Possession Requires Physical Control and Intent to Exclude Others Under Legal Principles and GST Rules
Possession in law requires both physical control and the intention to exclude others, known as animus possidendi. Courts distinguish between de facto possession (actual control without legal title) and de jure possession (legal ownership). Judicial rulings clarify that possession must be conscious and intentional, not incidental, with knowledge inferred from circumstances. In criminal and civil contexts, possession includes physical control, custody with intent, and dominion through concealment. In tax law, particularly under GST, penalties depend on the taxpayer's intent; deliberate evasion attracts penalties, while bona fide disputes may not. Thus, possession is a complex concept involving both factual and mental elements, crucial for determining liability and penalties in various legal domains. - (AI Summary)

Solar Power Plant on Mall Rooftop Qualifies for Full ITC Under Sections 16 and 17 of CGST Act
A partnership firm operating a mall installed a rooftop solar power plant exclusively to supply electricity for common area maintenance services, which are fully taxable. The Kerala Authority for Advance Ruling held that the solar plant qualifies as 'plant and machinery' and 'capital goods' under the CGST Act, as it is affixed to the rooftop by structural supports without major civil construction. Since the electricity generated is used solely for taxable services and each licensee pays separately, the input tax credit (ITC) on the solar plant is fully available under Sections 16 and 17 of the CGST Act. The ruling clarified that the plant is not considered immovable property and is not subject to ITC restrictions related to exempt supplies or construction of immovable property, thereby allowing full ITC recovery on the solar power plant installation. - (AI Summary)

India enforces colour-coded food labels with vegetarian symbols and traffic-light warnings under Food Safety Act
India mandates colour-coded food labelling under the Food Safety and Standards Act, requiring vegetarian and non-vegetarian symbols on pre-packaged foods, with strict size and placement rules. Mislabeling carries penalties including fines and imprisonment. A traffic-light system warns consumers of high fat, sugar, or salt, restricting marketing of such products to children. Food colour additives must be declared with INS codes and adhere to usage limits. Processed fruit products require an FPO mark, and all food operators must hold valid FSSAI licenses. These regulations promote transparency, protect public health, and empower consumers to make informed choices. Legal provisions under the Food Safety and Standards Act and Consumer Protection Act enable complaints against misleading labelling, ensuring accountability and safeguarding against health risks such as allergies and non-communicable diseases. Consumer awareness is essential for the system's effectiveness. - (AI Summary)

GST Input Tax Credit Transfer Allowed Between Amalgamating Companies in Different States Under Section 18(3) CGST Act
The Bombay High Court ruled that the transfer of unutilized GST Input Tax Credit (ITC) between amalgamating companies registered in different States is permissible under Section 18(3) of the CGST Act and Rule 41 of the CGST Rules. The court held that neither the GST law nor rules prohibit inter-State ITC transfer upon merger or amalgamation, rejecting the argument that distinct State registrations prevent such transfer. It emphasized that GST's objective is seamless credit flow across the supply chain and that denial based on technical or jurisdictional grounds contradicts this purpose. The court directed the GST Network to facilitate ITC transfer from the transferor company in one State to the transferee company in another, affirming that legislative intent and constitutional provisions support such transfer without causing revenue loss to any State. - (AI Summary)

Mandatory Colour-Coded Food Labels Under Food Safety and Standards Act for Clear Consumer Awareness
India's food labelling regulations mandate colour-coded symbols to inform consumers about the nature and safety of packaged foods. Green indicates vegetarian products, red denotes non-vegetarian items, yellow signals the presence of eggs, blue marks medicinal or therapeutic foods requiring medical supervision, and black warns of high chemical additive content linked to health risks. These labels are enforced under the Food Safety and Standards Act, 2006, and supported by the Consumer Protection Act, 2019, ensuring transparency and consumer rights. Consumers are advised to verify labels and report misleading information through official channels. The system aims to safeguard dietary preferences, public health, and informed choice, emphasizing the importance of consumer awareness in interpreting these legally backed food safety indicators. - (AI Summary)

Leniency Urged for Delayed CGST Appeals Beyond One-Month Limit Under Section 107
The article discusses the necessity of leniency in condoning delays in filing appeals under the CGST Act, particularly beyond the prescribed one-month limit under Section 107. It highlights a Punjab and Haryana High Court ruling where an appeal delayed by four months was allowed to be heard on merits, emphasizing a pragmatic rather than pedantic approach. The court referenced Supreme Court precedents advocating liberal concession in delay cases absent gross negligence or mala fide intent. It criticized automatic rejection of appeals solely on limitation grounds without merit consideration and remitted the matter for fresh adjudication. The article advises taxpayers and professionals to file appeals promptly but suggests that when delays are unavoidable, writ petitions citing relevant case law may provide relief. It cautions that inconsistent judicial attitudes exist and stresses vigilance in appeal timelines, especially with impending GST Tribunal notification deadlines. - (AI Summary)

Supreme Court stays refund of ocean freight service tax under reverse charge pending constitutional validity ruling
The Supreme Court stayed compliance with a CESTAT order directing a refund of service tax paid on ocean freight under reverse charge to a company operating in a Special Economic Zone, pending its decision on the constitutional validity of the ocean freight levy. The appellant challenged the refund order, arguing that it should await the Supreme Court's ruling in a related appeal questioning the levy's constitutionality. The Court allowed the delay and ruled that the refund order would be subject to the outcome of the pending case. Consequently, the refund will not be executed until the Supreme Court delivers its final judgment, ensuring that if the levy is upheld, no improper refunds are made, and if struck down, refunds will proceed without further delay. - (AI Summary)

GST Rules for Joint Development Agreements and Transfer of Development Rights Explained Under Section 9(3)
Goods and Services Tax (GST) on joint development agreements (JDAs) and transfer of development rights (TDR) involves complex compliance issues in real estate. Under GST law, landowners supplying development rights are distinct suppliers and must register individually if thresholds are met. The sale of land is exempt, but TDR and related rights are taxable services. If flats are sold before the occupancy certificate (OC), GST on TDR is exempt; however, for unsold flats at OC, developers must pay GST under reverse charge at 18%. Construction services supplied by developers to landowners attract GST at rates varying by project type, with input tax credit eligibility dependent on classification. Developers must maintain detailed records, conduct proper valuation of unsold inventory, and issue self-invoices to comply with reverse charge mechanisms. Non-compliance risks include litigation, denied input credits, and penalties. Judicial rulings emphasize the importance of accurate GST planning and adherence to notifications governing rates and exemptions. - (AI Summary)

Supreme Court Upholds 10% Limit on ITC Blocking Under Rule 86A Pending Final Hearing in 2025
The Supreme Court dismissed a Special Leave Petition challenging a High Court interim order that limited the blocking of input tax credit (ITC) under Rule 86A of the CGST Rules to 10% of the demand amount, following precedent set in a prior High Court ruling. The Court held no interference was warranted as the main writ petition remained pending. This ruling aligns with the principle that only a 10% pre-deposit is required under Section 107 for appeals. Divergent interpretations of Rule 86A exist among High Courts regarding whether ITC blocking can occur when electronic credit ledger balances are nil or negative. The Supreme Court has issued notice to resolve these conflicts, with a hearing scheduled for August 2025. Until then, the 10% blocking limitation as per the Punjab & Haryana High Court decision remains authoritative for interim relief. - (AI Summary)

GST Council urged to raise threshold limits and fix procedural flaws under Section 17(5) for smoother tax credits
The article recommends that the GST Council convene its next meeting promptly after an eight-month gap to address pressing issues. It suggests raising GST threshold limits to 50 lakh for service providers and 100 lakh for traders from April 2026 to reduce unnecessary notices and ease the department's focus on significant taxpayers. The author highlights frequent high court orders quashing GST adjudications due to procedural lapses and urges the Council to direct CBIC to prevent such errors. The non-functioning GST Appellate Tribunal is criticized, with a call for phased bench openings and activation of its website to facilitate appeals. The article also advocates deleting Section 17(5) to ensure seamless input tax credit flow. Implementing these measures is projected to improve trade facilitation and administrative efficiency under GST. - (AI Summary)

No Coercive Action Under Section 122(1A) CGST Act for Pre-2021 Transactions Pending Final Decision
The Delhi High Court ruled that no coercive action shall be taken under Section 122(1A) of the CGST Act, 2017 for penalties relating to transactions before January 1, 2021, when the provision came into effect. The Court consolidated similar petitions challenging the retrospective application of this penalty provision, granting interim relief to the petitioner until counter affidavits are filed. Section 122(1A), introduced by the Finance Act, 2020, penalizes persons who benefit from tax evasion causing violations by registered taxpayers. The Bombay High Court has similarly held that this provision is prospective and cannot be applied retrospectively. However, the Delhi High Court has also indicated that retrospective application may be possible if show cause notices were issued when the provision was introduced. The current stance prevents enforcement of penalties under Section 122(1A) for pre-2021 transactions pending final adjudication. - (AI Summary)

India-UK Free Trade Deal Cuts Tariffs on 64% UK Goods, Slashes Whisky and Auto Import Duties
The India-UK Free Trade Agreement significantly reduces customs duties on UK imports into India, with 64% of UK products becoming duty-free immediately. Tariffs on UK whisky will decrease from 150% to 75% initially and further to 40% over ten years. UK automobiles, including internal combustion engine, electric, and hybrid vehicles, will see tariff reductions from over 100% to 10% under quota. Cosmetic and toiletry products will also benefit from tariff cuts or eliminations. Overall, 90% of tariff lines affecting 92% of UK imports to India will be reduced or removed. The agreement promises customs clearance within 48 hours, along with options for duty deferral and paperless trade, aiming to facilitate smoother import processes. - (AI Summary)

Tax Assessment Orders During Insolvency Moratorium Under IBC Section 14 Are Invalid and Stay Proceedings
An assessment order under the Income Tax Act issued during the moratorium period declared under Section 14 of the Insolvency and Bankruptcy Code, 2016, is invalid. The moratorium prohibits initiation or continuation of any suits or proceedings, including tax assessments, against the corporate debtor. The Delhi High Court and Supreme Court have affirmed that the moratorium overrides inconsistent provisions in other laws, including tax laws, and prevents tax authorities from proceeding with assessments or recovery during insolvency resolution. In a recent case, the Bombay High Court held that tax assessment proceedings initiated during the moratorium were impermissible and quashed such orders, distinguishing prior Supreme Court rulings related to customs law. The tax department may resume proceedings only after the moratorium ends, and no coercive action can be taken during the moratorium period. - (AI Summary)

Penalty under Section 122(1A) CGST Act upheld for fake firms enabling fraudulent input tax credit claims
A writ petition challenging a penalty under Section 122(1A) of the CGST Act for enabling fraudulent input tax credit through fake firms was dismissed by the Delhi High Court. The petitioner, a GST consultant, failed to rebut allegations of involvement in creating multiple fake firms used for fraudulent ITC claims. The Court held that the penalty was valid despite the show cause notice referencing only Section 122(3), as the broader allegations attracted Section 122(1A). The petitioner's failure to respond negated claims of denial of opportunity. The Court emphasized that writ jurisdiction is inappropriate in fact-intensive tax fraud cases where statutory appeal remedies under Section 107 are available, even beyond limitation periods. This decision aligns with precedents affirming the prospective application of Section 122(1A) and the preference for appellate adjudication over writ petitions in complex GST fraud matters. - (AI Summary)

Wilful Possession Requires Knowledge and Control Under NDPS Act Section 54; Mere Receipt Isn't Enough for Conviction
The Delhi High Court in a narcotics case distinguished between wilful or conscious possession and mere possession under the NDPS Act, emphasizing that conscious possession requires knowledge and control over the illicit substance. The accused was found with a parcel containing LSD but lacked any direct link to the sender or consignee, and no incriminating evidence connected him to drug trafficking. The court held that mere receipt of a package without awareness of its contents does not satisfy the legal threshold for possession under the Act. The presumption of culpability under Section 54 was rebutted due to absence of foundational facts establishing knowledge or control. Prolonged detention without trial was found to violate fundamental rights under Article 21. The ruling underscores that criminal intent is essential for conviction, and mere custody without mens rea should not justify denial of bail or harsher penalties. - (AI Summary)

Notifications extending limitation under Section 168A without GST Council approval are invalid and unsustainable
The Madras High Court ruled that notifications issued under Section 168A of the CGST Act to extend limitation periods without a valid prior recommendation from the GST Council are ultra vires and unsustainable. The Court emphasized strict compliance with force majeure conditions, rejecting reliance on outdated COVID-19 impacts and administrative inefficiencies as force majeure events. It held that the issuance of notifications based on recommendations from bodies other than the GST Council, or ratified post-issuance, violates statutory mandates. The Court declared such notifications arbitrary and remanded related proceedings for fresh consideration, treating prior orders as show cause notices. This decision underscores that extensions under Section 168A must be grounded in proximate force majeure events and preceded by valid GST Council recommendations, preserving legislative intent and federal principles in GST administration. - (AI Summary)

Customs Law Presumes Transaction Value Valid Under Section 14, But Allows Rejection with Strong Evidence
Under Indian Customs Law, the transaction value of imported goods between unrelated parties is presumed valid if the price is the sole consideration and no doubts exist about its accuracy. However, customs authorities may reject the declared value if it is inconsistent with market realities or objective evidence. Undervaluation can lead to reassessment of value, recovery of duties with interest, penalties, and confiscation if fraud or misdeclaration is found. Overvaluation, while not causing revenue loss, is scrutinized for false representation or misuse related to allied laws like FEMA and anti-money laundering statutes, potentially triggering enforcement actions. Courts uphold the presumption of transaction value but require substantial evidence to reject it. Both undervaluation and overvaluation in unrelated party imports are subject to rigorous verification, with legal consequences including reassessment, penalties, and confiscation to ensure compliance with customs valuation rules. - (AI Summary)

Understanding Certificate of Origin Rules under Customs Tariff and CAROTAR, 2020 for Free Trade Agreements
Free Trade Agreements (FTAs) reduce tariffs and barriers between countries, with the Certificate of Origin (COO) serving as the key legal document certifying goods' origin under prescribed Rules of Origin (ROO). There are preferential COOs, enabling concessional duty rates under specific FTAs, and non-preferential COOs, used for general trade without tariff benefits. Compliance with ROO criteria is mandatory for preferential treatment, and failure may lead to denial of benefits. In India, COO issuance follows Customs Tariff Rules and CAROTAR, 2020, which impose due diligence on importers to prevent misuse. Exporters must apply through authorized agencies and substantiate origin claims with documentation. Misuse, such as false declarations or forged COOs, can lead to penalties, duty recovery, and prosecution under the Customs Act. Accurate and valid COOs are essential for lawful trade, and parties must maintain rigorous compliance to avoid legal and financial risks. - (AI Summary)

Eight-Year Delay in GST Appellate Tribunal Operation Raises Litigation Costs and Burdens Taxpayers
The Goods and Services Tax Appellate Tribunal (GSTAT), envisioned as a specialized appellate body to resolve GST disputes, has faced an eight-year delay in becoming operational, forcing taxpayers to directly approach High Courts, resulting in increased litigation costs and judicial burden. Established under Article 323B of the Constitution and Sections 109-112 of the CGST Act, GSTAT aims to provide a three-tier dispute resolution mechanism, including adjudication, first appeal, and second appeal before GSTAT. Delays arose from legal challenges over tribunal composition, exclusion of advocates, and administrative hurdles. Recent procedural rules introduced digital filings, time-bound hearings, and capped pre-deposits to enhance efficiency. Despite the appointment of officials and notified rules, ongoing court cases have stalled full functionality, perpetuating uncertainty and hardship for taxpayers. The tribunal's effective constitution and operation remain critical to ensuring consistent, accessible, and timely GST dispute resolution in India. - (AI Summary)

Misuse of Section 129 CGST Act: Penalties for Minor E-Way Bill Errors Without Tax Evasion Intent Quashed
Section 129 of the CGST Act, 2017, intended to address serious tax evasion during goods transportation, is often misapplied for minor procedural errors, leading to undue penalties. Despite a CBIC circular dated 14/09/2018 prescribing leniency and a maximum penalty of Rs 1,000 for minor errors, tax authorities continue imposing heavy penalties. The Allahabad High Court, in a recent ruling, quashed a penalty imposed for a typographical error in an e-way bill, emphasizing that mens rea for tax evasion is essential for penalty imposition. The Court ordered refund of amounts paid with nominal interest and highlighted the illegality of penalizing minor mistakes without intent to evade tax. The article calls for greater adherence to the CBIC circular by tax officials and suggests the issuance of further guidance to prevent wrongful detention of goods and unnecessary litigation. Taxpayers are advised to ensure accurate documentation during transportation. - (AI Summary)