narration, recorded that the reply uploaded by the tax payer was not satisfactory. It merely stated that "And whereas, the taxpayer has filed their objections/reply online on portal through DRC-06 which has been examined thoroughly and was found to be devoid of merits. Therefore, following principle of natural justice before passing any adverse order, further personal hearing opportunity was given to the taxpayer. And whereas, taxpayer/authorized representative appeared for personal hearing apart from reply filed no other additional information/documents were submitted by the taxpayer, hence undersigned is left with no other option but to issue DRC-07 on the basis of reply and documents available on the portal. And whereas, on examination of the reply/documents furnished by the taxpayer, it has been observed that since the reply is devoid of merits without any justification or: proper reconciliation, the demand raised in SCN/DRC-01 is hereby upheld along-with penalty."

The Proper Officer opined that the reply is unsatisfactory. The Court held that the impugned order dated 24-12-2023 was not sustainable for the reasons that the reply filed by the petitioner was a detailed reply. Proper Officer had to at least consider the reply on merits and then form an opinion whether the reply was devoid of merits. He merely held that the reply was devoid of merits which ex-facie reflected that Proper Officer had not applied his mind to the reply submitted by the petitioner. Further, if the Proper Officer was of the view that further details were required, the same could have been specifically sought from the petitioner. However, record did not reflect that any such opportunity was given to the petitioner to clarify its reply or furnish further documents/details. In view of the above, the order was held to be non-sustainable, and the matter was remitted to the Proper Officer for re-adjudication.

The Court observed that perusal of order dated 31-12-2023 reflected that the demand was created against the petitioner holding that the reply filed by the petitioner was non comprehensive and was not supported by sufficient document and tax payer could not explain/justify its reply. Reference was made to the reply filed by the petitioner to the Show Cause Notice which reflected that the reply was a detailed comprehensive reply adverting to each of the points raised in the Show Cause Notice.

It was thus held that ex-facie it was apparent that proper officer had not taken into consideration the reply filed by the petitioner while passing the cryptic order dated 31-122023. Consequently, order dated 31-12-2023 was held to be non-sustainable and thus set aside. The matter was remitted to the proper officer to re-adjudicate the Show Cause Notice dated 29-9-2023 by taking into account the detailed reply filed by the petitioner thereto.

S. No. Case Citation Relevant Text

40. Tvl. Murugesan Kesavan v. State Tax Officer [2024] 160 taxmann.com 204 (Mad.)

The proper officer after recording provisions of Section 62, had recorded following observation in the assessment order .

"The taxpayer's contention and verified and found that at the time of Inspection, the taxpayer had admitted the above defect. Now, they cannot go back their own statement.

The proprietor has agreed to pay taxes and penalty for buying and selling of illegal trade of tobacco products, which was recorded in sworn statement. It is therefore no alternative except to confirm the proposals. Hence, the proposed addition turnover, tax and penalty are confirmed."

The Court observed that tax demand and penalty were confirmed entirely on the basis of the statement recorded on 26-9-2022. Prima facie, such statement appeared to be based on the stock position as on that date. Since the impugned assessment orders did not take into account the returns, the reply and the documents annexed thereto, the orders were held to be non-sustainable and thus quashed and remanded for re-consideration

41. SL Lumax Ltd. v. Deputy Commissioner of State Taxes-II [2024] 160 taxmann.com 185 (Mad.)

The Court observed that the impugned SCN stated that

“Therefore it is proposed to levy the above said turnover at the rate of 28% as such supply should have fallen under HSN 8708 for the tax period July-2017 to March-2018. Moreover, since you are an automobile industry you cannot claim that you genuinely classify your product with right HSN code. To suppress the tax payable to Government treasury you willingly reduce the tax rate from 28% to 18% with intention to suppress the fact that you are manufacturing commodity of 28% that is why section 74 has been involved here. Hence, you are requested to pay the difference amount..”

It further stated that

“You are requested to pay the amount of tax as ascertained above along with the amount of aforesaid interest and penalty under section 74 of the TNGST Act 2017 and also submit objection if any against the proposals in DRC01 within 30 days from the date of receipt of this notice and you may also avail the opportunity of personal hearing on 53-2024 at 11.00 AM before the undersigned."

The Court thus held that the above extract was prima facie indicative of pre-judgment in as much as the assessee had been called upon to pay the quantified sum and not show cause as to why the said amounts were not payable. The Court further observed that the petitioner had placed on record the notes under section XVII, which dealt with chapter 85. He had also placed on record the HSN Explanatory notes. In multiple judgments of the Court and the Supreme Court, the HSN Explanatory notes have been referred to and relied upon as an authoritative guide to issues relating to classification. The petitioner had also placed for consideration Instruction No. 1/2022, which referred to several judgments of the Supreme Court. If the petitioner/assessee placed this material before the assessing officer, the assessing officer was under an obligation to consider this material with an open mind in an objective manner before concluding the assessment. Therefore, the writ petitions were disposed of by directing the petitioner to make the submissions and the assessing officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter conclude assessments by taking note of observations.

42. Pioneer Co-operative Car Parking Servicing and Constructions Society Ltd. v. Senior Joint Commissioner [2024] 160 taxmann.com 181 (Cal.)

43. Partha Pratim Bhowmik v. Deputy Commissioner of State Tax [2024] 160 taxmann.com 148 (Cal.)

The Court observed that once, the petitioner had sought for an extension, the officer was obliged to consider the application for extension and ought not to have passed the final order holding that more than six adjournments had been granted to the petitioner. There was no finding on the part that the petitioner did not made out sufficient cause for being denied the extension. The Court was thus unable to accept the reasoning provided for rejection of the extension application. It was further observed that the adjournments granted to the petitioner in respect of proceeding under section 61 of the said Act read with under Rule 99 of the CGST Rules, 2017, initiated vide notice dated 16th May 2023, cannot be clubbed together for the purpose of holding that the petitioner was afforded with ample opportunity to respond to the show cause issued under section 73(1) of the said Act.

Petitioner contended that the order of the adjudicating authority as well as the appellate authority was based on a report filed by the Irrigation and Waterways Directorate, Govt. of West Bengal vide their office memo no.03 dated January 3, 2020. The adjudicating authority found that the appellant reported and disclosed lesser turnover of outward taxable supply during the tax period spanning from July, 2017 to March, 2018.

The Court was of the view that when report of Irrigation and Waterways Directorate formed the foundation of the adjudication, it was incumbent upon the Revenue to supply a copy thereof to the writ petitioner so that he could effectively address the substance of the report. In view of that non-compliance with the principles of natural justice in this matter, the order dated April 13, 2023 passed by respondent no. 2 was set aside and direction was given to provide the copy of the report. The appellate authority was directed to conclude the entire exercise

S. No. Case Citation Relevant Text

44. Anurag Garodia v. Assistant Commissioner of State Tax [2024] 160 taxmann.com 144 (Cal.)

The Court observed that when the petitioner had sought for an extension, the proper officer was obliged to consider the application for extension and ought not to have passed the final order without appropriately considering the petitioner's application for extension. The final order was also not passed immediately. The same was passed on 20th December, 2023, which was more than a month from the date the petitioner had sought for extension. Although, discretion to grant an adjournment vests in the authority, such discretion must be exercised judiciously. The manner in which the proper officer proceeded to pass the final order without granting extension to the petitioner either to file its response or to be offered personal hearing, despite the petitioner showing sufficient cause, appeared to be a colorable exercise of power by the said authority. Thus, the impugned order was held to be non-sustainable and the same was set aside and remitted for fresh consideration.

45. Reckitt Benckiser (India) Ltd. v. State of Tamil Nadu [2024] 160 taxmann.com 85 (Mad.)

46. Rainbow Stones (P.) Ltd. v. Assistant Commissioner (ST)(FAC) [2024] 160 taxmann.com 48 (Mad.)

The Court observed though detailed objections under various Heads have been made by the petitioner, the impugned order of assessment did not deal with the same. It is fundamental that any quasi judicial order ought to be made taking into account all factors that are relevant while eschewing the irrelevant. The fact that the impugned order of assessment do not even refer to several aspects raised in the objection indicates that the same has been made without applying its mind to the objections made. It is trite law that when objections are raised a duty is cast on the assessing authority to apply its mind to the objections and deal with each one of them. Failure to do so would vitiate the order of assessment on the ground of non-application of mind. Secondly, the impugned orders of assessment for the first time revealed that the entire proposal was made on the basis of the proposal received from the enforcement wing authorities. Since, it was only in the impugned order of assessment it was disclosed for the first time about the fact that proposal had been received from the enforcement wing authorities, the petitioner's was disabled from submitting their objections on the above aspect. The Court thus held that the impugned order of assessment suffered from the vice of non-application of mind to the objection and also non-disclosure of the fact the proposal been received from the enforcement wing thereby the impugned order of assessment stood vitiated. Thus the same were set aside, however, liberty was granted to the 2nd Respondent to pass fresh order of assessment after granting reasonable opportunity to the petitioner in accordance with law.

The findings in respect of at least four issues, namely issue no.1, issue no. 3, issue no. 4 and issue no. 5 are identical. By way of illustration, the findings recorded in respect of issue no. 1 are set out below:

"The dealers reply and conclusion of the proper officer:

The dealer had given the detailed reply on: 21-12-2023 against SCN issued in DRC-01 regarding this aspect, thus the dealer have refused the defects raised by the proper officer and is not acceptable. Hence, the proposed levy of tax, interest, and penalty is confirmed."

The Court held that the above extract revealed that the assessing officer merely referred to the reply dated 21-12-2023 to the show cause notice and recorded that the reply was not acceptable. On that basis, the proposed levy of tax, interest and penalty was confirmed.

It was held that the said findings clearly do not contain any reasons for rejecting the petitioner's reply and for confirming the proposed levy of tax, interest and penalty notwithstanding such reply. Therefore, the impugned order, which was completely unreasoned quashed and remitted back for fresh consideration.

S. No. Case Citation Relevant Text

Cases on Section 79 of CGST Act, 2017

1. ACP Business Enterprises (P.) Ltd. v. Secretary to Government [2024] 159 taxmann.com 464 (Mad.)

2. Bivas De v. State of West Bengal [2024]

160 taxmann.com

646 (Cal.)

The Court held that On examining Section 79(1)(c)(iv) of the TNGST Act, it appears that the proper officer has the discretion to extend time for making payment if he has issued a notice for recovery of amounts in terms of clause (c)(i) of Section 79(1) of the TNGST Act.

The Court observed that the authority has taken note of the rectification order dated 26th July, 2022 and also the order passed in the earlier writ petition and found the submission of the appellant to be satisfactory and also concluded that no further proceedings were required to be taken against Form GST DRC-01A issued on 4th October, 2023. Therefore, the Court further observed that if such be the factual situation the garnishee order dated 20th July, 2022 issued to Indian Oil Corporation Limited cannot any longer survive.

Equally the order of attachment of the bank account of the appellant cannot also be effective any longer on account of it having lapsed since the period of one year had elapsed.

The Court also relied upon the judgement wherein direction was issued to the competent authority to lift the attachment over the bank account wherein the period of one year had elapsed. In the present case the same principle has to be applied to the appellant. The writ petition was disposed off with a direction to the authority concerned to lift the garnishee order dated 20th July, 2022 by addressing the Indian Oil Corporation and also lift the attachment over the appellant's bank account by addressing his bankers.

. No. Case Citation Relevant Text

Cases on Section 83 of CGST Act, 2017

SCN was issued to the appellant under Section 74(1) for total tax payable computed at Rs. 92,44,628/-. Appellant within the time permitted by the Department has uploaded their reply to the show cause notice. However, on and from 20.12.2023, as many as 13 provisional orders have been passed in FORM GST DRC 22 attaching all the bank accounts. The Court held that considering the fact that the show cause notice dated 06.12.2023 is yet to be adjudicated, an order of provisional attachment that too 13 in number by attaching all the bank accounts of the appellant was very harsh, more particularly, when there was no material on record to indicate that there was an attempt made by the appellant to evade the payment of tax. That apart, the tax and interest which is payable was yet to be adjudicated as the matter is still in the stage of the show cause notice. Therefore, at this juncture, the orders of provisional attachment of all the bank accounts of the appellant cannot be sustained.

. No. Case Citation Relevant Text 1.

Kaleidoscope v. State of West Bengal [2024] 159 taxmann.com 512 (Cal.)

Cases on Section 107 of CGST Act, 2017

1. Dial For Cool v. State of U.P. [2024] 158 taxmann.com 518 (All.)

2. Jey Tech Moulds Dies v. Deputy Commissioner (GST)-II [2024] 158 taxmann.com 15 (Mad.)

3. Optum Global Solutions (India) (P.) Ltd. v. State of Haryana [2024] 158 taxmann.com 20 (Punj. & Har.)

Since the provision uses the word “communicated” for the order against which appeal has to be filed therefore, while rejecting the appeal on account of limitation, authority has to make a finding in regard to the mode of copy of the order and also whether service upon the concerned person is complete

In view of provision of Section 107 if petitioner paid 10% of the outstanding tax dues along with penalty, the respondent proceedings will be automatically stayed. In such view of the matter, in the present case, since the petitioner had paid a sum of Rs. 83,000/-, the respondent is supposed to have de-freeze the bank account of the petitioner as per Section 107 of the Act. Thus, respondents were directed to consider the representation of the petitioner dated 18-10-2023 and de-freeze the petitioner's bank account, upon the production of proof of deposit of Rs. 83,000/- or 10% of the total demand made by the respondent.

Appellate Authority rejected the appeal being not maintainable on account of the fact that it had been presented in a manner by filing it offline (manual) on 31-8-2020 against the order dated 4-6-2020. It was contended by the department that Rule was amended on 4-8-2023 and the appeals have been filed earlier.Relying upon the judgments (Go Daddy India

Domains and Hosting Services Pvt Ltd v. State of Haryana, decided on 29-4-2023 CWP-9051-2023 and Ali Cotton Mill v. Appellate Joint Commissioner (ST), 2022 (56) G.S. T.L., 270 (A.P.) Writ Petition No. 3308 of 2021) wherein it was held that it is a highly technical ground for dismissing the appeal and set aside the said order and issued directions to hear the appeal on merits after giving opportunity of hearing to both the parties

4. F1 Auto Components (P.) Ltd. v. Deputy Commissioner (ST) [2024] 159 taxmann.com 190 (Mad.)

5. Swati Samantray v. Additional Commissioner of State Tax (Appeal) [2024] 159 taxmann.com 221 (Orissa)

The order passed by the appellate authority set aside as the petitioner was not heard before the appellate order was issued and there was no proof of service of notice of hearing on the petitioner.

The Court allowed the appeal to be filed even though the same was beyond the cut-off date of order as notified in Notification No. 53 of 2023-Central Tax. The Court relied upon the decision of Division Bench which in turn relied upon decision of High Court of Judicature at Patna in Civil Writ Jurisdiction Case No. 17202 of 2023 vide order dated 7-12-2023. The Patna High Court had observed that notification was brought out on 2-11-2023 and only permitted appeal to be filed from orders passed by the proper officer on or before 31-3-2023. The Bench observed they did not see any rationale for the date fixed of 31-3-2023, as a cutoff date when the notification itself was brought out on 2-11-2023 and in such circumstances any order passed in at least three months before that date; the time provided for filing an appeal, ought to have been considered for such beneficial treatment.

6. Abdus Sami Salfi v. Union of India [2024] 159 taxmann.com 231 (Raj.)

7 S K Chakraborty & Sons v Union of India [2024]

159 taxmann.com 259 (Cal.)

8. Ravin Sachdev v. Union of India [2024]

159 taxmann.com 303 (Delhi)

9. Trimurty Textiles v. Commissioner, Commercial Tax and GST, Orisha [2024]

159 taxmann.com 305 (Orissa)

Petitioner challenged the provisions of Section 107(4) of the Act which restricts the right of the appellate authority to condone the delay in filing appeal by one month only and that though, notification dated 02.11.2023 has been issued inter alia providing for extended period of limitation in cases where the orders have been passed on or before 31.03.2023, the said date has no rationale, inasmuch as, when the order was issued on 02.11.2023, in several other cases where the orders were passed even after 31.03.2023, in those cases also the appeals had already become barred by limitation. The petition was to list on 21st February 2024 and List the petition on 21.02.2024 and in the meanwhile and till the next date, in case the petitioner deposits 12.5% of the amount of 'tax in dispute' within a period of one week, the recovery of/action qua rest of the amount pursuant to the demand dated 21.07.2023 (Annex-2) shall remain stayed. For the rest of the amount, the petitioner would submit solvent security to the satisfaction of proper officer.

Since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29 (2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filling the appeal can be extended by the Appellate Authority.

High Court observed that there was no dispute that the petitioner filed the appeal within time along with a scanned copy of Order-in-Original as an annexure. Said filing was done within a period of three months, thereafter, petitioner sent the original Order-in-Original by post, however, to an incorrect Department. Action of the petitioner was held to be bona fide and error was not of a nature that could have led to the order rejecting the appeal solely on the ground of limitation.

Since the appeal has been dismissed on the ground of non-filing of certified copy and the same has already been filed by the petitioner, as stated by learned counsel for the petitioner, there is no impediment on the part of the authority to verify the same and reconsider the case of the petitioner in accordance with law.

. No. Case Citation Relevant Text

10. Sree Krishna Hot Dip Galvanizers v. State of Karnataka [2024] 159 taxmann.com 379 (Kar.)

11. Star Health and Allied Insurance Co. Ltd. v. State of Haryana [2024] 159 taxmann.com 381 (Punj. & Har.)

12. Aditri Jewellers v. Additional Commissioner of CT and GST [2024] 159 taxmann.com 430 (Orissa)

The Court held that while it is true that Section 29(2) of the Limitation 1963 excludes the applicability of Section 5 of the Limitation Act for the purpose of condonation of delay is concerned, Section 14 of the Limitation Act which excludes time spent before a wrong / incorrect forum for the purpose of concluding the prescribed period is applicable to an appeal preferred under Section 107 of the KGST Act in the light of the earlier judgment.

The court quashed the order rejecting the appeals on the ground of limitation keeping in view the fact that the appeals were filed electronically on 27.05.2022 but manually on 10.06.202. The Court held that once the procedure has been modified to the extent that Rule 108(3) for the purposes of ensuring that the rules of procedure are handmaids of justice, therefore, appeal having been dismissed on the ground of technicalities is not sustainable since apparently the appeal was filed within the period of limitation, if calculated from the date of electronic filing.

The Court allowed the appeal to be filed even though the same was beyond the cut-off date of order as notified in Notification No. 53 of 2023-Central Tax. The Court relied upon the decision of High Court of Judicature at Patna in Civil Writ Jurisdiction Case No. 17202 of 2023 vide order dated 7-12-2023. The Patna High Court had observed that notification was brought out on 2-11-2023 and only permitted appeal to be filed from orders passed by the proper officer on or before 31-3-2023. The Bench observed they did not see any rationale for the date fixed of 31-3-2023, as a cutoff date when the notification itself was brought out on 2-11-2023 and in such circumstances any order passed in at least three months before that date; the time provided for filing an appeal, ought to have been considered for such beneficial treatment.

13. Great Heights Developers LLP v. Additional Commissioner Office of the Commissioner of CGST & Central Excise,Chennai [2024] 159 taxmann.com 434 (Mad.)

14. GS Exim International LLP v. Commissioner, Central Excise/(GST) Appeals-I [2024] 159 taxmann.com 456 (Delhi)

The petitioner could not be file appeal in time both on account of the petitioner being diagnosed with septic shock and on account of the consequential difficulties in following up with the consultant As a result, it is stated that the time limits for filing an appeal with an application to condone delay expired on 16-12-2023 The Court observed that under Section 107 of the CGST Act, Appellate Authority does not have the power to condone delay beyond 120 days. In this case, the period of further delay is only 24 days and the petitioner has provided cogent reasons to explain such delay. It is pertinent to note that the petitioner has paid the entire tax liability and the proposed appeal is limited to penalty and interest. Therefore, Appellate Authority was directed to receive and dispose of the appeal on merits if the appeal is received within a maximum period of ten days from the date of receipt of a copy of this order.

The Court observed that on perusal of the Order-in-Appeal dated 09.09.2021, it could be seen that order was a cryptic order and did not deal with any of the submissions made by the petitioner. Said order in paragraph 5-Discussion and Findings, gave a brief narration of the fact, then noticed the contention of the petitioner and, thereafter, extracted a Board Circular and then in the next paragraph numbered as 7 merely held that in view of the above legal provisions, appellant had not fulfilled the eligibility conditions for taking input tax credit. Appellate Authority in paragraph 5 noted submissions of learned counsel on behalf of petitioner, however, there was no consideration of the submissions in the subsequent paragraphs and the order merely extracted the Board Circular and holds that the eligibility conditions are not complied with. It was not apparent from the order as to why or on what basis findings have been returned that petitioner does not fulfil the eligibility conditions. The order was held to be cryptic and the reasoning was not emanating from the order and there was no specific consideration of the factual matrix or the contentions of the petitioner in the Order-in-Appeal. Accordingly, Court was of the view that Order-in-Appeal cannot be sustained and the matter called for a remit.

15. Vibgyor Services v. Union of India [2024]

159 taxmann.com 618 (Delhi)

16. Garg Enterprises v. State of U.P. [2024]

159 taxmann.com 748 (All.)

Department admitted that though the Order-in-Original was posted on 30.12.2022, the envelope was received back undelivered on 04.01.2023 with the remarks 'no such firm' and thereafter, no steps were taken by the Department to serve the order-in-original. Further the petitioner had approached the Department and was delivered a copy of the order only on 07.03.2023. The Court held that the limitation for filing the appeal would commence from the date of service i.e. 07.03.2023. Limitation for filing an appeal is 90 days and the Order-in-Appeal shows that the appeal was filed on 22.05.2023. The appeal was accordingly within the period of limitation computed from 07.03.2023.

It was clearly pointed out by the appellate authority that the order impugned has been passed on August 2, 2019, whereas the appeal was filed on December 27, 2021, that is, after the period of more than 28 months and way beyond the time prescribed under section 107 of the Act. The court held that Central Goods and Services Act is a special statute and a self-contained code by itself. Section 107 of the Act has an inbuilt mechanism and has impliedly excluded the application of the Limitation Act. It is trite law that Section 5 of the Limitation Act, 1963 will apply only if it is extended to the special statute. Section 107 of the Act specifically provides for the limitation and in the absence of any clause condoning the delay by showing sufficient cause after the prescribed period, there is complete exclusion of Section 5 of the Limitation Act. Accordingly, one cannot apply Section 5 of the Limitation Act, 1963 to the aforesaid provision.

No. Case Citation Relevant Text

17. Shaik Abdul Azeez v. State of AP [2024] 159 taxmann.com 481 (A.P.)

The petitioner had undergone surgery and was unable to look after his business and in the affidavit it submitted that the order of cancellation of registration was not communicated to the petitioner physically and on account of the petitioner's health condition, the petitioner could also not be aware of the impugned order. The Court held that though the impugned order in view of Section 107 of APGST Act did not suffer from any illegality, as the appellate authority cannot condone the delay beyond statutory condonable period but considering that there was sufficient cause for not preferring appeal in time, the interest of justice requires condonation of the delay. The appeal is a valuable statutory right. In exercise of writ jurisdiction to do complete justice and provide opportunity of hearing on merits of the appeal, court condoned the delay by imposing costs of Rs. 20,000/.

18. G.V. Construction v. Commissioner of Commercial Taxes [2024] 159 taxmann.com 542 (Mad.)

19. Swati Samantray v. Additional Commissioner of State Tax (Appeal), CT and GST [2024] 159 taxmann.com 484 (Orissa)

20 Manjunatha Oil Mill v. Assistant Commissioner (ST) (FAC) [2024] 159 taxmann.com

514 (A.P.)

21. Gaddipati Venkateswara Rao v.

Additional Commissioner (ST) [2024]

160 taxmann.com 697 (A.P.)

The impugned order was issued on 27-9-2023. Consequently, the period of limitation would ordinarily expire on 26-12-2023. The appellate authority has the power to condone a further 30 days' delay. Such period ended on or about 26-1-2024. The Court observed that given the fact that delay beyond such period was only about 15 days, writ petition was disposed of by directing the appellate authority to receive and dispose of the appeal on merits, if such appeal was filed by the petitioner within a maximum period of ten days from the date of receipt of a copy of this order.

The Court allowed the appeal to be filed even though the same was beyond the cut-off date of order as notified in Notification No. 53 of 2023-Central Tax. The Court relied upon the decision of High Court of Judicature at Patna in Civil Writ Jurisdiction Case No. 17202 of 2023 vide order dated 7-12-2023. The Patna High Court had observed that notification was brought out on 2-11-2023 and only permitted appeal to be filed from orders passed by the proper officer on or before 31-3-2023. The Bench observed they did not see any rationale for the date fixed of 31-3-2023, as a cutoff date when the notification itself was brought out on 2-11-2023 and in such circumstances any order passed in at least three months before that date; the time provided for filing an appeal, ought to have been considered for such beneficial treatment.

Appeal was rejected as the pre-deposit for the Appeal was deposited by DRC-03 instead of APL-01 and petitioner contended that that it is only because of the technical glitch that was occurred on 19-11-2022, that he could not make the pre-deposit through the prescribed Format APL-01 and had to pay through Form GST DRC 03 and therefore, the said act of the petitioners may not be treated as a willful one. The Court observed, whether the petitioners were forced to make payment of pre-deposit through Form GST DRC-03 instead of APL-01 is a question of fact, which has to be considered in the light of other surrounding facts. Therefore, the impugned Rejection Orders were set aside and the matters are remanded back to the respondent No. 2 with a direction to consider the reasons in the delay condoning petitions submitted by the petitioners and after affording an opportunity of hearing to them pass any appropriate orders in accordance with governing law and rules expeditiously.

Appellate authority rejected the appeal on the sole ground that the appeal filed by the appellant is beyond the condonable period i.e., 56 days. Challenging the said order, the instant writ petition was filed.

The Court relied upon the Judgement and condoned the delay by observing that both the cases deal with same aspect i.e., condoning the delay that was occurred beyond condonable period. In that case the impugned Order challenged in Appeal was the cancellation of Registration. Whereas, in the case on hand, the impugned order under challenge in Appeal is the Assessment Order. However, the principle in the cited decision being the condonation of delay beyond the condonable period, the same can be made applicable to case on hand also. Similarly, it was also observed that in Writ Petition Nos.17349 of 2023 and 42201 of 2022, Division Bench of Madras High Court considered similar issue and condoned delay on terms and remitted the matter back to the 1st appellate authority.

S. No. Case Citation Relevant Text

22. Dipankar Bhowmik v. State of West Bengal [2024] 160 taxmann.com 452 (Cal.)

Petitioner was aggrieved by an order passed by the appellate authority on the ground that the appellant did not have any adequate opportunity. The appellate authority fixed the date of personal hearing on 29.05.2023 and admittedly the appellant did not attend the personal hearing and the order has been passed. Under normal circumstances, the court would have declined to interfere with the order.

The Court observed that the appeal filed by the appellant was presented before the appellate authority on 25th May, 2022 and the appeal was taken up for hearing after one year and on the very first date, namely, 29.05.2023 the appeal has been disposed of. Since there was a delay of one year in taking up the appeal, the appellate authority could have granted one more opportunity to the appellant by issuing a fresh notice of hearing. Furthermore, none of the grounds raised by the appellant in the appeal petition which is about 38 pages have been considered or dealt with. Therefore, the court was convinced that the appeal has to be heard out on merits and fresh orders have to be passed by the statutory appellate authority.

23. Aditya Enterprises v. Union of India [2024] 160 taxmann.com 421 (Patna)

24. White Mountain Trading (P.) Ltd. v. Additional Commissioner, CGST Appeals-II [2024] 160 taxmann.com 382 (Delhi)

25. Jayanta Ghosh v. State of West Bengal [2024] 160 taxmann.com 223 (Cal.)

The present writ petition filed on the demand notice being issued, which is not permissible when there was an alternate efficacious remedy, which was not availed by the petitioner for reason of his own default. There are specific contours for invocation of the extra ordinary remedy under Article 226 of the Constitution of India, as has been delineated in the State of H.P & Ors. v. Gujarat Ambuja Cement Limited & Anr.; (2005) 6 SCC 499. The Court did not find any such ground existing and in any event the attempt of the petitioner to bypass the appellate remedy, which he chose to not avail of, cannot be countenanced.

The date of filing is always taken as the date of initial filing through the online mode if other steps as required in the law are also taken by the appellant. Since in the present case the appeal was filed on 02.09.2023, it was held that the appeal was filed with a delay not exceeding one month and as such the Commissioner Appeals was empowered to consider the application seeking condonation of delay. As the Commissioner Appeals has erroneously not considered the application seeking condonation of delay solely on the ground that appeal filed was beyond the period prescribed under Section 107 (4) of the Act and thus beyond the powers vested in the Commissioner Appeals, the appellate order was set side and matter was remitted to the Commissioner Appeals to consider the application seeking condonation of delay.

Petitioner contended that in pursuance to the show cause notice, an order was passed on 11.08.2023 under Section 74 of the GST Act in total violation of the principles of natural justice by not affording any opportunity of personal hearing to the petitioner. The petitioner challenged the same before the appellate authority under Section 107 of the GST Act. The appellate authority vide order dated 17.01.2024 dismissed the appeal of the petitioner on the ground of limitation.

The Court relying upon its judgement condoned the delay wherein it was held that since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29(2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filing the appeal can be extended by the Appellate Authority. The Court further observed that the appellate authority has violated the principle of natural justice by not affording an opportunity of hearing to the petitioner. Therefore, it was directed that the appellate authority shall give personal hearing to the petitioner and his appeal shall be decided on merits.

26. Openwave India (P.) Ltd. v. Union of India [2024] 160 taxmann.com 19 (Bom.)

The Court observed that principles of natural justice would require that Appellate Authority which has to decide the said Appeals and pass orders therein, must give a personal hearing to the Petitioner. In the present case, the Petitioner has not been given a personal hearing in the said Appeals, thus appellate authority was directed to give a personal hearing to the Petitioner before passing any Order in the said Appeals.

Also, even if a statute does not prescribe the time within which the Order is required to be passed by the Appellate Authority, such an Order must be passed within a reasonable period of time. In the present case, the said Appeals have been filed by the Petitioner in 2019, 2020 and 2021. Even considering the disruption caused by the COVID-19 Pandemic, Appellate Authority ought to have passed Orders in the said Appeals by now. Failure to pass orders in the said Appeals within a reasonable period of time would cause prejudice to the Petitioner. Further, it would also affect the right of the Petitioner to carry on business, which is guaranteed to it under Article 19(1)(g) of the Constitution of India. For these reasons, as sought by the Petitioner, Appellate Authority was directed to decide the said Appeals within a fixed period of time.

S. No. Case Citation Relevant Text

Cases on Section 108 of CGST Act, 2017

1. Tvl. Renault Nissan Automotive India (P.) Ltd. v. Joint Commissioner (ST) (FAC), Chennai [2024] 159 taxmann.com 581 (Mad.)

The court stated that the petitioner assailed the order on the ground that it travelled beyond the scope of revision proceedings under section 108 of the TNGST Act. No findings were recorded with regard to this objection in the impugned order. The petitioner also contended that interest was not leviable under section 50(3) of the TNGST Act and that penalty should not be levied in the facts and circumstances. While these contentions were noticed in the impugned order, the respondent did not engage with these contentions and record reasons for not accepting the same. For such reason, the order impugned herein warrants interference. Therefore, the impugned order was quashed and the matter is remanded for reconsideration.

S. No. Case Citation Relevant Text

Cases on Section 112 of CGST Act, 2017

1. National Insurance Co. Ltd. v. State of Bihar [2024] 159 taxmann.com 226 (Patna)

The Court observed that no recovery shall be made when 20% of the tax is paid up after the first appeal is rejected. In fact, if the Tribunal was constituted and an appeal is filed there could be no further proceedings taken for recovery of the balance amounts till the appeal is disposed off. Hence, when a Tribunal is not constituted, obviously no such recovery could have been made. It was further observed that even if coercive action has to be taken the tax officer should confined it to the twenty percent of the total amounts assessed, in addition to the ten percent paid at the first appellate stage and any admitted tax, if remaining unpaid. Thus, following the said judgment it held the recovery of entire amount from the petitioner pending constitution of Tribunal and subsequent to rejection of appeal by first appellate authority was illegal and also imposed cost of Rs. 5000/- on the Officer, who issued the demand produced and appropriated the money from the bank account of the assessee/petitioner.

2. Royal Enterprises v. Union of India [2024] 159 taxmann.com 257 (All.)

3. G. L. Kundu & Sons Steel (P.) Ltd. v. Deputy Commissioner State Taxes [2024] 159 taxmann.com 402 (Cal.)

4. Jr Marble v. State of Rajasthan [2024] 159 taxmann.com 750 (Raj.)

5. RCCPL (P.) Ltd. v. State of Bihar [2024] 160 taxmann.com 737 (Patna)

The petitioner shall deposit 20% of the disputed tax liability in addition to the earlier deposit before the assessing authority (which is 10% of the disputed tax amount). Subject to the aforesaid deposit, the recovery proceedings of the balance amount shall remain stayed till the decision of this writ petition.

The Court allowed time limit stipulated in paragraph 4.2 of the Circular dated 18th March, 2020 within which the petitioner will be at liberty to file the appeal before the Appellate Tribunal. The Revenue authorities cannot be permitted to take advantage of this peculiar situation i.e. non-constitution of the Tribunal to realize amount demanded by the impugned order.

The Court disposed of the Petition with a direction that in case petitioner makes payment as per provisions contained in Sub-section(8) of Section 112 of the Act, further proceedings shall not be drawn for recovery of the balance amount, provided that the petitioner avails statutory remedy of appeal within a period of three months from the date of the constitution of the Tribunal.

The court disposed of the writ petition stating that subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non-constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.

6. Jnanada Prasanna Mohanty v. Commissioner of Goods and Services Tax [2024] 160 taxmann.com 735 (Orissa)

7. Arya Marble Suppliers v. State of Rajasthan [2024] 160 taxmann.com 131 (Raj.)

The Court disposed of the writ petition stating that subject to verification of the fact of deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, or deposit of the same, if not already deposited, in addition to the amount deposited earlier under Sub Section (6) of Section 107 of the CGST/OGST Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the CGST/OGST Act, for the petitioner cannot be deprived of the benefit, due to non-constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed.

The Court relied upon its judgement and directed that in case petitioner makes payment as per provisions contained in Sub-section(8) of Section 112 of the Act, further proceedings shall not be drawn for recovery of the balance amount, provided that the petitioner avails statutory remedy of appeal within a period of three months from the date of the constitution of the Tribunal.

No. Case Citation Relevant Text

Cases on Section 117 of CGST Act, 2017

1. Quadri and Company v. Commercial Tax Officer [2024] 160 taxmann.com 572 (Kar.)

The Cort held that as the revenue had not challenged the interim order dated 25-9-2023, permitting release of goods, they now cannot contend that the order of release could not have been passed on the conditions that were imposed and that the conditions should have been imposed regarding furnishing of bank guarantee for the entirety of the value of goods. Thus, the court also stated that accepting any argument by the revenue which places the petitioner worse off than the interim order passed on 25-92023 by the learned Single Judge, would not arise and accordingly, contentions of the State regarding the correctness of the interim order of release or regarding the insufficiency of imposition of conditions cannot be entertained.

2. Genius Ortho Industries v. Union of India [2024] 160 taxmann.com 147 (All.)

Article 226 of the Constitution of India is a discretionary jurisdiction which is to be exercised for petitioners who are acting in a good faith. The principle of uberrima fides requires a party that comes to a Court to act in utmost good faith. The above principle is the genesis of the expectation of the Court to pass orders at the behest of the petitioner who has approached the Court with clean hands. The moment this trust is broken and it is discovered that there is suppression of material facts, the Court is bound to dismiss the said petition without granting any relief whatsoever to the petitioner.

S. No. Case Citation Relevant Text

Cases on Section 129 of CGST Act, 2017

1. Vardan Associates (P.) Ltd. v. Assistant Commissioner of State Tax. [2024] 158 taxmann.com 89 (SC)

The Court stated that ordinarily, it may have refrained from interfering, but because there was an E-way bill that was generated and in view of the discussions made hereinabove, thus they were inclined to vary the orders passed by the High Court. The Court thus held that ends of justice would be served if the penalty amount is reduced to 50% of the penalty imposed, i.e., Rs. 27,00,000/- (Rupees Twenty seven lakhs). Therefore, Rs. 54,00,000/-(Rupees Fifty four lakhs) being the tax imposed, is upheld and penalty would now be Rs. 27,00,000/- (Rupees Twenty seven lakhs), totalling to Rs. 81,00,000/- (Rupees Eighty one lakhs), which shall be paid by the appellant.

Order not to be treated as Precedent-It is made clear that this order has been passed under Article 142 of the Constitution of India and shall not be treated as a precedent. Pending application stands disposed of.

2. Rawal Wasia Yarn Dying (P.) Ltd. v. Commissioner Commercial Tax [2024] 158 taxmann.com 609 (All.)

3. Shri Sai Enterprises v. State of U.P [2024] 158 taxmann.com 125 (All.)

4. Amil v. State of U.P [2024] 158 taxmann.com 559 (All.)

No levy of penalty U/Sec 129 since no intent to evade the duty could be ascertained only on the allegation that Part-B of the e-way bill was not filled

5. Roli Enterprises v. State of U.P. [2024] 158 taxmann.com 468 (All.)

Petitioner contended that since he was the owner of the goods, clause 6 of Circular No./GST-2018-19/1819078/36/Commercial Tax dated 31 December, 2018 would apply to him and petitioner should be treated as owner of the goods as the goods were detained along with proper e-invoice and e-way bill. The Court observed release of the goods upon payment penalty is required to be made under section 129 (1) (a) and the order passed quantifying penalty under section 129 (1) (b) was bad in law

The Court observed that the authorities have recorded a categorical finding to the effect that selling dealer, M/s. Sunshine Overseas was registered at Shri Ram Colony, Siya Wali Masjid, Rajeev Nagar, North East Delhi, Delhi. The e-way bill mentioned the goods to have been dispatched from the said place. The statement of the driver recorded disclosed that goods were loaded from Mayapuri, Delhi, which is 18 kms. away from Rajeev Nagar. On physical verification of the premises of M/s. Sunshine Overseas, it was clear that no business transaction was being done from that place and the GST registration was suspended on 4-5-2022. The selling dealer till date has not responded to the notice of the taxing authorities nor has come forward to state that goods were sent by him through the e-way bill alleged to have been generated from the portal from the address mentioned therein. The taxing authorities had also scrutinized the records of the selling dealer for the assessment year 2021-22 and found that it was not indulging in any sale and purchase and bogus transactions were only made for claiming ITC. The respondent no. 4 had recorded categorical finding that no reply was given disclosing the banking transaction made between the parties. Once, it was found that selling dealer was bogus firm, the goods carrying the e-way bill generated by such firm was of no benefit to the petitioners as the same was used for transiting the goods from non bona fide dealer from undisclosed place. The writ petition was dismissed.

The only controversy involved was with regard to non filling up of Part 'B' of the e-Way Bill. The undisputed facts were that firstly the bilty in fact had the details of the truck that was carrying the goods; secondly, the goods were not in variance with the invoice; and thirdly, the Department has not been able to indicate any kind of intention of the petitioner to evade tax. The court observed that as the invoice itself contained the details of the truck and the error committed by the petitioner was of a technical nature only and without any intention to evade tax.

6. S. V. Brothers v. State of U.P. [2024] 158 taxmann.com 193 (All.)

The Court firstly distinguished that the judgement relied upon the by the revenue by stating that the facts of the case of Amil and another (supra) were distinguishable in as much as in that case the specific finding recorded was that the consignor firm was a non-existent and fake firm. It was found not to be in existence at the place it was registered. Thus, there was categorical evidence on record to establish that the firm was existing only on papers to reap benefit of inverse tax credit. The e-way bill was held to have been generated for transporting goods from non-bonafide dealer from undisclosed place. However, in the instant case, there was no such finding. Although, the registration of the consignor firm was suspended subsequently but it is not the case of the department that the firm does not exist. It was also not disputed that the registration of the petitioner firm was cancelled after the passing of the impugned order. It was also not the case of the respondents that the petitioner was a non-bonafide dealer. Therefore, the finding that the parties had under valued the goods or there was any intention to avoid payment of correct amount as tax may justify seizure and penalty but cannot be made ground to not treat the petitioner as owner of the goods. The respondents ought to have examined the documents accompanying the goods at the time of seizure in terms of their own Circular dated 31-12-2018 in determining the said issue. Having not been done so, it was held that the order to the extent it sought to reject the prayer for release of goods in favour of the petitioner, cannot be sustained.

S. No. Case Citation Relevant Text

7. Hindustan Herbal Cosmetics v. State of U.P.[2024] 158 taxmann.com 200 (All.)

The vehicle was intercepted and the goods and vehicle were seized on the ground that the vehicle number in Part-B of the e-way bill was incorrect as the e-way bill showed the vehicle bearing No. DL1 AA 3552 instead of DL1 AA 5332. A typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to imposition of penalty. In the case of M/s. Varun Beverages Limited (supra) there was a typographical error in the e-way bill of 4 letters (HR - 73). In the present case, instead of '5332', '3552' was incorrectly entered into the e-way bill which clearly appears to be a typographical error. In certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically when the error is a minor error of the nature found in this particular case, imposition of penalty under section 129 was without jurisdiction and illegal in law.

8. Falguni Steels v. State Of U.P. [2024] 159 taxmann.com 100 (All.)

9. Jay Vijay Traders Varanasi v. State of U.P [2024] 159 taxmann.com 122 (All.)

The Court relying upon its earlier decision in observed that although petitioner failed to generate the e-Way Bill on time, the Tax Invoices issued contained all the relevant details including the detail of the vehicle transporting the goods. Moreover, the CGST and the SGST were already charged by SAIL. Therefore, no intention to evade tax is evident in this case. Mere technical errors, without having any potential financial implications, should not be the grounds for imposition of penalties. The underlying philosophy is to maintain a fair and just tax system, where penalties are proportionate to the gravity of the offense.

Transporting the goods without possession in the absence of E-Way Bill constitutes a contravention of the provisions of the GST Act. Authorities found that E-Way Bill which was later produced was infact generated after the interception of the vehicle by the revenue authority. The said E-Way Bill was rejected as it was found to be an attempt to post facto rationalize the illicit transportation of goods. The aforesaid findings have not been assailed before the initial authority in the show cause notice or in the memo of appeal or even in the writ petition.

10. Fairdeal Metals Ltd. v. Assistant Commissioner of Revenue, State Tax, Bureau of Investigation (NB) [2024] 159 taxmann.com 158 (Cal.)

11. Mohammad Shamasher v. State of West Bengal [2024] 159 taxmann.com 192 (Cal.)

Order of detention and the subsequent order imposing penalty are liable to be set aside and quashed wherein goods and vehicle of the recipient were detained on the assumption that there was an intention to evade tax on the part of the supplier. However, later once tax was paid by the supplier, thereafter, the allegation of intention to evade tax falls flat. Further, supplier appeared to be registered by the registered authority in Assam. Had there been any deficiency on the part of the supplier Company in production of relevant documents, registration ought not to have been issued. After registration has been issued and tax paid by the supplier Company, the allegation made against the supplier Company does not stand. The recipient being no way connected with any of the allegations that has been levelled against the supplier Company, cannot be made liable to pay penalty as has been assessed.

The Court held that there was a valid e-way bill in support of the transportation. It was only because of non-production of the delivery challan that the penalty was assessed and imposed. Though possession of all document in support of transportation is the fundamental requirement of law, but as it appeared that, petitioner did not have the intention to evade tax, accordingly, imposition of penalty at the rate of 200% of the tax payable appeared to be highly disproportionate and not in accordance with the provisions of law and thus the order was quashed and issue was directed to be revisited in line with the discussions made herein above and pass a reasoned order.

12. Ratan Enterprises v. State of U.P [2024] 159 taxmann.com 268 (All.)

13. Spirare Energy (P.) Ltd. v. State of U.P. [2024] 159 taxmann.com 271 (All.)

The factual matrix in the present case is that the goods were accompanied by the invoice, E-Way Bill, Gate Pass, 9R and bilty. The only flaw, on the basis of which goods were detained, was that the Part B of the E-Way Bill was not filled up. The court held that department was unable to indicate any intention of the petitioner to evade tax and the defect was of a technical nature only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the Act is not sustainable.

The Court observed that apart from an error with regard to the address of the consignee in the E-Way Bill, there were no other issues with the said consignment. The invoice contained the address, the goods matched the description in the invoice and all other materials were intact. The imposition of tax was only on the basis of a technical error with regard to address of the consignee that was wrongly written the E-Way Bill. The authorities were not been able to indicate any mens rea on the part of the petitioner for evasion of tax. The Court held that presence of mens-rea for evasion of tax is a sine qua non for imposition of penalty and mere technical error would not lead to imposition of penalty and thus quashed the order.

S. No. Case Citation Relevant Text

14. Kapil Transport Company v. State of U.P [2024] 159 taxmann.com 311 (All.)

Carrying invoice showing that the goods being transported was "sindoor". Part-B of the e-way bill was not filled up. Upon detention, it was found that there was no "sindoor" in the vehicle and there were 21 other items. The court observed that it is crystal clear that the petitioner could not justify the reasons for non-production of the invoice and the e-way bill. In such cases, a presumption automatically arose that there was an intention to evade tax. This presumption would be rebuttable. However, the petitioner was not able to bring any evidence to rebut the said presumption of evasion of tax. Thus, the court refused to reason to interfere with the impugned orders.

15. Kapil Transport Company v. State of U.P [2024] 159 taxmann.com 311 (All.)

16. Ashoka P.U. Foam (India) (P.) Ltd. v. State of U.P. [2024] 159 taxmann.com

328 (All.)

17. Anchor Health And Beauty Care (P.) Ltd. v. State of U.P. [2024] 159 taxmann.com

341 (All.)

18. Globe Panel Industries India (P.) Ltd. v.

State of U.P [2024] 159 taxmann.com

203 (All.)

Invoice and E- Way Bill were accompanying the goods and the description of the goods matched with the invoice. Only Part B of the E-Way Bill was not filled up at the time of interception. However, Part B of the E-Way Bill was filled up by the petitioner immediately after the interception, that is, much before the order of detention was passed. It is to be noted that in the present case, the goods were imported from China and IGST @ 28% was paid at the time of import. The Court held that it was crystal clear that IGST had already been paid and there was no involvement whatsoever of any mens rea for evasion of tax. Furthermore, the only technical fault was with regard to non filling up of Part B of the E-Way Bill. In light of the above, the impugned orders were held not to be sustainable and the same were set aside.

Goods were loaded on a particular vehicle, which broke down and upon such breaking down, the goods were loaded on another vehicle. At that point of time, the goods were seized. The petitioner had explained that the date on which the breakdown had taken place, there was Bharat Band and due to the same, the driver of the vehicle could not update the e-way bill. The factual position is that the goods were accompanied by invoice and e-way bill reflecting earlier vehicle number. Furthermore, it is to be noted that the revised e-way bill was produced before the authorities prior to the passing of the seizure order. The Court quashed the order and held that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty and mere technical error would not lead to imposition of penalty.

There was no dispute with regard to the fact that the goods were being transported from Patna branch to Lucknow branch and the said goods were accompanying with all the relevant documents. The only discrepancy, which was noticed by the mobile squad, who intercepted the goods, was with regard to the date occurring in the e-way bill as well as branch transfer invoice. In the e-way bill the date occurring was 2.8.2018 while in the branch transfer invoice the date was 31.07.2018. The Court held that even if there was discrepancy in the date which had occurred in the e-way bill as well as branch transfer invoice, there was no element of evasion of tax nor could any situation be pointed out to this Court where merely because of the said discrepancy, the petitioner could have evaded tax.

The Court observed that mens rea to evade tax is essential for imposition of penalty and since authorities have dealt with the issue with regard to the expiry of the E-Way Bill and held that no explanation was offered by the petitioner with regard to the fresh generation of the E-Way Bill, as the same had expired ten days before the detention. However, it is to be noted that the goods in the vehicle were for two e-Invoices and two E-Way Bills and only one E-Way Bill had expired. There is no dispute with regard to the consignor and consignee nor any dispute with regard to the description of the goods in the vehicle. In relation to the e-Invoices and the E-Way Bills, the authorities have not been able indicate any intention whatsoever on behalf of the petitioner to evade tax. Authorities have not been able to indicate in any manner that the E-Way Bill had been used repeatedly nor have they made out any case with regard to an intention to evade tax by the petitioner.

S. No. Case Citation Relevant Text

19. Hawkins Cookers Ltd. v. State of U.P. [2024] 159 taxmann.com 404 (All.)

The common thread that also runs through these orders was that the invoices and the bilties in all the eight invoices and in four of the e-way bills was correct in all respect including the address. Undisputedly, the address in four of the e-way bills was incorrect.but at the same time this particular address was not an anonymous address, but was the address of the registered office of the petitioner. The court held that where penalty is being imposed under section 129 of the Act an intention to evade tax should be present. Now, such an intention to evade tax may be presumed by the department in cases where there is wholesole disregard of the Rules. However, when most of the documents are accompanied with the goods and there are some typographical and/or clerical error, a presumption to evade tax does not arise. It is then upon the department to indicate that there was an intention to evade tax. The mere technical error committed by the petitioner cannot result in imposition of such harsh penalty upon the petitioner. As quoted in the Arthashastra by Chanakya that 'Governments should collect taxes like a honeybee collects honey from a flower without disturbing its petals.'

20. Nokia Solutions & Networks India (P.) Ltd. v. State Of U.P [2024] 159 taxmann.com 517 (All.)

21. Saraf Trexim Ltd. v. Deputy Commissioner of State Tax [2024] 159 taxmann.com 582 (Cal.)

Petitioner had not filled Part-B of the Eway Bill and also explained the reason of non filling up of Part B of the E-Way Bills to the authorities. However, the authorities did not consider the explanation and rejected the same on the basis of only the factual aspect that the distance between Delhi and Meerut is about 75 kilometers. The presumption was made by the authorities that there was intention to evade tax is based only on the factual matrix that the distance between Delhi and Meerut is only about 75 kilometers, which could have allowed the petitioner to carry out multiple trips. The Court observed that there was no other material brought on record by the authorities to indicate that there was any mens rea on the part of the petitioner to evade tax. Furthermore, other columns of the E-Way Bills such as description of the goods, quantity of the goods and value etc. were found to be the same as in the tax invoice accompanying the goods. Furthermore, there was no mismatch between the goods that was being carried out in the vehicle and the invoice. In light of the above, the reason of presumption of evasion of tax were held to be without any basis in law, and accordingly, the order of detention and subsequent appellate order were illegal and required to be set aside. It was further stated that that it is upon the authorities to pass orders under section 129 of the Act on the basis of some investigation that may indicate an intention to evade tax. The same cannot be solely on surmises and conjectures.

The e-way bill was valid upto midnight on 13.06.2022. On 14.06.2022 the vehicle was intercepted at about 5.30 p.m. The authorities found that the e-way bill had expired at 12 midnight on 13.06.2022 and fresh e-way bill has not been generated. Consequently, it was held that the goods were transported without a valid e-way bill. Though petitioner explained that the lapse was on the ground that the vehicle met to the accident and there was a settlement made between the owner of the motorcycle and the owner of the truck carrying the goods, this also had added to the delay in the process and in any event on 15.06.2022 the second e-way bill was generated and at the time when the vehicle was intercepted, hardly 24 hours had expired from the time at which the first e-way bill had expired. The Court observed that unless and until it is established by the department that the transporter of the goods or the owner of the goods had an intention to contravene the provisions of the Act, the question of imposing penalty under Section 129 of the Act that too 200% would not be justified. Each case has to be decided on the peculiar facts and circumstances and the court can definitely take into consideration the bonafide of the transaction and in the instant case the delay have been less than 24 hours, thus, penalty cannot be imposed that too 200%. The other factors which are also to be taken note of that the goods have been transported and the goods in question have been exported to Bangladesh. Considering all these facts, the court was of the view that in the instant case no penalty can be imposed on the appellant.

S. No. Case Citation Relevant Text

22. Indeutsch Industries (P.) Ltd. v. State of U.P [2024] 160 taxmann.com 733 (All.)

The issue involved was that due to non-availability of vehicle bearing registration no. UP14DT-8219, the transporter provided another vehicle bearing registration no. UP14BT-8220 and due to inadvertence, petitioner also loaded the goods in the said vehicle, without even checking the vehicle number mentioned on e-way bill. The vehicle was intercepted and penalty was levied U/Sec 129.

The Court allowed the writ petition by stating that the burden of proof lies on the petitioner in certain cases to show that there was no evasion of tax. However, when the error in the documents is only that of a clerical or typographical error, the initial burden of proof lies on the department to show there was intention to evade tax. The Court observed that in the present case, department failed to do so and infact not even tried to do so. The documents produced by the petitioner at the time of the interception itself indicated that the goods have been transported from a SEZ Unit to the DTA after payment of custom duty and payment of IGST. This fact was not discredited by the department in any manner whatsoever. Infact the court observed that there was a complete silence with regard to the fact whether the petitioner had made the payment as indicated in the invoices and the bill of entry. The department has accordingly failed to shift the burden of proof on the petitioner as the only error found by the department was that the vehicle number was incorrect. Apart from this one error in the e-way bill, nothing was shown by the department to justify the imposition of penalty under section 129(3) of the Act. The impugned order also failed to take into account the document produced by the petitioner of the transporter wherein the explanation was given with regard to the reason for the mistake of the vehicle number in the e-way bill.

23. Dy. CTO v. Vijay Metal [2024] 160 taxmann.com 538 (SC)

SLP Dismissed against decision in the matter of Vijay Metal v. Deputy Commercial Tax Officer [2021] 127 taxmann.com 397 (Telangana). The details of the decision by High Court were as under-

In the instant case, goods were loaded for two destinations i.e. Adoni (Andra Pradesh) and Hyderabad (Telangana). It was contended by department that to go to Adoni, Andhra Pradesh, the conveyance has to first pass Hyderabad, Telangana and the goods destined to the petitioner in Hyderabad should be delivered to the petitioner first, and then only the goods vehicle/conveyance should have proceeded to Adoni subsequently for delivery. As per their logic since Hyderabad comes first and not Adoni, when the vehicle comes from Dadra and Nagar Haveli, the consignment of 14.30 tonnes would be offloaded at Hyderabad, and then 2.01 tonnes consignment should proceed towards Adoni; and the vehicle was therefore rightly detained by him when it was more than 100 kms from Hyderabad and carrying the full load of 16.31 tonnes.

The High Court did not accept the plea of department that even if the goods meant to be delivered at Adoni were loaded on top of the conveyance, the said goods should have been unloaded and then reloaded after unloading the goods intended for the petitioner at Hyderabad. Such view, in the opinion of the High Court was utterly perverse and cannot be accepted and thus held that department had acted mechanically without application of mind to the operational convenience of the transporter. It was also held that for the bonafide action of the transporter, department cannot mulct the petitioner with tax and penalty and petitioner cannot be said to have any intention to evade tax if any mistake is, for the sake of argument without conceding it, has been committed by the transporter.

24. Pawan Carrying Corporation v. State of Bihar [2024] 160 taxmann.com

350 (Patna)

25. Riadi Steels Llp v. State of U.P. [2024] 160 taxmann.com 262 (All.)

The Court held that even if detention is stated to be on 28.12.2023, the notice was only issued on 05.1.2024, after the seven day period provided in section 129(3) CGST Act. Likewise when the petitioner had been informed at the time of verification, if the petitioner had sought for time on the seventh day from the date of serving of notice, there was nothing preventing the tax authority from rejecting the said prayer and passing the order, especially since, if the matter is kept pending, the proceedings would be barred by limitation. The Limitation is clear and definite. The facts of the case indicate that the officers did not act in accordance with the provisions, and there was no reason to sustain the demand raised. The Court set aside the orders passed for detention of the vehicles. The vehicle with the goods was directed to be released immediately.

The goods and vehicle were detained as the E-Way bill was expired and its validity period was not extended. The Court relied upon the judgement and observed that mens rea to evade tax is essential for imposition of penalty. The factual aspect in the present case clearly did not indicate any mens rea whatsoever for evasion of tax. The goods were accompanied by the relevant documents and the explanation of the petitioner with regard to slow movement of the goods coupled with GPS tracking system clearly indicate that the truck was moving slowly due to mechanical fault in the engine of the vehicle. The breach committed by the petitioner with respect to not extending time period of the e-way bill is only a technical breach and it cannot be the sole ground for penalty order being passed under section 129(3) of Act and thus the finding of the authorities with regard to intention to evade tax was not supported by the factual matrix of the case, and accordingly, the impugned orders dated April 6, 2022 and June 22, 2022 were quashed and set aside.

S. No. Case Citation Relevant Text

26. Ridhi Sidhi Granite and Tiles v. State of U.P. [2024] 160 taxmann.com 191 (All.)

The Court observed that apart from an error with regard to the address of the consignee in the EWay Bill, there were no other issues with the said consignment. The invoice contained the address, the goods matched the description in the invoice and all other materials were intact. The imposition of tax is only on the basis of a technical error with regard to address of the consignee that was wrongly written in the E-Way Bill. The Court relied upon its judgement and held that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty and mere technical error would not lead to imposition of penalty.

27. Shamhu Saran Agarwal & Company v. Addll. Commissioner Grade-2 [2024] 160 taxmann.com 151 (All.)

The Court observed that there was no dispute that the invoice, e-way bill and all other relevant documents were accompanied with the goods. Furthermore, there was no mismatch in the description of the goods with the documents. The only ground for detention of the goods was that the valuation of the goods as per the invoice was not correct.

The Court stated that in its view, it was not a valid ground for detaining the goods as the officer concerned was not competent to carry out such detention. In the event of under valuation, appropriate notice under Sections 73 or 74 of the Uttar Pradesh Goods and Service Tax Act, 2017 (hereinafter referred to as "the Act") is required to be issued as per the procedure provided therein. If the Court holds such a detention to be valid, it would be open to the authorities to carry out detention on their whims and fancies. The detention of the goods in such a scenario is not envisaged under the Act and the officers have not been vested with such a power to detain the goods and thereafter impose penalty under Section 129 of the Act. Specific provisions have been provided for detection of under valuation and the GST officials have to adhere to the same. It is to be noted that only after issuance of notice under Sections 73 or 74 of the Act, if the goods are found under valued, penalty can be imposed. Accordingly, imposition of penalty under Section 129 of the Act on the speculation that the goods are under-valued cannot be allowed.

28. Ms. Varun Beverages Ltd. v. State of UP [2024] 160 taxmann.com 122 (All.)

The Court observed that the invoices contained the vehicle number in which the goods were being transported; secondly, only part B of the e-way bill could not be generated; thirdly, the department has not been able to indicate any intention of the petitioner to evade tax. Furthermore, in the present case, this was not a sale that was being made to third party, but the goods are transported from one branch of the petitioner to another branch.

The Court relied upon its earlier judgements and held that it is clear that the department has been unable to indicate any intention of the petitioner to evade tax and the defect was of a technical nature only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the UPGST Act was held to be unsustainable.

29. Akhilesh Traders v. State of U.P [2024] 160 taxmann.com 94 (All.)

The Court observed that neither invoice nor E-Way Bill were accompanying the goods. Such a contravention to the Rules cannot be treated to be a mere technical or typographical mistake, and accordingly, in such cases, the burden of proof for establishing that there was no mens rea for evasion of taxes shifts to the assessee. The Court in umpteen cases where penalties were being imposed under Section 129 of the Act though held that an intention to evade tax should be present, however, in the event the goods are not accompanied by the invoice or the e-way bill, a presumption may be raised that there is an intention to evade tax. Such a presumption of evasion of tax then becomes rebuttable by the materials to be provided by the owner/transporter of the goods. In the present case, the court held that the inexorable conclusion is that the petitioner has not been able to rebut the presumption of evasion of taxes, as he has not been able to explain the absence of invoice and the E-Way Bill. Production of these documents subsequent to the interception cannot absolve the petitioner from the liability of penalty as the very purpose of imposing penalty is to act as a deterrent to persons who intend to avoid paying taxes owed to the Government. It was held to be very clear that if the goods had not been intercepted, the Government would have been out of its pocket with respect to the GST payable on the said goods.

S. No. Case Citation Relevant Text

Cases on Section 140 of CGST Act, 2017

1. Calcutta Radio Service (P.) Ltd. v. Union of India [2024] 160 taxmann.com 348 (Cal.)

The consistent case of the appellants was that they would fall under Entry 7B and inadvertently the TRAN-1 was filed under Entry 7A and the appellants explained that since they are not registered under the Central Excise Act, they are required to file TRAN-1 under Entry 7B.

The court relied upon judgements and taking note of the law and the subject as well as the facts of the case, the court held that it was a fit case where directions be issued to the authorities to enable the appellants to rectify the mistake and submit GST TRAN-1 under heading 7B of Table 7(a) of Form GST TRAN-1 and the appellants were directed to comply with the same within three weeks from the date of receipt of the server copy of this order after which the adjudicating authority was directed to verify the same and if admissible, extend the transitional credit to the appellants.

2. Siemens Ltd. v. Union of India [2024] 160 taxmann.com 184 (Bom.)

Where petitioner's, a registered input service distributors, ITC was not allowed to be transitioned due to a defective electronic mechanism, revenue should take an appropriate call on proceedings, before Court proceeded further to hear parties so as to decide these proceedings on merits and accordingly, proceedings were to be adjourned for a further period.

S. No. Case Citation Relevant Text

Cases on Section 155 of CGST Act, 2017

Tvl. Sakthi Ganesh Textiles (P.) Ltd. v. Asstt. Commissioner (State Tax) [2024]

159 taxmann.com 486 (Mad.)

In order to sustain a claim for transitional ITC, the assessee concerned should establish entitlement to such tax credit. It should be borne in mind that the obligation of establishing eligibility for ITC is cast on the assessee concerned and, therefore, it is the responsibility of the assessee to place all the material documents to establish the actual purchase and receipt of goods or services. If the assessing officer is of the view that further documents should be submitted for such purpose, it does not call for interference in exercise of discretionary jurisdiction.

S. No. Case Citation Relevant Text 1.

Cases on Section 159 of CGST Act, 2017

1. Jak Communications (P.) Ltd. v. Dy.

CTO [2024] 158 taxmann.com 332 (Mad.)

the notices dated 24-12-2021, 24-3-2023 and 15-5-2023 and the assessment order dated 25-5-2023 were uploaded in the web portal in the "View Additional Notices and Orders" column and the same were not at all physically served to the petitioner, due to which, the petitioner was unaware about the said notice. Hence, the reasons provided by the petitioner for being unaware of the notice, which was uploaded in the web portal, are appears to be genuine.

S. No. Case Citation Relevant Text

Cases on Section 160 of CGST Act, 2017

The Court held that the provisions of Section 160 and 169 of Goods and Services Tax Act, 2017 (GST Act, 2017) are not attracted and in the guise of those legal provisions, signature cannot be dispensed with. Thus impugned order was quashed only on the ground that it has not been signed and authority was directed to pass fresh orders.

S. No. Case Citation Relevant Text 1. Sri

Srinivasa Enterprises v. Asstt. Commissioner of State Tax [2024] 159 taxmann.com 660 (AP)

Cases on Section 161 of CGST Act, 2017

1. Sajal Kumar Das v. State of West Bengal [2024] 158 taxmann.com 690 (Cal.)

2. Sakkeena.C v. State Tax Officer [2024] 158 taxmann.com 361 (Ker.)

3. Satyam Auto Components (P.) Ltd. v. Union of India [2024] 158 taxmann.com 360 (Punj. & Har.)

4. Divya S. R. v. Union of India [2024] 158 taxmann.com 356 (Ker.)

Order suffered from illegality in as much as appellate authority had effectively rewritten its earlier order in the garb of rectification, which was impermissible in exercise of its powers under section 161 of the Act

Rectification cannot result in review and is permissible only when there are errors apparent on the face of the record, in a situation where SCN was contested. When SCN was not contested, resultant order passed assumes the nature of an agreed order and rectification application will not lie to correct a factual mistake therein

Petitioners allowed to rectify error made in submitting GSTR-1

5. Rajesh Real Estate Developers (P.) Ltd. v. Union of India [2024] 160 taxmann.com 297 (Bom.)

The petitioner had received IGST tax credit through inter state inward supply of goods. The total amount of IGST Credit as reflected in GSTR 2A was Rs. 1,14,957/-. The petitioner while preferring monthly return in GSTR 3B for July, 2017, by mistake claimed the entire input tax credit of Rs. 1,14,957/- under the heads of CGST and SGST, instead of claiming it under the head IGST. Department counsel stated that application has been filed only on 21-12-2023 and that Court may direct the 6th respondent for consideration of the said application filed by the petitioner, and that the 6th respondent shall consider the application, in accordance with law, and pass necessary orders. Considering the aforesaid submissions, and the facts of the case, the present writ petition is disposed of with direction to the 6th respondent to consider Ext.P4 application filed by the petitioner/assessee and pass necessary orders thereon expeditiously, in accordance with law.

The Court observed that Petitioner had made a bonafide mistake in Form DRC 03 wherein he had inadvertently shown the year as Financial Year 2019-20 instead of Financial Year 2018-19 which was also clear from the narration in the said Form DRC 03. Further Petitioner was not entitled to avail of any ITC and had not availed of any ITC, and, consequently, there was no question of ITC for Financial Year 2019-20 being reversed by Petitioner.

The Court relied upon the Judgement and allowed the writ petition by holding that since error made by the Petitioner is a bonafide error, therefore Department was directed to permit Petitioner to rectify the said error.

6. Vivo Mobile India (P.) Ltd. v. Joint Commissioner, CGST [2024] 160 taxmann.com 226 (All.)

The Court observed that primarily, decision of the Court being law declared and Circular being binding direction to apply the law, an order passed contrary to such law or direction to apply the law would remain an order that may have experienced an error apparent on the face of record. To that extent, approach of the assessing authority was erroneous and order dated 30.01.2024 was set-aside. The matter was remitted to the assessing authority to pass a fresh reasoned order dealing with the rectification application filed by the petitioner.

S. No. Case Citation Relevant Text

Cases on Section 169 of CGST Act, 2017

1. Sakthi Steel Trading v. Assistant Commissioner (ST) [2024] 159 taxmann.com 233 (Mad.)

The Court held that as a matter of prudence, it is advisable for the department to serve notice on such assessees through other mode of communications prescribed when they fail to respond to the summons, orders, notices and other communications etc., sent to them through email under Section 169 (1) (c) of the respective GST Enactments. Therefore, there has to be some amount of flexibility. Rigidity in the administration of tax in such matters may not serve the purpose and can be counter productive. There has to be a proper communication as otherwise exparte decisions are susceptible to be successfully challenged and declared as arbitrary for violation of principles of natural justice.

2. Abitha Timber Traders v. Assistant Commissioner (ST)(FAC) [2024] 160 taxmann.com 379 (Mad.)

The Court observed that the petitioner was a Timber trader. It was claimed by the petitioner that he was not acquainted with the advance technology of following the notices, which were uploaded in the portal. According to the petitioner, he submitted the returns only through his Auditor. The impugned order was passed after issuing notice in Form ASMT-10 dated 13.05.2022 and notice in Form DRC 01A dated 05.11.2022 and notice in Form DRC 01 dated 03.12.2022. Admittedly, all these notices were uploaded only through the portal.

The Court relied upon its earlier judgement and observed that though Section 169(d) of TNGST Act 2017, enables the respondent to issue notice through the common portal, other modes are also made available to the respondent under Section 169 of the TNGST Act 2017. In this case, the petitioner was a Timber Trader and was not an educated person and he was not acquainted in following the notices uploaded through the common portal. Thus the writ petition was allowed by setting aside the impugned order passed by the respondent dated 23.02.2023 and the remitted the matter back to the respondent for fresh consideration.

3. Raghava- HES- Navayuga (JV) v. Additional Commissioner of Central Tax [2024] 160 taxmann.com 21 (Telangana)

The Court observed that the petitioner had much in advance brought to the notice of the Department so far as his registered email address is concerned. Thus, it appeared that the notice for personal hearing was not sent at correct ID, But was inadvertently sent at the email reflected in the portal of the Department. Given the said circumstances of the case, the court was of the considered opinion that it appeared to be a case where because of technicalities, the notices for personal hearing were not served upon the petitioner and he was not provided with a fair opportunity of personal hearing. The Order-in-Original dated 28-11-2023, to the aforesaid extent was set aside and was remanded back for fresh consideration.

S. No. Case Citation Relevant Text

Cases on Section 171 of CGST Act, 2017

1. Excel Rasayan (P.) Ltd. v. Union of India [2024] 159 taxmann.com 365 (SC)

Where anti-profiteering measures under section 171 of CGST Act, 2017 as well as Rules 122, 124, 126, 127, 129, 133 and 134 of CGST Rules, 2017 were held to be constitutionally valid by High Court, notice was to be issued to Central Government in appeal filed in Supreme Court against said order of High Court

S. No. Case Citation Relevant Text

Cases on Rule 86A of CGST Act, 2017

The Court observed that text of Rule 86A indicated two requirements: the objective satisfaction of the officer concerned and the communication of reasons for so believing in writing to the assessee concerned. While Rule 86A does not stipulate a prior notice, the language thereof and the nature of power exercised by resort thereto require the contemporaneous communication of reasons in writing to the assessee. In the case at hand, the court observed that apart from mentioning the name of the supplier in the electronic credit ledger, no reasons were provided. Therefore, the petitioner was held to be entitled to the unblocking of ITC.

S. No. Case Citation Relevant Text 1. Tvl. J.M.

Traders v. Deputy Commissioner (ST) [2024] 159 taxmann.com 458 (Mad.)

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