This post covers summary of a few recent case laws on GST. Hope these judgement help you to understand the practical issues emerging in the GST regime in a better way.
Case: Input tax credit availed fraudulently by issue of fake or fictitious sale invoices.
Decision: Arrested senior officials of the company after recording their statements. Also, Rajasthan High Court dismissed the Writ petition of the petitioner and imposed a cost of Rs. 1,00,000/- only.
Comments: It is an offence committed under Section 132 of the Act. It specifically covers cases leading to wrongful availment of Input tax credit. The Department has the power to issue summons or arrest the offender on reasonable grounds, without first determining the tax.
Case: Rectification or Revision of GST TRAN-2 form should be allowed or not.
Decision: Allowed petitioner to file a revised Form GST TRAN-2 either electronically or manually.
Comments: Law permits a person to rectify or revise the Form , who voluntarily admits to have made a mistake in the form or admits to have submitted detail that is not true. The tax authorities have the right to retain original Form GST TRAN-2 for assessment purpose and they may ask the petitioner to provide proper explanation for such revision/rectification.
Case: Bogus billing under GST.
Decision: Arrested the petitioner and denied their bail in GST fraud.
Comments: Petitioners made bogus bills and adjusted the amount without any actual transportation or sale of goods. Transactions appeared only on paper. On search, it was found that premises were closed for a period of 5 years and there was tax evasion.
So, the Department has the power to arrest under Section 69 of the Act.
Case: Powers conferred on a statutory authority should be exercised in a reasonable manner.
Decision: Directed the authority to release the vehicle and goods detained.
Comments: Authority detained the vehicle, seized the goods when driver enrouted the vehicle to some other place instead of the place of delivery. Also, asked for a huge penalty for release of vehicle.
Since the tax in respect of goods had already been paid and transportation was duly covered by proper documentation, authority is wrong in taking such harsh steps. Instead, authority should have asked the driver to reroute the vehicle to the place of delivery.
Case: Detention of goods cannot extend beyond a reasonable period of time.
Decision: It is not open to the inspecting squad officers to detain goods beyond a reasonable period of time and take action against it.
Comments: Inspecting Squad officer raised the issue of wrong classification of goods, issued a detention notice and levied tax and penalty.
Squad officer can detain the goods only for the purpose of preparing relevant papers regarding any issue involved like wrong classification of goods, and handover the papers to the jurisdictional assessing officer. But , final action can be taken only by the jurisdictional assessing officer.