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GST - Case Laws

Showing 21 to 40 of 16301 Records

• 2025 (7) TMI 205
  

  Challenge to pre-show cause notice issued in Form GST DRC-01A, threatening to invoke proceedings u/s 74 of the WBGST/CGST Act, 2017 in respect of the tax period 2019-21 - HELD THAT:- Noting that the petitioner seeks to bring the pre-show cause notice dated 19th July 2024 to a logical conclusion and considering the fact that the consideration on the pre-show cause notice is pending for nearly a year, at this stage it would be prudent to direct the proper officer to decide on the pre-show cause notice on the basis of the response filed by the petitioner and if the proper officer is of the view that the pre-show cause notice need not to be proceeded, the proper officer should drop the proceedings. On the contrary if he is of the view that a notice u/s 73(1) or 74(1) of the said Act should be issued, he shall forthwith issue the same.

  Considering the peculiar facts and noting that the matter has been pending before this Court and noting that the pre-show cause notice remains outstanding for a year, in the event the proper officer is of the view that the pre-show cause notice is required to be issued u/s 73(1) of the said act, the petitioner shall be entitled to benefit of the Scheme introduced under Section 128 of the said Act provided the petitioner complies with all formalities and applies before the authority within 48 hours from the date of issue of such notice.

  The writ petition is disposed of.

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• 2025 (7) TMI 204
  

  Violation of principles of natural justice - Petitioner had no opportunity to meet with the allegations - vague SCN - fraud, willful misstatement or suppression of facts - cancellation of the Petitioner’s Registration - HELD THAT:- The Petitioner on instructions submitted that for a period of three months from today, the accumulated ITC will not be utilized.

  The impugned orders are set aside but the Respondents are granted liberty to issue a fresh show cause notice as proposed, within four weeks from today. The learned counsel for the Petitioner states that a response will be filed within four weeks of receiving the show cause notice. The show cause notice must be disposed of within four weeks of the Petitioner filing his reply to the same.

  Petition disposed off.

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• 2025 (7) TMI 203
  

  Violation of principles of natural justice - impugned order of assessment is an ex-parte order without considering the stand of the petitioner - suppression of turnover - invocation of extraordinary jurisdiction - HELD THAT:- The order u/s 73(9) read with Rule 142(5) of the Central/Bihar Goods and Service Tax Act and Rule, 2017 has been passed after the annual return furnished by the petitioner for the financial year 2018-19 was selected for scrutiny. The assessing authority noticed the suppression of turnover, availment and utilization of input tax credit wrongly and delayed payment of tax. The liability on these accounts were quantified under the provisions of Section 73(1) of CGST/BGST Act.

  In respect of suppression of turnover, the petitioner submitted that the mismatch in December 2018 return showing sales as per GSTR-3B at Rs.4,83,03,934.70/- was due to a clerical mistake. The actual sale for the period as per GSTR 1 in B2C was Rs.48,03,934.00/-. Thus, there was a difference of Rs.4,35,00,000.00/- in the sales figure. Similarly, there was a mismatch in January 2019 returns the sales as per GSTR 3B was Rs. 29,00,239.28/-, exempted sales was at Rs.1,68,750.00/- and the total sales for the period was Rs.30,68,989.28/- but as per GSTR 1, in B2B it was Rs.4,35,626.48/- and as per B2C it was Rs.20,05,429.00/-, the exempted sales was Rs. NIL which was said to be by way of mistake of accountant. Total sales for the period was Rs.24,41,055.48/-. Thus, the difference amount in sale was Rs.6,27,933.80/- and the net differences was Rs.4,41,27,934.50/-.

  The appellate authority has found that the appellant could not produce any evidence in terms of the clarifactory circular dated 27.02.2022 read with Section 16(2) (a) (b) (c) and (d).

  The petitioner has statutory remedy of appeal before the Tribunal, still the petitioner has chosen to move this Court in its extraordinary writ jurisdiction. This Court is of the considered opinion that the impugned orders are neither suffering from violation of principles of natural justice nor this Court finds any jurisdictional error committed by the respondent authorities. The scope of interference with the impugned orders in the extraordinary writ jurisdiction of this Court cannot be extended so as to entertain the present writ application.

  This writ application is dismissed.

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• 2025 (7) TMI 202
  

  Maintainability of petition - availability of efficacious remedy of filing an appeal u/s 107 of the GST act before the appellate authority - petitioner was not given any opportunity before the assessing authority during the assessment proceedings - violation of the principle of natural justice - HELD THAT:- A perusal of the provisions of Section 169 indicates that five modes of service have been provided and further that every decision, order, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided in sub section (1). Therefore, service can be effected at the discretion of the assessing authority by giving or tendering the notice directly or by a messenger including a courier or by registered post or by speed post or courier or by sending e- mail and or by making it available on the common portal or by publication in a news paper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain.

  The assessing authority in the impugned order has recorded that considering the discrepancy in the return filed by the petitioner are notice under section 61 of the GST act was sent on 04/10/2024 requiring the petitioner to remove the discrepancy pointed out in the said notice by 19/10/2024 - The petitioner did not either deposit the amount as directed by the assessing authority, nor did he reply to the notice and accordingly in the aforesaid circumstances the matter was heard ex - parte and decided by the impugned order dated 19/02/2025 which has been assailed in the present writ petition.

  The petitioner was duly communicated by the tax department as per the modes prescribed under Section 169, and therefore, it cannot be said that there was any violation of principles of natural justice. While interpreting the provision of section 169 we will also have to consider Section 13 of the Information Technology Act, 2000. According to Section 13 (2) electronic record deemed to be received when it enters the designated computer recourse. Similarly, as per section 13(3) unless it is otherwise agreed between the parties and electronic record is deemed to be dispatched at the place of the originator has his place of business is deemed to be received at the place of the addressee has his place of business - In the present case, it cannot be lost sight of the fact that at the time of registration the petitioner has disclosed his e-mail address and the mobile over for the purpose of communication, and there is, therefore, an agreement for exchange of communication through electronic mode. In case, the assessee has given a wrong email address, or an email address which is not accessible by him, may or may not be a valid defence which may be determined on the facts of each individual case, but one thing is clear that the respondent cannot be held be responsible for not giving adequate opportunity of hearing to the petitioner.

  The service of notice was made as per the provisions of Section 169 (c) of the GST Act and therefore, there was no breach of the fundamental rights of the petitioner with regard to service prior, during and after the assessment proceedings. In the aforesaid circumstances this court of the considered that the petitioner has an efficacious remedy by way of an appeal and therefore, the aspect of service can also be duly looked into after considering the facts and material produced by the petitioner and therefore for the said reason we do not proceed to determine the question as to whether as per sub clause 2 of section 169 once the service has been effected as per sub clause (c) & (d) of section 169, it shall be deemed to have been served on the date it is tendered.

  There are no merit in the claim of the petitioner that there is breach of fundamental rights that has occurred by not giving opportunity to the petitioner during the assessment proceedings and the impugned order has been passed without giving opportunity of hearing - the preliminary objection raised by learned counsel for the respondents that the petitioner has equally efficacious statutory remedy under Section 107 of GST Act before the First Appellate Authority is agreed and accordingly he is relegate to the same.

  The writ petition is not maintainable and the petitioner has equally efficacious remedy and accordingly he is relegated to the same. The petition is dismissed.

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• 2025 (7) TMI 201
  

  Violation of principles of natural justice - service of notice - all notices/communications were uploaded by the respondent under the “View Additional Notices and Orders” column in the GST common portal - impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner - petitioner is willing to pay 25% of the disputed tax amount to the respondent - HELD THAT:- In the case on hand, it is evident that the show cause notice was uploaded on the GST Portal Tab. According to the petitioner, he was not aware of the issuance of the said show cause notice issued through the GST Portal and the original of the said show cause notice was not furnished to them. In such circumstances, this Court is of the view that the impugned assessment order came to be passed without affording any opportunity of personal hearing to the petitioner, confirming the proposals contained in the show cause notice.

  No doubt, sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite of the fact that no response from the petitioner to the show cause notices etc., the Officer should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act, which are also the valid mode of service under the Act, otherwise it will not be an effective service, rather, it would only fulfilling the empty formalities. Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well.

  This Court finds that there is a lack of opportunities being provided to serve the notices/orders etc., effectively to the petitioner - it was submitted by the learned counsel for the petitioner that the petitioner is willing to pay 25% of the disputed tax amount to the respondent. In such view of the matter, this Court is inclined to set aside the impugned order dated 06.02.2025 passed by the respondent.

  The impugned order dated 06.02.2025 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 25% of disputed tax amount to the respondent within a period of four weeks from the date of receipt of a copy of this order. The setting aside of the impugned order will take effect from the date of payment of the said amount - Petition disposed off by way of remand.

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• 2025 (7) TMI 200
  

  Confirmation of entire original tax demand, without taking into aspect that the petitioner remitted 58% of the differential amount claimed by way of debit from electronic credit ledger - HELD THAT:- On perusal of the impugned order, it is clear that the entire tax proposal was confirmed and no credit was given in respect of 58% remitted by way of debiting the electronic credit ledger of the petitioner. Therefore, the matter requires reconsideration.

  The impugned order dated 07.05.2024 is set aside and the matter is remanded for reconsideration of the first respondent. After providing reasonable opportunity to the petitioner, the first respondent is directed to reconsider the matter, including by taking into consideration the remittances made by the petitioner by way of debit from electronic credit ledger.

  Petition disposed off by way of remand.

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• 2025 (7) TMI 199
  

  Entitlement to take input tax credit - HELD THAT:- Admittedly, the petitioner has submitted its invoice/debit note pertaining to the financial year 2018-19 and, that too, prior to 30-11-2021 and, therefore, the case of the petitioner very well comes under the provisions of sub-section (5) of Section 16.

  The respondent authorities are directed to consider the matter and pass an appropriate order taking into consideration the provision of sub-section (5) of Section 16 of the Central Goods and Services Tax Act, 2017, vide Amendment [Finance (No. 2) Act, 2024] dated 16-8-2024.

  Appeal disposed off.

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• 2025 (7) TMI 198
  

  Exemption from GST - activity of the applicant, involving the provision of pure services for the repair and maintenance of public street lighting infrastructure and the supply of manpower based on the work order issued by the local authorities of Kayamkulam Municipality - services of street light maintenance provided to various government authorities and government entities by the applicant - applicability of Serial No. 3 of N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 and Serial No. 3A of the amended N/N. 12/2017-Central Tax (Rate) dated 25.01.2018 - Applicable SAC entry.

  Exemption from GST - activity of the applicant, involving the provision of pure services for the repair and maintenance of public street lighting infrastructure and the supply of manpower based on the work order issued by the local authorities of Kayamkulam Municipality - applicability of Serial No. 3 of N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 and Serial No. 3A of the amended N/N. 12/2017-Central Tax (Rate) dated 25.01.2018 - HELD THAT:- Under the GST law, a Municipality is treated as a local authority by virtue of the definition provided under Section 2(69) of the CGST Act, 2017, which states that “local authority” includes a municipality as defined in clause (e) of Article 243P of the Constitution. Therefore, for the purposes of GST exemptions under Entry 3 of Notification No. 12/2017-Central Tax (Rate), a Municipality qualifies as a local authority, as it is a constitutionally recognized body entrusted with functions under Article 243W. Accordingly, services provided to a Municipality are eligible for exemption when they relate to such constitutional functions.

  The applicant's pure services of repair and maintenance of public street lighting infrastructure and supply of manpower based on the work order issued by Kayamkulam Municipality are covered under the said exemption and are not exigible to GST. However, this exemption applies only to pure services or to a composite supply where the value of goods involved does not exceed 25% of the total value.

  Applicable SAC entry - HELD THAT:- While the nature of the supply is indeed taxable under GST as it falls under the category of services, it has been held to be exempt under Entry 3 and Entry 3A of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017. Therefore, the question of applicable tax rate does not arise. If the exemption under Notification No. 12/2017 is not applicable, the supply would be taxable under SAC Heading 9987- Maintenance, Repair and Installation (except construction) Services, based on the description provided by the applicant.

  Whether the services of street light maintenance provided to various government authorities and government entities by the applicant, i.e., Kayamkulam Municipality, where the value of goods consumed is less than 25% of the total contract value, are eligible for exemption from GST as provided under Sr. No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, as amended by Notification No. 16/2021-Central Tax (Rate) dated 18-11-2021, being pure services as per the definition and relating to the functions listed under Articles 243G and 243W of the Constitution? - HELD THAT:- In cases where the value of goods involved does not exceed 25% of the total contract value, the supply falls under the NIL rate of tax as per Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 as amended by Notification No. 2/2018-Central Tax (Rate) dated 25-01-2018. Notification No. 16/2021-Central Tax (Rate) dated 18.11.2021 amended Entries 3 and 3A of Notification No. 12/2017-Central Tax (Rate) by omitting the words “or a Governmental authority or a Government Entity” from the list of eligible recipients. However, this amendment does not affect the exemption for supplies made to a “local authority”, which continues to be covered under both Entry 3 and Entry 3A, provided the supply is either of pure services or a composite supply involving goods not exceeding 25% of the total contract value, and the services relate to functions entrusted to Panchayats or Municipalities under Article 243G or Article 243W of the Constitution.

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• 2025 (7) TMI 197
  

  Taxability - fee collected by the applicant from employees who proceed on leave without allowance for engaging in private employment - fees collected from Self-financing educational institutions for conducting departmental inspection for issuing NOC/EC for starting new self-financing Medical, Nursing, Dental colleges' or starting new Courses and for enhancement of seats - rate of GST.

  Taxability on fee collected by the applicant from employees who proceed on leave without allowance for engaging in private employment - HELD THAT:- The collection of fees from Medical and Paramedical Officers for availing Leave Without Allowance (LWA) does not amount to a “supply” under Section 7 of the CGST Act, 2017. The act of granting leave arises out of an employer-employee relationship governed by service rules, and the levy of such fees is an administrative measure introduced as part of a broader public policy aimed at deterring indiscriminate availing of LWA, which adversely impacts the delivery of essential public health services. The fee does not involve any provision of goods or services, nor is it collected in the course or furtherance of any business activity. There is no contractual obligation on the part of the applicant to tolerate the act of taking leave, and the payment made by the employee is not in the nature of consideration for any service rendered. As clarified in CBIC Circular No. 178/10/2022-GST dated 03.08.2022, such deterrent or penal recoveries, including forfeiture of bond amounts or notice pay, are not consideration for any supply and are therefore not taxable.

  In view of the above, it is held that the fees collected in this context do not constitute taxable supply under GST law, and accordingly, no GST is leviable on such transactions.

  Taxability of Inspection fees - HELD THAT:- The affiliation-like services provided by the Directorate of Medical Education-namely, the inspection of facilities, faculty, infrastructure, and the issuance of No Objection Certificates (NOC) or Essentiality Certificates (EC) to private, self-financing medical, nursing, and dental colleges-are functionally and legally similar to the affiliation services discussed in the circular. These services are rendered for a consideration to private institutions for the purpose of enabling or expanding their commercial educational operations. Such services are not rendered to students or for the purpose of imparting education, but rather constitute a regulatory assessment and grant of eligibility to operate. Accordingly, following the same interpretation adopted in Circular 234, the services rendered by DME to self-financing institutions are also liable to GST at the rate of 18%.

  In terms of classification, such inspection and certification services do not fall under SAC 9992 (education services) but are appropriately classifiable under SAC 999799 - “Other services nowhere else classified”. As per N/N. 11/2017-Central Tax (Rate), services under SAC 999799 attract GST at the standard rate of 18% - the fees collected by the Directorate of Medical Education from self-financing institutions for conducting inspections and issuing NOC/ECs constitute a taxable supply of service under GST and attract GST at the rate of 18%.

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• 2025 (7) TMI 196
  

  Exemption from GST - taxability of Yoga course fees collected on behalf of the exempted Yoga courses marketed - applicability of N/N. 12/2017-Central Tax (Rate) dated 28.06.2017, specifically Entry No. 80, read with CBIC Circular No. 66/40/2018-GST dated 26.09.2018 - HELD THAT:- The applicant has claimed that it collects the Yoga course fee on behalf of the Yoga institutions and therefore should not be liable to pay GST on that portion of the transaction. Implicitly, this suggests reliance on the provisions of Rule 33 of the CGST Rules, 2017, which allow exclusion of certain expenses incurred by a supplier acting as a pure agent of the recipient of supply.

  However, in the present case, the applicant has not submitted any documentary evidence, contractual agreements, or transaction-specific details to demonstrate that it fulfils all the mandatory conditions prescribed under Rule 33. These include the existence of a contractual arrangement with the recipients authorizing the applicant to incur expenses on their behalf, separate indication of such amounts in the invoice, and strict pass-through of actual costs without markup or benefit. In the absence of such evidence, it is not possible for this Authority to conclude that the applicant is operating as a pure agent within the meaning of Rule 33. Accordingly, the benefit of exclusion from taxable value under Rule 33 cannot be extended to the Yoga course fee component in the current circumstances.

  A third party organization which markets an exempted Yoga course is not exempted from GST for the Yoga course fees component. However, if the service offered by them is in the nature of pure agent within the scope of Rule 33 of the CGST Rules, 2017, they would be entitled for exemption from GST for the Yoga course fees component.

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• 2025 (7) TMI 195
  

  Classification of goods - rate of GST - Rooter Trainer Cup, made of plastic, used exclusively for propagation of plants, which an agricultural activity - to be classified under HSN 8201 90 00 or otherwise?

  Classification of goods - HELD THAT:- The item in question is made of plastic, and “Plastics and Articles thereof” fall under Chapter 39 of the Customs Tariff. The Chapter Notes to Chapter 39 do not exclude the subject product or any goods related to agricultural activity from its scope. Chapters 3901 to 3914 cover various types of plastics in primary forms, while Chapter 3915 pertains to waste, parings, and scraps of plastics. Chapter 3916 covers monofilaments. Chapters 3916 to 3925 describe various plastic products with specific classifications, none of which include the item under discussion, viz., rooter trainer cups or similar agriculture-related plastic products. Tariff heading 3926, which is the last 4-digit heading under Chapter 39, covers “Other Articles of Plastics.”

  Since the product in question does not fall under any of the preceding specific headings, it is appropriately classified under this residual heading. Upon verification of -the 6-digit classifications under heading 3926, it is found that there is no specific entry covering the subject product, and therefore it falls under the residual sub-heading 3926 90 and further under the residual entry 3926 90 99.

  The product in question, namely the “Rooter Trainer Cup” made of plastic, is appropriately classifiable under Customs Tariff Heading (CTH) 3926 90 99, which shall be the applicable classification for the purposes of levy of GST.

  Applicable rate of tax - HELD THAT:- The item appears to fall under SI. No. 45 of Schedule IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, which reads as: 'Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastic, PVC belt conveyor, plastic beads and plastic tarpaulins]'. This entry attracts Central GST at the rate of 14%, and an equal rate is applicable under the corresponding State GST notification. Further, Sl. No. 137 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017 provides exemption to agricultural implements that are manually operated or animal-driven, falling under Chapter 8201. Since the item in question neither qualifies under Chapter 8201 nor satisfies the condition of being a manually operated or animal-driven implement, the exemption is not applicable in this case. Notification No. 41/2017-C.T.(Rate) (14-11-2017) omitted S. No.45 from Schedule IV w.e.f. 15.11.2017. Also, in S. No. 111, for the entry in column (3), the entry “Other articles of plastics and articles of other materials of headings 3901 to 3914 [other than bangles of plastic, plastic beads and feeding bottles]” was substituted. In practice, Schedule III, Sl.. 111 of Notification No. 1/2017-Central Tax (Rate) now covers 3926 at CGST 9% and SGST 9%.

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• 2025 (7) TMI 194
  

  Taxability of medicines and medical supplies to patients - applicability of N/N. 1/2017-Central Tax (Rate) dated 28-06-2017 - Supply of medicines, implants and other supplies to inpatients - Supplies made to patients who are not admitted to the hospital but who receive treatment as outpatients - Supply of medicines and other supplies to patients based on a doctor's prescription, specifically for consumption at home and during follow-up care -

  Taxability - medicines and medical supplies to patients - applicability of N/N. 1/2017-Central Tax (Rate) dated 28-06-2017 - HELD THAT:- In accordance with the provisions of Section 2(30) of the CGST Act, where the supply of medicines or medical items is naturally bundled with healthcare services-such as in the course of diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy in any recognised system of medicine in India-the entire supply qualifies as a composite supply. In such cases, the principal supply is the provision of healthcare services by a clinical establishment, an authorised medical practitioner, or paramedics. Consequently, any medicines and medical supplies that are naturally bundled with such healthcare services inherit the nature of the principal supply and therefore become eligible for GST exemption - This interpretation is also supported by Circular No. 32/06/2018-GST dated 12-02-2018, wherein it was clarified that “Food supplied to the in-patients as advised by the doctor/nutritionist is a part of the composite supply of healthcare and not separately taxable. “Accordingly, the underlying principle is that healthcare services are exempt from GST. When medicines and medical products are supplied as part of a naturally bundled package with healthcare services, the entire supply is treated as a composite supply, and the exemption available to healthcare services under GST applies to the entire transaction, including the medicines and medical products.

  In the case of outpatients, hospitals generally prescribe medicines but do not administer or remain involved in their continuous treatment. It is entirely up to the patient to decide whether to follow the prescription, and if so, from where to procure the medicines. The choice to purchase or not, or to source them from an external pharmacy, lies solely with the patient. Because the hospital does not exercise control over the patient's continuing treatment after the consultation, such supplies of medicines or consumables cannot be said to be naturally bundled with healthcare services. Consequently, they do not qualify as a composite supply. As a result, the GST exemption applicable to healthcare services does not extend to such supplies of medicines or allied goods, and these are accordingly treated as taxable supplies under GST.

  Supply of medicines, implants and other supplies to inpatients - HELD THAT:- The supply of these items are naturally bundled with supply of health care services as discussed above. Therefore, such supplies are eligible for exemption under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 subject to the conditions stipulated in the Notification.

  Supplies made to patients who are not admitted to the hospital but who receive treatment as outpatients - HELD THAT:- The medicines and other supplies provided to patients are naturally bundled with the underlying health care services. Importantly, the law does not create a distinction between 'inpatients' and 'outpatients' for the purpose of granting exemption. Instead, the eligibility for exemption must be assessed on the basis of whether the supplies are part of a composite supply of medical services. Therefore, where a hospital provides treatment to patients without admitting them, such as in the case of dialysis, dressing, chemotherapy, minor surgeries, or other similar procedures-including pre-admission care like services rendered in casualty-the exemption shall apply, provided that the medicines and supplies are naturally bundled with the delivery of health care services. However, it is important to note that the exemption is limited to cases where the supplies are part of a naturally bundled package of health care services delivered within the hospital.

  Supply of medicines and other supplies to patients based on a doctor's prescription, specifically for consumption at home and during follow-up care - HELD THAT:- These supplies are not naturally bundled with the provision of health care services. Since the hospital's involvement is limited to prescribing and dispensing the medicines-without continuous treatment or direct supervision-the supply of medicines in this context does not constitute a composite supply of health care services. Accordingly, such supplies fall outside the ambit of health care services as defined for GST purposes, and therefore, are not eligible for the exemption granted to health care services.

  However, the exemption from GST on supplies made to inpatients or outpatients as part of their treatment within the hospital does not apply when medicines or other items are sold to them with GST. In such cases, since GST has been collected, it must be paid to the government as per Section 76 of the CGST Act, 2017.

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• 2025 (7) TMI 193
  

  Taxability - potable drinking water supplied through tanker lorries to both Government institutions and private customers - applicability of GST exemption under Serial No. 99 of N/N. 02/2017-Central Tax (Rate), dated 28.06.2017 - HELD THAT:- The customers include Government institutions, Indian Railways, local authorities, other Government offices, and private customers such as hotels and contractors. The applicant collects water from various sources such as dug wells and bore wells and carries out an initial purification process by filtering to remove suspended solids, organic matter, etc. The second phase of processing involves chlorination at appropriate levels to bring the water up to drinking water standards. Proper testing is also conducted by the applicant before supplying the water to customers. The supply of water is not in sealed containers but is filled into tanker lorries with capacities ranging from 2,000 kiloliters to 30,000 kiloliters and transported to the customers' premises, where it is pumped into their tanks or containers for further use.

  Whether the “drinking water” in the instant case is eligible to qualify for exemption as per serial No. 99 of Notification No. 02/2017-Central Tax (Rate), dated 28.06.2017? - HELD THAT:- The process of purification and the contents dissolved in the above categories of water have no similarities with the drinking water supplied by the applicant. Chlorination and filtration are the basic purification methods used by any public utility engaged in water distribution to make the water potable. Also, the applicant does not supply the water in sealed containers; rather, it is supplied in bulk quantities through tanker lorries. Hence, the drinking water supplied by the applicant is not included in any of the categories of water specifically excluded from exemption under the GST Act as per serial No. 99 of N/N. 02/2017-Central Tax (Rate), dated 28.06.2017.

  The drinking water supplied by the applicant in bulk to various customers, including Government institutions, through tanker lorries having capacities ranging from 2,000 kiloliters to 30,000 kiloliters, is eligible for exemption from tax under GST as per entry at serial No. 99 of N/N. 02/2017-Central Tax (Rate), dated 28.06.2017.

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• 2025 (7) TMI 192
  

  Supply or not - cancellation of a lease agreement, originally executed under the pre-GST regime - Taxability of proportionate amount (refund) corresponding to the unexpired lease periods - HELD THAT:- It is evident that while leasing of property constitutes a supply of service under the GST Act, the cancellation of a lease, in itself, does not constitute a taxable activity under the Act. In the present case, as outlined in the application, the applicant is receiving a proportionate amount corresponding to the unutilised period of the lease.

  The taxability of similar transactions has been addressed by the Central Board of Indirect Taxes and Customs (CBIC) in Circular No. 178/10/2022-GST dated 03-08-2022. In this circular, while clarifying the GST liability on compensation paid for cancellation of coal blocks, the CBIC held that 'The compensation was given to them for such cancellation, not under a contract between the allottees and the Government, but under the provisions of the statute and in pursuance of the Supreme Court Order. Therefore, it would be incorrect to say that the prior allottees of the coal blocks supplied a service to the Government by way of agreeing to tolerate the cancellation of the allocations made to them by the Government or that the compensation paid by the Government for such cancellation in pursuance to the order of the Supreme Court was a consideration for such service. Therefore, the compensation paid for cancellation of coal blocks pursuant to the order of the Supreme Court in the above case was not taxable.'

  The gist of the is that the cancellation of coal blocks was not based on any agreement where prior allottees consented to or agreed to tolerate the cancellation in exchange for compensation. Instead, the cancellation was imposed by the Government under statutory provisions and pursuant to a Supreme Court order. The compensation paid was not contractual but statutory, and therefore did not involve any supply of service (such as agreeing to tolerate an act) under GST law. Hence, the compensation paid was not taxable under GST.

  Proceeding on similar lines, the refund received by the applicant for the unexpired portion of the lease period is not liable to GST, as it does not involve any supply of service. The transaction does not entail any agreement to perform, refrain from, or tolerate an act, and is merely a return of consideration for the unutilized lease period.

  The cancellation of the lease agreement, as described above, shall not be treated as a supply under the provisions of Section 7 of the CGST Act, 2017.

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• 2025 (7) TMI 191
  

  Levy of GST - commission earned by the applicant for conducting cardamom auction - HELD THAT:- Going by the nature of activities performed by the applicant, they do not merely cause the sale of goods on behalf of their clients, the cardamom growers and traders. They provide necessary storage and auction facilities including electronic weighing machine and moisture meters for pooling the cardamom in places convenient to the farmers. They pool cardamom from different origins, grade them and convert them to lots for auction. They draw samples from these lots for the purpose of inspection of Spice Board licenced dealers to inspect at the auction house of the Spices Board - As per rule 10(1)(j) of the Cardamom (Licensing and Marketing) Rules, 1987”the auctioneer shall not charge more than one per cent of the sale price as commission for the services rendered by him. The taxability of this commission is the issue raised in this application.

  As regards the eligibility to the exemption under S1.No 54(g) of Notification No 12/2017 Central Tax (R) dated 28.06.2017, it is seen that the exemption is available to the services provided by a commission agent for sale or purchase of agricultural produce. The respondent company has in effect argued that the words 'auctioneer' and 'commission agent' are interchangeable and the reference to 'commission agent' in Entry SI. No 54(g) of Notification No 12/2017 Central Tax (R) can include even an auctioneer. This Authority are not impressed by this argument. It is trite law that exemption notifications are to be strictly interpreted. A notification has to be interpreted in the light of the words employed by it and not on any other basis. In the case of Entry SI. No 54(g) of Notification No 12/2017 Central Tax (R), the exemption given is to the APMC or Board or Commission Agent. As mentioned, a commission agent and an auctioneer are no doubt mercantile agents but the functions performed by them are vastly different.

  Hence by the nature of the services mentioned under SAC 9986(relating to entry 54 of exemption Notification No. 12/2017) sales commission and auction commission will not get classified under this SAC code. Sales commission and auction commissions rightly falls under SAC codes 996111-“Services provided for a fee/ commission or contract basis on wholesale trade or 996211-Services provided for a fee/ commission or contract basis on retail trade” (relating to Entry 5 of Notification Number 11/2017 (CGST Rate).

  The applicant's services fall squarely under Entry No.5 of the Notification Number 11/2017/CT (Rate), Therefore, where a specific entry is available under Entry Number 5 of it supersedes the general entry of the Notification 12/2017 (CGST Rate) and the commission earned by the applicant is liable to GST at the applicable rate.

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• 2025 (7) TMI 139
  

  Cancellation of GST registration of petitioner - non-furnishing of returns for a continuous period of six or more months - petitioner fails to furnish a reply within the stipulated date or fails to appear for personal hearing on the appointed date and time - no date for personal hearing was ever notified - violation of principles of natural justice - HELD THAT:- As per Section 29(2)(c) of the Act, an officer, duly empowered, may cancel the GST registration of a person from such date, including any retrospective date, as he deems fit, where any registered person, has not furnished returns for a continuous period of 6 (six) months. Rule 22 of the CGST Rules, 2017 has laid down the procedure for cancellation of the registration.

  Having regard to the fact that the GST registration of the petitioner has been cancelled under Section 29(2)(c) of the Act, for the reason that the petitioner did not submit returns for a period of six months and more and the provisions contained in the proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 and cancellation of registration entails serious civil consequences, this Court is of the considered view that in the event the petitioner approaches the officer, duly empowered, by furnishing all the pending returns and make full payment of the tax dues, along with applicable interest and late fee, the officer duly empowered, may consider to drop the proceedings and pass an appropriate order in the prescribed Form.

  This writ petition is disposed of by providing that the petitioner shall approach the concerned authority within a period of two months from today seeking restoration of her GST registration. If the petitioner submits such an application and complies with all the requirements as provided in the proviso to Rule 22 (4) of the Rules, the concerned authority shall consider the application of the petitioner for restoration of her GST registration in accordance with law and shall take necessary steps for restoration of GST registration of the petitioner as expeditiously as possible.

  Petition disposed off.

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• 2025 (7) TMI 138
  

  Challenge to pre-show cause notice dated 18th July, 2024 issued in Form GSTDRC-01A, threatening to invoke proceedings under Section 74 of the WBGST/CGST Act, 2017 in respect of the tax period 2019-20 - HELD THAT:- Noting that the petitioner seeks to challenge the show cause issued under Section 74 of the said Act and also considering the fact that the initiation of proceedings are based on alleged fraudulent availment of input tax credit in respect of the supplies effected by the sellers whose registration has been cancelled with retrospective effect, the writ petition should be heard. However, having regard to the fact that the Amnesty Scheme introduced by the respondents in terms of insertion of Section 128A in the said Act, is due to expire on 30th June, 2025, and noting that the petitioner may have an arguable case, the liberty should be afforded to the petitioner to avail the benefits of the Amnesty Scheme introduced pursuant to insertion of Section 128A in the said Act without prejudice to the rights and contentions of the parties in the present writ petition.

  In the event, the petitioner applies before the appropriate authority for availing the benefits of the Amnesty Scheme, the concerned authority shall permit the petitioner to avail such benefits by treating the show cause issued in Form GST DRC 01 dated 5th February, 2025 to be under Section 73 of the said Act. All further steps including the deposit of tax pursuant to the aforesaid shall, however, abide by the result of the petition.

  Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date - Liberty to mention for inclusion in the list after expiry of the period for filing of affidavits.

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• 2025 (7) TMI 137
  

  Rejection of partial refund - entitlemnet to the benefit of delayed filing of return on account of its claim for input tax credit for the period upto 2021, provided such return has been filed on or before 30th November, 2021, consequent upon insertion of Section 16(5) in the WBGST/CGST Act, 2017 - HELD THAT:- The scope of application of Section 16(4) of the said Act has since stood altered to a great extent especially having regard to Section 16(5) being inserted retrospectively with effect from 1st July, 2017. Consequent upon the insertion of Section 16(5) in the said Act, the time for filing of return under Section 39 of the said Act for the tax period 2017-18, 2018-19, 2019-20 and 2020-21 has been extended till 30th November, 2021.

  The orders issued both by the proper officer and appellate authority cannot be sustained and the matter is remanded back to the proper officer for re-adjudication of the issue having regard to the insertion of Section 16(5) of the said Act in the statute book with retrospective effect from 1st July, 2017.

  The orders passed by the appellate authority on 21st February, 2024 and the proper officer on 14th April, 2023 are set aside - Petition disposed off.

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• 2025 (7) TMI 136
  

  Eligibility to pass Input Tax Credit (ITC) on the strength of invoices without actual supply of goods - reasons to believe - gross violation of provision of Section 132(1) of the Assam Goods and Services Tax Act, 2017 - HELD THAT:- It is the admitted fact that the respondent No. 2 issued authorization of arrest of the petitioner to the respondent No. 3. On perusal of the grounds of arrest, it appears that certain reasons have been assigned for effecting the arrest. But it cannot be denied that there was no proper compliance of Section 41/41-A of Cr.P.C., corresponding to Section 35(3) of BNSS, which are mandatorily required to be followed. From the view expressed by the Hon’ble Supreme Court in case of Radhika Agarwal [2025 (2) TMI 1162 - SUPREME COURT (LB)], it is evident that though the GST is a special enactment, but the same cannot be considered as a complete Code in itself as regards to the provision of search, seizure and arrest and as stated above, the provision of Code of Criminal Procedure would be applicable unless it is expressly or impliedly barred by the provision of the said Act. But, here in the instant case, it is seen that there is no compliance of Section 41/41-A of Cr.P.C., corresponding to Section 35(3) of BNSS, which is mandatorily required to be followed as per the guidelines of Hon’ble Supreme Court in the cases of Arnesh Kumar Vs. State of Bihar [2014 (7) TMI 1143 - SUPREME COURT] and reiterated in Satender Kumar Antil Vs. CBI [2022 (8) TMI 152 - SUPREME COURT].

  It is also an admitted position that though the grounds of arrest were communicated to the present petitioner, but there is no communication of “reasons to believe” which ought to have been recorded before issuing authorization letter of arrest. As held by the Hon’ble Supreme Court in case of Radhika Agarwal, the requirement of furnishing the “reasons to believe” to the arrestee is not a mere formality but a substantive safeguard, enabling the person concerned to challenge the legality of the arrest in accordance with law. But, here in the instant case, though it is stated that the “reasons to believe” were duly recorded by the competent authority prior to issuance of the authorization to arrest, but there is nothing on record to show that the same were communicated to the petitioner either at the time of arrest or along with the grounds of arrest. Such non-communication of foundational reasons vitiates the process and undermines the safeguards guaranteed under law, rendering the arrest procedurally infirm.

  It is also an admitted fact that while the grounds of arrest were communicated to the petitioner at the time of arrest under Section 69 of the CGST Act, but the "reasons to believe" forming the basis of the arrest authorization were not communicated to the present petitioner. Furthermore, it is also a fact that the accused/petitioner is in judicial custody since 10.06.2025, but there was no prayer made by the respondent authorities for custodial interrogation or police remand of the petitioner during his custody.

  This Court finds it to be a fit case to extend the benefit of interim bail to the accused/petitioner till disposal of the present criminal petition under Section 482 Cr.P.C. - List the matter after the ensuing summer vacation on a date to be fixed by the Registry.

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• 2025 (7) TMI 135
  

  Classification of goods - Refusal to classify the 'Flavoured Milk' under Chapter 4 of First Schedule of the Customs Tariff Act, 1975 - HELD THAT:- The petitioner came to this Court to get an Advance Rulling of the product in question i.e. 'Flavoured Milk'. Now the Order-in-Original has been passed, therefore, stage of grant of Advance Rulling has gone. Now the petitioner is required to challenge the Order-in-Original by way of appeal to challenge the classification done by the adjudicating authority.

  The petition stands disposed off without expressing any opinion on the merits of the case.

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