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Showing 161 to 180 of 1182 Records
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2025 (2) TMI 1022
Confiscation of imported consignments - hazardous material in the imported consignments - waiver of penalties under the Customs Act, 1962 - disregarding evidence submitted by the importer regarding the contents of the consignments - HELD THAT:- The question of re-examination of a cargo would arise when there is material to discredit the initial examination. On a reading of the order-in-original, it is prima facie found that the description of the goods stuffed in the 67 (54+13) containers did not conform to the pre-shipment certificate.
On a perusal of the order-in-original of the show-cause notice and the order-in-original, it is found that the examination had been conducted on several containers and it has been found that the containers contained waste material which have been referred to as municipal waste that they are hazardous waste and the same is not permissible to be imported.
The Court was convinced in the case of Emami Paper [2024 (5) TMI 1261 - CESTAT KOLKATA] that substantial questions of law arose for consideration and therefore the appeal was admitted. The necessity to grant an interim order did not arise in the said case since the importer agreed to comply with the order passed by the first Appellate authority who directed destruction of the goods.
The option is given to the respondent-importer that if they are willing to re-export the imported cargo which have been held to be prohibited goods in terms of the direction issued by the adjudicating authority, they will give their consent in writing to the Department and if the same is given, subject to compliance of other formalities the Department shall permit the respondent/importer to re-export the goods at their risk and cost without reference to the pendency of this appeal.
The learned Advocate for the appellant shall file requisite number of informal paper books prepared out of Court within four weeks including therein all papers and documents used before the trial Court upon serving copies thereto the learned Advocate for the respondent. Settlement of index and all other formalities are dispensed with.
Conclusion - The Court admitted the appeals based on substantial questions of law raised by the revenue.
List the appeal for hearing after six weeks - The stay application stands disposed of.
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2025 (2) TMI 1021
Invocation of judicial review under Article 226 of the Constitution to interdict personal insolvency proceedings initiated against respondent no.1 under Section 95 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This Court in Jiwrajka [2024 (1) TMI 33 - SUPREME COURT], while deciding the constitutional validity of Sections 95 to 100, has delved into the same and has held as follows. Pursuant to an application for initiating personal insolvency proceedings under Section 94 or Section 95, the Adjudicating Authority appoints a resolution professional under Section 97. The resolution professional performs distinct functions under Part II (dealing with corporate insolvencies) and Part III (dealing with personal insolvencies) of the IBC.
As has been held by this Court in Jiwrajka [2024 (1) TMI 33 - SUPREME COURT], the Adjudicating Authority does not adjudicate any point at this stage and need not decide jurisdictional questions regarding existence of the debt before appointing the resolution professional. This is because Section 99 requires the resolution professional to, at the first instance, gather information and evidence regarding repayment of the debt, and ascertain whether the application satisfies the requirements of Section 94 or Section 95 of the IBC. The existence of the debt will first be examined by the resolution professional in his report, and will then be judicially examined by the Adjudicating Authority when it decides whether to admit or reject the application under Section 100.
It is well-settled that when statutory tribunals are constituted to adjudicate and determine certain questions of law and fact, the High Courts do not substitute themselves as the decision-making authority while exercising judicial review - In the present case, the proceedings had not even reached the stage where the Adjudicatory Authority was required to make such determination. Rather, the High Court exercised jurisdiction even prior to the submission of the resolution professional’s report, thereby precluding the Adjudicating Authority from performing its adjudicatory function under the IBC.
While there is no exclusion of power of judicial review of High Courts, and the limits and restraint that the constitutional court exercises and must exercise are well articulated - the High Court was not justified in allowing respondent no. 1’s writ petition. The High Court should have permitted the statutory process through the resolution professional and the Adjudicating Authority to take its course.
Conclusion - The High Court's exercise of writ jurisdiction was incorrect as it interfered with the statutory process and made determinations that fell within the Adjudicating Authority's domain.
Appeal allowed.
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2025 (2) TMI 1020
Violation of principles of natural justice - non-speaking order - no privity of contract between the Appellant and Respondent No.1 - Impugned Order passed based on invocation of personal guarantee by 3rd party - guarantee was not invoked by proper party - valid appointment of Respondent No. 2 - valid Board Resolution to show that the Respondent No. 1 was authorised to file its Application u/s 95 of the Code or not - liability of Appellant as Guarantor for outstanding dues.
Whether there was no privity of contract between the Appellant and Respondent No.1? - Whether the Adjudicating Authority could have passed the Impugned Order based on invocation of personal guarantee by 3rd party? - HELD THAT:- Section 95 of the Code provides right to the creditors to file application to initiate Personal Insolvency Resolution Process (‘PIRP’). The security trustee is merely holding security in favour of the Financial Creditor or consortium of creditors and therefore either the trust or creditors may file application under Section 95 of the Code. The wording of Section 95(1) of the Code clearly stipulates that creditor may apply “either by himself or generally with other creditors”. Therefore, the creditor i.e., Respondent No. 1 is within his right to initiate Section 95 application and does not prevent him based on alleged lack of privity of contract with the Appellant. It is settled law that a party can enforce the contract made for its benefit.
The Assignment Agreement and the transfer of rights and obligations under the Facility Agreement were binding on the Corporate Debtor and accordingly, the Appellant could not seek to escape his obligations thereunder.
Whether the guarantee was not invoked by proper party as Demand Notice dated 21.04.2021 was issued by PHL Fininvest Private Limited whereas the Guarantee was executed into between the Appellant and Piramal Trusteeship Services Private Limited? - HELD THAT:- The clauses of the Personal Guarantee dated 20.07.2017 are loud and vocal and establish the independent rights of creditors in addition to Trust. By no way of imagination it can be argued by the Appellant (as guarantor) that creditor (including its assignee) can not pursue his rights against the Appellant. The pleading of the Appellant does not stand to any logic and need to be dismissed. There are no merit in the pleadings of the Appellant on their issue and stand rejected.
Whether the Impugned Order is a non-speaking order and contravene the principal of natural justice? - HELD THAT:- The proceedings under the Code are summary and time-bound, and thus, the Adjudicating Authority is not required to conduct proceedings akin to civil proceedings. The Adjudicating Authority's role is limited in considering whether a debt is due and payable and whether a default has occurred. In the present case, the amount of default is not in dispute, nor has the Appellant disputed signing the personal guarantee with the Financial Creditor by admitting to being a signatory to the personal guarantee, the privity of contract is established.
Hon’ble Supreme Court of India in case of Dilip B. Jiwarjka vs. Union of India & Ors. [2024 (1) TMI 33 - SUPREME COURT] cautioned that the principles of natural justice cannot be mechanically applied in a straightjacket formula and stipulated that based on the facts and circumstances, principles of natural justice on some occasions may extend to the right to a full-fledged evidentiary hearing while in certain cases may be circumscribed to a bare minimum opportunity to furnish an explanation by the affected party.
The Impugned Order is found to be valid and was passed while keeping in mind the principles of natural justice and equity.
Whether the appointment of Respondent No. 2 was not in accordance with provision of the Code? - HELD THAT:- The Respondent No. 2 was appointed as the Resolution Professional by the Adjudicating Authority vide order dated 08.04.2022 which has not been challenged by the Appellant and thus attained finality - there are no merit in the contention of the Appellant on this issue.
Whether there was no valid Board Resolution to show that the Respondent No. 1 is authorised to file its Application u/s 95 of the Code? - HELD THAT:- The Board Resolution was valid and wide enough to cover the proceedings, and any objections raised by the Appellant were addressed by a fresh Board Resolution ratifying previous actions.
Whether when adequate securities are already available with the Respondent No. 1 by way of first and exclusive mortgage of various properties (both immoveable and moveable) charged in favour of the Piramal Finance Limited at the time of execution of the Facility Agreement dated 20.07.2017 by Corporate Debtor (HEIL) and therefore, the Appellant as Guarantor is not liable for outstanding dues? - HELD THAT:- In terms of Section 128 of the Indian Contract Act, 1872, the liability of the surety is co-extensive with that of the principal debtor. The Supreme Court in the case of Industrial Investment Bank of India Ltd. v. Biswanath Jhunjhunwala [2009 (8) TMI 1186 - SUPREME COURT] while examining the issue of the term 'co extensive liability' has held that the liability of a surety is not in alternative to the principal borrower or Corporate Debtor and further it is not necessary for a creditor to first proceed against the principal borrower or Corporate Debtor before initiating legal proceedings against the surety.
Section 5(22) of the Code defines personal guarantor as an individual who is the surety in a contract of guarantee to a corporate debtor who provides guarantee in his personal capacity against the loans availed by the corporate debtor with co-extensive liabilities alongwith the corporate debtor.
Conclusion - i) The Assignment Agreement and the transfer of rights and obligations under the Facility Agreement were binding, and the Appellant could not escape his obligations. ii) The creditors have the right to enforce the contract made for their benefit, and the Facility Agreement allowed for the assignment of rights without the consent of the Corporate Debtor. iii) The terms of the Personal Guarantee allowed both the 'Lender' and the 'Trustee' to initiate action against the Appellant. iv) The Adjudicating Authority had considered the Resolution Professional's report and provided reasonable opportunities for objections. The Impugned Order was deemed valid, adhering to the principles of natural justice. v) The appointment was within the discretion of the Adjudicating Authority and that the provisions of the Code are directory in nature. vi) The Board Resolution was valid and wide enough to cover the proceedings, and any objections raised by the Appellant were addressed by a fresh Board Resolution ratifying previous actions. vii) The liability of the surety is co-extensive with that of the principal debtor, and the creditor is not required to first proceed against the principal borrower.
There are no merits in the appeal - appeal dismissed.
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2025 (2) TMI 1019
Seeking grant of regular bail - Money Laundering - proceeds of crime - scheduled offence - right to speedy trial - evidence against the present applicant is in the form of confessional statements by the other co-accused persons which cannot be relied upon with respect to the prosecution of the present applicant - HELD THAT:- The first complaint filed by the respondent/Enforcement Directorate in the present ECIR was on 04.12.2021, thereafter, it is pointed out that 4 supplementary complaints have been filed, last of which was filed on 06.04.2023. The Hon’ble Supreme Court in V. Senthil Balaji [2024 (9) TMI 1497 - SUPREME COURT] has clearly held that since the existence of a scheduled offence is the sine qua non for alleging existence of proceeds of crime then, the said existence of proceeds of crime at the time of the trial of offence under Section 3 of PMLA can be proved only if the scheduled offence is established in the prosecution of the said offence. In these circumstances, it was held, that trial in the case under PMLA cannot be finally decided unless a trial of scheduled offence concludes.
In the present case, as pointed out by the learned counsel for the applicant, in the scheduled offence wherein the charge-sheet has also been filed, the trial has not yet commenced and the charges have not been framed so far.
The role of the present applicant as per the case of the prosecution was for providing entries in order to assist the main accused in laundering the proceeds of crime. The said allegation is sought to be proved by the prosecution on basis of statements made by the other co-accused persons as well as the present applicant. The statements made under Section 50 of the PMLA, no doubt is admissible in evidence, however, the veracity and sanctity of the same has to be tested during the course of the trial - The trial has not even commenced. The present applicant who is accused in a case of money-laundering cannot be considered to be a threat to the society without any material to demonstrate the same. The continued incarceration of the applicant with no possibility of trial being completed in near future, cannot be ignored and in case of conflict with a restrictive statutory provision like Section 45 of PMLA, the latter would not come in way ensuring the right to liberty and speedy trial under Article 21 of the Constitution of India.
In the present case, the applicant was arrested on 12.10.2021 and has been in custody for a period of 3 years and 4 months approximately. The trial in the present complaint, is yet to commence and would take time to conclude. Apart from expressing apprehension of the applicant being a flight risk, no material has been shown to demonstrate the same. The evidence in the present case is primarily documentary in nature which is already in possession of the prosecution.
The applicant is directed to be released on bail upon his furnishing a personal bond in the sum of Rs. 1,00,000/- alongwith one surety of like amount to the satisfaction of the learned Trial Court/Link Court, further subject to the fulfilment of conditions imposed.
Conclusion - The right to a speedy trial is paramount and cannot be compromised by statutory conditions for bail. It establishes that prolonged pre-trial detention without a foreseeable trial conclusion infringes on constitutional rights. The applicant should be granted bail due to the prolonged detention and lack of trial progress.
Bail application allowed.
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2025 (2) TMI 1018
Levy of service tax on the operation of air-conditioned buses - rejection of Sabkha Vishwas (Legacy Dispute Resolution) Scheme, 2019 - whether the petitioner was eligible for relief under the scheme based on the notices received and the rejection order? - HELD THAT:- The Karnataka High Court in M/S. JAGADISH ADVERTISING [2020 (8) TMI 788 - KARNATAKA HIGH COURT] had held that creation of a remarks column and assigning reasons for rejection by the Designated Committee, under the scheme, was not permissible as there was no such prescription in the statutory form. Consequently, the Learned Single Judge set aside the order of rejection as the committee did not have any authority to go into such reasons.
In the present case, the Designated Committee had set out the reasons for rejection as filing of bogus certificates and notices. This Court is of the opinion that, where applications had been filed by producing documents which are not genuine, the same can be rejected by the Designated Committee. Any other view, would mean that a person claiming the benefit of the scheme can come forward with any kind of document and the Designated Committee is precluded from going into the question of whether the said document is genuine or not. Such a view, would result in extreme situations.
Conclusion - The petitioner was not entitled to the benefits of the scheme due to insufficient evidence to support eligibility.
There are no reason to interfere with the order of rejection of the application of the petitioner and accordingly, the Writ Petition is dismissed.
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2025 (2) TMI 1017
Levy of service tax on reimbursement - reimbursable expenses received by the appellant as 'consideration' towards rendering of the taxable service of 'supply of manpower' - time limitation - HELD THAT:- The personnel engaged are the employees of the appellant company and the appellant is paying all salaries etc. to such employees. Only cost of salary of such employees are reimbursed by the JV on actual basis. Thus, it is observed that the whole arrangement between the appellant and the JV does not fall under the taxable service of manpower supply service as defined under rule 2(g) of the Service Tax Rules. Accordingly, the reimbursements received by the appellant cannot be considered as 'consideration' towards any taxable service.
The instant case is squarely covered by the decision of the Hon’ble Apex Court in COMMISSIONER OF CGST, DELHI SOUTH Versus BOEING INDIA DEFENSE PVT. LTD. [2023 (12) TMI 239 - SC ORDER] where it was held that 'The issues which arise in these appeals are covered by the judgment of this Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax.'
Time Limitation - HELD THAT:- In the instant case, the Show Cause Notice dated 16-09-2014 has been issued by invoking the larger period under proviso to the Section 73(1) of the Act, whereas the activity of the appellant is well within the knowledge the of the respondent when first Show Cause Notice, dated 09- 04-2013 was issued. Hence, the whole demand is barred by limitation.
Conclusion - i) The reimbursements received by the appellant cannot be considered as 'consideration' towards any taxable service. ii) The demand is barred by limitation.
The impugned order is set aside - appeal allowed.
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2025 (2) TMI 1016
Extended period of limitation - suppression of facts - intent to evade or not - differences between the Form-26AS and the Balance Sheet furnished by the appellant - HELD THAT:- In the present case, on the basis of third party data received from the Income Tax Department, there was a mismatch in the gross amount declared in the ITR/TDS on the services during the period of FY 2016-17. Further, due to portal glitches, certain errors were there in the service tax returns for the second half year period from 01.10.2016 to 31.03.2017; but at the time of statutory audit, the exact liability was indentified and entire amount was deposited. The information sought by the Revenue was supplied along with the relevant documents, but despite that, show cause notice was issued after inordinate delay of more than three years and by resorting to best judgment assessment, the demand was confirmed without looking into the documents/information supplied by the appellant.
Extended period of limitation - HELD THAT:- There is no allegation of suppression against the appellant either in the show cause notice or in the Order-in-Original & Order-in-Appeal. The Revenue has failed to establish any of the ingredients as required for invoking the extended period of limitation.
The impugned order is barred by limitation - Appeal of the appellant allowed only on limitation by setting aside the impugned order.
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2025 (2) TMI 1015
Maintainability of petition - availability of alternative statutory remedy - petitioners did not put in the pre-deposit as is required for maintaining such appeals - HELD THAT:- Considering the fact that the petitioners had already applied before the statutory authority by filing appeals and at this stage since learned advocate representing the petitioners would submit that the petitioners are ready and willing to pursue the aforesaid appeal provided the communications dated 30th September, 2024 are permitted to be withdrawn, I am of the view that in the fitness of things and not to render the petitioners remediless, the petitioners should be permitted to pursue the appeal filed by them. Accordingly, the petitioners are permitted to withdraw the letters dated 30th September, 2024.
The Commissioner of Appeals is directed to if necessary by passing appropriate orders to restore the appeal, hear out and dispose of the appeals in accordance with law, subject to compliance of statutory formalities.
Application disposed off.
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2025 (2) TMI 1014
Works contract - Exemption to subcontractors in terms of Entry 59-A of the 1st schedule to the AP VAT Act - HELD THAT:- Entry 59A exempts all goods sold within the SEZ area by an operator, developer, a co-developer or contractor or by any of the above. The term contractor has now been interpreted to include sub-contractors, by virtue of the Judgment of the erstwhile High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh in M/s. Larsen and Toubro and Others vs. State of Andhra Pradesh [2006 (10) TMI 377 - ANDHRA PRADESH HIGH COURT].
However, Section 7A, which was introduced subsequently, on 24.09.2008, states that exemption of tax on sale of goods within the Special Economic Zone will be available on sale of any goods to persons who have been authorized to establish unit in the SEZ or authorized to develop operate and maintain a SEZ. The further condition is that only such sales of goods made for the purposes, set out in Section 7A would be eligible for such exemption.
In the present case, entry 59A states that all goods sold by the persons mentioned in entry 59A, would be eligible for exemption. Section 7A also provides for such exemption. However, the said exemption is subjection to certain conditions - When there is a possibility of conflict between two provisions of law, the rule of harmonious construction would have to be applied to see if both provisions of law can operate simultaneously. Applying this principle, there are no reason as to why both provisions cannot operate at the same time. At best, Section 7A is a more restrictive provision of law whereas item 59A is a more expansive exemption. It may also be noted Entry 59A was not deleted from the Act, when Section 7A was introduced, and came to be deleted much later. This is also a factor, which has to be taken into account while trying to harmonize both the provisions of law.
Conclusion - There are no reason to hold that there is a conflict between Section 7A of AP VAT Act and Entry 59A of the 1st Schedule to the AP VAT Act. In the absence of a conflict, the non-obstante clause does not come into operation and consequently the petitioner was entitled to the benefit of Entry 59-A of the 1st schedule which exempts all the sales made by the petitioner, in the course of execution of the works contract, for M/s. Abhijeet Projects Limited.
All the impugned orders are set aside and the Writ Petitions are allowed.
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2025 (2) TMI 1013
Seeking to quash the SCN issued by the State Tax Officer and the Office of the Commissioner of Commercial Taxes, Goa - demand for alleged short-payment of goods and service tax for the financial year 2017-2018 with interest and penalty - HELD THAT:- Let all these matters be notified for final disposal on 18-3-2025 along with SLP (C) Nos.19366-19369/2023 and other connected matters.
Appeal disposed off.
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2025 (2) TMI 1012
Violation of principle of natural justice - personal hearing was denied - difference in the amount of Input Tax Credit (ITC) for the tax period April, 2018 to March, 2019 - HELD THAT:- A bare look at the show cause notice issued under Section 73 of the Act (Annexure - 5) would reveal that date of filing of reply and date of personal hearing are the same i.e. 20.01.2024. This Court has repeatedly frowned on the action of the respondents in fixing identical date of reply and date of hearing, as the same apparently is an empty formality and essentially results in violation of principle of natural justice.
It would be seen that show cause notice was issued on 10 points and while on 7 points, the same was accepted, that also without indicating any reason, on 3 points only a cursory observation has been made that no evidence has been produced pertaining to deposit of tax through RCM and the accounts books have not been verified. Such a cursory disposal of the objection raised in reply to the show cause notice cannot be countenanced when plea raised is very specific.
In view of above fact situation, wherein besides non granting of opportunity of hearing, the order impugned i.e. 30.04.2024 passed, is wholly cursory, the same cannot be sustained.
So far as the challenge laid to order passed under Section 161 of the Act rejecting the rectification application is concerned, in view of the fact that the order dated 30.04.2024 itself has been found to be vitiated, rejection of the said application under Section 161 of the Act loses its significance.
The order impugned dated 30.04.2024 passed under Section 79(3) of the Act is quashed and set aside - Petition allowed.
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2025 (2) TMI 1011
Challenge to an order rectifying a penalty imposed u/s 129(3) of the Goods and Services Tax Act, 2017 - HELD THAT:- It is not in dispute that an order of detention u/s 129(1) of the Act qua the goods being transported by the petitioner was passed and show cause notice under Section 129(1)(a) of the Act proposing a penalty of Rs. 22,37,220/- was issued. Reply to the show cause notice was filed by the petitioner whereafter though challan under PMT-06 for deposit of GST was generated, the amount was deposited through DRC-03 in cash. The reason at the footnote clearly indicated that ‘the amount of penalty is paid under protest and without prejudice to our legal right of appeal’. Whereafter the order u/s 129(3) was passed on 06.10.2024 indicating a demand of Rs. 22,37,220/- and form GST DRC-07 qua the demand was also generated. However, apparently, by way of an afterthought, exercising power u/s 161 of the Act, the order dated 06.10.2024 was passed purportedly rectifying the order and the demand was indicated as ‘NIL’.
Though in terms of the requirement on part of the respondent to pay the amount penalty, it is true that the demand was NIL, but the deposit was under protest. The passing of the order rectifying the order passed u/s 129(3) of the Act has the implication that on account of the demand being ‘NIL’, the petitioner cannot file appeal against the demand raised and deposited under protest by him. The mere fact that the amount was deposited through DRC-03 of the Act with specific endorsement regarding the payment being under protest, the same cannot be termed as a voluntary payment so as to permit the respondents to rectify the order and deprive the petitioner from questioning the validity of the said order by filing statutory appeal.
Conclusion - The rectification order is quashed, reinstating the petitioner's right to appeal the original penalty order.
In view of the fact that on passing of the order dated 08.10.2024, the petitioner has been deprived of the right to file appeal, the period starting from 08.10.2024 till passing of this order, shall be excluded for computing the period of limitation for filing the appeal against the order dated 06.10.2024 passed under Section 129(3) of the Act - petition allowed.
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2025 (2) TMI 1010
Rate of GST on works contracts - Government entity or not - recovery of differential tax - HELD THAT:- There is no doubt that the petitioner is liable to pay GST @ 18% on the taxable turnover arising out of the contract with the 1st respondent. However, the 1st respondent had only reimbursed @12% instead of 18%.
The contention of the petitioner that the contract between the petitioner and the 1st respondent required the 1st respondent to reimburse the entire amount of GST paid by the petitioner, has not been contradicted. In such circumstances, it must be held that the 1st respondent was liable to reimburse the petitioner to the extent of the GST paid out by the petitioner and accordingly, the 1st respondent is liable to reimburse the petitioner the differential amount of GST @ 6%, for the period for which the petitioner ended up paying GST @ 18%. Needless to say, if interest is recovered from the petitioner for late payment, by the GST authorities, the same shall be reimbursed by the 1st respondent.
This Writ Petition is disposed of directing the 1st respondent to reimburse the petitioner to the extent of the differential amount of GST paid by the petitioner over and above the GST which has been reimbursed by the 1st respondent on account of the works executed by the petitioner under the contract with the 1st respondent.
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2025 (2) TMI 1009
Violation of principles of natural justice - no proper and prior SCN prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 and the petitioner was only served with a Summary of SCN in Form GST DRC-01 - HELD THAT:- Non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section [1] of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section [1] of Section 73 and sub-rule [1] of Rule 142 of the AGST Rules, 2017. A Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section [1] of Section 73 to set the proceeding in motion.
From the provisions of Section 73, it emerges that the Show Cause Notice is required to be issued by the Proper Officer, the statement under Section 73 [3] is to be issued by the Proper Officer as well as the Order under Section 73[9] is required to be issued by the Proper Officer. Compliance of the provisions contained in sub-section [1] to sub-section [8] and sub-section [10] to sub-section [11] of Section 73 and sub-rule [1] of Rule 142 are conditions precedent to term an Order passed under sub-section [9] of Section 73 as a valid one.
Having regard to the fact that a proper and prior Show Cause Notice under sub-section [1] of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 [Annexure-B to the writ petition] and the Attachment to Determination of Tax [Annexure-B to the writ petition], and in terms of the observations made in the common Judgment and Order [2024 (10) TMI 279 - GAUHATI HIGH COURT], the impugned Order dated 21.08.2024 [Annexure-C to the writ petition] is found not sustainable in law and the same deserve to be set aside and quashed.
Conclusion - i) The Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73(1) of the Central Act as well as the State Act. ii) The issuance of proper Show Cause Notices is mandatory for initiating proceedings under Section 73, and that compliance with natural justice principles is essential.
Petition disposed off.
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2025 (2) TMI 1008
Violation of principles of natural justice - no proper and prior SCN prescribed under sub-section [1] of Section 73 of the Assam Goods and Services Tax Act, 2017 and the petitioner was only served with a Summary of SCN in Form GST DRC-01 - HELD THAT:- Non-issuance of a proper and prior Show Cause Notice, as contemplated under sub-section [1] of Section 73 of AGST Act, 2017 and issuance of only Summary of Show Cause Notice and Attachment to Determination of Tax cannot be said to be in compliance with sub-section [1] of Section 73 and sub-rule [1] of Rule 142 of the AGST Rules, 2017. A Summary of Show Cause Notice is held to be not a substitute of a Show Cause Notice, contemplated by the provisions of sub-section [1] of Section 73 to set the proceeding in motion.
From the provisions of Section 73, it emerges that the Show Cause Notice is required to be issued by the Proper Officer, the statement under Section 73 [3] is to be issued by the Proper Officer as well as the Order under Section 73[9] is required to be issued by the Proper Officer. Compliance of the provisions contained in sub-section [1] to sub-section [8] and sub-section [10] to sub-section [11] of Section 73 and sub-rule [1] of Rule 142 are conditions precedent to term an Order passed under sub-section [9] of Section 73 as a valid one.
Having regard to the fact that a proper and prior Show Cause Notice under sub-section [1] of Section 73 of the AGST Act, 2017 was not issued along with the Summary of Show Cause Notice in Form GST DRC-01 [Annexure-B to the writ petition] and the Attachment to Determination of Tax [Annexure-B to the writ petition], and in terms of the observations made in the common Judgment and Order [2024 (10) TMI 279 - GAUHATI HIGH COURT], the impugned Order dated 21.08.2024 [Annexure-C to the writ petition] is found not sustainable in law and the same deserve to be set aside and quashed.
Conclusion - i) The Summary of the Show Cause Notice in GST DRC-01 is not a substitute to the Show Cause Notice to be issued in terms with Section 73(1) of the Central Act as well as the State Act. ii) The issuance of proper Show Cause Notices is mandatory for initiating proceedings under Section 73, and that compliance with natural justice principles is essential.
Petition disposed off.
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2025 (2) TMI 1007
Violation of principles of natural justice - no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order - petitioner's consultant had simply uploaded the Form GSTR-9 and Form GSTR-9C instead of filing a proper reply - HELD THAT:- As far as the opportunity for filing of reply is concerned, this Court does not find any fault on the part of the respondent. Though sufficient opportunity was provided, the consultant of the petitioner had failed to file any effective reply to decide the matter. Under these circumstances, the impugned order came to be passed by the 1st respondent.
As far as the opportunity of personal hearing is concerned, no such opportunity was provided to the petitioner subsequent the filing of reply. As per the provisions of Section 75(4) of the GST Act, if the 1st respondent is intend to pass any adverse order, it is mandatory for them to provide sufficient opportunity to the petitioner subsequent to the filing of reply and prior to the passing of assessment order. However, in this case, the impugned order has been passed against the petitioner without providing any such opportunity of personal hearing, which is not only contrary to the provisions of Section 75(4) of the GST Act, but also in violation of principles of natural justice.
The impugned order dated 23.04.2024 is set aside and the matter is remanded to the 1st respondent for fresh consideration, on condition that the petitioner shall pay 10% of disputed tax amount, to the respondent within a period of two weeks from today (18.02.2025) and the setting aside of the impugned orders will take effect from the date of payment of the said amount - Petition disposed off by way of remand.
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2025 (2) TMI 1006
Constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 - ultra vires of Articles 14, 19(1)(g) and 20 of the Constitution of India - availment of fraudulent Input Tax Credit (ITC) on the invoices issued by respondent No.3 - HELD THAT:- As per the contents of the show-cause notice, a specific intelligence was gathered by the officers of the CGST and Central Excise, Indore Commissionerate that as many as 12 noticees are indulged in issuance of fake invoices to various manufacturers without actual supply of goods. The investigation further revealed that the noticees had shown supply of various commodities to their recipients despite the fact that their supply pertains to FMCG goods. A detailed show-cause notice which runs into 82 pages has been issued to the petitioner and 11 other purchasers as well as respondent No. 3/supplier. Therefore, only on the instance of the petitioner the entire show-cause notice cannot be quashed.
Petitioner is required to establish its defence by producing documents before the competent authority, who shall examine the invoices and bills generated by all the noticees during the enquiry. It appears that in order to avoid the participation in the enquiry, petitioner is challenging the constitutional validity by placing reliance on the judgment passed by the Delhi High Court in case of On Quest Merchandising India Pvt. [2017 (10) TMI 1020 - DELHI HIGH COURT] in respect of Delhi Value Added Tax Act, 2004 in which the pari materia provision was 'read down'.
Conclusion - The non-obstante clause in the negative sentence in Section 16(2) restricts the eligibility under Section 16(1) for entitlement to claim ITC.
There are no good ground for entertaining this petition - petition dismissed.
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2025 (2) TMI 1005
Adjustment of the amount paid based on the demand raised by the respondents in Form GST DRC-07 - HELD THAT:- Having considered the scheme of rule 142 of the said rules which provides that voluntary payments or payments made pursuant to intimation made in FORM GST DRC-01 by the proper officer before a demand is raised shall be made in FORM GST DRC-03, however, once a demand is raised or an order is passed and a demand is raised for recovery in GST DRC-07, the payment thereof could only be made by crediting the demanded amount in the electronic liability registered in FORM GST PMT-01 against the debit entry created for such demand. It is noted that sub-rule (2B) of rule 142 has recently been inserted by notification no.12/24 dated 10th July, 2024 which takes care of payments made in FORM GST DRC -03 against a recovery demand as well.
Admittedly, in this case the petitioners had paid the demand, in Form GST DRC-03 instead of crediting the said amount in electronic liability register in Form GST PMT -01 against the debit entry created for the said demand. It appears that rule (2B) taking note of such anomalous situations has provided for an opportunity to such person to apply in Form GST DRC-03A electronically on the common portal for availing the benefit of the amount already paid in Form GST DRC-03, for the same to be credited in the electronic liability register in Form GST PMT 01 against the debit entry already created for the said demand. Since, it is an admitted position that the petitioners had made payment in Form GST DRC-03, the petitioners are permitted to make an appropriate application in Form GST DRC-03A electronically.
If the petitioners make an application under Section 54 of the said Act, such application shall duly be processed and the amount as aforesaid already recovered shall be refunded back to the electronic cash/credit ledger of the petitioners within a period of two weeks from the date of making such application.
The writ petition is disposed of.
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2025 (2) TMI 1004
Non-service of SCN - notices issued under Section 73 of the Act, were uploaded on 'Additional Notices and Orders' Tab of the G.S.T. Portal - petitioner being unaware of issuance of the notices as well as passing of the order, could neither appear before the authority nor question the validity of the impugned order within the period of limitation - HELD THAT:- In the case of Ola Fleet Technologies Pvt. Ltd [2024 (7) TMI 1543 - ALLAHABAD HIGH COURT] a coordinate Bench of this Court inter alia observed and held that 'At present, it does appear that the petitioner is entitled to a benefit of doubt. No material exist to reject the contention being advanced that the impugned order was not reflecting under the tab "view notices and orders". On merits, as noted in the earlier orders an other dispute exists whether all replies and annexures to the replies as filed by the assessee were displayed to the assessing officer and whether those have been considered. We find, no useful purpose may be served for keeping this petition pending or calling for a counter affidavit or even relegating the petitioner to the available statutory remedy.'
The order impugned dated 05.04.2024 passed by the Assistant Commissioner, State Tax, Sector 8, Varanasi (Annexure-1 to the writ petition) is quashed and set aside - petition allowed.
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2025 (2) TMI 1003
Rejection of petitioner's appeal on the ground of delay - Reversal of the input tax credit availed by the petitioner - HELD THAT:- This Court finds that the second respondent, in rejecting the petitioner's appeal on the ground of delay, applied the provisions of the GST Act strictly. However, it is the opinion of this Court that the delay of 35 days in filing the appeal, while significant, could be condoned in the interests of justice, considering the circumstances surrounding the delay and the actions already taken by the petitioner to discharge a substantial portion of the disputed tax liability.
This Court is of the view that the appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the pre- deposit of 10% of the tax liability and additional payments towards the disputed tax amount. Therefore, this Court is inclined to provide the petitioner an opportunity to present the matter on its merits before the second respondent.
The matter is remanded back to the second respondent for fresh consideration, directing the second respondent to consider the appeal on its merits and in accordance with law, taking into account the facts and circumstances of the case - Petition disposed off by way of remand.
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