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AI TextQuick Glance (AI)Headnote
GST Registration Cancellation Overturned: Petitioner Granted Opportunity to Represent Case Before Appellate Authority
In the case before the Jammu & Kashmir and Ladakh High Court, the petitioners filed an application (CM 8054/2023) requesting the dispensation of filing certified typed copies of certain annexures, which was granted by the court.
The main writ petition (WP(C) 3355/2023) involved the petitioner's request for the reconsideration of the cancellation of their GST registration. The petitioner argued that, due to the absence of an Appellate Tribunal, the Appellate Authority should rehear the case, as the cancellation occurred without assigning any reason.
The court, exercising its jurisdiction under Article 226 of the Constitution of India, agreed with the petitioner's submission. It held that "in the absence of Appellate Tribunal," it is appropriate for the Appellate Authority to rehear the petitioner to ascertain the facts surrounding the GST registration cancellation. The court provided the petitioner with the liberty to submit a representation for reconsideration within one week. The Appellate Authority is directed to reconsider the cancellation and issue appropriate orders after hearing the petitioner, preferably within three weeks thereafter. The writ petition was disposed of in these terms.
GST Registration Cancellation Overturned: Petitioner Granted Opportunity to Represent Case Before Appellate Authority
HC allowed petitioner's challenge to GST registration cancellation. In absence of Appellate Tribunal, the Appellate Authority must rehear the case. Court directed petitioner to submit representation within one week and Appellate Authority to reconsider and issue orders within three weeks, ensuring procedural fairness.
Cancellation of the Registration of GST of the petitioner - it has been submitted by the learned counsel for the petitioner that the petitioner would be satisfied if a direction is issued to the respondent-authority to reconsider the cancellation of the Registration of GST of the petitioner, after rehearing him, in view of the absence of Appellate Tribunal.
HELD THAT:- In the absence of Appellate Tribunal, to challenge any order passed by the Appellate Authority, it would be more appropriate that the Appellate Authority rehears the petitioner regarding the cancellation of Registration, as it involves certain ascertainment of facts. This Court, in exercise of Article 226 of the Constitution of India rather than examining this issue deems it proper to close this writ petition with liberty to the petitioner to file an application for reconsideration of the cancellation of Registration of GST of the petitioner, which according to the petitioner, was cancelled without assigning any reason.
Petition disposed off.
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Competition Commission orders reinvestigation of construction projects for alleged GST profiteering under Section 171
Competition Commission orders reinvestigation of construction projects for alleged GST profiteering under Section 171
The Competition Commission of India directed reinvestigation of two construction projects after finding the DGAP report incomplete regarding alleged profiteering under Section 171 of the Central Goods and Services Tax Act, 2017. The case involved allegations that the developer failed to pass on Input Tax Credit benefits to buyers through commensurate price reductions. The Commission held that additional ITC benefits in the GST regime must be passed to recipients via price reductions and ordered the respondent to provide complete documentation to facilitate proper investigation of the profiteering allegations.
Profiteering - construction projects - benefit of Input Tax Credit (ITC) not passed on to the buyers - contravention of Section 171 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- It is observed that the DGAP report dated 15.02.2023 in respect of both the projects is incomplete. Accordingly, the DGAP is directed to re investigate both the above projects viz 'Omkar 1973 Worli' and 'The Summit Business Bay' under Rule 133(4) of the above Rules and submit complete report accordingly. The Respondent No. 1 is also directed to supply the required information to the DGAP promptly.
Conclusion - i) The additional benefit of ITC in the GST regime is required to be passed on by the suppliers to the recipients by way of commensurate reduction in price, in terms of Section 171 of GST Act, 2017. ii) Reinvestigation directed by the DGAP to address identified discrepancies and ordered the Respondent No. 1 to provide complete documentation.
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Construction company must face fresh investigation for allegedly not passing GST Input Tax Credit benefits to flat buyer under Section 171
Construction company must face fresh investigation for allegedly not passing GST Input Tax Credit benefits to flat buyer under Section 171
The CCI examined a profiteering case under Section 171 of CGST Act, 2017 involving a construction service provider allegedly failing to pass on Input Tax Credit benefits to a flat purchaser through commensurate price reduction. The Commission found the matter required re-investigation and directed DGAP to submit a fresh investigation report under Rule 133(4) of CGST Rules, 2017. The re-investigation must examine whether the complainant received ITC benefits through settlement, GST rates on affordable housing flats, impact of cancelled units on profiteering calculations, and verification of ITC benefit pass-through to homebuyers.
Profiteering - Construction Service supplied by the Respondent - it is alleged that the Respondent had not passed on the benefit of ITC to her by way of commensurate reduction in the price of the flat purchased from the Respondent - contravention of Section 171 of the CGST Act, 2017 - HELD THAT:- The Commission finds that the matter needs to be sent back to DGAP under Rule 133(4) of the CGST Rules, 2017 for re-investigation on the following issues:
i. Whether Smt. Sudha has received the benefit of ITC due to the settlement made by her with the Respondent as a consequence of which she has withdrawn her complaint?
ii. Whether some of the flats constructed by the Respondent fell under the 'Affordable Housing Scheme' and whether GST was to be charged on those flats @ 8%?
iii. To consider the claim of the Respondent regarding cancellation of flats/units in the project and calculate the profiteering accordingly.
iv. Verification of the 'passing on of ITC benefit' to homebuyers/customers be carried out afresh.
Conclusion - The DGAP is directed to submit a fresh investigation report under Rule 133(4) of the CGST Rules, 2017 on all the issues mentioned.
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Statutory Appeal Delay Pardoned: Genuine Misinterpretation of Time Limit Accepted, Merit-Based Review Ordered Under Finance Act, 1994
Statutory Appeal Delay Pardoned: Genuine Misinterpretation of Time Limit Accepted, Merit-Based Review Ordered Under Finance Act, 1994
The SC examined a statutory appeal delay under the Finance Act, 1994. Despite filing 21 days beyond the prescribed period, the court found the petitioner's misunderstanding of the time limit reasonable. The SC directed the Appellate Authority to accept the appeal and adjudicate it on merits, considering the genuine interpretation error in the original order.
Condonation of delay of 21 days in filing the appeal before the first respondent/Appellate Authority - time limit for filing an appeal - HELD THAT:- This Court finds that since the order dated 30.03.2023 passed by the second respondent has provides 3 months time for preferring appeal, the petitioner was under the wrong impression that they can file the appeal within 3 months plus 30 days in addition, (in the event of any delay) from the date of receipt of the order 30.03.2023. But, however, the Act only provides for 2 months, which is exclusive of one month grace time for the delay, if any. Therefore, reasons assigned by the petitioner for preferring the Appeal with delay is appears to be genuine and reasonable, inasmuch as, the petitioner got confused over the time limit prescribed under the Statute, (which is only two months) and the time limit prescribed by the second respondent/Authority which is three month's, inclusive of one month delay period. Therefore, this Court is inclined to set aside the impugned order dated 27.09.2023.
Conclusion - This Court finds that since the order dated 30.03.2023 passed by the second respondent has provides 3 months time for preferring appeal, the petitioner was under the wrong impression that they can file the appeal within 3 months plus 30 days in addition.
The impugned order is set aside and the first respondent is directed to take the Appeal on record and dispose of the Appeal on merits.
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Tax Penalties Upheld: Registered Dealer Must Exhaust Statutory Appeals Before Seeking Judicial Intervention Under Alternate Remedy Provisions
In this judgment from the Kerala High Court, presided over by Justice Dinesh Kumar Singh, the petitioner challenged penalty orders issued under Section 129 of the CGST/SGST Act, 2017. The petitioner, a registered dealer under the CGST/SGST Act, faced penalties after the Assistant Tax Officer intercepted a vehicle transporting raw cashew nuts without an invoice. The penalties amounted to Rs. 1,93,932/- and Rs. 1,85,518/-.
The Court noted that the petitioner has an "efficacious alternate remedy" of filing a statutory appeal against the penalty orders. Consequently, the writ petition was not entertained. The Court disposed of the petition, granting the petitioner "liberty to approach the Appellate Authority" within four weeks. The Appellate Authority is directed to consider the appeals "in accordance with law, expeditiously."
Tax Penalties Upheld: Registered Dealer Must Exhaust Statutory Appeals Before Seeking Judicial Intervention Under Alternate Remedy Provisions
HC dismissed writ petition challenging tax penalties, finding statutory appeal available as alternate remedy. Petitioner, a registered dealer transporting goods without invoice, was directed to file appeals before Appellate Authority within four weeks. Court emphasized procedural compliance and expeditious resolution of tax dispute through appropriate legal channels.
Maintainability of petition - availability of alternative remedy - Challenge to penalty orders under Section 129 of the CGST/SGST Act, 2017 - HELD THAT:- Admittedly, the petitioner has the remedy of filing an appeal against the said order. Instead of filing the statutory appeal, the petitioner has approached this Court in the present writ petition. As the petitioner has an efficacious alternate remedy to file a statutory appeal, this Court does not entertain the present writ petition.
Petition disposed off.
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Seized CGST Funds Must Be Returned Promptly: Judicial Order Upholds Taxpayer Rights and Mandates Immediate Fund Release
The petitioner filed a writ petition seeking the release of Rs. 62,40,000 seized during a search by CGST officers. The High Court directed the authorities to return the amount along with accrued interest within one week as per a previous judgment. The petition was allowed.
Seized CGST Funds Must Be Returned Promptly: Judicial Order Upholds Taxpayer Rights and Mandates Immediate Fund Release
The HC allowed the writ petition, directing CGST authorities to release seized funds of Rs. 62,40,000 with accrued interest within one week, consistent with prior judicial precedent. The court's order mandated prompt return of the seized amount to the petitioner.
Seeking release of amount seized during a search by CGST officers - HELD THAT:- This Court in its judgment DEEPAK KHANDELWAL PROPRIETOR M/S. SHRI SHYAM METAL VERSUS COMMISSIONER OF CGST, DELHI WEST & ANR. [2023 (8) TMI 929 - DELHI HIGH COURT], had held that the concerned authorities do not have the power to cease cash found during the search conducted under Section 67 (1) of the CGST Act.
Thus, the currency ceased is required to be returned to the petitioner - the concerned authority is directed to remit the aforesaid amount into the bank account of the petitioner - petition allowed.
AI TextQuick Glance (AI)Headnote
Petitioner wins refund claim for unutilized input tax credit despite missing Section 54(1) deadline due to GST portal technical issues.
Issues Involved:
1. Denial of refund of unutilised input tax credit (ITC).
2. Application of the two-year limitation period under Section 54(1) of the CGST Act.
3. Technical glitches in the GST portal affecting the filing of refund applications.
4. Manual filing of refund applications under Rule 97A of the CGST Rules.
5. Bona fide attempts and guidance by jurisdictional GST officers.
Summary:
1. Denial of Refund of Unutilised ITC:
The petitioner was aggrieved by the denial of refund of unutilised ITC accumulated in respect of GST paid on inputs for zero-rated supplies (goods exported without payment of IGST) during July 2017 to March 2018. The Proper Officer rejected the refund application on 11.03.2020, citing it was filed beyond the two-year period specified under Section 54(1) of the CGST Act. This decision was upheld by the Appellate Authority on 06.08.2021.
2. Application of the Two-Year Limitation Period:
The petitioner's application for refund was rejected for being filed beyond two years from the relevant date of export. The Proper Officer determined the relevant dates based on the export dates of the consignments, concluding that the refund claim should have been filed by September 2019 for exports made between July 2017 and March 2018.
3. Technical Glitches in the GST Portal:
The petitioner encountered technical errors while attempting to file refund applications on 14.05.2018 and 08.08.2018. Despite filing a complaint and receiving a ticket, the petitioner was unable to complete the online filing process. The petitioner argued that the authorities ignored these technical glitches, which were beyond his control.
4. Manual Filing of Refund Applications under Rule 97A:
Rule 97A of the CGST Rules, introduced on 15.11.2017, allowed for manual filing of applications. The petitioner claimed he was advised by jurisdictional GST officers to wait until filing the annual GST Returns in Form 9 and obtaining Bank Realisation certificates before filing the refund application, which he did on 05.02.2020.
5. Bona Fide Attempts and Guidance by GST Officers:
The Court acknowledged the transition difficulties during the GST regime rollout and accepted that the petitioner made bona fide attempts to file the refund application. The Court noted that the petitioner's legitimate right to seek a refund should not be foreclosed due to technical glitches and the guidance he received from GST officers.
Conclusion:
The Court directed the proper officer to examine and process the petitioner's refund claim, recognizing the bona fide efforts made by the petitioner and the technical issues faced. The petition was allowed, emphasizing that the petitioner's claim could not be denied on the ground of delay under the peculiar facts of the case.
Petitioner wins refund claim for unutilized input tax credit despite missing Section 54(1) deadline due to GST portal technical issues.
Delhi HC allowed petitioner's refund claim for unutilized input tax credit on zero-rated supplies from July 2017 to March 2018. Revenue authorities rejected the application citing filing beyond the two-year limitation period under Section 54(1) of CGST Act, 2017. Court held that petitioner had attempted to file within the prescribed period but was prevented due to technical glitches on the GST portal. The court found that legitimate refund rights cannot be foreclosed due to technical issues and directed proper officer to examine and process the refund claim.
Denial of refund of unutilised input tax credit (ITC) accumulated in respect of the Goods and Services Tax paid on inputs - zero-rated supplies - period from July 2017 to March 2018 - petitioner’s application for refund rejected on the ground that it was filed beyond the period of two years as specified under Section 54(1) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- A plain reading of Sub-section (1) of Section 54 of the CGST Act indicates that any person who is claiming a refund of tax or interest, if any, paid on the amount is entitled to make an application before the expiry of two years from the relevant date and in such form and manner as may be prescribed. The term “relevant date” has been defined in Explanation (2) to Section 54 of the CGST Act - There is no cavil that the petitioner was required to make an application for refund under Sub-section (1) of Section 54 of the CGST Act within two years of the goods leaving India or crossing its territorial frontiers.
The controversy essentially revolves around whether the petitioner did make an application within the period and/or was prevented from doing so. It is not disputed that at the material time, there was confusion regarding the implementation of the Goods and Services Tax regime which had been rolled out - In the present case, there is no dispute that the petitioner had attempted to upload its application for refund but could not do so on account of technical glitches - it is difficult to accept that the petitioner’s legitimate right to seek refund could be foreclosed on account of such technical glitches.
There is no dispute that the petitioner had attempted to file an application for refund on the GST portal twice but its application could not be uploaded on account of technical glitches. It is not disputed that the petitioner had also made a complaint and a ticket for the same was also raised.
It cannot be accepted that the petitioner’s claim for refund is required to be denied on the ground of delay - the proper officer is directed to examine the petitioner’s claim for refund and process the same, if it is found that the petitioner is entitled to the same.
Petition allowed.
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Taxpayers Challenge GST Vehicle Purchase Discount Assessment Under Section 74, Interim Relief Granted Pending Comprehensive Review
In the case before the Gujarat High Court, presided over by Honourable Justices Biren Vaishnav and Bhargav D. Karia, the petitioners sought to quash an order dated 21.12.2021 issued under Section 74 of the GST Act. The petitioners argued that they were incorrectly held liable to pay GST on discounts received for motor vehicle purchases, contrary to a circular from the Central Board of Indirect Taxes and Customs and similar appellate orders under the Finance Act. The court noted that the petitioners' reliance on an appellate order is currently under challenge before the Customs Excise and Service Tax Appellate Tribunal (CESTAT), necessitating the petition's pendency until CESTAT's decision. The court clarified that the petitioners challenged the order-in-original without pursuing alternative remedies, asserting the respondent authorities' obligation to follow the appellate order in identical circumstances. The court issued a rule returnable by April 30, 2024, and continued the interim relief granted earlier until the petition's final resolution.
Taxpayers Challenge GST Vehicle Purchase Discount Assessment Under Section 74, Interim Relief Granted Pending Comprehensive Review
GHC examined a GST Act dispute challenging an order under Section 74, where petitioners contested tax liability on vehicle purchase discounts. The court issued a rule returnable by April 30, 2024, maintaining interim relief and noting the pending CESTAT challenge to a similar appellate order. The case remains active, with the court reserving final determination pending further judicial review.
Quashing of order passed u/s 74 of the GST Act on the ground that the petitioners are liable to pay GST on the amount of discount received by it on purchase of the motor vehicles contrary to the circular issued by Central Board of Indirect Taxes and Customs and the appellate orders passed under similar provisions under the Finance Act - HELD THAT:- When the matter was taken up for passing the order, it was found that the appellate order relied upon by the petitioners is under challenge before the CESTAT. In such circumstances, the petition is required to be kept pending till the CESTAT decides such issue.
Issue Rule returnable on 30th April, 2024. Ad interim granted earlier to continue as interim relief till the final disposal of this petition.
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Taxpayer Wins ITC Claim, GST Authority Ordered to Issue Fresh Order Within Fortnight for Eight Confirmed Imports
In the case before the Calcutta High Court, presided over by Justice Md. Nizamuddin, the petitioner contested the denial of Input Tax Credit (ITC) by the State GST authority. The denial was based on the assertion that the goods in question had not been imported, a claim contingent upon certification by the customs authority. The customs authority confirmed that out of nine imports, eight were duly imported with Integrated Goods and Services Tax (IGST) paid, but could not certify one bill of entry.
The court, upon reviewing the written instruction from the customs authority dated December 20, 2023, and the submissions from both parties, decided to set aside the impugned adjudication order dated August 16, 2023. The court directed the State GST adjudicating authority to issue a fresh adjudication order within two weeks, allowing the ITC claim in accordance with the law. For the uncertified import, the petitioner was advised to provide supporting documents to the customs authority for consideration.
Additionally, a typographical error in the recording of the writ petition number was noted and corrected from WPA 260 of 2023 to WPA 26026 of 2023.
Taxpayer Wins ITC Claim, GST Authority Ordered to Issue Fresh Order Within Fortnight for Eight Confirmed Imports
HC allowed petitioner's ITC claim, directing GST authority to issue fresh order within two weeks. Eight imports were confirmed with IGST paid. For one uncertified import, petitioner must submit supporting documents. Typographical error in writ petition number was corrected.
Denial of ITC - imported goods or not - HELD THAT:- Considering the facts and circumstances of the case and submission of the parties and in view of the instruction dated 20th December, 2023, this writ petition is disposed of by setting aside the impugned adjudication order dated 16th August, 2023 by directing the adjudicating authority concerned of the State GST, to pass a fresh adjudication order, within two weeks from the date of receipt of such order and allow the claim of ITC in accordance with law.
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Tax Refund Challenge Rejected: Petitioner Directed to Follow Statutory Appeal Procedure Under Sections 54 and 107
Issues involved:
The writ petition challenging the order confirming the demand of IGST wrongly claimed as refund.
Comprehensive details:
The petitioner claimed benefit of Rule 96 (10) of the CGST Rules but was not entitled to it. The petitioner argued that under Section 54 of the CGST Act, it was eligible for the refund. The respondents contended that the show cause notice was issued earlier, and the petitioner did not respond. Despite the rejection of the stay petition, the petitioner did not file a response. The authority passed a detailed order addressing all issues raised by the petitioner, including the entitlement under Section 54 of the Act, which was negated. The court held that the petitioner must question the validity of the determination through the appeal process under Section 107 of the Act.
The court considered the submissions of both parties and reviewed the available material on record. It noted that despite the rejection of the stay petition, the petitioner did not respond to the show cause notice. The court emphasized that the petitioner's entitlement under Section 54 of the Act had already been examined and rejected by the authority in the impugned order. The court concluded that no grounds were established in the writ petition to warrant the invocation of extraordinary jurisdiction under Article 226 of the Constitution of India, especially considering the availability of the appeal remedy as established in the case law of Godrej Sara Lee Ltd.
Therefore, the court dismissed the writ petition, allowing the petitioner to pursue the remedy of appeal as per the law.
Tax Refund Challenge Rejected: Petitioner Directed to Follow Statutory Appeal Procedure Under Sections 54 and 107
SC dismissed writ petition challenging IGST refund demand. The court found no merit in the petitioner's claim under Section 54 of CGST Act. The authority's order was upheld, and the petitioner was directed to pursue the appeal remedy under Section 107 of the Act, maintaining the established legal procedure for challenging tax determinations.
Demand of IGST wrongly claimed as refund - proceedings initiated against the petitioner resulting in the order impugned is based on a wrong premise - HELD THAT:- It is not in dispute that pursuant to show cause notice issued to the petitioner, the petitioner only on account of pendency of DBCWP No.4465/2021, choose not to respond to the said show cause notice and put forth his response to the said show cause notice and insisted on the adjudication being deferred only on account of pendency of said petition. Apparently, even when the stay petition was rejected on 07.08.2023, despite such rejection also, no response was filed, however, the authority has passed a detailed speaking order dealing with all possible pleas raised by the petitioner.
The submission made pertaining to the entitlement of the petitioner under Section 54 of the Act, which even otherwise is not a jurisdictional aspect, already stands examined and negated by the authority vide impugned order dated 30.10.2023 and the petitioner has to question the validity of said determination in accordance with law including filing of appeal under Section 107 of the Act.
Thus, no case has been made out in the writ petition so as to invoke our extra ordinary jurisdiction under Article 226 of the Constitution of India on the settled parameters, based on which, the same can be invoked by this Court despite availability of remedy of appeal.
Petition dismissed.
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GST Assessment Order Invalidated Due to Lack of Proper Notice, Petitioner Granted Opportunity to Respond and Seek Fresh Assessment
Issues involved: Violation of principles of natural justice in passing assessment order, Challenge to the validity of section 16(4) of the CGST/SGST Act, 2017
The petitioner filed a writ petition seeking the quashing of Exhibit P5 order and P6 summary of order in Form GST DRC-07, alleging violation of natural justice and limitation. The petitioner also requested the invocation of powers under section 172 of the CGST/SGST Act, 2017 to address difficulties faced by taxable persons in availing input tax credit from belatedly filed returns and challenged the constitutionality of section 16(4) of the CGST/SGST Act, 2017.
The Court noted that the petitioner was issued a notice in Form GST ASMT-10 and a show cause notice under Section 73 of the CGST Act, 2017, without receiving physical copies, as they were uploaded on the GST portal. The petitioner's registration had been cancelled before the issuance of these notices, leading to the petitioner not filing a reply. The Court observed a lack of time granted for the petitioner to respond to the notices, indicating a violation of natural justice in passing the assessment order, Ext.P5.
The Court found merit in the petitioner's argument, highlighting that the notices were issued one after the other without affording the petitioner an opportunity to respond. Additionally, the petitioner's GST registration had been cancelled before the notices were uploaded on the portal, further supporting the violation of natural justice in the assessment process.
Consequently, the Court held that the impugned assessment order, Ext.P5, was unsustainable due to the violation of natural justice. The order was set aside, and the matter was remanded to the assessing authority for a fresh order. The petitioner was granted three days to file a reply to the show cause notice dated 30.9.2023, and the assessing authority was directed to provide an opportunity for the petitioner before finalizing the fresh assessment. The petitioner was barred from raising any grounds regarding the limitation in finalizing the assessment for the relevant year.
In conclusion, the writ petition was disposed of with the above observations and directions, while any pending interlocutory application was dismissed.
GST Assessment Order Invalidated Due to Lack of Proper Notice, Petitioner Granted Opportunity to Respond and Seek Fresh Assessment
HC found a violation of natural justice in the GST assessment order. The order was issued without proper notice after the petitioner's registration was cancelled. The court set aside the assessment order, remanded the matter to the assessing authority, and directed a fresh assessment with three days granted to the petitioner to file a reply to the show cause notice.
Cancellation of petitioner's registration before issuance of the notices - petitioner was not granted any time in the notice so issued in GST ASMT-10 - violation of principles of natural justice - HELD THAT:- Since the petitioner's registration had been cancelled before issuance of the said notices, the petitioner did not file reply to the said show cause notices. Otherwise, the petitioner was not granted any time in the notice so issued in GST ASMT-10 and therefore, there has been violation of the principles of natural justice in passing the assessment order, Ext.P5 - there are substance in the submission advanced by the learned counsel for the petitioner. Notice in Ext.P2 disclosed that it is dated 29.9.2023 and on the very next day, Ext.P3 notice under Section 73 was issued. The petitioner was not afforded any time for filing reply to the notice in GST ASMT-10.
There is violation of the principles of natural justice and, therefore, the impugned assessment order, Ext.P5, is unsustainable and the same is hereby set aside. The matter is remanded back to the file of the assessing authority, 1st respondent, to pass fresh a order.
Petition allowed by way of remand.
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GST Act Time Extension Challenged: Interim Relief Granted, Authorities Restricted from Passing Final Orders Without Court Permission
Issues involved: Challenge to extension of time period for issuance of show-cause-notice under Section 10 of the Central Goods and Service Tax Act, 2017 u/s 168A of the Act post-COVID Pandemic.
Summary:
Issue 1 - Extension of Time Period for Issuance of Show-Cause-Notice:
The petitioner challenged the extension of time period for issuance of show-cause-notice under Section 10 of the Central Goods and Service Tax Act, 2017 u/s 168A of the Act. The impugned notification dated 31.03.2023 was contested on the grounds that there was no mention of grounds for extension post the COVID Pandemic of 2022, rendering Section 168A inapplicable. The petitioner argued that the explanation to Section 168A did not align with the circumstances at the time of issuance of the notification by the Central Board of Indirect Taxes and Customs. It was contended that the extension was not sustainable in law and contravened the provision of Section 168A.
Court's Decision:
Upon hearing the submissions, the Court issued a Notice returnable on 8th February, 2024. As an ad-interim relief measure, the Court directed that no final order shall be passed by the respondent authority pursuant to the show-cause-notice issued during the extended period without the permission of the Court until the next date of hearing. Direct service was permitted in this regard.
GST Act Time Extension Challenged: Interim Relief Granted, Authorities Restricted from Passing Final Orders Without Court Permission
HC examined challenge to GST Act time extension for show-cause-notice post-COVID. Court issued notice and granted interim relief, directing respondent authorities not to pass final orders on notices issued during extended period without court permission. Matter adjourned to 8th February, 2024 for further hearing.
Extension of time period for issuance of the show-cause-notice - applicability of provisions of Section 168A of CGST Act - HELD THAT:- Issue Notice returnable on 8th February, 2024. By way of ad-interim relief, no final order shall be passed by the respondent authority pursuant to the show-cause-notice issued during the period extended by the impugned notification without permission of the Court till the next date of hearing. Direct service is permitted.
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Judicial Review Upholds GST Show Cause Notice, Mandates Procedural Fairness and Comprehensive Response from Assessee
Issues involved:
Petitioner challenging show cause notice u/s Article 226 of the Constitution of India for GST Act non-compliance. Respondent arguing against maintainability due to filed reply. Petitioner questioning jurisdiction and merit of notice.
Jurisdiction and Compliance:
The petitioner, an assessee under the GST Act, brought a writ petition challenging a show cause notice dated 26-09-2023 for non-reversal of ITC as declared in GSTR-9 return for 2017-18. The respondent objected to the petition's maintainability, citing the filed reply. The petitioner's counsel contested the notice's validity on jurisdictional and merit grounds. The court refrained from delving into these contentions post the petitioner's reply submission, advising the petitioner to file an additional reply if desired.
Disposition and Conclusion:
The court disposed of the writ petition, expecting the authority to address the raised issues and make a decision in accordance with the GST Act provisions while maintaining judicial discipline. The petitioner was granted the option to submit further replies to incorporate arguments presented during the court proceedings.
Judicial Review Upholds GST Show Cause Notice, Mandates Procedural Fairness and Comprehensive Response from Assessee
HC dismissed the writ petition challenging GST show cause notice, directing the petitioner to file additional replies if needed. The court advised the tax authority to address jurisdictional and merit-based concerns while following GST Act provisions, maintaining procedural fairness and allowing the assessee an opportunity to present comprehensive arguments.
Validity of SCN - jurisdiction of the assessing officer - justifiabilty of demand - non-reversal of excess ITC availed - HELD THAT:- Once petitioner has subjected itself to jurisdiction of the authority by filing reply, it is not deemed proper to address on the contentions raised by the petitioner touching the jurisdiction as well as merits of the show cause notice. Petitioner if so advised, may file additional reply incorporating the submissions as advanced before this Court.
This Court hopes and trusts that the authority concerned shall address on the issues raised in the reply/ additional reply and pass an order with due advertence to the record keeping in mind the provisions of GST Act maintaining judicial discipline.
The writ petition disposed off.
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Tax Assessment Challenge Rejected: Alternative Appeal Pathway Mandated for Warehousing Services Under GST Regulations
Issues:
The issues involved in this case are the interpretation of tax laws regarding the services provided by the petitioner for storage and warehousing, the applicability of Notification No. 12/2017 - Central Tax (Rate), dated 28.06.2017, and the maintainability of the writ petition when an alternative remedy of appeal is available.
Interpretation of Tax Laws:
The petitioner owned godowns used for storage and warehousing services, including loading, unloading, stacking, packing, care, custody, and security of food grains for Andhra Pradesh State Civil Supplies Corporation Ltd (APSCSCL). The petitioner contended that these services were exempt from tax under Notification No. 12/2017 - Central Tax (Rate), dated 28.06.2017. However, the 2nd respondent held that the activity attracted tax at 9% under SGST & CGST, as the petitioner was deemed to have rented out space on a monthly basis. The petitioner argued that since the services were provided to a Government Authority (APSCSCL), they should be exempt from tax.
Applicability of Notification No. 12/2017:
The petitioner relied on Notification No. 12/2017, which exempts services related to supplies like loading, unloading, storage, or warehousing when provided to the Government or Government Authority. The petitioner claimed that APSCSCL qualified as a Government Authority due to the government holding more than 90% equity shares. Therefore, the petitioner argued that the transactions were exempt from tax under this notification.
Maintainability of Writ Petition:
The 2nd respondent contended that the writ petition was not maintainable as the petitioner had an alternative remedy of appeal. The respondent argued that the services provided were essentially renting of non-residential property and fell under GST taxation as per Section 7 (Schedule II) of the CGST Act, 2017. The respondent challenged the petitioner's reliance on Notification No. 12/2017, stating that it pertained to specific classifications with a "NIL" rate, whereas the rental income derived by the petitioner was for real estate services under a different notification.
Judgment:
The High Court, after considering the submissions, noted that the petitioner did have an alternative remedy to file an appeal against the impugned order. Citing a previous decision, the Court held that in such cases where an alternative remedy exists, the writ petition should not be entertained. Therefore, the Court disposed of the writ petition, granting the petitioner liberty to file an appeal within four weeks. The respondent authorities were directed not to take coercive action for recovery of demanded tax until the appeal process was completed. No costs were awarded, and any pending interlocutory applications were closed as a result of this judgment.
Tax Assessment Challenge Rejected: Alternative Appeal Pathway Mandated for Warehousing Services Under GST Regulations
The HC dismissed the writ petition challenging tax assessment on warehousing services, finding an alternative remedy of appeal exists. The court directed the petitioner to file an appeal within four weeks and instructed respondent authorities to refrain from coercive tax recovery actions pending appeal resolution. The case centered on tax exemption interpretation for government-related storage services under GST regulations.
Maintainability of petition - availability of efficacious and alternative remedy of appeal - Services of storage and warehousing of food grain - Exemption from levy of tax as per Notification No. 12/2017 – Central Tax (Rate), dated 28.06.2017 - agreement with APSCSCL for providing storage, warehousing services involving loading, unloading, stacking, packing, care, custody and security etc., of food grains - HELD THAT:- Admittedly, the petitioner has an efficacious and alternative remedy to file appeal. The said fact is also mentioned in the impugned order to the effect that an appeal lies against the impugned order before the Appellate Joint Commissioner (ST), Tirupathi.
In view of the decision in ASSISTANT COMMISSIONER (CT) LTU, KAKINADA & ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED [2020 (5) TMI 149 - SUPREME COURT] wherein the Hon’ble Apex Court held that the High Court ought not to have entertained the writ petition when an efficacious and alternative remedy of appeal is available to the petitioner, without expressing our opinion on the merits of the petitioner’s case, it is deemed apposite to give liberty to the petitioner to file an appeal against the impugned order.
The writ petition is disposed of giving liberty to the petitioner to file an appeal against the impugned order dated 10.07.2023 passed by the 2nd respondent before the concerned Appellate Authority within four (4) weeks from the date of receipt of a copy of this order, in which case, the Appellate Authority shall admit the appeal and after affording an opportunity of hearing to both parties, pass an appropriate order on merits in accordance with governing law and rules expeditiously.
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Provisional attachment of bank account under Section 83 CGST Act upheld despite cross-territorial enforcement
Issues Involved:
1. Territorial jurisdiction under Article 226 of the Constitution of India.
2. Jurisdiction of respondent no. 1 to invoke Section 83 of the CGST Act for provisional attachment.
3. Legality and validity of the provisional attachment order under Section 83 of the CGST Act.
Summary:
Issue 1: Territorial Jurisdiction
The Court examined whether it had territorial jurisdiction under Article 226 to entertain the writ petition challenging the provisional attachment order dated 22.03.2023. The petitioner argued that since the bank account was maintained in Kolkata and the petitioner is a registered person in Kolkata, the High Court of Calcutta has jurisdiction. The Court agreed, stating that part of the cause of action arose within its territorial jurisdiction, making the writ petition maintainable.
Issue 2: Jurisdiction of Respondent No. 1
The petitioner contended that respondent no. 1 lacked jurisdiction to invoke Section 83 of the CGST Act for provisional attachment without initiating or having pending proceedings against the petitioner. The petitioner argued that the impugned order was issued without any proceedings under Chapters XII, XIV, and XV of the CGST Act, and thus, was non est in law. The Court, however, found that the CGST Guwahati authority had jurisdiction based on tangible material and the necessity to protect government revenue. The Court cited relevant sections and judgments to support its conclusion that the respondent's actions were legal and valid.
Issue 3: Legality and Validity of Provisional Attachment
The petitioner challenged the legality of the provisional attachment order, arguing that it was not issued in the prescribed format (Form GST DRC-22) and lacked the necessary conditions precedent. The petitioner also argued that the order was arbitrary and without jurisdiction. The Court examined the provisions of Section 83, Rule 159 of the CGST Rules, and relevant judgments. It concluded that the impugned order was issued in accordance with the law and within the jurisdiction of the CGST Guwahati authority. The Court dismissed the writ petition, upholding the legality and validity of the provisional attachment order.
Conclusion:
The High Court of Calcutta dismissed the writ petition, holding that it had territorial jurisdiction to entertain the petition. The Court found that the provisional attachment order issued by the CGST Guwahati authority was legal, valid, and within jurisdiction, and thus, not liable to be interfered with.
Provisional attachment of bank account under Section 83 CGST Act upheld despite cross-territorial enforcement
Calcutta HC dismissed writ petition challenging provisional attachment of bank account under Section 83 CGST Act, 2017. Petitioner argued attachment was invalid due to absence of pending proceedings under Chapters XII, XIV, XV. Court held territorial jurisdiction existed as bank account was in Kolkata despite attachment by Guwahati authority. Reading Sections 1(2), 6(1), 83, 122(1) and 122(1A) conjointly with investigation materials, HC found CGST Guwahati authority's provisional attachment order legal, valid and within jurisdiction.
Provisional attachment of the Bank account u/s 83 of the CGST Act, 2017 - challenge to attachment order on the ground that the condition precedent to initiate proceeding under Chapter XII, XIV and XV of the GST Act is absent in the present case - HELD THAT:- So far as objection of the respondents with regard to maintainability of the writ petition before this Court on the ground of lack of territorial jurisdiction is concerned, is not sustainable since cause of action is a bundle of fact and in the facts and circumstances of the present case, the part of cause of action arose within the territorial jurisdiction of this Court since petitioner’s bank account in Kolkata was attached though may it be by an authority in Guwahati and in view of the fact that petitioner is a registered person in Kolkata and as such writ petition before this Court against the impugned order passed by the authority at Guwahati is maintainable.
So far as challenge by the petitioner the legality and validity of the impugned order of provisional attachment under Section 83 of the Act on the ground of non pendency or initiation of any proceeding against the petitioner is concerned, on reading conjointly Section 1(2), Section 6(1), Section 83, Section 122(1) and Section 122 (1A), Clause (i), (ii), (vii) and (ix) thereunder and judgments, relevant circulars and notification and taking into consideration materials found against the petitioners during investigation, CGST Guwahati authority’s action of attaching the bank account of the petitioner provisionally and the impugned order to this effect is very much legal, valid and within jurisdiction and is not liable to be interfered by this writ Court.
This Writ Petition is dismissed.
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Rajasthan HC quashes GST recall order for violating natural justice under Section 174(2B) RGST Act
The Rajasthan High Court, through Justices Arun Bhansali and Ashutosh Kumar, addressed a writ petition challenging the order dated 06.05.2022 (Annex.6) which recalled an earlier order of the same date (Annex.3) allowing the petitioner's application to set aside an ex-parte assessment under Section 174(2B) of the Rajasthan Goods and Service Tax Act, 2017. The petitioner contended that the recall order was passed without affording any opportunity of hearing and was not communicated, causing the petitioner to withdraw a pending Special Leave Petition before the Supreme Court.The respondent relied on Section 161 of the Act read with Section 33 of the RVAT Act, 2003, asserting the power to rectify errors apparent on the record and that the initial order had become final, thus justifying the recall.The Court held that the recall order (Annex.6) was passed without observing the principles of natural justice as mandated by the third proviso to Section 161 of the Act, which requires an opportunity of hearing where rectification adversely affects a person. Since the order adversely affected the petitioner, the failure to provide a hearing rendered the order invalid.Accordingly, the Court quashed and set aside the recall order dated 06.05.2022 (Annex.6) and directed the respondent to pass a fresh order in accordance with Section 161 and other applicable provisions, ensuring compliance with natural justice. The writ petition was disposed of on this basis.
Rajasthan HC quashes GST recall order for violating natural justice under Section 174(2B) RGST Act
The Rajasthan HC, through Justices Arun Bhansali and Ashutosh Kumar, allowed a writ petition challenging a recall order dated 06.05.2022 that set aside the petitioner's successful application under Section 174(2B) of the Rajasthan GST Act, 2017. The Court held that the recall order violated principles of natural justice as required under Section 161's third proviso, which mandates hearing opportunities when rectification adversely affects a person. The HC quashed the recall order and directed the respondent to pass a fresh order ensuring compliance with natural justice principles.
Violation of principles of natural justice - ex-parte assessment - order was passed without affording any opportunity of hearing and that the order was not communicated to the petitioner - HELD THAT:- A bare look at the order dated 06.05.2022 (Annex.6) reveals that the said order has been passed without affording any opportunity of hearing to the petitioner. Even under the provisions of Section 161 of the Act, third proviso requires that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification. The order passed definitely adversely affect the petitioner and therefore, the same could not have been passed by the respondent without affording any opportunity of hearing to the petitioner.
In view of the above fact situation, the order dated 06.05.2022 (Annex.6) is quashed and set-aside. The respondent would be free to pass a fresh order after following the provisions of Section 161 of the Act and / or any other applicable provisions in accordance with law.
Petition disposed off.
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Pre-deposit requirement under Section 107(6)(b) CGST Act applies only to disputed tax amount, not penalties or interest
Issues involved:
The judgment addresses the issue of the maintainability of an appeal under Section 107(6) of the Central Goods and Services Tax Act, 2017, specifically focusing on the pre-deposit requirement for filing an appeal.
Summary:
Issue 1: Interpretation of pre-deposit requirement under Section 107(6) of the CGST Act
The petitioner challenged the appellate authority's decision to decline admission of the appeal due to non-compliance with the pre-deposit mandate. The petitioner argued that the pre-deposit amount should only include the disputed tax amount and not penalty, fine, or interest. Citing judgments from the High Courts of Patna and Allahabad, the petitioner contended that the appellate authority erred in calculating the pre-deposit amount. On the other hand, the AGA argued that the petitioner, by disputing the entire amount, must pay 10% on the total sum determined by the Enforcement Officer. The court analyzed Section 107(6) of the CGST Act, emphasizing that the pre-deposit must cover the tax, interest, fine, fee, and penalty admitted by the appellant and 10% of the remaining disputed tax amount.
Issue 2: Legislative intent and statutory interpretation
The court delved into the legislative intent behind the pre-deposit requirement, highlighting the deliberate exclusion of disputed interest, fine, fee, and penalty from the pre-deposit calculation. By focusing on the disputed tax amount for the 10% pre-deposit, the court emphasized that penalties and fines are consequential to the tax liability determination. The court referred to legal principles and judgments to support the interpretation that the pre-deposit obligation pertains solely to the contested tax amount, aligning with the legislative design to prioritize the financial commitment related to the primary tax liability in appeals.
Conclusion:
The court allowed the writ petition, setting aside the appellate authority's decision on the pre-deposit amount. It directed the appellate authority to admit the appeal since the petitioner had already deposited 10% of the tax liability. The judgment clarified that the legislative intent, as construed from Section 107(6)(b) of the CGST Act, mandates pre-deposit only on the tax liability when the appellant contests the entirety of the tax liability, excluding penalties, fees, or interest from the pre-deposit requirement.
Pre-deposit requirement under Section 107(6)(b) CGST Act applies only to disputed tax amount, not penalties or interest
Karnataka HC ruled that the pre-deposit requirement under Section 107(6)(b) of CGST Act mandating 10% deposit for filing appeal applies only to the disputed tax amount, not to penalties, fines, fees, or interest. The court held that legislative intent clearly distinguishes between tax liability and ancillary components like penalties. The appellate authority erred in requiring deposit of 10% of both tax and fine. The court emphasized that penalties and fines are subsequent to tax determination and the statute's language specifically refers to "tax in dispute." Petition was allowed, establishing that pre-deposit obligation is limited to contested tax amount only.
Determination of quantum of pre-deposit for filing of appeal - deposit of 10% of the disputed tax amount means only tax amount and entire composite amount comprising tax, fine, penalty and fee? - failure to comply the mandate of pre- deposit - HELD THAT:- By isolating "a sum equal to ten per cent of the remaining amount of tax in dispute" in sub-clause (b), the legislator conveys a focused pre-deposit requirement specifically related to the disputed tax amount. This implies that the legislative design prioritizes the financial commitment associated directly with the primary tax liability being contested. This approach aligns with the legal principle that penalties, fines, fees, and interest are subsequent to the determination of tax.
The apex court in the case of PRAKASH NATH KHANNA AND ANOTHER VERSUS COMMISSIONER OF INCOME-TAX AND ANOTHER [2004 (2) TMI 3 - SUPREME COURT], has explained that the language employed in a statute is the determinative factor of the legislative intent. The legislature is presumed to have made no mistake. The presumption is that it intended to say what it has said. Assuming there is a defect or an omission in the words used by the legislature, the Court cannot correct or make up the deficiency. Where the legislative intent is clear from the language, the Court should give effect to it.
The appellate authority therefore, was not justified in calling upon the petitioner to deposit 10% of not only tax liability, but, also fine which is imposed by the Enforcement Officer equivalent to the value of the goods. If the order passed by the appellate authority under challenge is accepted, then the condition under clause (b) giving an option to the aggrieved person who disputes the entire tax liability to deposit 10% of the remaining amount of tax in dispute would be defeated.
There is no need for the petitioner to deposit any percentage of disputed interest, fine, fee and penalty arising from the impugned order. In essence, the legislative intent as construed from Section 107(6)(b) of the CGST Act is that aggrieved party has to pre-deposit 10% of the tax liability and it does not extend to penalties, fees or interest when the petitioner has contested the entirety of the tax liability.
Petition allowed.
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High Court Modifies Bail Conditions, Grants Conditional Travel Permission for Applicant Under Section 482 Criminal Procedure Code
Issues involved: Application under Section 482 of Cr.P.C. seeking setting aside of an impugned order and permission to travel abroad.
Summary:
The present judgment pertains to an application filed under Section 482 of the Code of Criminal Procedure, 1973, seeking to set aside an impugned order and obtain permission to travel abroad for a specified period. The applicant had previously been granted permission to travel abroad on two occasions and had not misused the liberty granted. The applicant was earlier granted anticipatory bail with a condition to obtain prior permission from the Investigating Officer, which is now sought to be modified to require prior permission from the Trial Court instead. The Court, considering the circumstances, modified the condition accordingly and granted permission to the applicant to travel to Dubai, UAE, for a period of two months, subject to the terms and conditions imposed by the Trial Court. The application was allowed, and the order was directed to be provided to the concerned parties and uploaded on the website.
The applicant/petitioner sought setting aside of an impugned order and permission to travel abroad for 12 months. The applicant had been granted permission to travel abroad on previous occasions and had not misused the liberty granted. The applicant was earlier granted anticipatory bail with a condition to obtain prior permission from the Investigating Officer, which is now sought to be modified to require prior permission from the Trial Court instead. The Court modified the condition accordingly to require prior permission from the Trial Court. The applicant was granted permission to travel to Dubai, UAE, for two months, subject to the terms and conditions imposed by the Trial Court. The application was allowed, and the order was directed to be provided to the concerned parties and uploaded on the website.
High Court Modifies Bail Conditions, Grants Conditional Travel Permission for Applicant Under Section 482 Criminal Procedure Code
HC allowed application under Sec. 482 Cr.P.C., modifying prior bail conditions to require Trial Court's permission for travel. Applicant granted two-month travel permission to Dubai, UAE, after demonstrating previous responsible overseas travel. Court imposed specific conditions and directed order to be communicated to relevant parties.
Seeking permission to travel abroad for a period of 12 months - HELD THAT:- This Court deems it appropriate to modify the condition (i) of order dated 07.07.2022 to the extent, that instead of prior permission to be obtained from the I.O., the same be read as “prior permission of the Trial Court”.
Accordingly, the applicant/ petitioner is granted permission to travel abroad i.e. Dubai, UAE, for a period of two months, on the same terms and conditions imposed vide order dated 31.12.2022 by the learned Trial Court, to the satisfaction of the learned Trial Court.
Application allowed.
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Tax Refund Victory: GST Act Interpretation Limits Excessive Security Demands and Protects Taxpayer Rights
Issues Involved:
The issues involved in the judgment are the demand for refund, withholding of refund, requirement of furnishing bank guarantee, and interpretation of Section 54(11) of the Rajasthan Goods & Services Tax Act, 2017.
Demand for Refund:
The petitioner filed a writ petition seeking direction for the respondent No. 1 to issue the refund due to it. Orders creating a demand were passed by the Assistant Commissioner, which were later set aside, and the refund was ordered to be processed as per law.
Withholding of Refund:
The respondent No. 1 referred the matter to withhold the refund under Section 54(11) of the Act, 2017. The respondent No. 2 concluded that there were no reasonable grounds for withholding the refund and directed the proper officer to process the refund application, subject to the petitioner furnishing solvent security.
Requirement of Furnishing Bank Guarantee:
The respondent No. 1 ordered the petitioner to furnish a bank guarantee as a form of solvent security before allowing the refund, which the petitioner contested. The petitioner complied with the requirement of furnishing solvent security but objected to the demand for a bank guarantee, considering it beyond the scope of the Act.
Interpretation of Section 54(11) of the Act:
The petitioner argued that the demand for a bank guarantee was not justified under Section 54(11) of the Act, as the original order required solvent security. The court found the demand for a bank guarantee to be contrary to the directions given by the appellate authority and ruled in favor of the petitioner.
Conclusion:
The court allowed the writ petition, quashed the order seeking a bank guarantee, and directed the respondent No. 1 to comply with the directions of the appellate authority and Chief Commissioner within two weeks from the date of the order.
Tax Refund Victory: GST Act Interpretation Limits Excessive Security Demands and Protects Taxpayer Rights
The HC examined a tax refund dispute involving GST Act interpretation. The court ruled in favor of the petitioner, quashing the demand for a bank guarantee and directing the tax authority to process the refund as per appellate authority's earlier directions. The decision emphasized strict compliance with statutory provisions and prevented excessive security requirements beyond legal mandates.
Seeking refund claim - petitioner submitted the requisite for complying with the directions of furnishing the solvent security and requested the respondent No. 1 to refund the amount with up-to-date interest - HELD THAT:- The order passed by the appellate authority while rejecting the prayer of the respondent on an application filed under Section 54 (11) of the Act, 2017 was very clear and specifically required the proper officer to process the application of refund as per the provisions of Act/Rules provided the petitioner furnishes the solvent security as per his satisfaction.
It appears that the respondent No. 1, who had passed the original order, which came to be set aside by the appellate authority and ordered for refund so made, has been trying to somehow block the refund to be made to the petitioner. Initially, he moved an application under Section 54 (11) of the Act, 2017 which came to be rejected by the authority and direction was given to the petitioner to provide solvent security. Once solvent security was produced by the petitioner, the respondent No. 1 again, apparently not willing to refund the amount, has demanded bank guarantee from the petitioner.
The solvent security is that of a person who is entitled to/recipient of the amount. Whereas, the ‘bank guarantee’ is a guarantee given by the bank on behalf of the applicant to cover the payment obligation to a third party. As such, it cannot be said that the demand of bank guarantee by respondent No. 1 could be equated with providing solvent security in terms of the order passed under Section 54 (11) of the Act, 2017.
The action of respondent No. 1 in seeking bank guarantee from the petitioner is ex facie contrary to the directions of respondent no. 2 and, therefore, the same cannot be sustained - Petition allowed.
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GST Registration Cancellation Overturned: Authorities Must Provide Precise Evidence of Fraud or Misstatement Under Rule 21
Issues involved:
The cancellation of GST registration u/s 29(2)(e) for alleged fraud, wilful misstatement, or suppression of facts without specific details in the show cause notice (SCN).
Impugned Order and SCN:
The petitioner challenged the order cancelling their GST registration dated 19.07.2023 based on the SCN issued on 05.07.2023, which cited u/s 29(2)(e) for registration obtained through fraud, wilful misstatement, or suppression of facts. The SCN lacked specific reasons for the proposed cancellation, failing to meet the standard of enabling a meaningful response.
Judgment:
The High Court found that the SCN did not specify the alleged fraud, misstatement, or suppressed facts by the petitioner, rendering it insufficient for a proper response. The impugned order, which lacked reasons and merely referenced the SCN, was set aside. The retrospective cancellation of registration from 23.05.2023 without justification was deemed unjust.
Relief Granted:
The Court allowed the petition, setting aside both the SCN and the impugned order. The respondent was directed to immediately restore the petitioner's GST registration. However, it was clarified that this restoration did not prevent the respondent from taking action if the petitioner was found non-compliant or violating any laws. The petition was disposed of accordingly.
GST Registration Cancellation Overturned: Authorities Must Provide Precise Evidence of Fraud or Misstatement Under Rule 21
HC found the show cause notice for GST registration cancellation legally deficient, lacking specific details of alleged fraud or misstatement. The court set aside the cancellation order, directing immediate restoration of registration while preserving tax authorities' right to take future action if non-compliance is proven.
Cancellation of GST registration of petitioner - SCN do not specify the alleged fraud or the misstatement alleged to have been made by the petitioner - HELD THAT:- It is trite that a show cause notice must clearly set out the allegations on the basis of which an adverse action is proposed, to enable the noticee to meaningfully respond to the same. Clearly, the SCN in the present case fails to satisfy the said standard - The impugned order is also not informed any reason and it merely mentions that the same has been issued in reference to the SCN.
It is noticed that the petitioner’s registration has been cancelled with retrospective effect from 23.05.2023. Neither the SCN nor the impugned order provides any reasons for doing so.
The respondent is directed to forthwith restore the petitioner’s GST registration - The SCN as well as the impugned order are set aside - Petition allowed.
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