The GST Case Law Compendium – May 2024 Edition provides a comprehensive analysis of pivotal legal questions shaping the GST landscape. This edition addresses key issues, such as the discretionary power of Appellate Authorities in admitting appeals post-limitation, the imposition of penalties under Section 122 (1A) of the CGST Act on non-involved employees, and the calculation of adjournments in ASMT-10 proceedings under Section 73. It delves into the implications of non-state-wise turnover disclosure in financial statements, the Superintendent’s jurisdictional limits, and the sufficiency of SCN intimation via the GST portal. The compendium also explores scenarios involving IGST under RCM for FOB contracts, the validity of GST registration cancellations based on incorrect field visits, and the seizure of cash by the Revenue Department. Furthermore, it examines the necessity of personal hearings, especially when notices are sent to unregistered emails, and the potential stay of recovery proceedings due to the non-constitution of the Appellate Tribunal. Each case provides valuable insights, essential for navigating the complexities of GST compliance and litigation.
1. Whether Appellate Authority has discretion to allow an appeal preferred after expiry of limitation period?
Yes, the Honorable Calcutta High Court in the case of Arvind Gupta v. Assistant Commissioner of Revenue State Taxes [Writ Petition Application No. 2904 of 2023 dated January 04, 2024] held that the Appellate Authority has the discretion to allow an appeal to be presented within one month after expiry of the period of limitation stipulated from the date of communication of the order upon sufficient cause being shown as per Section 107 (4) of the Central Goods and Services Tax Act, 2017.
The Honorable Calcutta High Court relied on the Honorable Division Bench in the matter of S.K. Chakraborty v. Union of India & Ors. (MAT 81 of 2022) where the Bench held that the provisions of Section 5 of the Limitation Act, 1963 have not been expressly or impliedly excluded by Section 107 of the CGST Act. Therefore, Section 5 of the Limitation Act,1963 stands attracted.
The Honorable Court observed that it was well within the power of the Respondent to consider the prayer of the Petitioner for condonation of delay. The Impugned Order passed by the Respondent that there is no scope to condone the delay beyond four months suffers from infirmity and the delay was evident from the annexure to FORM GST APL-01 and the Petitioner was prevented by sufficient cause for not preferring the appeal within the statutory period.
The Honorable Court opined that the Respondent failed to exercise its jurisdiction. The delay in presenting the appeal before the Respondent was condoned. The Respondent was directed to consider the appeal on merit and decide the same in accordance with law upon giving an opportunity of hearing to the Petitioner.
Author’s Comments
If the appeal is filed after the period of condonation permitted in section 107(4) (3+1 months), the Appellate authority does not have statutory authority to condone the delay, not even if the reasons are ample and deserve to be entertained. The appeal must be dismissed for being fatally belated because the Legislature has allowed Appellate authority this much authority and not more.
The Honorable Supreme Court has decided in Singh Enterprises v. CCE 2008 (221) ELT 163 that where the period of limitation is specifically provided in the statute, admitting appeals albeit for ‘sufficient cause’ would render statutory provisions impossible. And Appellate Authority thus being the denuded of authority to condone (due to lapse of maximum time permitted) is barred from examining the cause and condone the delays even for a “good and sufficient” reason.
The Honorable Allahabad High Court in the case of M/s. Yadav Steels v. Additional Commissioner and Anr. [Writ Tax No. 975 of 2023 dated February 15, 2024] and in the case of M/s. Abhishek Trading Corporation v. Commissioner (Appeals) and Anr. [Writ Tax No. 1394 of 2023 dated January 19, 2024] has decided that the Central Goods and Services Tax Act, 2017 is a special statute and a self-contained code in itself and Section 5 of the Limitation Act is not applicable to give power to First Appellate authority to condone the delay beyond statutory time limit allowed.
2. Whether penalty can be levied on the employee of the Company under Section 122 (1A) of the CGST Act who is not directly involved in day-to-day affairs of the Company and has not retained any benefit of the transaction?
No, the Honorable Bombay High Court in the case of Shantanu Sanjay Hundekari v. Union of India and Ors [Writ Petition (L) No. 30198 of 2021 dated March 28, 2024] allowed the writ petition and set aside the demand of penalty amount of Rs.3731 Crores opining that the penalty is imposable only on a person under sub-section 1A of Section 122 of the Central Goods and Services Tax Act, 2017, who is responsible for the transaction conducted, is a taxable person and is in legal position to retain the benefit of tax on the transaction covered under the aforesaid provisions of sub-section (1) of Section 122 of the CGST Act. The Honorable Bombay High Court observed that Section 122 provides for a levy of penalty for certain offences by the taxable person. Also, sub-section (1A) of Section 122 of the CGST Act provides that the benefit of the transaction covered under clauses (i), (ii), (vii), and clause (ix) of sub-section (1) and at whose instance such transaction is conducted, would be liable for penalty for an amount equal to the amount of tax evaded or ITC availed of or passed on. NB Further observed that, sub-section 1A would apply only to the taxable person, as it states that the aforesaid provisions of sub-section (1) of Section 122 would only be applicable in relation to taxable person as defined under Section 2(107) of the CGST Act, read with Section 2(94) of the CGST Act, any person who retains the benefit of transaction covered under aforesaid clause of sub-section (1) of Section 122 of the CGST Act. Further, noted that sub-section 1A of Section 122 of the CGST Act cannot be attracted with respect to the person who has not retained the benefit of transaction covered under the aforesaid provision. Further, noted that Section 137 of the CGST Act relating to prosecution would not be applicable when demand cum show cause notice is issued under Section 74 of the CGST Act. The Honorable Court opined that the Revenue Department has erred in raising the demand from the Petitioner and other employees when liability arises against the Maersk and the notice was issued to pressurize and threaten the Petitioner.
Author’s Comments
This is the most celebrated case of recent times, where the case was argued by Mr. Harish Salve, ld. senior counsel. It is important to understand that the Proper officer has no jurisdiction to sit on the adjudication of an allegation of section 122(1A) till the offense of section 122(1) clause (i), (ii), (vii) or (ix) (invoice-credit-refund racket) is adjudicated. Without adjudication of the invoice-credit-refund racket, there is no investigative material to implicate the ‘Master Mind’ under section 122(1A) of the Act. The Petitioner could have resorted to preferring an application under section 67(10) of the GST Act read with section 165(5) of Cr.Pc. to the Commissioner of GST in response to SCN issued to this effect.
The allegation against the Petitioner is self-defeating, as the department has alleged that benefits of the GST evasion have been retained by the Petitioner and still no action under section 67 of the Act was taken to unearth where the money has gone and likewise no action under allied laws is also surprising. Moreover, the allegation of misclassification (tax @5% discharged not 18%) is not a subject matter of evasion of tax and there is no jurisdiction under section 67 to adjudicate such matters not involving evasion of tax.
3. Whether the adjournments granted for ASMT-10 proceedings be clubbed together to calculate the maximum permissible adjournments for proceedings under section 73 of the Act?
No, the Honorable Calcutta High Court in the case of Pioneer Co-Operative Car Parking Servicing and Constructions Society Ltd. v. Senior Joint Commissioner [WPA No. 3092 of 2024 dated March 1, 2024] disposed of the writ petition holding that the adjournments granted for the notice issued under section 61 cannot be clubbed together with proceedings under Section 73 of the Central Goods and Services Tax Act, 2017. The Honorable Calcutta High Court noted that as per sub-section (5) of Section 75 of the CGST Act, upon sufficient cause shown by the person, the adjournment should be granted by the proper officer and the reasons are to be recorded in writing. However, the adjournment should not be granted more than three times to a person during the proceeding. The Honorable Court opined that the adjournment granted to the Petitioner in relation to the proceedings under Section 61 of the CGST Act cannot be clubbed together with the SCN proceedings and holding that the Petitioner was granted ample opportunity to respond to SCN issued under Section 73(1) of the CGST Act is erroneous. The Honorable Court quashed the recovery notice.
Author’s Comments
Proceedings under section 73 of the CGST Act are completely different and independent of section 61 proceedings. Proceeding under section 61 of the CGST Act is a pre-adjudication exercise (where no demand can be confirmed and recovered) and certainly not a pre-condition to initiate proceedings under chapter XV of the CGST Act. Although, the Proper officer to issue a notice under sections 61 and 73 of the CGST Act might or might not be the same one, but the adjournments granted during section 61 proceedings cannot be considered as adjournments granted for the purpose of section 73 of the CGST Act.
Section 75(5) states that if sufficient cause is shown, the proper officer is empowered to grant maximum of three adjournments to a person during the proceeding. This power must neither be misused nor left to fall into disuse. Many instances arise where intervention is warranted but this request may be entertained based on ‘sufficient cause’. The Apex Court in case of Esha Bhattacharjee v. MC of Raghunathpur Nafar Academy (2013) 12 SCC 649 has held that reasonableness, practicality and fairness must underpin course of disposal of all such requests and applications and extent of condonation allowance must not exceed statutory boundaries even in meritorious facts.
4. Whether output tax can be demanded merely because the financial statements did not provide State-wise turnover?
No, the Honorable Madras High Court, in the case of Tvl. Future General India Insurance Co. Ltd. v. Assistant Commissioner (State Tax) [WP No. 3534 OF 2024 dated February 16, 2024] held that an assessment order passed by the Assessing Officer had accepted the explanation of the assessee with regard to certain defects but had imposed GST at the rate of 36% instead of18 % on the ground that the financial statements submitted by the assessee did not reflect state-wise turnover.
The Honorable Madras High Court observed that the turnover for an entity operating in multiple states in India as reflected in the financial statements and the turnover attributable to its operations in a particular state (in this case- Tamil Nadu) would vary and the bifurcation of total and state-wise turnover is the only relevant factor, and the Competent Authority erred in imposing GST at rate of 36% instead of the applicable rate of 18%, despite the Petitioner having already paid tax on the turnover of Rs. 80,89,05,068/-.
The impugned assessment order was to be set aside, and the matter was to be remanded to the Competent Authority for reconsideration.
Author’s Comments
There is an urgent need to understand that the linear comparison of two different data sets is meaningless in GST. Yes, it may raise suspicion but no adverse inference can be made regarding non-payment, short-payment, or evasion of taxes.
In this particular case, Output tax is demanded citing data differences without stating (i) the nature of supply (ii) the taxability of the same (iii) the HSN code (iv) the time of supply, and (v) the place of supply. Without these taxing ingredients, any demand for output tax is arbitrary and illegal.
This principle has been laid by the Honorable Apex Court in the case of Govind Saran Ganga Saran v. CST &Ors. AIR 1985 SC 1041, where it was held that ‘four ingredients’ are required to be present in any proceedings to demand tax.
5. Whether the Superintendent can pass the order beyond the jurisdictional monetary limits prescribed?
No, the Honorable Allahabad High Court in the case of Mansoori Enterprises v. Union of India [Writ Tax No. 35 Of 2024 Dated February 23, 2024] held that as per Circular No. 31/05/2018-GSTdated February 09, 2018, power of the Superintendent, Central Goods and Service Tax & Central Excise is limited to the matter not exceeding Rs. 10,00,000/- and in the present case the amount involved is more than Rs. 16,00,000/- and consequently, the order passed by the Superintendent is without jurisdiction. Hence, the said order was declared without jurisdiction and liable to be set aside.
The Honorable Allahabad High Court observed that the Superintendent lacked jurisdiction to issue the Impugned Order since the amount involved exceeded the limits set in Circular No. 31/05/2018-GST dated February 09, 2018. The Honorable Court held that the Impugned Order was liable to be quashed, also the Court granted liberty to the Respondent to initiate fresh proceedings by the law.
Author’s Comments
In this statute, there is a ‘Proper Officer’ for every section and every action under the law. The Officer who is empowered to grant registration is not the Proper officer to do audit (most likely), those who can come for audit, cannot come for proceedings under section 67 of the Act. The Proper officer who can do audit and inspection cannot be a Proper officer to adjudicate. Just because statutory duties are being performed, even if there is strong suspicion of revenue leakage, except by following the due process of invoking specific powers conferred within specific boundaries of the law, these proceedings are in as much illegal. The Law of administration states that what power is given to be a particular thing, that thing must be done in that particular manner or not at all.
Taxpayers before replying to any proceedings, ‘Validity of Jurisdiction’ must be tested and confirmed. And if there is any doubt, the Proper Officer must explain the exercise of jurisdiction when validity of notice is questioned in view of the mandate in section 160(2) of the Act.
6. Whether uploading SCN under the category “Additional Notices” on the GST portal constitute sufficient intimation to the taxpayer?
No, the Honorable Delhi High Court in the case of Anhad Impex v. Assistant Commissioner [Writ Petition (Civil) No. 2356 OF 2024 dated February 16, 2024] held that merely uploading a Show Cause Notice under the category “Additional Notices” instead of “Notices” on the GST portal does not constitute sufficient intimation to the taxpayer. Consequently, the subsequent demand order passed without giving the Petitioner a proper opportunity to respond to SCN was set aside, and the Court directed that SCN be re-adjudicated after affording a proper opportunity of hearing to the Petitioner.
The Honorable Delhi High Court observed that the perusal of the Impugned Order showed that it categorically recorded that the Petitioner had not filed any reply or appeared in person in response to SCN. This indicated that the Petitioner did not have a proper and timely intimation of SCN. Further noted that the uploading of the SCN under the category “Additional Notices” instead of “Notices” on the GST portal, which is the standard practice followed by the tax authorities, had resulted in the Petitioner missing out on the intimation of SCN. The Honorable Court opined that merely uploading the SCN on the portal, especially under the “Additional Notices” category, which is not easily accessible or discoverable by the taxpayers, cannot be considered as sufficient intimation or compliance with the principles of natural justice and the provisions of the CGST Act.
The Honorable Court relied on the judgment in the case of East Coast Constructions & Industries Ltd. v. Asstt. Commissioner (ST) [W.P. No.26457/2023, dated September 11, 2023] wherein the Honorable High Court of Madras has noticed that communications were placed under the heading of “View Notices and Orders” and “View Additional Notices and Orders”. The Honorable Madras High Court had directed the respondents to address the issue arising out of the posting of information under two separate headings. According to the petitioner, the Menu “View Additional Notices and Orders” were under the heading of “User Services” and not under the heading “View Notices and Orders”.
Author’s Comments–
Although Section 169 of the CGST Act, 2017 specifies 14 different ways/modes of serving any decision, order, summons, notice, or other communication under the Act, care must be taken by the authorities not to simply pick and choose any option, rather the best possible option must be chosen by which it is mostly likely to reach the notice. The notice or any other communication cannot be termed to be served until it has reached the intended notice.
Violation of principles of natural justice is a failure of due process. This violation renders the process arbitrary and when executive action is arbitrary it violates articles 14, 19, and 21 of the Constitution. Reference may be made to the jurisprudence in the case of Menaka Gandhi v. UOI AIR 1978 SC597, which illuminates understanding about the ‘role’ of a valid notice in any proceeding, however obvious the conclusion and consequent treatment might be.
In the author’s considered opinion, it is immaterial whether the notice was uploaded on “View Notices and Orders” tab or “View Additional Notices and Orders” tab. The only aspect to consider is whether or not the intended notice was served to the intended notice or not.
7. Whether the Appellate Authority can dismiss the appeal on ground of limitation without affording an opportunity of being heard?
No, the Honorable Calcutta High Court in the case of Jyanata Ghosh v. State of West Bengal [Writ Petition Application No. 230 of 2024 dated March 05, 2024] held that an Appellate Authority cannot dismiss an appeal on the ground of limitation without affording any opportunity of hearing. The delay can be condoned if the principles of natural justice has been violated by not providing an opportunity for hearing to the Petitioner. The Honorable Calcutta High Court held that the Respondent should have given personal hearing to the Petitioner and decided appeal on merits. The Honorable Court relied on Murtaza B Kaukawala v. State of West Bengal [MAT 1361 of 2023 dated October 18, 2023] wherein the Calcutta High Court held that delay can be condoned if the principles of natural justice have been violated by not providing the opportunity of hearing to the petitioner. Further relied on S. K. Chakraborty & Sons v. Union of India [MAT 81 of 2022] wherein the Calcutta High Court held that once provisions of Section 5 of the Limitation Act, 1963 have not been expressly or impliedly excluded by Section 107 of the CGST Act, by virtue of Section 29(2) the Limitation Act, 1963, Section 5 of the Limitation Act, 1963, stand attracted. The Honorable Court held that the delay in filing of the appeal was condoned and the writ petition is allowed by setting aside the Impugned Order dated January 17, 2024.
Author’s Comments
Belated appeals are permitted up to a maximum of one month under section 107(4) after the end of the due date for filing an appeal under section 107(1) or (2/3). Appellate Authority has power to condone delay, but this power cannot be expected by the Appellant to be exercised in a routine manner and automatically condone the delay. Limitation Act, 1963 states in sections 5 and 14 that ‘’sufficient cause‘’ must be shown to justify the delay.
The principle of law is that when the time to file an appeal lapses, the counterparty gets a visited right (or advantage or benefit from such failure) which cannot be denied by condonation of appeal in a routine and mechanical manner without ‘good and sufficient’ reasons.
When an appeal is filed after the period of condonation permitted in section 107(4), the Appellate authority does not have statutory authority to condone the delay, not even if the reasons are ample and deserve to be entertained. The appeal must be dismissed for being fatally belated because the Legislature has allowed Appellate authority this much authority and not more.
The Honorable Apex court has declared in Singh Enterprises v. CCE 2008 (221) ELT 163 that where the period of limitation is specifically provided in the statute admitting appeals albeit for ‘sufficient cause’ would render statutory provisions impossible. And Appellate Authority thus being the denuded of authority to condone (due to lapse of maximum time permitted) is barred and examining the cause, much less its sufficiency.
8. Whether IGST is payable under RCM for services in Free-on-Board Contract?
No, the Honorable Bombay High Court in the case of M/s. Agarwal Coal Corporation Pvt. Ltd. v. The Assist. Commissioner of State Tax [Writ Petition No. 15227 of 2023 dated March 05, 2024] set aside the Show Cause Notice issued by the Revenue Department based on the Notification No. 08/2017-Integrated Tax (Rate) dated June 28, 2017 which has been held ultra vires as per the judgment of Division Bench of Honorable Gujarat High Court in the case of the Mohit Minerals Pvt. Ltd. v. Union of India [Special Civil Application No. 726 of 2018 dated January 23, 2020] which was further affirmed by the Honorable Supreme Court in the case of Union of India and Anr. v. Mohit Minerals Pvt. Ltd. [Civil Appeal No. 1390 of 2022 dated May 19, 2022]. The Honorable High Court further held that SCN should not have been issued for payment of IGST on reverse charge basis concerning the Free-on-Board contract-related services as the Notification, which includes payment of IGST on reverse charge basis on services concerning Cost, Insurance, and Freight and FOB Contract, has been held as ultra vires.
Author’s Comments
The Honorable Bombay High Court relied upon its judgment in the case of Liberty Oil Mills v. Union of India [Writ Petition No. 5191 of 2021 dated January 27, 2023] wherein the Honorable High Court set aside the Show Cause Notice issued by the Department by placing reliance upon the Notification, for non-payment of IGST on Ocean Trade Services. The Honorable Court noted that in the cases filed by the Petitioner before the Honorable Delhi High Court in the case of Agarwal Coal Corporation Pvt. Ltd. v. Union of India and Anr. (Writ Petition (C) No. 8720/2017 dated August 24, 2022) and Honorable Madhya Pradesh High Court in the case of M/s. Agarwal Fuel Corporation Pvt. Ltd. v. Union of India & Anr. [Writ Petition No. 19382 of 2017 dated January 30, 2023] which involved both CIF and FOB Contracts, wherein the Honorable High Courts relying upon the judgment of the Honorable Supreme Court in Mohit Minerals case, quashed the Notification and related entries thereto, thereby holding that the Petitioner is not liable to pay IGST on ocean freight for services supplied by a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance of India. Further the contention made by the department that the decision in the Mohit Minerals case is only applicable in the case of CIF contracts and not FOB contract is not tenable as the whole Notification has been held ultra vires.
9. Whether demand can be raised when negative taxable value of outward supply is claimed as ITC?
No, the Honorable Madras High Court in the case of Oasys Cybernetics Private Limited v. State Tax Officer [W.P. No. 9624 of 2024 dated April 12, 2024] disposed of the writ petition by setting aside the assessment order in a case where the total taxable and invoice value was in negative due to erroneous reporting of Credit Notes as Input Tax Credit, thereby holding that the demand should not be raised when there is no loss caused to the government in the aforesaid scenario. The Honorable Madras High Court noted that as per the GSTR-1 statement placed on record by the Petitioner, in the heading relating to B2C total invoice value was in negative for which a reply was filed by the Petitioner stating that the credit notes were erroneously reported as ITC. The Honorable Court opined that the explanation provided by the Petitioner was not taken into consideration as to the tallying of the amount reflected as ITC with the value of the Credit note so as to check whether there is excess a ailment of ITC. Further opined that the required exercise was not carried out and tax demand has been raised solely on the ground that the credit notes have not been duly reported in GSTR-1 or in the auto populated GSTR-2A, therefore, the Impugned Order calls for interference. The Honorable Court held that the Impugned Order is set aside and the matter is remitted back for reconsideration.
Author’s Comments
Care must be taken while replying to the notice that in pursuit of parading all the truth before the Proper officer,the reply must not become an admission of wrongdoing. Any admitted wrongdoing becomes an undisputed fact that requires no further proof (Section 58 of Indian Evidence Act, 1872) and it becomes ground for confirming the demand.
In this instant case, if it is admitted that ITC claimed was ineligible and relief was sought on the grounds of revenue neutrality, the Proper officer was justified in confirming the demand. The quite often talked about the concept of ‘Revenue Neutrality’ is a myth and no longer existing concept in GST.
10. Whether recovery proceedings can be initiated against the former director of the Company who was not the director during the concerned period?
No, the Honorable Bombay High Court in the case of Prasanna Kumar Shetty v. State of Maharashtra and Others [Writ Petition No. 3098 of 2024 dated April 16, 2024] allowed the writ petition and set aside the attachment order in case where recovery proceedings were initiated against the former director of the Company who was not the director of the Company during the concerned period. The Honorable Bombay High Court observed that as per Section 79 of the Central Goods and Services Tax Act, 2017, the principal liability is not on the Petitioner who is not a registered person as per sub-section (1) of Section 79 of the CGST Act. Further observed that Section 89 of the CGST Act provides that before taking any action of recovery against the Directors of the Company, the Concerned Officer should be satisfied that the person concerned against whom recovery is to be made is the Director of the Company for the concerned period. Further, it is after the aforesaid satisfaction of the Officer that such person was the director of the Company; the liability could be fastened against the Director. The Honorable Court noted that the factual issues needed to be verified before the passing of the Impugned Attachment Order by the concerned officer, by issuing the SCN to the Petitioner calling upon him to show cause that the amount due and payable by the Company is liable to be recovered from the Petitioner under Section 79, read with Section 89 of the CGST Act. The Honorable Court opined that neither any SCN was issued nor any opportunity for personal hearing was granted to the Petitioner before the passing of the Impugned Attachment Order and held that the writ petition is allowed and the Impugned Attachment Order is set aside.
Author’s Comments
Allegation of deliberate actions attracting imposition of penalty under section 122(1) or (2) against the legal entity is entirely compatible with imposition of penalty under section 122(3) against natural persons (directors or partners). And omission to impose penalty under section 122(3) would be good ground to assail the allegation against legal entities independent of natural persons who ought to be the real perpetrators of the alleged offence.
11. Whether ITC is permissible when the payment is settled through Book Adjustment?
Yes, the West Bengal, AAR in the case of Paragon Polymer Products (P.) Ltd., In re [Order No. 27/WBAAR/2023-24 dated December 20, 2023] held that the claim of input tax credit by the taxpayer cannot be denied under the second proviso to sub-section (2) of section 16 of the Central Goods and Services Tax Act, 2017 when payment is settled through book adjustments because the law has not put any restriction on such adjustments. The Advance Ruling Authority of West Bengal observed that the Applicant intends to enter into agreements with different vendors to whom they outsource the process of manufacturing footwear/parts of footwear. In this process, the Applicant procures raw materials and supplies to those outsourced vendors raising tax invoices. In return, vendors make outward supplies of finished goods to the Applicant for which payment is settled through book adjustment against debt created on the buy-back model. Therefore, the Applicant plays as supplier while supplying raw materials and emerges as the recipient when purchasing finished goods from those outsourced vendors. The AAR opined that the provision of Section 16(1) and (2) of the CGST Act, restricts credit of input tax to the recipient unless he pays the consideration to the supplier for inward supplies received by him along with tax payable thereon within the stipulated time limit of one hundred and eighty days from the date of issue of invoice and noted that the term ‘consideration’ has been defined in clause (31) of Section 2 of the CGST Act in an inclusive manner that extends the scope and range for mode of payment. Further, as per the said definition it is immaterial whether the payment is made by the recipient or by any other person. Further, when there is barter of goods or services, the same activity constitutes supply as well as a consideration. The AAR held that the settlement of mutual debts through book adjustment is a valid mode of payment under the CGST Act.
Author’s Comments
The Second proviso to section 16(2) of the CGST Act read with rule 37 of the CGST Rules provides a time limit of 180 days to pay the suppliers where input tax credit has been availed. Normally we have seen quite a number of cases where demand for reversal of ITC is fastened based on creditors’ balance appearing in the financial statements. The appearance of credit balance does not ipsi dixit imply non-compliance with any condition to avail the ITC. No adverse inference can be drawn without showing ‘bill-wise delay’ in settlement of creditors, without this, allegations are deeply rooted in guesswork, estimate and conjecture which will be incompatible with the demand under Chapter XV of the Act.
Further there is no restriction under the law to settle payments through book adjustment and this was decided in the case of Senco Gold Ltd [02/WBAAR/2019-20 DATED 08 May 2019] wherein it was held that the payment is a transfer of an asset to the payee for discharging an obligation arising out of transactions involving goods, services or other legal obligations. The most common asset class used for such payment is money, although other assets unless specifically excluded by law, may be used provided the payee accepts payment by such assets other than money as good and sufficient discharge of the obligation.
12. Whether Goods can be detained and penalty be imposed under Section 129 alleging undervaluation of goods?
No, the Honorable High Court of Allahabad in the case of Shamhu Saran Agarwal & Company v. Additional Commissioner Grade-2 [WP. No. 33 of 2022 dated January 31, 2024] allowed the writ petition and held that goods cannot be detained and penalty cannot be imposed under Section 129 of the Uttar Pradesh Goods and Services Act, 2017 when goods are undervalued.
The Honorable High Court of Allahabad noted that in case of undervaluation, the Department is required to issue a Notice under Section 73 or 74 of the Uttar Pradesh Goods and Services Act, 2017. The Proper Officer cannot detain the goods on the aforesaid ground and thereafter impose a penalty under Section 129 of the UPGST Act.
Author’s Comments
Intercepting officers, fuelled by their experience in earlier tax regime, are able to ‘sense’ evasion of tax and expand the scope of their own limited powers conferred by the Legislature. It is trite that to whom authority is delegated, in the course of exercising authority vested, cannot ‘expand’ the scope of that authority. If MOV-07 (SCN) admits compliance with rule 138A but alleges undervaluation or misclassification of supplies involved in movement, this is extra legislative inquiry that is not within the terms of reference of Proper officer intercepting the consignment under section 68 read with section 129. The intercepting officer has no jurisdiction to go beyond the requirements of rule 138A. For such issues, notice has to be issued under section 73/74 of the Act by the concerned Proper officer.
Kerala High Court in the case of Hindustan Coca Cola Private Limited vs. Assistant State Tax Officer dated 19 March 2020 has ruled that the misclassification cannot be challenged to detain the goods. Further, the Department of Commercial Taxes, Uttar Pradesh has issued circular no.1819010 dated May 09, 2018, wherein it has clarified that (Para 4) in case of undervaluation or misclassification noticed, the consignment will not be detained, rather Intercepting officer will make a report and send to the concerned Joint Commissioner office for further action.
13. Can the GST Registration be cancelled based on incorrect field visit report not belonging to the taxpayer?
No, the Honorable Delhi High Court in the case of Gulab Nagar v. Assistant Commissioner [W.P No. 3387 of 2024 dated March 06, 2024] disposed of the writ petition opining that there vocation application filed by the taxpayer has to be taken into consideration in case where the GST Registration has been canceled by the Revenue Department based on incorrect field visit report.
The Honorable High Court of Delhi held that the entire proceedings of GST Registration cancellation are based on the field visit report which is not in relation to the Petitioner for which revocation application has been filed by the Petitioner. The Honorable High Court thereafter directed the Respondent to take into consideration the revocation application filed by the Petitioner.
Author’s Comments
This is a welcome decision by the Honorable High Court of Delhi and it comes to the rescue of the taxpayer once again the Rule of Land stands tall against the over-passionate administration. The Revenue Department has to understand that this kind of approach renders the “due process” laid down in the statute “Superfluous, unnecessary and nugatory”, which is impermissible in the law. A similar judgment was passed by the Honorable Delhi High Court in case of Rane Brake Lining Ltd. v. Superintendent, Range-17, Central GST Division [Writ petition (Civil) NO. 2259 OF 2024 dated February 16, 2024].
14.Whether Cash can be seized by the Revenue Department?
No, the Honorable Delhi High Court in the case of Jagdish Bansal v. Union of India [W.P. (C) No. 16677 of 2023 dated February 26, 2024] allowed the writ petition and directed the Revenue Department to remit the cash seized along with interest opining that the Revenue Department is not empowered to seize cash under the GST law.
The Honorable Delhi High Court relied upon its judgment in the case of K.M Food Infrastructure Pvt Ltd Through Its Director Mukesh Kapoor Vs Director General DGGI Headquarters [W.P. (C) 328/2024 dated February 13, 2024] and while interpreting the provision of Section 67 of the Central Goods and Services Tax Act, 2017 noted that cash would not fall within the purview of definition of goods and would fall within the purview of money as defined under Section 2(75) of the CGST Act and if cash cannot be considered as goods, then it cannot be seized. The Honorable Court opined that there is no justification for the retention of cash by the Respondent and held that the Impugned Order is liable to be set aside. Directed the Respondent to remit the cash seized along with the interest.
Author’s Comments
It is important to note that even cash must be ‘secreted’ to qualify for the seizure but, more importantly, cash is not ‘goods liable to confiscation’ under section 130(1) but are ‘things’ which are considered “useful or relevant” by the Authorized Officer to carrying out “any further proceedings”. What, therefore, can be the ‘use or relevance’ of cash to be seized? There is a popular, mysterious, and erroneous understanding that ‘cash’ is illicit if discovered in search proceedings. Officers tend to seize cash without even ascertaining to whom it belongs. ‘Cash’ seizure does not directly point to proceeds from unaccounted sales. That would have been easy but the Legislative wisdom is that (i) ‘Evasion of tax is a must for proceedings under section 67 to be with the jurisdiction and lawful and (ii) No presumption flows in favor of the Revenue, especially, when cash may be treated to be ‘things’ and not ‘consideration from supply’. After all, ‘things’ seized can only be if they are “useful or relevant” for that Authorized Officer in carrying out “any further proceedings”.
A similar decision was given by the Honorable Kerala High Court in the case of Shabu George v. State Tax Officer (IB) [WA No. 514 of 2023 dated March 24, 2023].
15. Whether penalty shall be imposed if Part B of the E-way bill not filed due to technical difficulties?
No, the Honorable Allahabad High Court in the case of Precision Tools India v. State of Uttar Pradesh [Writ Tax No. 415 of 2023 dated January 29, 2024] held that non-filling of Part ‘B’ of the E-Way Bill on technical difficulties and without any intention to evade tax would not lead to the imposition of penalty.
The Honorable Allahabad High Court observed that the Respondent has been unable to indicate any intention of the Petitioner to evade tax and rely on M/s. Roli Enterprises v. State of U.P. and Others [Writ Tax No.937 of 2022 dated January 16, 2024] wherein the Court had considered two judgments of the Allahabad High Court in VSL Alloys (India) Pvt. Ltd. v. State of U.P. and another [2018 NTN [Vol.67]-1] and M/s Citykart Retail Private Limited through Authorized Representative v. Commissioner Commercial Tax and Another [2023 U.P.T.C. [Vol.113]-173] and held that non-filling up of Part ‘B’ of the e-Way Bill by itself without any intention to evade tax would not lead to the imposition of penalty under Section 129(3) of the UPGST Act. The Honorable Court held that the defect was technical only and without any intention to evade tax. Accordingly, the penalty imposed under Section 129(3) of the UPGST Act is unsustainable. The Impugned Orders were quashed and set aside.
Author’s Comments:
As per Circular No.64/38/2018 dated 14.09.2018, a general penalty under section 125 of the GST Act must be imposed in case of minor breaches or discrepancies.
In the Author’s considered opinion, all the discrepancies in relation to the movement of goods except the fatal errors like not accounting for transaction of supply in the books of account, are to be treated as minor discrepancies and no penalty u/s 129 of the GST Act can be imposed.
As per Section 129 and Rule 138A of the GST Act, until and unless mensrea exists and is proved, all the errors and omissions have to be termed as non-fatal errors and no penalty under section 129 can be imposed.
A Similar judgment was delivered by the Honorable Allahabad High Court in the case of M/s. Varun Beverages Ltd. v. State of Uttar Pradesh [Writ Tax No. 129 of 2024 dated February 07, 2024], wherein the court set aside the orders imposing penalty under Section 129(3) of the UPGST Act on the reason that the defect was of a technical nature only and without any intention to evade tax.
16. Whether refund of ITC reversed earlier can be claimed when Tax is paid by the Supplier?
Yes, the Honorable Delhi High Court in the case of Pedersen Consultants India Pvt. Ltd. v. Union of India and Ors. [W.P. (C) 1039/2024 dated March 19, 2024] disposed of the writ petition allowing the registered person to file a refund application for the Input Tax Credit reversed when subsequently returns have been filed and taxes have been paid by the Supplier.
The Honorable Delhi High Court allowed the Petitioner to file the refund application as mandated by Section 54 of the CGST Act, and the Respondent is required to adjudicate the claim of the Petitioner in accordance with law taking into consideration the fact that the Petitioner would fall within the purview of Notification wherein the time period from March 1, 2020 to February 28, 2022 would be excluded for computation of period of limitation for filing refund application.
Author’s Comment
As per sub-section (2) of Section 41 of the CGST Act, the registered person is required to reverse the ITC availed along with applicable interest, where on the tax payable has not been paid by the supplier (with effect from October 1, 2022). However, as per the proviso to section 41(2) of the CGST Act, where the supplier makes payment of the tax payable, the registered person can re-avail the amount of credit reversed. Important to draw attention that the said provision is applicable prospectively and therefore, for past periods this provision cannot be resorted to demand reversal of credit.
17. Whether Opportunity for Personal Hearing must be granted even if the Notices were sent to an unregistered email-id?
Yes, the Honorable Telangana High Court in the case of M/s. Raghava-HES-Navayauga (JV) v. Additional Commissioner of Central Tax [Writ Petition No. 3353 of 2024 dated February 8, 2024], held that the Assessee must be granted an opportunity of a personal hearing even where the notices for personal hearing were sent to an unregistered e-mail id due to technical glitches.
The Honorable Telangana High Court observed that because of technicalities the notices for personal hearing seem to have not been served upon the Petitioner and he has not been provided with a fair opportunity for personal hearing. The Honorable Court held that the Impugned Order was set asideonly on the ground of it being violative of principles of natural justice.
Author’s Comments
Although Section 169 of the CGST Act, 2017 specifies 14 different ways/modes of serving any decision, order, summons, notice, or other communication under the Act, care must betaken by the authorities not to simply pick and choose any option, rather the best possibleoption must be chosen by which it is mostly likely to reach the notice. The notice or anyothercommunication cannot be termed to be served until it has reached the intended notice.
This is a welcome judgment and this highlights a major issue being faced by the taxpayer, where Principles of Natural Justice are grossly violated when the opportunity of being heard is not provided. This is expressly given in the statute [Section 75(4) and 126(3)] that the opportunity of being heard must be presented where it is specifically asked by the taxpayeror where an adverse order is contemplated against the taxpayer.
Similar orders were delivered by the Honorable Madras High Court in the case of M/s. SHIDO Pharma v. Assistant Commissioner (ST) [W.P. Nos. 10371 to 10373 of 2023 and W.M.P Nos. 10334 to 10336 of2023 dated April 03, 2023] and in the case of Tvl. Shanthi Vijay Granites v. Assistant Commissioner (ST), Hosur [W.P. No. 615 of 2021 dated October 31, 2023].
18. Whether Audit proceedings by the SGST Authority can continue if the same subject matter is pending before the CGST Authority?
No, the Honorable High Court of Calcutta in the case of Mahabir Prasad Kedia v. Assistant Commissioner of State Tax [MAT No. 2388 of 2023 dated January 9, 2024] held that the Audit Wing of the State Goods and Services Tax Authority should keep the proceedings in abeyance if the subject matter was pending before the Central Goods and Services Tax Department.
Author’s Comments
As per Section 6(2) (b) of the CGST Act, if a proper officer under the SGST Act or the UTGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. In the considered opinion of the author, there is no bar under the law that once a proceeding is initiated for a particular period by the CGST department, no proceedings can be issued by the SGST or UTGST authorities for the same period. The only bar that the statute places is regarding proceedings based on the same cause-of-action and the same subject matter (in a few circumstances, even for the same cause-of-action, parallel proceedings are permissible).
Important to highlight here that cross-empowerment is allowed for proceedings carried out under section 67 only and for the rest of the proceedings, where there is no evasion of tax involved, the Proper officer to issue Show Cause notice under section 73/74 is the jurisdictional officer (either CGST or SGST).
19. Whether Assessing Officer can conclude the assessment without considering the reply with an open mind?
No, the Honorable Madras High Court in the case of SL Lumax Ltd. v. Deputy Commissioner of State Taxes-II [W.P. Nos.5066, 5067, 5070 & 5071 OF 2024 dated March 1, 2024] disposed of the writ petitions by holding that the show cause notices issued to the Petitioner were prima facie indicative of pre-judgment and directed the assessing officer to conclude the assessments after considering the Petitioner’s materials, including HSN Explanatory Notes and relevant judgments.
The Honorable Madras High Court noted that the Petitioner has placed on record the notes under Section XVII, which deals with chapter 85 along with the HSN Explanatory notes. In multiple judgments of this Court and the Supreme Court, the HSN Explanatory notes have been referred to and relied upon as an authoritative guide to issues relating to classification. The Petitioner has also placed for consideration Instruction No. 1/2022 Customs dated January 05, 2022, which refers to several judgments of the Supreme Court. If the petitioner/assessee placed this material before the assessing officer, it is needless to say that the assessing officer is under an obligation to consider this material with an open mind in an objective manner before concluding the assessment.
Author’s Comments
This is a welcome decision by the Honorable High Court of Madras and it comes to the rescue of the taxpayer and once again the Rule of Land stands tall against the over-passionate administration. The Revenue Department has to understand that this kind of approach renders the “due process” laid down in the statute “Superfluous, unnecessary and nugatory”, which is impermissible in the law.
A Similar judgment was delivered by the Honorable Madras High Court in the case of Global Calcium (P.) Ltd. v. Assistant Commissioner (ST) [Writ Petition No. 170 of 2024 dated February 01, 2024] where it was held that the Assessing Officer must consider the relevant aspects before passing any order.
20. Whether right to personal hearing and right to object to the SCN are compromised if the SCN is not uploaded on the GST portal?
Yes, The Honorable Allahabad High Court in the case of Khanna Polyrib (P.) Ltd. v. State of Uttar Pradesh (Writ Tax No. 1311 of 2023 dated January 12, 2024) held that although, the printout of the dashboard clearly indicated that the Petitioner was not denied the right to object to the Show Cause Notice and the right to personal hearing rather it was due to the non-uploading of the Show Cause Notice on the GST portal that those rights came to be denied to the Petitioner automatically.
The Honorable Allahabad High Court observed that the right of the Petitioner to object to the Impugned Notice and right to hearing was completely compromised. Unless, the Impugned Notice had been served on the Petitioner with all its contents and annexure, if any, the Petitioner may never have availed the opportunity to effectively object to the Impugned Notice and participate in the personal hearing. The Honorable Court held that there is no useful purpose that may be served in keeping such a petition pending or calling for a counter affidavit. Hence, the Impugned Order was set aside with the liberty to proceed in accordance with law.
Author’s Comments
This is expressly given in the statute [Section 75(4) and 126(3)] that the opportunity of being heard must be presented where it is specifically asked by the taxpayer or where the adverse order is contemplated against the taxpayer. In the instant case, although all the other relevant details were uploaded, but missing to upload a valid SCN is a fatal error. The taxpayer is denied justice at the threshold itself by not issuing a SHOW CAUSE NOTICE to create any demand and recover taxes. Similar views were given by the Honorable Apex court in the case of Menaka Gandhi v. UoI & Ors AIR 1978 SC 597; State of Orissa v. Dr (Mrs.) Binapani Dey & Ors. AIR 1967 SC 1269.
21. Whether the recovery proceedings can be stayed since the Appellate Tribunal is not constituted?
Yes, the Honorable Orissa High Court in the case of M/s. BPD Steel Syndicate (P.) (Ltd.) v. Union of India [WP (C) 6518 of 2023 dated February 22, 2024] allowed the writ petition and stayed the recovery proceedings initiated by the Revenue Department as per the Appellate Order till the time of the constitution of the Appellate Tribunal on the ground that the Appellate Tribunal has not been constituted. The Honorable Orissa High Court noted as per clause 2 of the Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated December 3, 2019 and as per para 4.2 and 4.3 of Circular No. 132/02/2020 dated March 18, 2020 wherein the date from which the period for filing of appeal would start under sub-section (1) of Section 112 of the CGST Act, would be the date from which the Appellate Tribunal is constituted. The Honorable Court opined that the Petitioner cannot be denied the statutory benefit sub-section (9) of Section 112 of the CGST Act due to the non-constitution of the tribunal. The Honorable Court held that the recovery proceedings would be stayed subject to the condition of payment of the amount of pre-deposit.
Author’s Comments
This is a laudable judgment by the Honorable Court to give the desired relief to the aggrieved taxpayer. The CBIC issued Central Goods and Services Tax (Ninth Removal of Difficulties) Order, 2019 dated 03 December 2019 in exercise of powers given under section 172 of the CGST Act, 2017, and also issued circular no. 132/2/2020-GST dated 18th March 2020 to clarify that the appeal to the tribunal can be made within three months (six months in case of appeals by the Government) from the date of communication of order or date on which the President or the State President, as the case may be, of the Appellate Tribunal enters office, whichever is later (Para 4.2 of the circular). Hence, the time to file an appeal before the Appellate Tribunal is extended. The only question that remains is whether or not additional pre-deposit as required under sub-section 8 of section 112 of the Act is to be made or not for stay of operation of the order under section 107/108 because CGST (Removal of Difficulties) order 9/2019- Central Tax dated 03 Dec 2019 read with circular 132/2/2020 does not expressly stay any recovery under section 79.
22. Whether the Assessment Order is valid when turnover is disclosed incorrectly in GSTR-1 but reported correctly in GSTR-3B?
No, the Honorable Madras High Court in the case of Southern Engineering Services v. Deputy State Tax Officer-1 [WP No. 6523 of 2024 dated March 14, 2024] allowed the writ petition and set aside the Assessment Order and opined that the Assessment Order is liable to be quashed in case where Assessee incorrectly reported turnover in GSTR-1 as taxable supply but correctly reported in GSTR-3B.
The Honorable Madras High Court noted that as per the invoice placed on the record by the Petitioner, the supply was made to the SEZ unit and therefore, the said supply would fall within the purview of zero-rated supply and the error in GSTR-1 return was at the time of introduction of GST. The Honorable Court opined that the Petitioner is entitled to an opportunity for hearing as per the facts and circumstances of the case and held that the Impugned Order is quashed and the matter is remitted back for reconsideration.
Author’s Comments
There is an urgent need to understand that linear comparison of two figures is meaningless in GST. Yes, it may raise suspicion but no adverse inference can be made regarding non-payment, short-payment, or evasion of taxes.
In this particular case, Output tax is demanded citing data differences without stating (i) the nature of supply (ii) the taxability of the same (iii) the HSN code (iv) the time of supply, and (v) the place of supply. Without these taxing ingredients, any demand for output tax is arbitrary and illegal.
This principle has been laid by the Honorable Apex Court in the case of Govind Saran Ganga Saran v. CST &Ors. AIR 1985 SC 1041, where it was held that ‘four ingredients’ are required to be present in any proceedings to demand tax.
23. Whether Goods seized can be released by invoking writ jurisdiction if no application filed for release of goods before the Proper officer?
No, the Honorable Calcutta High Court in the case of Kanak Timber House v. Assistant Commissioner of Sales Tax [W.P.A. NO. 4729 of 2024 dated March 11, 2024] disposed of the writ petition opining that a person cannot seek the release of the goods by way of filing the writ petition and is required to file application under sub-section (6) of Section 67 of the Central Goods and Services Tax Act, 2017. The Honorable Calcutta High Court relying upon the judgment of the Honorable Supreme Court in the case of State of Uttar Pradesh v. Kay Pan Fragrance Pvt. Ltd. [Civil Appeal No. 8941 of 2019 dated November 22, 2019] observed that the Assessee in order to seek release of the goods seized is required to invoke the provisions of GST Act. Further, relying upon the judgment of the Honorable Delhi High Court in the case of Best Crop Science Pvt. Ltd. v. Superintendent, CGST, Delhi West and Ors. [WP (C) No. 238 of 2023 dated September 5, 2023] noted that the prohibitory order cannot be valid for infinite period of time. The Honorable Court opined that the goods seized cannot be released till the time the Petitioner has not filed the application under sub-section (6) of Section 67 of the CGST Act and held that the Court is not inclined to interfere as no application has been filed by the Petitioner with the Respondents for release of goods.
Author’s Comments
Section 67(6) read with Rule 140 provides for provisional release of seized goods under section 67(2) of the Act upon execution of a bond in form INS-04 and furnishing of a security in form of bank guarantee equivalent to the amount of applicable tax, interest and penalty payable. The Provisional release is against own assurance of the taxpayer that the seized goods will be produced when called for by the Authorized officer. There is hardly any reason for the authorized officer to turn down the application for provisional release because seizure is to ‘secure and identify’ details of all secreted articles and not a form of recovery of liability under the Act.
Whenever there is any seizure under section 67(2) or under section 129, it is advisable that taxpayers must apply for provisional release of seized goods immediately under section 67(6) or 129(1)(c) of the Act.
24. Whether the Assessment Order issued without considering the reply furnished by the taxpayer is valid?
No, the Honorable Delhi High Court in the case of Emco Cables Pvt. Ltd. v. Union of India [W.P. 1622 of 2024 dated February 27, 2024] disposed of the writ petition holding that the reply filed by the Assessee should be taken into consideration at the time of passing the Assessment Order and in case where proper reply/explanation has not been filed and when further details are required, the Revenue Department is obliged to seek the relevant documents/details.
The Honorable Delhi High Court noted that the Proper Officer was required to consider the reply on merits and thereafter form an opinion on whether the reply filed by the Petitioner was sufficient or not and even if the Proper Officer was of the view that the reply filed by the Petitioner is incomplete and further details were required, the said details could have been sought from the Petitioner. However, as per the records no such opportunity was granted to the Petitioner. The Honorable Court opined that the Proper Officer merely held that no proper reply/explanation was received which ex-facie shows that the Proper Officer has not perused the reply submitted by the Petitioner and held that the Impugned Order is set aside and the matter is remitted back to the Proper Officer for re-adjudication.
Author’s Comments
This is a welcome decision by the Honorable High Court of Delhi and it comes to the rescue of the taxpayer and once again the Rule of Land stands tall against the over-passionate administration. The Revenue Department has to understand that this kind of approach renders the “due process” laid down in the statute “Superfluous, unnecessary and nugatory”, which is impermissible in the law.
A Similar judgment was delivered by the Honorable Delhi High Court in the case of Aarem Tradex (P.) Ltd. v. Sales Tax Officer [W.P. (C) 2767 of 2024 dated February 23, 2024] wherein it was held that an Assessment Order is not sustainable when devoid of any proper reasoning.
25. Whether the Assessment Order is sustainable when reply filed by the Assessee is not taken into consideration?
No, the Honorable Delhi High Court in the case of Aarem Tradex (P.) Ltd. v. Sales Tax Officer [W.P. (C) 2767 of 2024 dated February 23, 2024] disposed of the writ petition and remitted the matter back for reconsideration in case where the assessment order was passed by the proper officer without taking into consideration reply filed by Assessee and held that the Assessment Order is not sustainable when devoid of any proper reasoning. The Honorable Delhi High Court in the case observed that the only reason recorded by the proper officer in the Impugned Order is no payment has been made within 30 days of the notice issued and no proper reply/explanation has been received” which prima facie shows that proper officer has not even looked at the reply submitted by the petitioner. The Honorable Court noted that the proper officer was required to consider the reply on merits filed by the Petitioner and form an opinion on whether the explanation filed was sufficient or not. The Honorable Court opined that the Impugned Order is not sustainable as the Impugned Order is bereft of any proper reasoning.
Author’s Comments
This is a welcome decision by the Honorable High Court of Delhi and it comes to the rescue of the taxpayer and once again the Rule of Land stands tall against the over-passionate administration. The Revenue Department has to understand that this kind of approach renders the “due process” laid down in the statute “Superfluous, unnecessary and nugatory”, which is impermissible in the law.
A Similar judgment was delivered by the Honorable Madras High Court in the case of Global Calcium (P.) Ltd. v. Assistant Commissioner (ST) [Writ Petition No. 170 of 2024 dated February 01, 2024]wherein it was held that the Assessing Officer must consider the relevant aspects before passing any order.
Conclusion: The May 2024 edition of the GST Case Law Compendium highlights the nuanced legal interpretations surrounding GST matters. From considerations of limitation periods to the scope of penalty imposition, these cases underscore the importance of procedural clarity and adherence to principles of natural justice in tax adjudication. As India continues its journey towards a more robust GST regime, these judgments serve as guiding beacons, ensuring fairness and transparency in tax administration.
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(The content and views stated in this article are solely for informational purposes. It does not constitute professional advice or recommendation in any manner whatsoever. For any feedback and queries write to me at caritesharora1628@gmail.com)
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