In 2024, several landmark decisions were made, significantly impacting taxpayers and revenue authorities. Our editorial team carefully examined and analysed the year’s judgments and orders, culminating in over 3,000 meticulously reported cases on taxmann.com. These cases span a wide array of critical aspects within indirect tax laws, with a focus on highlighting favorable outcomes. From this comprehensive collection, we have curated the top 25 cases of 2024, as featured on taxmann.com and the roster for 2024 is outlined below.
1. Construction of Immovable Property May
Be Considered as ‘Plant’ for Claiming ITC If It is Critical to Business Operation: SC
Chief Commissioner of Central Goods and Service Tax & Ors. vs. M/s Safari Retreats Private Ltd.& Ors. [2024] 167 taxmann.com 73 (SC)
In the present case, the petitioner had constructed a shopping mall in which huge quantities of materials were purchased and CGST and SGST were paid on such purchases. The petitioner let out different units of the mall to different persons on rental basis and claimed benefit of input tax credit on GST paid by it on purchases of input materials and services which had been used in construction of shopping mall for set off, against GST payable on rent received from tenants. The authorities denied benefit of ITC in view of section 17(5)(d).
The Orissa High Court had read down section 17(5)(d) to give benefit of ITC to taxpayer on goods and services consumed in construction of shopping mall against GST payable on rentals received from tenants of shopping mall. But the department filed SLP against the order before the Apex Court.
The Honorable Supreme Court noted that the expression ‘plant or machinery’ used in Section 17(5)(d) cannot be equated with the term ‘plant and machinery’ as defined by the explanation to Section 17 of the CGST Act. These terms must be interpreted distinctly in the context of their specific use under the law.
Moreover, a ‘functionality test’ is necessary to determine whether a building qualifies as a ‘plant’ under clause (d) of Section 17(5). This test involves assessing the specific facts of each case in light of the building’s purpose and utility in the registered person’s business. Thus, the Court held that if the construction of the immovable property is critical to the business’s operation, it may be considered a plant for the purposes of input tax credit under the CGST Act.
Eicher Motors Ltd. v. Superintendent of GST and Central Excise, Range-II [2024] 158 taxmann.com 593 (Madras)
In the instant case, the petitioner was not able to file the monthly return in Form GSTR 3B within the prescribed time limit since the amount of transitional credit was not reflect in Electronic Credit Ledger. However, the petitioner had deposited the tax amounts in the Electronic Cash Ledger (ECL) within the due dates, discharging the GST liability for
the period from July 2017 to December 2017. Subsequently, the department demanded the payment of interest for the alleged belated payment of GST. It filed writ petition and challenged the demand.
The High Court observed that the GST amount was routinely deposited into the ECL within the due date by the petitioner. The Court further noted that once the amount is paid by generating GST PMT-06, the said amount would be initially credited to the account of the Government immediately upon deposit, at which point, the tax liability of a registered person would be discharged to the extent of the deposit made to the Government.
Thereafter, for the purpose of accounting only, it would be deemed to be credited to ECL as stated in Explanation (a) to section 49(11) of the CGST Act. Thus, the Court held that the petitioner would not be liable to pay interest on GST amount which was routinely deposited into ECL within due date and the writ petition was allowed.
3. Interest Liability Arises Automatically on Delayed Filing of Returns Even If Payment Made From
Credit Ledger: Patna HC
The petitioner received a notice for the recovery of interest on the belated payment of tax. The interest was charged for the tax paid from the Electronic Credit Ledger (ECL) for the financial year 2018-19 and order was passed. Aggrieved by the order, the petitioner filed a writ petition to the High Court of Patna.
The High Court noted that the payment of tax and furnishing of return have to occur simultaneously. The Court further noted that the input tax credit and the resultant payment of tax from the Electronic Credit Ledger occurs only when a return is furnished. If there is a delay in furnishing of returns then obviously there is a delay in the input tax credit coming into the Electronic Credit Ledger and a resultant payment being made to the Government as tax, interest, penalty or other amounts due under the Act.
Therefore, the claim of the petitioner that the proviso of Section 50(1) mandates a levy of interest only when there is a delayed furnishing of return and debit made and payment effected from the Electronic Cash Ledger was rejected. The Court also held that interest shall be payable on the delay occasioned in the payment of tax and as per section 50(1) interest liability would arise automatically on delayed filing of returns, irrespective of whether payment is made from Electronic Credit Ledger or Electronic Cash Ledger.
4. HC Placed Matter Before Division Bench to Decide Whether State Tax Authority Can Issue SCN Under CGST Act
Pinnacle Vehicles and Services (P.) Ltd. v. Joint Commissioner, (Intelligence and Enforcement) [2024] 169 taxmann.com 177 (Kerala)
The petitioner was a registered person under the CGST/SGST Acts, allocated to the jurisdiction of the Central Tax Authorities. The petitioner challenged the show cause notice issued by the State Tax Authority without jurisdiction and without any notification as contemplated by the provisions of Section 6(1) of the CGST Act.
The Kerala High Court noted that a reading of Section 6(1) of the CGST Act makes it clear that the officers appointed under the State Goods and Services Tax Act are authorised to be proper officers for the purposes of the Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify. Unaided by authority, a reading of the provision suggests that the officers appointed under the State Goods and Services Tax Act are proper officers for the purposes of the Central Goods and Services Tax Act. It is only when any restriction or condition has to be placed on the exercise of power by any officer appointed under the State Goods and Services Tax Act that a notification as contemplated by the provisions of Section 6(1) of the CGST Act has to be issued.
Since the issue raised in this writ petition will affect several proceedings, and taking note of the view expressed by the Madras High Court in case of Tvl. Vardhan Infrastructure [2024] 145 taxmann.com 1/66 GST 1 (Mad.), which is contrary to the prima facie view that the Court has taken, the Court was of the opinion that this issue requires an authoritative pronouncement by a Division Bench of this Court.
5. Telecom Towers Are Movable Properties as
They
Do Not Meet the Test of Permanency and ITC
on Same
Cannot Be Denied: HC
Bharti Airtel Ltd. v. Commissioner, CGST Appeals-1, Delhi* [2024] 169 taxmann. com 390 (Delhi)
In the present case, the writ petition was filed to challenge the proceedings under GST in which the department raised demand of tax along with interest and penalty on the ground that input tax credit was denied on inputs and input services used for setting up passive infrastructure i.e. telecommunication towers. It was contended that telecommunication towers would not fall within ambit of Section 17(5)(d) and hence, denial of input tax credit would not sustain.
The Honorable High Court noted that the Supreme Court in case of Bharti Airtel Ltd. v. Commissioner of Central Excise [2024] 168 taxmann.com 489 has conclusively held that telecommunication towers cannot be construed as immovable property. The Court further noted that telecommunication towers would not qualify as immovable property as they neither qualify test of permanency nor can be said to be attached to earth. The mobile towers can be dismantled and moved and they were never erected with an intent of conferring permanency. Their placement on concrete bases was only to enable those towers to overcome vagaries of nature. Thus, the denial of input tax credit on telecommunication towers would not sustain.
6. Transfer of Development Rights of Land by Way of JDA Should Not Be Treated as Sale of Land by Land Owners: HC
Prahitha Contruction (P.) Ltd. v. Union of India [2024] 159 taxmann.com 437 (Telangana)
The petitioner was engaged in construction activities and entered into joint development agreement (JDA) with land owners. It filed writ petition seeking declaration that transfer of development rights of land by land owners to petitioner by way of JDA should be treated as sale of land and execution of agreement should not be subjected to levy of GST.
The Honorable High Court noted that as per JDA, there was no automatic transfer of ownership given to petitioner at time of execution of JDA. The petitioner would get right to sell property only after completion of project and issuance of completion certificate. Therefore, it was held that transfer of development rights to petitioner would be amenable to GST and can’t be brought within purview of Entry 5 of Schedule-III of GST Act. The Court also noted that the notification issued by Government to clarify aspect of transfer of development rights being attracted to GST would be valid.
7. Claiming of ITC Under Wrong Head is Only a Technical Mistake Committed by Assessee: HC
Rejimon Padickapparambil Alex v. Union of India [2024] 169 taxmann.com 152 (Kerala)
The assessee was a registered dealer and received various inwards supplies of goods, both inter-state and intra-state. For the inter-state inward supplies, on which IGST was paid by the supplier, the assessee had to avail input tax credit. While filing Form GSTR-3B, instead of showing the IGST component in the eligible credit details, the assessee inadvertently showed the IGST component as nil and added the bifurcated CGST and SGST components of IGST to the existing figures showing eligible CGST and SGST credit.
This resulted in a mismatch between Form GSTR-2A and Form GSTR-3B. The Assessing Authority (AA) contended that the mismatch had resulted in the assessee utilising ‘unavailable credit’ towards payment of CGST and SGST on outward supplies. Further, the authority issued a notice demanding the return of the CGST/SGST amounts allegedly utilised in excess by the assessee.
The Kerala High Court held that Section 73 of the GST Act was attracted only when it appeared to a proper officer that any tax had not been paid or short paid or erroneously refunded, or where input tax had been wrongly availed or utilised for any reason. In the instant case, there had been no wrong availment of credit, and the only mistake committed by the assessee was an inadvertent and technical one. The mistake was also insignificant because there was no outward supply attracting IGST that was effected by him. Therefore, the Court set aside the order of AA and allowed the writ petition by quashing the demand order.
8.
Disallowing ITC for Late Returns is Arbitrary as Late Fees and Interest Serve as Sufficient Deterrents: HC
During the financial year 2018-19, the petitioner filed GST returns from April 2018 to March 2019 in FORM GSTR-3B along with the GST liability and late fee on outward supplies. The petitioner availed input tax credit correctly as per their inward supplies for the relevant period. Subsequently, a notice was issued by the Assistant Commissioner of COST to the petitioner proposing to disallow the ITC for the tax period 2018-19. The disallowance was proposed on the ground of late filing of return in FORM GSTR-3B. Aggrieved by the order, the petitioner filed a writ petition to the Madhya Pradesh High Court and contended that Section 16(4) puts arbitrary restrictions/limitations on the right to avail input tax credit.
The Madhya Pradesh High Court held that the provision of Section 16(4) of the CGST Act, which restricts the claim of ITC only on the ground that a return is filed after the date prescribed, is arbitrary. The tax payer who is claiming the ITC has already made the payment of tax to the supplier from whom the foods and services have been received. The payments include both the cost of service or goods and the amount of Tax. Thus, the taxpayer cannot be deprived of his right to claim ITC. The imposition of a time limit through Section 16(4) would supersede or override the scheme of the statute.
The operation of Section 16(4) makes the non-obstante Section 16(2) meaningless since Section 16(2) has overriding effect on Section 16(4), and Section 16(2) has been drafted in a manner which shows clear legislative intent that it is not subject to Section 16(4). Moreover, the payment of late fees and interest are already there as deterrents for the taxpayers forcing them to be disciplined. Under such circumstances, saddling with double payment of tax by way of Section 16(4) is arbitrary and capricious.
9. Initiation of an Enquiry or Summons Under CGST Cannot Be Considered
as Initiation of Proceedings: HC
K.T. Saidalavi v. State Tax Officer [2024] 168 taxmann.com 211 (Kerala)
In the present case, the CGST department had initiated enquiry regarding non-payment of GST and had directed the production of certain records. This was followed by summons issued under Section 70 of the CGST Act leading to the recording of certain statements. The petitioner filed writ petition to challenge the action by contending that State Authority had already initiated proceedings under Section 74 read with Section 122(1) of the CGST/ SGST Acts.
The Honorable High Court noted that the term ‘initiation of any proceedings’ is a reference to the issuance of a notice under the provisions of the CGST/SGST Acts and the initiation of an enquiry or the issuance of summons under Section 70 of the CGST/SGST Acts cannot be deemed to be initiation of proceedings for the purpose of Section 6(2)(b) of the CGST/ SGST Acts.
In the present case, the Central Authority had only initiated an enquiry and the proceedings were initiated by the State Authority by the issuance of notice under Section 74 of the CGST/SGST Acts. Therefore, it was held that the petitioner was not entitled to any relief and the writ petition was liable to be dismissed.
10. Rule 96(10) is Ultra Vires to Section 16 of IGST Act and Unenforceable on Account of Being Manifestly Arbitrary: HC
Vinayaka Cashew Company v. Union of India [2024] 167 taxmann.com 760 (Kerala)
In the instant case, the petitioner challenged the validity of Rule 96(10) of the CGST Rules, 2017. The Rule 96(10) was inserted with effect from 23-10-2017 by Notification No. 53/2018-Central Tax, dated 9-10-2018.It provided that persons claiming a refund of IGST on the export of goods or services, should not have received supplies on which the benefit of certain notifications was availed. However, the concept of zero-rated supply in the provisions of Section 16 of the IGST Act, 2017, indicate that there is to be no export of taxes and on the goods being exported the exporter is entitled to a refund of the IGST paid on the export of goods.
The High Court noted that Section 16 of the Integrated Goods and Services Tax Act, 2017 does not impose any restriction on the right of the exporter to claim a refund of IGST paid on the export of goods or tax paid on input services or input goods used in the export of
goods or services. The Court also noted that the provisions of Rule 96(10) of CGST Rules have undergone a series of amendments and the Rule as it presently stands imposes certain restrictions in the matter of refund of IGST.
Thus, the Court held that Rule 96(10) is ultra vires section 16 of the IGST Act and unenforceable on account of being manifestly arbitrary as it produces absurd results not intended by the legislature. The High Court also directed that any action that was initiated or had culminated in an order against the petitioner on the basis of provisions contained in rule 96(10) would stand quashed.
11. Single SCN Covering Multiple FYs Under GST is Bad in Law; Each FY to Be Treated Independently: HC
Chimney Hills Education Society v. Additional Commissioner of Central Tax [2024] 168 taxmann.com 12 (Karnataka)
The petitioner was an educational institution which received a show cause notice (SCN) from the department for tax period July 2017 to 2023. It filed writ petition to challenge the SCN on the ground that the department issued consolidated notice covering multiple assessment years in single SCN.
The Honourable High Court noted that the practice of issuing single consolidated SCN for multiple assessment years contravenes provisions of CGST Act and each assessment year must be treated independently. Therefore, the Court held that the impugned notice was liable to be quashed with liberty to department to issue separate notice for each assessment year.
12. DGGI Has No Power to Transfer Case Pending Before State GST Authority to Itself: HC
Stalwart Alloys India Private Limited v. Union of India [2024] 167 taxmann. com 93 (Punjab & Haryana)
The petitioner was a manufacturer of Lead alloys, Lead pure in shape of ingots, lead suboxide and red lead in power form and an enquiry was initiated by the State Tax Department with regard to wrongful availment of Input Tax Credit (ITC) against the petitioner. The DGGI, Headquarters had accorded permission to office of DGGI, Meerut Zonal Unit to conduct centralized investigation against petitioner for period after 2019 and State Tax Officer transferred proceedings. The petitioner filed writ petition against the transfer of proceedings to DGGI and contended that the action was in violation of provisions of Section 6(2)(b) of the Central Goods and Services Tax Act, 2017.
The Honorable High Court noted that the State and Central Government have same powers under CGST and if one of officers has already initiated proceedings, the same could not be transferred to another. In the instant case, the State authorities initiated proceedings for the period from 01.07.2017 to 22.07.2019 alone. However, the DGGI passed order to conduct investigation for period from July 2019 to March 2022.
But the word ‘subject matter’ used in Section 6 means ‘nature of proceedings’ and in present case, it meant proceedings initiated for wrongful availment of ITC by fraudulent means. Thus, if state had already initiated proceedings by issuing notice under Section 74 for same subject matter, DGGI could not be allowed to initiate from 28.07.2019 to 20.01.2022. Therefore, the Court held that the action of transferring proceedings to DGGI was not sustainable in law and liable to be set aside.
13. No Interest is Payable on Refund of Amount
Deposited During Search by Way of Adjustment of Credit Amount in ECL: HC
Sushil Kumar v. Delhi State GST Govt. NCT of Delhi [2024] 163 taxmann.com 419 (Delhi)
The petitioner was engaged in business of manufacturing and trading of ferrous and non-ferrous metals. It was subjected to search and during search operation, the amount towards alleged stock variation and alleged wrongful input tax credit was recovered without statutory demand. The petitioner filed writ petition and contended that deposit was involuntary and amount to be refunded with interest.
The Honorable High Court noted that the deposit was made at 3 AM during ongoing search operation and it could not be termed as voluntary. The Court also noted that as per Board instruction, no recovery can be made during search and requires deposit post search.
The Court further noted that no interest would be liable to be paid on the amount deposited by way of an adjustment of the credit amount standing in the Electronic Credit Ledger, unless an appropriate application had already been made, prior to the alleged non-voluntary deposit, claiming refund or as an adjustment towards tax due. Therefore, the Court held that deposit was involuntary and directed to refund amount towards alleged stock variation with interest and towards alleged wrongful input tax credit without interest.
14. ITC Refund Cannot Be Denied If Export Service Payment is Received in Another
Branch’s Bank Account: HC
Cable And Wireless Global India Private Limited v. Assistant Commissioner, CGST [2024] 167 taxmann.com 288 (Delhi)
The petitioner is engaged in providing Business Support Services to Vodafone Group Services Limited (VGSL). It filed an application for a refund of the unutilized ITC. The department rejected the refund application on the ground that payment for services was routed to the Bangalore branch’s bank account instead of the Delhi branch. It led the department to conclude that the ‘supplier’ of services (Delhi branch) had not received the payments, thus invalidating refund under Section 2(6) of IGST Act, 2017, which defines ‘export of services’.
It filed writ petition against the rejection order and contended that the denial of refund was unjustified as the department had no power to deny refund on the ground that payment was made in different bank account.
The Honorable High Court noted that the Section 2(6)(iv) of IGST Act does not specify particular bank account where payment must be received but rather that it should be received by the supplier. Merely because payment of service provided by petitioner was received in a bank account at Bangalore, the same would neither warrant location of supplier identified in accordance with Section 2(15) being altered nor impact determination of actual supplier of service. The Court further noted that the department’s objections based on bank account remittance were overly technical and unsustainable. Therefore, the Court held that the impugned order rejecting refund was to be quashed.
15. Refund Rejection Order Passed Merely Due to Absence of Bank Realization Certificates to Be Set Aside: HC
Rajiv Sharma HUF v. Union of India [2024] 165 taxmann.com 215 (Delhi)
The petitioner was engaged in business of trading and export of automotive spare parts, automobile components and other allied products. It filed application for refund of accumulated ITC but the same was rejected on ground of non-submission of BRCs and incomplete bank statements and ledger accounts of suppliers. It filed appeal against the rejection order but the appeal was also rejected. Therefore, it filed writ petition against the rejection of refund.
The Honorable High Court noted that the first reason for rejection of refund was that the petitioner had not provided Bank Realization Certificates (BRCs) for relevant period. As per
Circular No. 125/44/2019-GST dated 18.11.2019, furnishing BRCs is not a necessary condition for claiming refund in case of export of goods. Therefore, the claim for refund of ITC could not be rejected by proper officer on ground of non-furnishing of BRCs.
The Court also noted that the second reason of rejection of refund was that ledger accounts provided by petitioner were incomplete and hence, payments against inward supplies could not be verified with bank statements. The Court held that this issue was required to be examined and therefore matter was remanded back to adjudicating authority for fresh decision.
16. Assessee’s Tax Liability for a Prior Period Could Not Be a Ground for Refusing Cancellation of GST Registration: HC
Sanjay Sales India v. Principal Commissioner of Department of Trade and Taxes [2024] 165 taxmann.com 350 (Delhi)
The petitioner was registered with the GST authorities and it discontinued his business. It filed application for cancellation of registration with effect from 13.06.2024. However, the Proper Officer issued a notice proposing to reject petitioner’s application stating that it was required to pay due tax and penalties. It filed writ petition against the rejection of application.
The Honorable High Court noted that the cancellation of GST registration would not impinge upon the liability of the petitioner to pay the outstanding tax and penalties, if any. The scrutiny as to petitioner’s tax liability for a prior period could not be a ground for refusing cancellation of GST registration. Therefore, it was held that the impugned notice was liable to be quashed and the department was directed to process application for cancellation of GST registration.
17. ITC
Merely Due to
APN Sales and Marketing v. Union of India [2024] 164 taxmann.com 789 (Delhi)
The petitioner received a notice from the department proposing demand of Rs. 17,43,356 along with interest and penalty. It was alleged that the petitioner had availed excess Input Tax Credit. It submitted response to the notice along with invoices of supplier in question.
The Adjudicating Authority passed an order and raised demand of Rs.18,30,522. It filed writ petition against the demand and contended that the order was passed merely on the ground that supplier’s registration was cancelled retrospectively.
The Honorable High Court noted that the petitioner submitted invoices along with response which were issued by the supplier in question. The Authority was required to examine the documents submitted by the petitioner and opportunity of being heard was also required to be given before passing the order. However, the impugned order was passed without giving any reasoned finding and the same was liable to be set aside. The Court also directed the Authority to decide the matter afresh after giving opportunity of being heard to the petitioner.
18. Appeal Against Penalty Can’t Be Rejected Merely Because Tax Wasn’t Challenged: HC
Aatral Associates v. State Tax Officer [2024] 166 taxmann.com 141 (Madras)
In the present case, the department issued show cause notice (SCN) to the petitioner and thereafter, the impugned assessment order was passed by imposing tax and penalty. The petitioner paid the tax but challenged the imposition of penalty by filing appeal. However, the Appellate Authority rejected appeal on ground that penalty alone could not be challenged. Therefore, the petitioner filed writ petition against it.
The Honorable High Court noted that in the instant case, the petitioner had already paid the entire tax amount and filed an appeal only against the penalty imposed. It was not proper for the Appellate Authority to reject the said appeal merely because tax wasn’t challenged. Therefore, the Court directed the Appellate Authority to take the appeal on record and pass appropriate orders on merits and in accordance with law.
19. Notification No. 56/2023 Which Extended Time to Pass Order u/s 73 Wasn’t in Consonance With Provisions of Section 168A: HC
Jawahar Singh v. Union of India [2024] 166 taxmann.com 547 (Gauhati)
In the present case, the petitioner has challenged the action on part of the Central Board of Indirect Taxes and Customs in issuance of Notification No. 56/2023-CT dated 28.12.2023. The petitioner contended that the said notification which extended time limit for passing of order under section 73(9) for Financial Year 2018-19 and 2019-20 was issued without recommendation of GST Council which was mandatory requirement under Section 168A.
The Honorable High Court noted that Notification No. 56/2023 was not in consonance with provisions of Section 168A since the GST Council has not made any recommendation to extend the time limit for passing of order. Therefore, the Court held that if said notification could not stand scrutiny of law, all consequential actions taken on basis of such notification would also fail. Thus, the Court granted interim protection and directed that no coercive action shall be taken on the basis of impugned assessment order.
20. Uploading of SCN Under Heading ‘Addi-
tional Notices’ Was Not Sufficient
Service in Terms of Section 169 of CGST Act: HC
Neeraj Kumar v. Proper Officer SGST Ward-19 Zone-2 [2024] 164 taxmann. com 685 (Delhi)
The petitioner was the sole proprietor of a concern and it filed writ petition to challenge the order passed under Section 73 of the CGST Act, 2017. It was contended that the show cause notice (SCN) was uploaded on the portal in the category of ‘Additional Notices and Orders’ which were not easily accessible.
The Honorable High Court noted that the uploading of a notice under heading ‘Additional Notices’ would not be sufficient service in terms of Section 169 of the CGST Act. However, the Court noted that the GST Authorities have since addressed issue and have redesigned portal to ensure that ‘View Notices’ tab and ‘View Additional Notices’ tab was placed under one heading.
Since, the impugned SCN was issued before GST portal was re-designed, the Court held that the impugned order was liable to be set aside. The Court also remanded the matter to adjudicating authority for consideration afresh.
21. Matter Be Remanded Since GST Demand on Discount for Facilitating Increase in Volume of Supplier Was Erroneous: HC
Tvl. Shivam Steels v. Assistant Commissioner (ST)(FAC) [2024] 164 taxmann. com 156 (Madras)
The petitioner received a show cause notice calling upon it to show cause with regard to reversal of ITC in respect of credit notes issued by supplier. It submitted that the value of supply would not include a discount only if conditions prescribed in Section 15(3) were satisfied. However, the department rejected the reply and passed order to reverse ITC. The petitioner filed writ petition against the order and contended that in impugned order, discount offered by supplier was erroneously construed as service provided by purchaser to supplier.
The Honorable High Court noted that the assessing officer while passing order concluded that taxable person was providing a service to supplier while taking benefit of discount by facilitating an increase in volume of such supplier. The Court held that the conclusion was ex facie erroneous and contrary to fundamental tenets of GST law. Therefore, it was held that the impugned order was to be set aside only in so far relating to reversal of ITC for volume of credit notes issued by supplier and matter was to be remanded for reconsideration by original authority.
22. HC Remanded Matter Since Petitioner Didn’t Monitor GST Portal After Cancellation of GST Registration
Venew Decors v. Deputy State Tax Officer [2024] 162 taxmann.com 590 (Madras)
The petitioner was a registered taxable person and GST registration was cancelled by the department. It filed writ petition against the order and contended that it didn’t monitor GST portal in view of cancellation of GST registration.
The Honorable High Court noted that the petitioner had stated categorically in the affidavit that the GST registration was cancelled on 25.09.2019. In those circumstances, it was reasonable that petitioner would not monitor GST portal continually. However, the notice and order were also communicated by e-mail and by text message on the mobile but it would be just and appropriate that petitioner should be provided with an opportunity to contest tax demand on merits.
Thus, the Court remanded matter and also directed the petitioner to remit 10% of disputed tax demand and department was directed to provide reasonable opportunity to petitioner.
23. Payment of Tax Made Before Completion
of Search
Could Not Be Retained by Revenue Without Proper Acknowledgment: HC
ATR Malleable Casting (P.) Ltd. v. Inspector of Central Taxes [2024] 164 taxmann.com 78 (Calcutta)
The assessee made a payment of tax during course of search but there was no intimation given to assessee regarding non-payment or short payment of taxes. The assessee submitted that it was compelled to pay a sum of Rs.30,00,000/- under threat of arrest, coercion and undue influence during the course of search. It filed writ petition for refund of amount paid during search but the petition was dismissed on ground that there was proper authorization in INS-01. It filed appeal against the order of dismissal of petition.
The Honorable High Court noted that, as per instructions issued by the Commissioner (GST-Inv.), CBIC, there may not be any circumstances necessitating recovery of tax dues during course of search or inspection or investigation proceedings. So far as voluntary payment by taxpayer is concerned, it should be against an ascertainment of their liability on non-payment/ short payment.
In the instant case, such ascertainment had not taken place, and there was no intimation given to the assessee regarding non-payment or short payment of taxes. Therefore, it was held that the payment of Rs.30,00,000/- during course of search could not have been stated to be voluntarily made and the same was required to be refunded as the amount could not be retained by revenue without proper acknowledgment.
24. Audit Notice is Valid Even If Issued After GST Cancellation; HC Denied Relief to Petitioner Who Fraudulently Availed ITC: HC
Ashoka Fabricast (P.) Ltd. v. Union of India [2024] 162 taxmann.com 719 (Rajasthan)
The petitioner was served with a notice for conducting audit after cancellation of registration. It filed a writ petition to challenge the audit notice issued after the cancellation of GST registration & subsequent assessment order and submitted that Section 65 of CGST Act, 2017, applies only to registered persons. It was also contended that since the foundation of the proceedings was contrary to the mandate of the CGST Act, any assessment order passed in pursuance thereof, deserves to be quashed.
The Honorable High Court noted that Section 29(3) of CGST Act, 2017 provides that the cancellation of registration shall not affect the liability of the person to pay tax and other dues under this Act. Also, Section 65 of CGST Act, 2017 authorizes the Authority to undertake audit of any registered person for such period.
Therefore, the Court observed that the audit notice and subsequent assessment order for period when petitioner was GST registered were valid even if issued after cancellation of registration. Thus, the Court held that the petitioner was not entitled to relief after fraudulently availing ITC and cancelling registration.
25. HC Set Aside Penalty Order Issued Merely on Ground That Vehicle Was Not on Its Normal Route
Vishal Steel Supplier v. State of U.P. [2024] 164 taxmann.com 609 (Allahabad)
The petitioner was engaged in the business of trading of steel goods. The goods were being transported from Muzaffarnagar to Ghaziabad and intercepted at Hapur by the department. The goods were detained on the pretext that it was not on its normal route and the driver of the truck was having mobile number of a dealer of Hapur. Therefore, an inference was drawn by authorities that goods would be unloaded at Hapur without proper document. The petitioner filed writ petition and contended that goods were detained only on the basis of surmises and conjunctures.
The Honorable High Court noted that no discrepancy had been pointed out at time of detention or seizure of goods with regard to quality or quantity of goods. Moreover, the Court observed that the authorities had also not recorded any finding with regard to mens rea to avoid payment of tax. It was also not case of the department that under GST Act, dealer was required to disclose specific route of its journey for movement of goods. Therefore, the Court held that the impugned order was to be set aside and any amount deposited by the petitioner in the present proceeding shall be refunded.
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A Glimpse of the People Behind Taxmann
Naveen Wadhwa
Research and Advisory [Corporate and Personal Tax]
Chartered Accountant (All India 24th Rank)
14+ years of experience in Income tax and International Tax
Expertise across real estate, technology, publication, education, hospitality, and manufacturing sectors
Contributor to renowned media outlets on tax issues
Vinod K. Singhania Expert on Panel | Research and Advisory (Direct Tax)
Over 35 years of experience in tax laws
PhD in Corporate Economics and Legislation
Author and resource person in 800+ seminars
V.S. Datey Expert on Panel | Research and Advisory [Indirect Tax]
Holds 30+ years of experience
Engaged in consulting and training professionals on Indirect Taxation
A regular speaker at various industry forums, associations and industry workshops
Author of various books on Indirect Taxation used by professionals and Department officials
Manoj Fogla Expert on Panel | Research and Advisory [Charitable Trusts and NGOs]
Over three decades of practising experience on tax, legal and regulatory aspects of NPOs and Charitable Institutions
Law practitioner, a fellow member of the Institute of Chartered Accountants of India and also holds a Master's degree in Philosophy
PhD from Utkal University, Doctoral Research on Social Accountability Standards for NPOs
Author of several best-selling books for professionals, including the recent one titled 'Trust and NGO's Ready Reckoner' by Taxmann
Drafted publications for The Institute of Chartered Accountants of India, New Delhi, such as FAQs on GST for NPOs & FAQs on FCRA for NPOs.
Has been a faculty and resource person at various national and international forums
the UAE
Chartered Accountant (All India 36th Rank)
Has previously worked with the KPMG
S.S. Gupta Expert on Panel | Research and Advisory [Indirect Tax]
Chartered Accountant and Cost & Works Accountant
34+ Years of Experience in Indirect Taxation
Bestowed with numerous prestigious scholarships and prizes
Author of the book GST – How to Meet Your Obligations', which is widely referred to by Trade and Industry
Sudha G. Bhushan Expert on Panel | Research and Advisory [FEMA]
20+ Years of experience
Advisor to many Banks and MNCs
Experience in FDI and FEMA Advisory
Authored more than seven best-selling books
Provides training on FEMA to professionals
Experience in many sectors, including banking, fertilisers, and chemical
Has previously worked with Deloitte
Contact Us
Taxmann Delhi
59/32, New Rohtak Road
New Delhi – 110005 | India
Phone | 011 45562222
Email | sales@taxmann.com
Taxmann Mumbai
35, Bodke Building, Ground Floor, M.G. Road, Mulund (West), Opp. Mulund Railway Station Mumbai – 400080 | Maharashtra | India
Phone | +91 93222 47686
Email | sales.mumbai@taxmann.com
Taxmann Pune
Office No. 14, First Floor, Prestige Point, 283 Shukrwar Peth, Bajirao Road, Opp. Chinchechi Talim, Pune – 411002 | Maharashtra | India
