GST Rules: Cancel or Regenerate E-Way Bill Within 24 Hours If Expired Before Transit, Else Extend or Halt Movement
Under GST, transporting goods without a valid e-way bill is a serious offense subject to penalties and detention. If the e-way bill expires before the goods start moving, it cannot be extended; the correct approach is to cancel and regenerate the bill within 24 hours or issue a new invoice or delivery challan to generate a fresh e-way bill. If the goods are already in transit and the e-way bill expires, the transporter may extend its validity through the portal by recording the delay reason. If extension is not possible, movement must stop, and a delivery challan with a new e-way bill must be prepared before continuing. Maintaining documentary proof of the goods' status during expiry is essential to avoid penalties. Compliance with these rules is critical to prevent fines, detention, and operational delays. - (AI Summary)

Show Cause Notice Must Be Effectively Served Under Section 169 GST Act; Portal Upload Alone Is Insufficient
A tax authority must issue a show cause notice to an assessee before recovering GST, specifying the tax, interest, and penalty due, and allowing the assessee an opportunity to respond. Section 169 of the GST Act outlines acceptable modes of service, including direct delivery, registered post, email, portal upload, publication, or affixing notices when other methods are impracticable. The Madras High Court held that uploading a show cause notice solely on the GST portal does not constitute effective service if no physical or alternative notice is provided, as this violates natural justice principles. The court emphasized that repeated non-responses to portal notices require the authority to attempt other service methods, such as speed post, to ensure proper communication. Consequently, the court set aside an assessment order passed without effective notice and remanded the case for fresh consideration, directing the authority to provide a proper hearing opportunity before proceeding. - (AI Summary)

Constitutional Mandate for Reasoned Orders in GST Adjudication Under CGST Act Sections
The article emphasizes the constitutional mandate for speaking orders in Goods and Services Tax (GST) adjudication, grounded in the principle of natural justice requiring reasoned decisions. It highlights the Supreme Court's ruling in a landmark case mandating that judicial, quasi-judicial, and administrative authorities must provide clear reasons for their decisions to ensure fairness, transparency, and accountability. Under the GST regime, provisions in the CGST Act require reasoned orders in assessments, cancellations, and enforcement actions. Failure to provide reasons undermines the right to a fair hearing and invites constitutional challenges under Articles 14 and 21 for arbitrariness and denial of due process. Reasoned orders facilitate effective appeals, prevent misuse of discretion, and uphold trust in the tax system. The article concludes that reasoned orders are a constitutional and procedural necessity in GST adjudication, serving as the essential link between authority and justice. - (AI Summary)

Understanding Tax Implications and Methods in Mergers and Acquisitions under Sections 47 and 72A
Mergers and acquisitions in India involve various methods including share purchase, slump sale, NCLT-approved mergers, and asset purchase, each with distinct tax and regulatory implications. Share purchases attract capital gains tax with regulatory compliance under SEBI and FEMA, while slump sales, though simpler, often result in higher tax liabilities. NCLT-approved mergers provide significant tax benefits, including exemptions under Sections 47(vi), 47(vii), and carry forward of losses under Section 72A, making them the most tax-efficient option. Asset purchases involve capital gains tax on individual assets and applicable GST. Case studies such as Vodafone-Idea (NCLT merger), Jio-Saavn (hybrid asset and share acquisition), Tata-Air India (share purchase), and Zomato-Blinkit (share swap) illustrate practical applications and tax strategies. Successful M&A requires comprehensive valuation, due diligence, and financing strategies to ensure compliance, tax efficiency, and strategic alignment. - (AI Summary)

Cross-Examination Not Required When GST Adjudication Based Solely on Documentary Evidence Under Sec 61
A taxpayer challenged the denial of cross-examination of departmental officers who issued summons and arrest memos during a GST investigation based solely on documentary evidence. The Gujarat High Court held that cross-examination was not required since the adjudication relied entirely on documents, and the officers were not witnesses in the proceedings. The Court noted that the taxpayer had an alternative remedy through statutory appeals and that denying cross-examination in such circumstances did not violate principles of natural justice. The decision aligns with precedents establishing that cross-examination is not an absolute right when the case is based purely on undisputed documentary evidence and no prejudice is shown. Thus, the writ petition seeking to quash the order denying cross-examination was dismissed. - (AI Summary)

Recipients must reverse ITC if supplier misses GSTR-3B filing by Sept 30 under Rule 37A CGST Rules
Rule 37A of the CGST Rules mandates that a recipient who has claimed Input Tax Credit (ITC) must reverse the ITC if the supplier fails to file their GSTR-3B return for the relevant tax period by September 30 following the financial year-end. The reversal must be made by November 30, failing which the recipient becomes liable to pay the ITC amount with interest under Section 50 of the CGST Act. If the supplier subsequently files the pending GSTR-3B, the recipient is entitled to re-avail the reversed ITC in any future return. This rule imposes a compliance obligation on recipients to monitor supplier filings to ensure ITC is only retained when the supplier has discharged their tax liability, thereby preventing wrongful credit claims and promoting accurate tax compliance. - (AI Summary)

Reintroduction of Form GSTR-1A Allows Amendments to Sales Data Before Filing GSTR-3B Under GST Rule Changes
The reintroduction of Form GSTR-1A aims to enhance GST compliance by allowing registered taxpayers to amend sales data reported in Form GSTR-1 before filing GSTR-3B, thereby reducing discrepancies and ensuring accurate tax liabilities. GSTR-1 remains a mandatory monthly or quarterly return detailing outward supplies, with recent amendments lowering the invoice value threshold for reporting interstate supplies to unregistered persons from Rs. 2.5 lakh to Rs. 1 lakh, increasing compliance in B2C transactions. GSTR-1A, suspended since 2017, was reinstated following the 53rd GST Council meeting and CBIC notification in 2024 to facilitate corrections and improve transparency. The changes reflect ongoing GST reforms aimed at streamlining return filing, reconciling outward and inward supplies, and improving tax reporting accuracy through enhanced mechanisms and updated thresholds. - (AI Summary)

Court Upholds Passenger Rights to Keep Personal Jewellery Without Unlawful Confiscation or Storage Fees
A recent court ruling reaffirmed that bona fide personal jewellery worn by passengers cannot be confiscated solely based on purity, weight, or value, emphasizing procedural fairness including the right to a personal hearing. The court found the customs authority erred in treating high-purity gold bangles as prohibited goods and ordering absolute confiscation without offering redemption options. However, the court's directive to release the jewellery subject to warehousing charges conflicts with legislative amendments that removed Customs' authority to levy such charges during detention. Current law and regulatory instructions prohibit Customs and custodians from charging storage fees for periods attributable to Customs' actions. The ruling strengthens passenger protections under the Baggage Rules but highlights the need for judicial and administrative compliance with updated Customs laws, particularly regarding the illegitimacy of warehousing charges following detention. - (AI Summary)

Services to Foreign Contractual Recipients Paid in Convertible Currency Are Export and Service Tax Exempt Under Export of Service Rules 2005
The Supreme Court held that services provided to contractual recipients located outside India, with payment received in convertible foreign exchange, qualify as exports under the Export of Service Rules, 2005, and are exempt from service tax. The Court affirmed that preparatory or incidental use of services within India or the presence of ultimate beneficiaries in India does not negate export status, as the levy is contract-based. The findings of fact by the appellate tribunal that services were delivered and used outside India were upheld. The Court also confirmed the entitlement to CENVAT credit on inputs used for such exported services. This ruling clarifies that for services under Category II and III of the Rules, the location of the contractual recipient and payment terms determine export classification, not the location of ultimate beneficiaries or place of service use within India. - (AI Summary)

GSTAT (Procedure) Rules 2025 set mandatory forms for appeals, records, affidavits, summons, and tribunal documentation
The GSTAT (Procedure) Rules, 2025 prescribe specific forms for use by appellants, respondents, the Tribunal, and its staff in Goods and Services Tax appellate proceedings. These forms cover various procedural aspects including filing appeals, inspection of records, memorandum of appearance, affidavits, summons, depositions, certificates of discharge, and registers for cause lists, court diaries, and appeals at different judicial levels. Designated officers and registrars are responsible for maintaining registers and records, ensuring standardized documentation and procedural compliance within the Tribunal's operations. - (AI Summary)

GST demand order set aside for lack of proper statutory notices under CGST Act, case sent for fresh review
A construction company challenged a GST demand order, arguing that required statutory notices under the CGST Act were not issued before initiating assessment and recovery proceedings. The High Court found that both parties agreed the matter required fresh consideration of factual and legal issues. The court set aside the impugned assessment and recovery orders and directed the tax authority to re-examine the case, providing the petitioner an opportunity to respond and submit evidence. The authority was ordered to conclude the proceedings by a specified deadline, ensuring adherence to natural justice principles and proper procedural compliance under the GST law. - (AI Summary)

Approval of insolvency plan doesn't discharge personal guarantors' liabilities under IBC rules
Approval of a corporate insolvency resolution plan does not discharge the liabilities of personal guarantors for the corporate debtor's debts. Financial creditors may initiate insolvency proceedings against both the corporate debtor and its personal guarantors under the Insolvency and Bankruptcy Code. The National Company Law Appellate Tribunal and the Supreme Court have held that even after a resolution plan is approved and the corporate debtor's debt is assigned to a resolution applicant, personal guarantees remain enforceable and are not extinguished. Personal guarantors remain jointly and severally liable with the corporate debtor, and creditors may recover dues from either party. The resolution plan may explicitly exclude guarantees from assignment, preserving creditors' rights against guarantors. Foreign judgments on similar matters do not override settled Indian law affirming that approval of a resolution plan does not absolve personal guarantors of their contractual obligations. - (AI Summary)

Refund Allowed for Unutilised Compensation Cess Credit on Inputs Used in Exported Goods Under CGST Rules
A public limited company engaged in manufacturing chemical products challenged the rejection of its refund claim for unutilised compensation cess paid on coal used as input in exported goods, where IGST was paid on exports. The Gujarat High Court held that refund of such unutilised cess credit is permissible since the final goods are exempt from compensation cess and the cess was only levied on inputs. The Court found the rejection based on circulars was a misinterpretation and relied on precedent affirming that the proviso restricting utilisation of cess credit applies only when cess is payable on the outward supply. Consequently, the refund claim must be sanctioned under the CGST Act, IGST Act, and Cess Act provisions, clarifying that unutilised input tax credit of compensation cess is refundable even when exports are made with IGST payment and the final product is cess-exempt. - (AI Summary)

Rule 37A requires ITC reversal if supplier misses GSTR-3B filing by Sept 30; interest applies under Section 50 if not reversed by Nov 30.
Rule 37A mandates that a recipient who has claimed input tax credit (ITC) must reverse it if the supplier fails to file their GSTR-3B return for the relevant tax period by September 30 following the financial year-end. The reversal must be made by November 30; failure to do so results in the ITC amount becoming payable with interest under Section 50 of the CGST Act. If the supplier subsequently files the pending return, the recipient may re-avail the ITC in future returns. This rule complements Section 16(4), which restricts ITC claims for invoices from previous financial years beyond November 30. Interest is payable only if the ITC was utilized before reversal, and it is generally not refundable even if ITC is later re-availed. The regulation ensures ITC is claimed only when the supplier has discharged the corresponding tax liability, promoting compliance and preventing wrongful credit claims. - (AI Summary)

Criminal Prosecution Under Central Excise Act Can Proceed Despite Quashed Adjudication Order
Criminal prosecution under the Central Excise Act, 1944 may proceed even if the related departmental adjudication is set aside on procedural grounds, provided the prosecution is supported by independent investigative material. The Supreme Court held that quashing an adjudication order for procedural irregularities does not bar criminal proceedings unless the accused is exonerated on merits. The Court emphasized that parallel criminal and adjudicatory processes can coexist, and the dismissal of the appellants' discharge application was justified as the complaint was not solely reliant on the quashed order but also on investigation findings. The decision reaffirms that criminal liability under economic statutes depends on substantive evidence rather than procedural outcomes in departmental proceedings. - (AI Summary)

Limitation for Show Cause Notice under CGST Section 73(2) is three calendar months, not 90 days
The Delhi High Court held that the limitation period for issuing a Show Cause Notice under Section 73(2) of the CGST Act is to be interpreted as three calendar months, not 90 days. An SCN dated November 30, 2024, was deemed timely as it provided the required three calendar months before the final order deadline of February 28, 2025. The Court rejected the petitioner's claim of delayed issuance and inadequate hearing opportunity, noting that sufficient chances for personal hearing were provided and that the petitioner failed to attend the rescheduled hearing without seeking further adjournment. The Court clarified that Section 75(5) allows up to three adjournments upon sufficient cause but does not mandate a minimum number. The decision affirms procedural timelines and upholds the SCN and demand order, emphasizing that appellate remedies under Section 107 render the writ petition premature. - (AI Summary)

Summary Notice in Form GST DRC-01 Cannot Replace Formal Show Cause Notice Under Section 73 of GST Act
The High Court held that the summary of show cause notice issued in Form GST DRC-01 does not replace the requirement of a formal, duly authenticated show cause notice under Section 73 of the GST Act. Attaching a tax determination order to the summary is insufficient to initiate proceedings lawfully. The Court emphasized that a proper show cause notice must clearly state the reasons for tax recovery and comply with procedural mandates, including authentication and the provision of a reasonable opportunity of hearing as required under Section 75(4). The absence of a specified hearing date and failure to grant an opportunity to be heard before passing an adverse order violates natural justice principles. Consequently, orders passed without issuing a valid show cause notice and without affording a hearing opportunity were set aside for non-compliance with statutory and procedural requirements. - (AI Summary)

Refund claim rejection quashed under Section 16(4); ITC timeline extended by retrospective Section 16(5) amendment
The Calcutta High Court quashed the rejection of a refund claim based on Section 16(4) of the CGST/WBGST Act, emphasizing the retrospective insertion of Section 16(5) which extended the timeline for availing input tax credit (ITC) for the initial GST years 2017-18 to 2020-21 up to November 30, 2021. The court held that the refund authorities erred in denying the claim by ignoring this extension, set aside the prior orders rejecting the refund, and directed re-adjudication in accordance with Section 16(5). This ruling confirms that ITC claims for the specified years must be considered under the amended law, overriding earlier limitations, and aligns with similar judgments affirming retrospective relief for ITC availment within the extended timeline. - (AI Summary)

Personal Gold Jewelry Worn by Foreign Tourists Exempt from Duty Under Baggage Rules Rule 3
A foreign national arriving in India wearing personal gold jewelry had the items seized by customs. The petitioner challenged the seizure, arguing that under Rule 3 of the Baggage Rules, personal jewelry carried by a foreign tourist is exempt from duty and not prohibited under the Customs Act. The court referenced a prior ruling where similar gold ornaments worn by a foreign tourist were deemed exempt. It held that Rule 5, which applies to returning residents, does not apply to foreign nationals. Since the seized items were personal jewelry and fell outside the prohibited category, the court quashed the seizure and ordered the customs department to return the ornaments within one week, with the condition that the petitioner not sell them and carry them back to the country of origin. - (AI Summary)

Denial of Cross-Examination Violates Natural Justice in Tax Cases Under Indian Evidence Act Section 161
A tax adjudication order imposing liability and penalty was challenged on the ground that the petitioner was denied the opportunity to cross-examine witnesses whose statements were relied upon. The court held that denial of cross-examination violates principles of natural justice, especially when the adjudicating authority depends on witness statements. The court rejected the respondent's justification based on procedural delays and the voluntariness of statements under the relevant tax statute, emphasizing that cross-examination is a fundamental right under the Indian Evidence Act and essential for fair adjudication. The impugned order was set aside, and the matter was remanded for fresh proceedings beginning at the cross-examination stage. The ruling reaffirmed that statements recorded during investigation do not dispense with the right to cross-examination during adjudication, underscoring that procedural grounds alone cannot justify denial of this right. - (AI Summary)