Monthly GST Updates for the Month of May 2022

# Recent GST Updates

1. In GSTR-1, Submit button has been replaced with ‘Proceed with file’ Now, there is no need to first generate the summary and submit the return before filing of the same.

2 .GSTN enabled the functionality of Annual Aggregate Turnover (AATO) computation for the F.Y. 2021-22 on the taxpayers’ dashboard. However, the taxpayer has been provided with the facility of updating of their turnover.

# Recent Case Laws

A. Godavari Commodities Ltd. v. The State of Jharkhand& Ors. [2022 TAXSCAN (HC) 326][W.P. (T) No. 3908 of 2020 with W.P. (T) No. 3909

Facts of the case:

The Petitioner is a Public Limited Company and is primarily engaged in the business of trading of coal.

The respondents carried out an inspection under section 67 of the Jharkhand Goods and Services Tax Act 2017 in the registered premises of the petitioner. Vide inspection report dated 28.01.2019, the petitioner was directed to produce documents pertaining to movement of goods relating to purchase and sale transactions of the petitioner in exercise of the powers under section 71(2) of the CGST Act. In the said inspection report itself, it was mentioned that if the petitioner fails to produce the relevant documents as directed, proceedings for adjudication under section 73/74, as the case may be, would be initiated against the petitioner. It was further proved that no SCN was issued and only the summary of the SCN which lacked a timeline for the petitioner to reply was issued. Further, an adjudication order was filed. The learned counsel for the petitioner claimed that the adjudication order was issued with malice in law to somehow justify the issued summary.

Observations by the Court:

The Hon’ble court noted that the issue of whether the very initiation of the adjudication proceeding without the issuance of show cause notice is void ab initio was already settled by a decision of the coordinate Bench of this court in the case of M/s. NKAS Services Private Limited Vs. State of Jharkhand and Ors. It was held in the same that “In absence of clear charges which the person so alleged is required to answer, the notice is bound to be denied proper opportunity to defend itself. This would entail a violation of principles of natural justice which is a well-recognised exception for invocation of writ jurisdiction despite the availability of alternate remedy. Section 75(4) and (5) of the CGST Act states that an opportunity for a hearing shall be granted upon request. It is evident that no such opportunity for a personal hearing was granted to the petitioner. The court also observed that “the Adjudicating order is non-est in the eye of the law, as the same has been passed without the issuance of proper show cause notice and thus amounts to violation of principles of natural justice.”

Ruling:

For the abovementioned reasons, the court concluded that the issued order was quashed however, the respondents would have the liberty to initiate a fresh proceeding in accordance with the law, if so advised.

B. Greenlights Power Solutions vs. State tax Officer [2022 TAXSCAN (HC) 324- Kerala HC]

Fact of the Case:

The petitioner M/s. Greenlights Power Solutions has a valid GST registration and carries on business in electrical contract work. In connection with the work of a hospital in Assam, some goods were transported by a vehicle after paying the required tax amount. During the course of transportation from Ernakulam, the goods were intercepted by the department, who detained the goods under section 129 of the CGST Act 2017 on noticing an irregularity in the e-way bill.

According to the petitioner, the error occurred due to the default computer formatting system, instead of day-month-year (dd-mm-yyyy) formatting for the Indian system, the computer-generated bill provided a month-day-year (mm-dd-yyyy) format. As a result, instead of 02.03.2021, the invoice bill mentioned the date as 03.02.2021. Due to the said irregularity in the invoice, the goods were detained and tax along with the penalty was demanded.

Observation of the Court:

The Court observed that the discrepancy pointed out is only on the date of invoice which is shown as 03.02.2021 while in the e-way bill, it is shown as 02.03.2021. Apart from this, “all other details in the invoice and the e-way bill including the nature of goods transported, the details of consignor and consignee, the GSTIN of the supplier and the recipient, place of delivery, invoice number, value of goods, HSN code, vehicle number etc. tallied and had no discrepancy. Thus the error noticed is insignificant and not of any consequence for invoking the power conferred under section 129 of the said Act to impose tax and penalty.

Ruling:

The Court ruled that the situation arising in the instant case, warranted imposition of only a minor penalty as contemplated under the Circular [Circular No. 64/38/2018 dated 14.09.2018].

Hence, in view of the above, the imposition of the tax and penalty upon the petitioner is perverse and illegal, warranting interference under Article 226 of the Constitution of India.

GST Monthly Compliance Calender- MAY 2022