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

Latest Judgements for January and February 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 Month of January 2024 and February 2024, thus for the ease of referring-

Particulars

Cases Discussed for January Month

are Highlighted in the Following

Colour

Cases Discussed for February Month

are Highlighted in the Following Colour

Specification

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)

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.

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.)

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.

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 (Kar.)

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.

2. Prahitha Contruction (P.) Ltd. v. Union of India [2024] 159 taxmann.com 437 (Telangana)

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.

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 (A.P).

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)

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.

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.

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. Asstt. CST [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.)

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.

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)

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.)

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.

24. A. John Peter v. State Tax Officer [2024] 159 taxmann.com 339 (Mad.)

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.

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 non payment 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.

Case Citation Relevant Text

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 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.

28. Section 29 NP Trading Co. v. Commissioner of GST [2024] 159 taxmann.com 417 (Delhi)

29. Section 29 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 Khandelwal Brothers v. State of U.P [2024] 159 taxmann.com 544 (All.)

32. Section 29 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

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.)

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.

No. Case Citation Relevant Text

Cases

on Section 50 of CGST Act, 2017

1. Eicher Motors Ltd. v. Superintendent of GST and Central Excis [2024] 158 taxmann.com 593 (Mad.)

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

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. Asstt. CCGST & CE [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.)

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

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

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.)

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

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%.

S. No. Case Citation Relevant Text

Cases

on Section 56 of CGST Act, 2017

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

'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

S. No. Case Citation Relevant Text

Cases

on Section 63 of CGST Act, 2017

1. 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

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:5823DB 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)

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.

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. Dy. STO [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.

. 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 (MP)

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 [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 (MP)

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 [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.)

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.

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

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

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.

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.

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

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

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.

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.

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.)

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.

. No. Case Citation Relevant Text

Cases

on Section 83 of CGST Act, 2017

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

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

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 [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) [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)

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.

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.)

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.

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. Abilities Pistons and Rings Ltd. v. Additional Commissioner, Circle-2 (Appeal) Commercial Tax [2024] 159 taxmann.com 326 (All.)

16. Ashoka P.U. Foam (India) (P.) Ltd. v. State of U.P. [2024] 159 taxmann.com 328 (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.

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.)

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.

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Cases on Section 155 of CGST Act, 2017

1. Tvl. Sakthi Ganesh Textiles (P.) Ltd. v. Assistant 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.

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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.

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Cases on Section 160 of CGST Act, 2017

1. Sri Srinivasa Enterprises v. Asstt. Commissioner of State Tax [2024] 159 taxmann.com 660 (A.P)

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.

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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

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.

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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.

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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

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Cases on Rule 86A of CGST Act, 2017

1. Tvl. J.M. Traders v. Dy. Commissioner (ST) [2024] 159 taxmann.com 458 (Mad.)

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.

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