Case Law Details
JEM Exporter Vs Union of India (Bombay High Court)
Introduction: In the landmark case of JEM Exporter vs Union of India, the Bombay High Court has set a precedent in interpreting the law surrounding input tax credits under the Central Goods and Services Tax Act (CGST Act). This case involves a dispute over the issuance of composite notices and procedural lapses, with substantial implications for businesses.
Analysis: The petitioner, JEM Exporter, a mobile phone exporter, lodged a claim for the refund of input tax credit under section 54(3) of the CGST Act. Subsequently, a show cause notice under section 74 was issued proposing the cancellation of registration and denial of input tax credit on allegations of fake Input Tax Credit (ITC). The Hon’ble High Court of Bombay overturned this order, pointing out significant legal and procedural mistakes.
The court held that no order on merits could be passed if the appeal was defective due to non-production of a certified copy, failure to deposit, or incorrect signatures. Furthermore, the court asserted that the petitioner should have been granted an opportunity to correct these defects and that technical objections should not obstruct substantive justice.
A pivotal point in the ruling was that a composite notice could not be issued as the procedure under sections 54, 29, and 74 (each read with their corresponding rules) was not correctly followed, hence leaving the matter open for the appellate authority to decide.
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