Courts have clarified that Section 79 of the GST law is a recovery mechanism that can be invoked only after tax liability is adjudicated or self-assessed and remains unpaid.
GST authorities often cancel registrations retrospectively after detecting fake entities, leading to ITC denial for genuine buyers. Courts have ruled that ITC cannot be denied solely on retrospective cancellation without proving bogus transactions.
The law treats orders as communicated when served through any valid mode under Section 169, including e-mail, portal upload, or service on an advocate. Once proper service is proved, courts strictly enforce the 120-day limitation for filing GST appeals.
GST law allows appeals within three months with a maximum condonation of one additional month. Courts have largely held that delays beyond 120 days cannot be condoned except in rare circumstances.
The article examines how Section 64 of the CGST Act is increasingly used against genuine recipients in ITC disputes. It argues that summary assessment powers meant for emergencies are being misapplied to fast-track tax demands.
Courts have repeatedly held that bona fide buyers cannot lose ITC merely because suppliers default or registrations are cancelled retrospectively.
Courts have clarified that once one GST authority initiates proceedings by issuing a show cause notice, the other authority cannot start separate proceedings on the same issue and tax period.
The guide explains that construction involving goods and labour is treated as works contract service under GST. Taxability depends on the nature of work, recipient, and applicable rate or exemption.
High Courts held that undervaluation disputes must be examined through assessment proceedings under Sections 73 or 74. Detention during transit is not justified if proper documents accompany the goods.
Courts have increasingly held that Input Tax Credit cannot be denied to bona fide taxpayers merely because suppliers failed to pay GST. Authorities must prove fraud or collusion before disallowing ITC.
